Never has the mouse been mightier-except in the days of Walt Disney of course. With the click of a mouse you can have access to equities, bonds, commodities, international markets – anything anywhere in the world seems to be just a mouse click away. On line trading seems to be finally gaining acceptance, considering that now ICICI Direct boasts of a client base of over 55000.

As is with every new technology, the hiccups are still there and will be ironed out with time. But with a plethora of choices, what should an investor really look at while choosing an on line broker? One may argue that one should look at the same things one would look at in an off line broker, i.e.-your friendly neighborhood broker-but a deeper analysis reveals that on line brokers have to be compared on some additional parameters also.

"Write down what your ideal broker would look like," recommends Bill Burnham, an E commerce analyst for Credit Suisse First Boston. "You can probably find a group of firms that fit your criteria."Start by asking the following questions. Afterwards, you can make a list of five or so candidates, and compare in detail the services and features that most closely fit your needs.

Of course speed of execution and the commissions will be foremost in any investors mind. Commissions are important of course-As more on-line brokers have entered the market, commission prices have come down. Rates are especially important if you are trading in and out of positions throughout the day, because fees can add up quickly. But remember you typically get what you pay for. Low cost is low service to the degree that they may not have as many reps, or they cut hours. The best way to measure commissions? Price several sample executions based on your typical types of trades, and compare the total costs. Also check about hidden costs? Ask if there are charges for calling a representative, transferring funds electronically, falling below a minimum account balance, and managing special accounts etc. Research tools are typically free, but you should find out if these are any extra costs for the information you need.

Speed of execution is another equally important factor. Ask how quickly orders are executed. Also, find out how the broker alerts investors when trades go through. Some brokerage sites require investors to check an execution screen, while other firms send an e-mail alert. You should, at the least, get a trade confirmation the next business day.

Ease of usage is a major factor impacting the comfort level. Test out different Web sites and see how quickly you can get the information you need. Are you able to access accounts easily, and fill out forms for accounts on-line? Try out a few sites, see how you feel with the tools, research and portfolios. Bigger isn't always better in this category, some big sites are tough to navigate. For the site to be easy to use, you shouldn’t have to look around for information, it should be easily findable. Some websites also allow investors to personalize certain areas of their Web sites, like configuring news to appear at the top of the computer screen.

To get an all round picture see the range of services offered by the broker. Even if you trade stocks throughout the day, and are looking for low commissions, fast executions, and real-time stock quotes, it would help if the on line broker also offers research materials like historical stock charts, news, stock and fund screening tools etc. Also find out what types of research tools are available? The standard tools include 15 or 20 minute delayed quotes, historical stock charts and news headlines. Typically these services are free. If you're an active trader, you'll want real-time stock quotes, intraday charting and, perhaps, a dynamically updated portfolio that is adjusted as trades are executed. You may be interested in financial planning tools like customized stock and mutual fund screening, stock analyst information and research reports from top equity research firms. If you're watching particular stocks, find out if you can customize the news you receive. Also if your interest goes beyond stocks, you'll want to know about the breadth of products each brokerage firm offers. Find out how many mutual funds are available, and ask about options trading, not many firms offer bond trading .If you want a consolidated place to do investing, banking and on-line bill payment, then banking on line brokers are suited to your needs.

The next thing to check out is what is the minimum trade accepted by the brokerage houses and how much money do they need you to have in your account. Typically the higher the minimum, the more qualified and experienced the customer is that they're looking for and lower the rates.

The firm's history and background are also very important factors which ought to have a bearing on your choice of broker. New firms are entering the on-line brokerage business all the time. It may be a good idea to go with a firm that has been in business for a little while, and presumably has its operational kinks worked out. You may also feel more comfortable if the on-line firm is a division of a larger organization. Read the press releases and historical materials that are posted on each company's Web site. If the firm is publicly owned, you can get financial reports.

How reliable is its customer service? Is a point which may seem contradictory. After all, you want to use an on-line broker to avoid having to call in trades, right? But at some point, you may need to call or visit a broker's office. Many people turned to the phone last fall, when heavy volume in the market caused big delays at many on-line firms. Every on-line brokerage firm should at least have a telephone access number. It is better if the on click and mortar broker also has a brick and mortar office. For example Charles Schwab, the biggest on-line brokerage house in the US , has 279 offices all over the country. Schwab guarantees that if an investor waits more than five minutes to trade on-line, he can go into a Schwab office and execute the trade for free. Find out what hours representatives are available. Some brokers offer around-the-clock support. E-mail a question and see how long it takes for a response. Similarly, call a brokerage on both light and heavy trading days and see how quickly you get through You can check on-line message boards to hear opinions and experiences from other on-line investors.

Sometimes brokerages will make available extra features for their best customers. If you're a large investor, certain perks can make a difference. For example some brokerage firms allow customers with a certain balance to access initial public offerings handled and distributed by the firm. Some brokerage houses charge less per trade, instead of the usual fee to customers who have accounts worth a certain sum or more, or those who trade at least 12 trades annually. It never hurts to ask what bonuses you are entitled to receive.

So remember as in every service – customer is king and you have the right to choose the service which suits you the best.

Aru Srivastava

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