So many people ask me this question that I can reply without much thought…..
Well to start with,
1. Do not open with a broker: I know how a broker used client A’s share to do a pay in for client B. It is a matter of relief that the shares were replaced next week, but this is FRAUD.
2. A bank has no advantage in fiddling with your shareholding at all, so chances are they will not fool around with your shares.
3. Whoever you open with please keep checking your statement.
4. If you are not going to buy or sell shares for say 4 months, request the service provider to freeze your account.
5. Most brokers will want you to open an account with them. In such a case open one account in a bank where you will keep your big long term holdings and one with the broker for trading.
6. A big reputed broker or a small not very reputed broker behave the same way under stress. Repeat.
7. Look at the costs too. My account is with a bank, and I think I am paying very high charges, but will live with that I think – resistance to change and afraid of needing to sign in 43 places.
8. Stock Holding is the only non bank non broker to give this service – and is not a bad choice at all. Has reasonable checks and balances and will be more careful than a broker.
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