Stockbroking – What It Is and What It Entails
Stockbroking is performed by individuals who buy and sell stocks, securities, and other financial shares through the stock exchange. It is a vital role in the financial services industry. Stockbrokers perform this task on behalf of their clients, who may be private individuals, companies, or institutions. Stock brokers work closely with fund managers, financial advisors, wealth managers, and other financial planners to establish a stock portfolio that best suits their client’s investment goals and risk profile.
What Does Stock Broking Entail?
Stockbrokers manage wealth portfolios. They work closely with their clients, developing new investment and business opportunities. The role involves:
- Keeping abreast of current affairs, and the latest financial and tax laws and legislation
- Staying up to date with market fluctuations
- Monitoring the performance of stock markets locally and internationally
- Conducting in-depth market research and analysis
However, their most important function is to intimately understand the client’s financial needs. They must be aware of their short-, medium-, and long-term goals and have a clear understanding of their client’s wants, needs, and financial ambitions. Then, they need to work closely with the client to achieve these objectives by making appropriate suggestions regarding their stock investments and how to manage them.
Brokers need to be completely honest, with no hidden agendas, and must be trustworthy, with a solid reputation: providing exaggerated or misleading information to a client could have disastrous financial consequences.
Different Types of Stock Broking
There are many different types of stockbrokers. However, most fall into one of four specific groups:
- Full-service Stock Broking: These professionals provide a personalised service to clients. They have a responsibility to deliver honest and important information that is exclusive to a specific full-service client. It is personalised research, investment management, and relevant information to that client’s portfolio.
- Online brokers: They carry out research and provide relevant investment news, information, and charts for their clients. They also share up-to-date information and relay relevant stocks and trades to their clients for them to consider.
- Discount stock brokers: They only follow up on orders from their clients. They do not offer advice, research, or analysis services. These brokers usually operate through online platforms.
- Robo-broking (or artificial intelligence) services: AI advisors are automated digital platforms. The client completes an online survey to provide personal information about their goals, objectives, and financial needs. The AI advisor then uses algorithms to provide financial advice with very little human intervention.
Choose an Efficient Stock Broking Service
Although stock broking has historically been perceived as a service reserved for the wealthy and technically astute, and was avoided by many owing to its apparent complexities. However, the team of financial professionals at Efficient Wealth has a solution. Our certified financial planners and wealth managers, in consultation with one of South Africa’s top stockbroking firms, has packaged a stockbroking solution to suit the needs of almost every investor, regardless of their expertise, knowledge, and understanding of the capital-market environment.
Our solution includes a full one-on-one portfolio management service with personal consultations with a specialist stockbroker. It also includes brokerage services, online trading services, and independent research. Our online trading solutions are delivered through an industry-leading electronic platform, using cutting-edge technology to bring you the very latest, up-to-date trading news and daily information. When it comes to stockbroking portfolio solutions, there is only one solution: contact us at Efficient Wealth,
