Are you interested in investing in the stock market, and you are looking for a brokerage firm? This article is a comprehensive guide to tell you how these firms work and is Interactive investor a good option for you. Some companies offer a direct stock purchase plan (DSPP) means you can purchase their stocks directly through their websites. Most companies do not provide this service, and you have to buy their shares through a brokerage firm. As the name suggests, a brokerage firm acts as a middleman connecting the buyer and the seller and making possible a transaction. The brokerage firms that deal in share markets are financial brokerage firms. And the company – Interactive Investor, we are talking about in this article is one of the renowned brokerage firms in the U.K.
Before we jump into the details about the Interactive Investor Company, let’s first talk about how these firms work.
The Functions of Brokerage Firms:
The brokers or the brokerage firms are agents that only facilitate the transaction and are not the principal participants. They charge their commission on each transaction. The commission varies from transaction to transaction and from a brokerage firm to firm. A new phenomenon is introduced in the market called zero-commission brokerage firms. The zero-commission brokerage firms make their fees by the difference in price on which they buy the shares and the price they sell to the investors. The difference in the buying and selling price is called the spread. The spread between the bid and sell price is the commission or the fee of such brokerage firms. Apart from facilitating the financial transaction, brokerage firms offer additional services such as investment services, market analysis, price quotes, etc.
The Interactive Investor (ii.co.uk)
The interactive investor is one such example of an investment services provider. The interactive investor (ii) is the UK based online investment services.
In 1994, Sherry Coutu founded interactive investors International and angel investors and Arts Alliance funded it. In 1995, Tomas Carruthers, who was hired by Coutu, introduced ESI and equities to expand its fund management pool. After withdrawal from the Asian and South African market, Carruthers changed its name to Interactive Investors (ii). Currently, the Interactive Investors office is based in Manchester, and its sub-offices are in Leeds and London. Interactive Investors’ products are the UK and international shares and funds, SIPPs, ISAs, Investment trusts, CFD, ETFs, spread betting, and forex. The company has more than £30 billion in assets, 300,000 customers, and more than one million users. The Interactive Investors provide market analysis services, readymade portfolios, community, discussions, etc. Moneywise and Money Observer are the subsidiaries of Interactive investors.
Main Functions of the Interactive Investor Brokerage Firm
The main functions of Interactive Investor are:
- Facilitate the financial transaction between the seller and buyer in the financial market. The firm represents its clients on the stock exchange floor and keeps the clients updated about their buying and selling, price, and quantity of stoc
- Providing trade confirmation to the client or investors within 24 hours of the transaction.
- Providing information to the clients about the stock market.
- The firm also works as investment advisor. It does market analysis and market research and advise the clients on when to invest in particular stocks or short the stocks.
- Providing information to clients about other market participants.
What to Look for in A Brokerage Firm:
- Before choosing a broker or a brokerage firm, the first step is you should understand your needs. It would help you in understanding your investment goals. Do you want to become an investor who actively participates in the day to day trade, or you want some side investment to supplement your current income or want to save for your retirement? This analysis will help you in determining your broker. In case you want to become an active investor, so you need a broker with a broader range of resources and a broker that will help you identify new investment opportunities such as ETFs, stocks, mutual funds, stock income securities, margin trading, and conditional orders, et
- Once you are clear about your investment goals, the next step is to choose a broker. There are many options available in the market; you need to make sure that your investment is in safe hands. Ensure that the brokerage firm is a member of the Securities Investor Protection Corporation (SIPC). You should check on FINRA’s Broker Check Website that the firm is a member of the Financial Industry Regulatory Authority (FINRA). In case the brokerage firm offers money market, CDs, and deposit accounts, it covered by the Federal Deposit Insurance corporations.
- Also, make sure that the brokerage firm offers protection against fraud. In case of any fraud or losses, the firm has a reimbursement policy.
- The last thing that you should consider is the brokerage firm fee. Make sure that the fee and other cost structures fall under your budget.
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