10 Things to Check Before Opening a Trading Account

Knowing how to choose a broker is one of the most useful skills a new investor can build, because the platform you pick decides how safely your assets are held, what you pay year after year and which mistakes are easy to make. NeroxFinance does not rank or recommend firms. Instead, here are the ten questions to put to any broker, in roughly the order that matters. The first three can rule a firm out on their own.

1. Is the firm authorised where you live?

Look the company up on your national regulator's public register, for example the Financial Conduct Authority in the UK, the Securities and Exchange Commission and FINRA in the US, or ASIC in Australia. Search by the firm's exact legal name and registration number, then check that the website and contact details on the register match the ones you are using. Scam sites often copy the name of a real firm; the register is where that trick is exposed.

Also note which entity you would actually be a client of. Many groups have several companies in different countries, and clients from one place may be signed up to an offshore affiliate with weaker rules.

2. How are your cash and shares held?

Regulated brokers in major markets must keep client money and assets separate from their own. Ask where your shares are held, in whose name, and whether client cash sits in segregated bank accounts. Find out whether a compensation scheme applies if the firm fails, and up to what limit. Check whether the broker lends out client shares; some do, sharing part of the income, which adds a layer of risk.

3. Do the products match what you intend to do?

If your plan is to buy shares and funds and hold them, you need a platform that sells the real assets, not one built around leveraged contracts. Some platforms that advertise "stocks" actually offer contracts for difference (CFDs), where you never own the share. That is a very different product with leverage, overnight charges and no voting rights. Read the product description carefully.

4. What will it cost you, based on how you will invest?

Fee tables are designed to be hard to compare. Instead, write down what you expect to do in a typical year: how many purchases, of what size, in which markets and currencies. Then price that pattern at each broker. Include:

• dealing commission per trade, or the spread if "commission-free";
• an annual platform or custody fee, fixed or a percentage of assets;
• currency conversion charges on foreign shares;
• charges for transferring out, closing an account or inactivity.

Our guide to trading fees explained breaks down each one.

5. Which account types are available?

Tax-advantaged accounts can matter more than any fee difference. In the UK, for example, a stocks and shares ISA shelters gains and dividends within an annual allowance of £20,000 for 2026/27. Other countries have their own retirement and savings wrappers. Check whether the broker offers the account type you need, and whether you can hold the same investments in it.

6. How easy is it to leave?

You may want to move one day. Ask whether you can transfer holdings to another provider without selling them ("in specie"), how long it usually takes and what it costs. A platform that makes exit expensive quietly reduces your choices.

7. Are the order types and tools adequate?

For a long-term investor, basics matter more than advanced charts: limit orders, the ability to set up regular monthly investments, automatic dividend reinvestment, fractional shares if you invest small sums, and clear contract notes and annual statements. Test the demo or look at the help pages before opening anything.

8. How does the platform handle security?

Look for two-factor authentication, login alerts, withdrawal only to bank accounts in your own name and a clear process for reporting suspicious activity. Be cautious of any firm that asks you to install remote-access software or to share screens with a "support" agent.

9. Can you reach a human when something goes wrong?

Check the published support channels and hours, and whether there is a formal complaints process. In many countries, if a regulated firm does not resolve a complaint, you can escalate it to an independent ombudsman or dispute body; the firm must tell you how.

10. Does the marketing respect you?

Pay attention to how the firm sells itself. Retail CFD providers in the UK, EU and Australia may not offer bonuses or similar inducements. Warning signs include pressure to deposit quickly, promises of returns, "account managers" who call you unprompted and encouragement to raise leverage. A broker that behaves like a salesperson is telling you something about its priorities.

Questions worth asking the firm directly

Documents answer most questions, but a short written enquiry to customer support also tests how the firm treats people before they are clients. Useful questions include:

• Which legal entity will hold my account, and what is its registration number?
• Where are client shares held, and are they registered in my name or a nominee's?
• Is uninvested cash kept in segregated accounts, and do I earn interest on it?
• Do you lend client securities? If so, can I opt out?
• What is the total cost of transferring my holdings to another provider?

A clear, specific reply is a good sign. Evasive answers, pressure to deposit before replying, or a response that moves the conversation to a messaging app are not.

Where beginners commonly go wrong

The most frequent mistake is starting with the app rather than the firm: choosing a platform because its design is appealing or because friends use it, and checking regulation afterwards, if at all. The second is comparing headline commissions while ignoring currency conversion, which for someone buying overseas shares every month can easily be the larger cost. The third is signing up for a product that does not match the plan, such as leveraged CFDs when the intention was to own shares for years.

A slower, duller process protects you from all three. Spend an evening on the register, the client agreement and the fee schedule before you spend anything else.

Keep your own records

Whichever firm you choose, keep a simple file of your own: the legal name and register number of the firm, copies of the client agreement and fee schedule as they stood when you joined, contract notes for each purchase and sale, and annual statements. These records make tax returns easier, help if you ever need to complain or transfer, and let you check that charges on your statements match what you were promised. Download statements regularly rather than relying on continued access to an online account, since logins can be lost and firms can be sold or closed.

Putting the checklist to work

Use the ten points as a filter, not a scorecard. Any firm that fails points 1 to 3 should be dropped, however attractive its fees or app. Among the remaining firms, compare the cost of your realistic activity and the features you will actually use. Keep notes: the exact legal entity, the register reference and the date you checked. Revisit them once a year, because terms change.

If you suspect a firm is not what it claims, stop and read how to spot trading scams before sending anything.

Sources

• UK Financial Conduct Authority, Financial Services Register
• HM Revenue & Customs, ISA allowances 2026/27
• European Securities and Markets Authority, CFD product intervention measures