Opening a brokerage account may be the best way of achieving your financial goals, whether that means becoming a homeowner, saving for your children’s education, or planning for retirement. Rather than having a stockbroker manage your funds, opening a brokerage account gives you more control over your investments.

The range of securities you can purchase with your brokerage account (mutual funds, stocks, exchange-traded funds, options, futures, and the list goes on) are as wide as the number of brokerages with which you can do business.

Here are some basic steps to take when considering where exactly to open a brokerage account.

The primary consideration when buying real estate is often summed up in three words: location, location, location. This idea also applies to brokerage firms — the location of your money is critical.

Where do you invest? The first step: research. Check out online reviews to get a general sense of a company. Explore their website and evaluate its functionality. Call their customer service line to see how effective and responsive they are.

Also, have a thorough understanding of your trading experience level. For the novice trader, a full-service broker that charges a bit more might be preferable, as they can assist you while starting to invest. More experienced traders may opt for discount brokerages that offer lower fees but less hands-on support.

Trading style is also important. If you’re more of a buy-and-hold trader who makes just a few trades per month, and a company offers $3 trades on the condition that you make over 100 trades monthly, then this may not be the most prudent option. Active traders, on the other hand, would probably consider this a great deal.

What kinds of investment does the company deal in? If you plan on putting money in gold-silver certificates, for example, make sure the company offers those services and then compares them to their competitors.

Opening an online brokerage account is another popular option given your increased control of, and 24/7 access to, your trading portfolio.

The next thing to decide is what kind of account you want to open. A margin account, for instance, lets you spend more than the cash amount in your brokerage account (at an interest rate, and with the caveat that if the shares decline drastically, they may then sell those shares to refund the loan). A cash account limits your asset-spending to the amount of money in the account.

Another option is whether to give discretionary power to the brokerage, allowing them to make trades on your behalf. You may prefer complete autonomy over your account, and prefer being the sole person making trading decisions.

Make sure to have all required documents in order. These will likely include government photo identification indicating your name, address, and date of birth, such as a driver’s license, as well as your Social Security number. All trades must be reported to the IRS by year’s end.

Once you’ve decided which brokerage best fits your investment goals and style, the last step is filling out an application. You may be asked to answer questions for the purposes of profiling your investment goals and needs, as well as your risk tolerance so the firm can best calibrate your approach to successful investing. Ensure your starting funds are secured in an account from which it can be transferred to the brokerage, and then you’re on your way to making your money work for you!

Featured Image: Depositphotos/© SergeyNivens