Ready to make your first investment and looking for a stockbrokerage? Here are some tips on how to open an account and choose the brokerage that's right for you.

What do you need to open a brokerage account?

All stockbrokers are required to perform Know Your Customer (KYC) procedures and have you complete the necessary account-opening documents. Depending on the brokerage, KYC may be done digitally or face-to-face.
Generally, you'll need to complete:

• A Customer Account Information Form (CAIF)
• Two signature cards
• An account agreement or contract
• Two valid IDs
• Proof that you are of legal age

Can minors/ corps open an account?

Yes! However, minors generally cannot open an account on their own. Instead, they can have a joint account with a person of legal age, who will serve as the primary account holder, subject to the brokerage's requirements.
Corporations can also open brokerage accounts. One potential advantage for corporations is that dividends received from domestic corporations are generally not subject to withholding tax, subject to applicable tax rules.

Online vs. broker assisted accounts

The first thing to consider is what type of service you want.
There are two main approaches: online trading and traditional or broker-assisted trading.
Not all stockbrokerages offer online trading platforms. If you prefer a self-service approach where you can research stocks and place trades yourself, an online brokerage may be the better choice.
Equally important things to consider when you open an online trading account is up-time, speed and customer support quality.
Traditionally, broker-assisted means advisory services, where your broker may call/ message you to discuss investment ideas, recommend stocks, and only then execute trades based on your explicit instructions. They are not authorized to trade without your prior consent.

Discretionary accounts

Another type of account available through traditional brokerages is a discretionary account.
With a discretionary account, you discuss your investment goals, risk tolerance, and preferences with your stockbroker. The broker can then make investment decisions and buy or sell securities on your behalf without obtaining your prior approval for every trade.
Personally, I would suggest at least having your broker confirm the trades with you at the end of the trading day or on a weekly basis, so you remain aware of what is happening in your portfolio.
The skill level of stockbrokers can vary significantly, from person to person and also between brokerages. This can be especially important when the brokerage has its own research team that supports its brokers. They would also vary according to their trading styles, some would do very short term trading while other prefer to trade with longer term horizons, so choose one with a style that you're comfortable with.
For those who want to be personally serviced by a stockbroker, expect to pay somewhat higher commissions. Rates of around 0.375% to 0.50% are not uncommon for broker-assisted service, although rates can vary. If they're raking in money for your account, what's a little more fee to compensate their skill.. but that's only if they're raking it in.
If you are just starting out or too busy with work, having a skilled broker who can provide advice and execute trades for you may be worth the additional cost.

Can I have both online trading and a stockbroker?

Yes! Some brokerages offer hybrid accounts, giving you access to an online trading platform for self-directed trading while also allowing you to work with a stockbroker for advice and assistance.
This can be a good option if you want the flexibility to trade yourself while still having someone you can turn to when you can't access your trading account.

Can I open with different brokerage houses?

Yes. Just like you can have accounts with multiple banks, you can also have accounts with different stockbrokerages and work with different stockbrokers.
Diversifying across multiple accounts is a smart choice especially for higher portfolio values. It can give you access to different platforms, research teams, services, and brokers.
Opening a brokerage account is generally free. If you see a brokerage advertising a "minimum opening amount", it's usually just a suggested minimum. They won't turn away a valid applicant.
That said, policies vary between brokerages, some firms routinely close empty or dormant accounts, while others may keep them open.

Are stock trading commissions negotiable?

Yes, they can be. As a general rule of thumb for retail clients, anything above 0.25% is worth negotiating, particularly if you have a sizeable portfolio or trading volume.
For example, if a stockbroker quotes you a commission of 0.50% or even 1%, you can try negotiating it down to 0.25%.
Of course, skilled and high demand brokers can also dictate their own rates and instead direct you to their online platform for self-service trading.
Ultimately, it comes down to how valuable the stockbroker's advice and service are to you and how much you're willing to pay for it.
A highly skilled broker who understands your objectives and provides valuable advice may be worth paying more for.

Robo-advisors

These have recently emerged for Philippine stocks.
A robo-advisor like AAA Robo Advisor Account account allows you to select an investment strategy like dividend investing or momentum investing and have the platform automatically execute trades according to that strategy.
Instead of making every buy and sell decision yourself, you essentially choose the strategy and let the system manage the portfolio according to its rules. Pros: Fully automated and disciplined. Cons: Has added fees.

Does the brokerage have its own research team?

Another important factor is research.
The quality and depth of a firm's research output can vary depending on the size and capabilities of the team. Smaller research usually just provide daily market commentaries while larger teams may provide several reports like:

• Individual stock coverage
• Technical analysis
• Sector reports
• Company updates
• Mid-year reports
• Full-year reports
• Market outlooks

Successful investing means plenty of reading and understanding, so especially for those starting out, consider choosing a brokerage with a strong research team and consistently useful reports.

Platform functionality and customer support

Different platforms offer different features. Some may offer automated stop-loss orders, while others may not. Some have more advanced charting, tools and order types, while others focus on simplicity. Some platforms simply look and feel better than others.
Customer support is also very important, how fast do they reply to inquiries and support tickets? They should generally reply within a day or even faster.

I hope this guide helps!