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Investing in securities and yielding long-term positive results, results being defined as increased value in the form of dividends and appreciation, is a key objective for most businesses. Why is a good broker essential for your success?
As a successful business owner, you know that choosing to work with someone is a big decision and should not be taken lightly. The relationship you form with your broker is no different.
You don’t want just any broker, but the right one that shares your business values has your best interest at heart and will go above and beyond to get you the best results.
Choosing the right broker to help you manage your investment portfolios is a challenging task.
That being said, you are more than up for the challenge.
So, let’s dive in and start the process of finding the right broker for you and your business.
Check for Indicators of Past and Current Success
Success leaves breadcrumbs, and we can call those breadcrumbs results.
To find a broker that will help you achieve your desired results, it is important to look for indicators of success.
These breadcrumbs can be found in the form of past performance, new clients and assets under management. In addition, most successful brokers will have a wide variety of clients that have been with them for many years.
A broker that has a long list of happy clients is a good start.
But, don’t stop there.
Remember, you can’t ask for details that your potential broker can’t share with you. Other investors’ securities are their business, not yours.
If you find a broker that not only knows this but has built it into the way that they talk about past performance, you are on the right track.
They aren’t in a Rush
When making such an important decision, the last thing you want is to feel like your broker is trying to push you into a decision.
Investments are a long term game, and the best brokers want to ensure that you are comfortable with your decision before moving forward.
Why? The best brokers out there are patient because they understand that this decision is about more than just the numbers.
It’s about building a relationship and trust.
In addition, 99.9% of investments take a significant amount of time to mature. So, even if your broker is the best in the business, they understand that you won’t see results overnight.
“Time in the market beats timing the market.” – Ken Fisher, founder of Fisher Investments
They are Passionate (not impulsive) and an Avid Learner
When meeting with potential brokers, one of the first things you should look for is passion.
A passionate broker will be enthusiastic about their work and want to learn everything they can about their clients’ businesses.
Note: passion and impulsiveness are two very different things. Do your emotional intelligence homework and learn to understand the difference.
A passionate broker will…
- Be genuinely interested in your business and what makes it tick
- Be a lifelong learner, always looking for new opportunities to grow their knowledge
- Have a genuine desire to help you reach your goals
An impulsive broker will…
- Be pushy and try to force you into decisions
- Lack emotional intelligence and an ability to understand people
- Only care about making a quick buck
The takeaway here is that you want a broker that is passionate about their work and has a genuine interest in helping you reach your goals.
Communication Feels like Talking with a More Educated Peer
The best brokers are excellent communicators.
This means that they will be able to explain investment concepts in a way that you can easily understand. In addition, they should be able to answer any questions you have in a way that leaves you feeling confident and comfortable.
The best brokers understand that not everyone is an expert in investments and they take the time to educate their clients.
You should never feel like your broker is talking down to you or using confusing jargon.
If you do, move on.
They Don’t Have any SEC Disclosures
If you are working with a broker registered with the SEC, they are required to disclose any disciplinary actions taken against them. When a broker has had an SEC investigation that led to disciplinary actions taken against them, it is a red flag that you should take seriously.
You can also find this information on FINRA’s BrokerCheck website. (Most brokers will be registered with the Financial Industry Regulatory Authority (FINRA).)
If you find any disciplinary actions on either of these websites, take that as a red flag and move on to another broker.
The Bottom Line
Choosing the right broker is an important decision that should not be taken lightly.
There are a lot of factors to consider, and you want to make sure that you find someone you can trust and feel comfortable with.
The best way to find the right broker for you is to do your homework, ask around, and trust your gut.
If something feels off, it probably is. And when in doubt, always err on the side of caution.
You may also like: What Do Business Brokers Do? When Should You Call One?
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