Up-to-date Obligations of Your Stockbroker

Stock trading is one of the most rewarding business endeavours. With the introduction of online trading platforms such as CMC Markets, there has been a tremendous increase in both investors and professionals involved in stockbroking. As a trader, you must do your part in increasing your chances of realizing profits while trying to evade any loss situations. This includes creating a diversified profile and conducting market research before going for a trade. However, success is often achieved when there is a strong combined effort between the trader and the stockbroking professional.

While regarded by many people as a prestigious career, stockbroking comes with heavy responsibilities. Nevertheless, a large number of traders don’t know what to expect from their brokers. Actually, you may be at the mercy of market forces most of the time—which will determine whether you make profits or losses—but it’s the duty of your stockbroker to ensure that every possible action is taken in order to ensure that you stay on the right path, steering clear of the murky waters. Towards this end, your stockbroker should be able to conduct market research, stay up-to-date with financial news as well have enough knowledge on the latest laws on taxation.

A Fair Deal

Getting a fair deal from your stockbroker simply means he or she should exercise high levels of integrity, which includes fairness and honesty, in all commitments to you. Stockbrokers are governed by rules set out by self-regulatory organizations. Among other requirements, the rules call for the highest level of honesty and justness from everyone involved in conducting business in the industry. Keep in mind that the rules are legal requirements and are, therefore, legally enforceable.

Your Interests First

Much of stockbroker’s earnings come from commissions or your payment for spreads. Sometimes, brokers may be tempted into trying to increase their earnings by encouraging you to make numerous trades even when they know you won’t gain much from it. This is not only illegal but against the spirit of the industry.

Your broker should always put your interest first. Be wary of advice which leads you into frequent trading. More than often than not, you will be left in problems while the tricky stockbroker is left with a smug smile.

Access to All Trading Information

It is the obligation of your stockbroker to allow you access to any information needed in making an informed investment decision. In addition, you should not be kept in the dark in regard to information on the risks of a trade in which you interested. Above all, your broker should be truthful. Exaggerated or false information is likely to lead you into making wrong investment decisions which in turn results in losses.

Authorizing your Trading

Your trades belong to you. Therefore, your broker should not assume the role of making decisions on which trades should be taken. He or she should only trade on your behalf after getting your approval and authorization. You may, however, give your broker the authority to make trading decisions in your account and there is, thus, no need for him or her to seek approval every time a trade which is likely to be favorable comes up.

Appropriate Recommendations

One of the main reasons for contracting a stockbroker is the need for informed and experienced recommendations aimed at giving you the best opportunities in taking advantage of market changes to make a favourable trade. In that respect, your broker should take into consideration your objectives and balance them with your financial status and trade risks before issuing a recommendation. Most brokers will create your trading profile which will be used in picking out the most suitable investments for you.


Most brokers conduct their business with clients in good faith and are willing to go beyond their legal requirements to ensure your success in stock trading. They are also part of stockbroking firms which are uniformly charged with the responsibility of ensuring that all their clients’ interests are looked after. In addition, there are always such organizations as the Financial Industry Regulatory Authority (FINRA) which require brokers and brokerage firms to report any issue they might have had in the past including past malpractice cases. However, it is advisable to not only understand your obligations as a trader but also your rights.


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