How to Identify a Reliable Online Brokerage in Hong Kong

How to Identify a Reliable Online Brokerage in Hong Kong

Hong Kong is one of the leading financial markets in the world. The Stock Exchange of Hong Kong Limited (SEHK) is ranked 5th globally and 4th in the Asian content in market capitalization.

There are different online brokerages in Hong Kong that have specialized in different market specializations.

However, it is recommended you seek help from the  best online brokerage in Hong Kong before venturing into online trading.

If you want to trade stocks in the country, most Hong Kong online brokers suggest you trade on the SEHK since most of the largest Chinese companies are listed there.

However, you cannot trust all online brokerages. This article discusses how to identify a reliable online brokerage.

Tips How To Find reliable online brokerage.

1. Secure Brokerage Website

You should ensure the online brokerage website is secured before trading with them. A secure website reflects the business; it gives clients trust and is also vital in search engine optimization strategy.

A secured website will ensure that your financial information and details are secured by encrypting the data exchanged between the host website and your internet browser.

If there is a red warning triangle next to your online brokerage website’s URL, avoid it or proceed with caution. This warning symbol means that the website is not secured with Secure Sockets Layer (SSL).

It is wise not to send any private or personal information to such sites since there is no protection for your details. If possible, avoid the brokerage at all. Making secure online payments should be paramount for all brokerage.

A reliable online brokerage should implement security tools such as the SSL and one-time passwords that assure confidentiality of the data transmitted and secure your account.

2.  Availability Of Reliable Payment Channels

The growth of online brokerage has made online payments a necessity. However, online payment has made customers and companies vulnerable to hackers and scammers.

Ensure your online brokerage uses the services of top-rated online payment service providers. You must answer the following questions before selecting the brokerage site.

• Access –

What authentication measures do they have? e.g., e-certificate or passwords. What other alternatives does the brokerage have to place your orders and receive your money if there is a network breakdown?

• Order Flow –

What are the available order types? E.g., limit order or market order. Are there limitations on the order sizes, i.e., the Hong Kong dollar amount or lots size?

How do you know the status of your order and get the confirmation? Will the order be accepted only during the working hours or 24 hours a day?

• Processing Time –

What time does it take to deposit and withdraw your cash? Knowing the processing time will ensure your plans are not interrupted and that you are aware of each procedure’s time.

3. Check their Registration with Authorities

Before selecting an online brokerage , find out whether it is registered with the governing body. A registered company guarantees that your information and your transactions are secured.

There will be no chance of paying money to the broker, and days later, the website has disappeared.

All online brokerages in Hong Kong must be licensed by the Securities and Futures Ordinance (SFC) stated in Chapter 571 of the laws of Hong Kong.

Make sure the SFC licences your online brokerage. To check whether they are registered, visit the SFC website.

Even the banks carrying such operations must be registered with SFC. If a firm is not registered with the SFC, you should avoid their services.

• The Type of Services Offered

Online brokers are specialized in different brokerage activities. You should compare the services of various brokerages to find one that fits your needs.

• Level of Services –

Some online brokerages focus on the executions of orders only with limited value-added. They will not advise the clients but execute their orders.

Other brokerages provide additional services such as market news, advisory services, research materials, price quotes, analytical tools, and margin financing.

Depending on your experience and goals, you should choose a brokerage that will suit your needs.

• Service Access Channels –

Some online brokerage provides multiple channels such as hand-held electronic devices and wireless electronic systems for you to access their trading services.

4. Brokerage Fees

A reliable online brokerage must disclose its charges to its clients. These charges may include stock transfer chargers, brokerage commissions, divided collection fees, etc.

The online brokerage may also have various commissions rates for orders placed through various channels and trading different products.

The brokerage should provide the charges for the value-added services, e.g., research tools, price quote charges, etc.

5. Is the Website User Friendly?

It would help if you browsed through the brokerage website to understand how friendly it is. The market account and news should be easily accessible.

Some online brokerage will provide a demo account that takes you through the entire trading process before you open the account.

Do they have a hotline? How easy do you get assistance if something goes wrong? Do they promptly respond to chats and emails?

6. Check Customer Reviews

Looking at the previous customer reviews is the easiest way to identify a reliable online brokerage. Try looking online at the customer’s reviews on different brokerages.

However, not all online reviews are genuine. Additionally, if several users complain about the same thing, you will need to investigate.

Conclusion

Ensure you understand the firm you are dealing with when choosing an online brokerage. Make sure their services are in tandem with your investment needs and objectives.

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