Brokerage is, first and foremost, a business. Like any business, it is aimed at making a profit. However, deliberate attempts to confuse or deceive a client in order to make money are not only unethical, but can also lead to unpleasant consequences for the broker himself. For example, such actions may damage the relationship with the client or even result in litigation.

There are obvious things that a scammer gives away – for example, lies or distortion of facts. But there are also more subtle forms of unethical behavior that are no less unacceptable.

Below we talk about the signs of a reputable broker.


Transparency of rhetoric

An honest broker is not afraid to be open with traders. If he has any doubts or questions, he prefers to inform the client rather than remain silent. Even if the broker knows that because of this the transaction may not take place, he understands that the trader’s trust cannot be lost.


Individual approach

A professional broker does not try to treat all traders the same. Everyone has their own unique needs and goals. Therefore, it is important to develop an individual investment portfolio for each client. It is also important to personalize your messages so that they are relevant to the individual trader. Thus, the broker focuses on providing personalized information about the current situation of the client’s portfolio, how it is performing, and any plans to change it.


Notifying the client about risks

Companies with extensive experience understand that you should not rely on the client to tell you what he wants to know. Many clients won’t ask questions if they don’t know what they need to ask. Therefore, it is important to be proactive and interested in the client’s conditions. The broker needs to make sure that the client understands what he is getting, what the risks and potential benefits of the transaction are.


Specificity regarding market conditions

An honest broker does not hide the truth about market conditions from his client. This includes discussion of factors such as current trends, economic indicators and geopolitical events. The client must have a complete understanding of what is happening in the market in order to make informed investment decisions.


Terminology explanation

Dry retelling of information to a client is not the same as communicating with him. Many clients will not be able to understand complex financial terms and concepts the first time. Therefore, it is important to discuss the main points with him in a personal conversation.

Regular novice traders do not know the meaning of concepts such as portfolio risk optimization, sector allocation, technical analysis, etc. They also do not understand the differences between long-term and short-term investments. Therefore, communication with the client is a key element of good brokerage practice.