Clearing brokerage firms are an essential part of any trade. They are the backbone, ensuring that trades are conducted smoothly and securely, and with maximum transparency. We rely on their experience and expertise just as much as we rely on their tireless research and absolute reliability.
Given just how essential their role in these transactions is, there is naturally an awful lot of pressure on the part of the investor and/or seller to ensure that they employ the services of a broker that they can trust. Here are a few things that you should look for.
A Broker You Can Trust
This is really the point at the crux of all this, and it can be a little difficult to pinpoint exactly what “trustworthy” looks like. A good place to start is by looking to see if they are a member of the London Stock Exchange and are regulated by the FCA. A long history will of course suggest a certain amount of trustworthiness, but it is also worth considering what they offer in terms of support and accessibility.
Will they be reachable if you have an urgent request? Look for 24-5 coverage and a dedicated trading desk that is open for business no matter where in the world you are.
Experience Across A Wide Range Of Markets
Coming back to the point about experience: It’s not just about the number of years that this company has spent in the business. You should feel confident that they have history across a range of different markets and different business models to offer flexibility.
One of the best ways to gauge this is to see how many different global markets the broker in question covers. Ideally, your broker should have a physical presence in the region you are interested in trading in. Local knowledge can be absolutely essential in brokerage clearing, which is why Global Investment Strategy has proven to be so popular and effective with its Hong Kong office. They cover the Americas, Europe, the Middle East and Africa, as well as a large number of Asia-Pacific regions from Japan and China to frontier markets like Thailand, Indonesia and Vietnam.
Experience always counts for a lot, but it is just as important to know that your clearing broker is constantly striving to explore and embrace new technology. When you are trading, you need to know that your broker prioritises speed, accuracy and accessibility as much as you do. You should also make sure that the firm has a disaster recovery site in place in case of any massive power outages.
When you are dealing with large sums of money, transparency is crucial. One of the most important services that a clearing broker should provide is peace of mind, which is not easy to come by with the markets in their current state. But it certainly helps when you know that you can request information at any time concerning the state of the transaction and the finances involved. Look for a high level of corporate governance, and a desire to foster repeat business.