This week, I want to share some practical advice on what investment fund managers should look for in a broker. Make no mistake – your broker is integral to your long-term success. That’s why we offer our fund manager clients guidance on how to find the right broker for their individual needs.
Let’s explore the topic further.
Your Broker Checklist
So what does an investment fund need to look for in a broker? Here’s a checklist that you can use when making your own choice:
Regulation & Security
You need to use a regulated broker in one of the major jurisdictions, such as in the UK, EU and USA. These regulatory regimes are the toughest in the world – and will provide reassurance to prospective investors.
Transaction Costs
You need to use a broker that offers a Professional Account with competitive spreads. Remember – you may have to sacrifice the best transactional spreads/commissions in order to trade with the most secure brokers.
Deposit & Withdrawal
A good broker will allow you to deposit funds and withdraw your earnings hassle-free. Brokers should have no reason to make it hard for you to withdraw your profits. The only reason they hold your funds is to facilitate trading.
Trading Platform
The trading platform of your FX broker should be user-friendly and stable. It should also provide you with easy-to-use charting tools and news feeds.
Execution
It’s a regulatory requirement that a broker ‘fills’ your order at the best possible price. If market conditions are normal, your broker should fill your order at the market price you originally see.
Personal Account Manager
It’s integral that your broker gives you a Personal Account Manager that you can contact by phone. The ability to speak to someone directly is extremely important should there be an unexpected shock to the financial markets.
7 Brokers You Can Trust
Many prospective investment fund managers ask me what brokers IFINA would recommend.
Truthfully, we do not recommend any individual broker – because the most appropriate firm depends on an individual’s circumstances. Ultimately, the decision is always down to the client.
However, I thought I’d share seven reputable brokers that our clients have used in the past:
- IS Prime
- Interactive Brokers
- Saxo
- Charles Schwab
- Swissquote
- Britannia Global Markets
- LMAX
- Advanced Markets
Do you want to create your own investment fund? If you do, just email me back and we can arrange a free Skype consultation.