What questions should I consider when choosing an online broker?

Online brokers are the new way to efficiently buy, sell, and trade stocks, so what questions should you ask yourself and the broker before you choose them to be your online broker? You will want to know how well they will serve you, and you can't do that without answering some questions.

1. Questions about Cost:
Questions to Ask Yourself
Do I understand exactly what I'm paying for? Am I interested in trading stocks and bonds, and mutual funds, or just one of these? How important is access to advice? Or in other words, how much advice do I need? How often will I want to trade? (If you can't answer these questions then it won't matter what the broker says, you won't know which one to choose. Knowing what you need from the broker, and what you are willing to pay for it is what you should consider first when choosing an online broker.)
Questions to Ask a Broker
How are you compensated? What are your fees and/or commissions? What do those fees and commissions cover? Are there any hidden fees? If my account grows or contracts, how will your fees change? (Knowing exactly what your relationship with this online broker is going to cost you helps you to make an informed, and educated decision about whether or not this is a broker you can use, and most importantly-afford!)

2. Questions about Balance Requirements:
Questions to Ask Yourself
How much do I have to invest today? How much will I have to invest over time?(Some online brokers have minimum balances, and if you do not have enough to invest to fill those balances, then don't waste your time on the broker)
Questions to Ask a Broker
What kind of service do I get for the amount I'm investing? What is the minimum investment you require? What happens when I drop below the minimum? Do you have different benefits for different size accounts? What happens to my costs as my balance increases? (Depending on how much you have to invest, and how much you intend to invest in the long run, the differences in price can be quite substantial, so make sure you get these answers.)

3. Questions about Products and Services
Questions to Ask Yourself
Are there certain products or services I consider mandatory? What am I basing these requirements on? Do I know what types of investments I want? If not, how/where can I get information? Am I consolidating finances from multiple accounts and need to roll over certain types of investments? Am I considering any non-investment services, such as insurance or estate planning?
Questions to Ask a Broker
Can I buy investments from other companies through you? What types of investments do you offer? Are there limitations to what you offer? Beyond investment products, what other services do you offer? Can I look at all of my accounts and services in one place, so I can easily see how my whole portfolio is doing? (Knowing what kind of products and services you want, vs. how many and what kinds they offer can really help you weed out the online brokers that you can't use.)

4. Questions about Help and Advice
Questions to Ask Yourself
What kind of advice am I looking for, and how often will I need it? How do I want to pay for this advice, one time, ongoing, per hour?Is the fee worth it to me? Will the broker take time to learn about me before giving me advice so that it reflects my goals and situation? What do third-parties say about advice from this firm? Which is more important to me: paying for advice as I need it, or having the cost included in other things I buy, e.g., trade commissions? Do I want the broker to be paid only when he buys and sells stocks on my behalf?Does that give him an incentive to push certain products?
Am I comfortable empowering an advisor to make investment decisions on my behalf?
How much time do I have to manage my finances and investments, and how much interest to do so? How much am I going to invest with this firm?
Questions to Ask a Broker
What kind of advice do you offer? How can I get more advice when I want it? What exactly do you mean by "advice?" What do I really get? How do I pay for advice?What are your commissions and fees? What's your track record? What methodology do you use when recommending individual investments? How often will you recommend that I sell a security? How do you get paid when you are providing me advice on my portfolio?
What resources do you have to help me to be a better investor? (knowing how much advice you want, and how much you are willing to pay for it weeds out a number of online brokers.)

5. Questions about Reputation and Credentials
Questions to Ask Yourself
Who are three people I trust to give me an honest assessment of the firms they have worked with? Do I feel comfortable with the capabilities of the firm?
Do I feel comfortable with the knowledge and experience of the individuals I would be working with, if applicable? Do I need to work with a more established firm to feel secure?
Questions to Ask a Broker
Do you have an investment banking or other non-consumer business? How does it affect your consumer business? Do brokers in the firm independently give advice, or are they guided by a firm philosophy? What is the investment philosophy? Are all your representatives licensed brokers? How long have you been in business? How many clients do you serve? What is the average account size? What are you doing to keep my personal information and assets safe? (getting leads from friends and family is a smart way to get a good online broker, but it is also important to find out what other people think of them, and what they do to maintain a high level of customer satisfaction.