The basic online broking service is usually competent these days, but nothing is infallible and you should make what checks you can. If a trade is held up because of system failure or site upgrades, it is your money at stake.
Make sure that there is telephone backup, and make a note of the broker’s telephone number. Open a backup account with another broker, which will be useful for buying. For selling, it will be more efficient when you have paper certificates. If, as is more usual, you hold shares electronically, and you try to sell them through a broker through which you did not buy, your nominee holdings must be transferred, which creates an administrative hurdle.
Security issues are thankfully no longer the problem they were in the distant past. At the end of 1999, an online broker had a security failure, and clients could gain access to each other’s accounts. To avoid this risk, brokers use encryption, which ensures that the information passed between you and the broker online is scrambled. You can only make sense of the information by using the right encryption software and an individual key code. If, as is usual, your broker uses 128-bit encryption, which is the strongest kind, this aspect of security should not worry you.
Make sure that your broker has insurance in place to protect client accounts in case the firm should run into financial problems.
Your broker will have issued you with a password of your choice. Make it a nonsense word, using letters as well as numbers, and keep it secret. While you are in the secure part of your broker’s website, do not let anybody watch over your shoulder. Once you have completed a transaction, log out correctly. |
