The internet has transformed the way people buy and sell stocks. While people can trade from home, many do not have the time or the knowledge to execute trades on their own. That can make it difficult for people to focus on wealth creation. If you feel you cannot manage the share market on your own and would like a professional to assist you, you should take a closer look at how a full-service demat account can help you in your investment goals.
Finding out how a full-service broker can work to your advantage will allow you to weigh the pros and cons and decide if it is the right choice for you.
What is a Demat Account?
Before learning more about a full-service broker, you should know what is a demat account. That will help you understand why this account is essential to your financial health and wealth creation.
Demat full form is dematerialization. A demat account stores the electronic form of the shares and other financial instruments that you purchase. You need a demat account if you are going to buy and sell shares. Your account and the brokerage that you use will be regulated by SEBI.
It is not time-consuming to open a demat account. You can get an instant demat account using an online brokerage house. The digital KYC used by the broker will enable real-time verification, allowing you to open your demat account within minutes.
Understanding Full-service Demat Account
You would need to collaborate with a full-service broker to have a full-service demat account. As the name suggests, the broker will not only manage your investment portfolio but will also offer financial investment advice, tips, tax planning, retirement planning, and more.
Here are some of the advantages why you should opt for a full-service demat account:
Portfolio Management:
When you have a full-service demat account, the broker will not only help you buy and sell shares so that you can create a great portfolio to spread your risks. Your account manager will keep revisiting your portfolio to align it with your changing financial goals. That will ensure you are always achieving these goals and creating new ones.
Financial Planning:
You will have goals when it comes to your investment. A full-service demat account will enable you to accomplish those goals. The account manager will understand the goals for your investments and then use their expertise to help you achieve them in the quickest and safest possible manner.
Enjoy Access to Additional Investment Opportunities
The Indian stock market offers numerous investment opportunities besides stocks. A full-service demat account is perfect for those looking to invest in IPOs. Rather than trying to get IPO allotments on your own, you should go through a full-service demat account. You stand a better chance of getting the number of allotments you want through your broker when you have a full-service demat account. In addition, you will be among the early birds to know about upcoming IPOs and can choose the ones that fit into your investment goal. Your broker will do the remaining so you do not have to be stressed about it.
Functions
As per the mandates by the SEBI, no company can issue its shares in paper form; therefore, it is mandatory to open a demat account. Demat accounts functions include:
- Holding securities electronically: You receive digital securities reflected in your demat account when you invest in the stock market. There are no paper-based securities in the current online trading system.
- Security of your investments: Demat accounts protect your shares against any unauthorized transfer. You can hold your shares as long as you need to meet your financial goals. It will be safe in your demat account from any loss or damage, unlike physical share certificates.
- Quick transfer of shares: Demat accounts facilitate smooth and quick transfer of share ownership from one person to another through a secured process.
- Easy Transmission: In case of the demise of the shareholder, the beneficiary or nominee can receive those shares in their demat account without any hassle.
- Dematerialization/Rematerialization: It is the function of a demat account to change the format of share certificates from physical to digital or vice versa.
In Conclusion
A full-service demat account is more beneficial than you can imagine. Once you get the account, you will have a dedicated account manager, who will function as your financial advisor and cater to your investing needs. In addition, the account manager will keep aligning your investments to your goal to ensure optimal financial health and also to help your wealth grow. The investments that you do through your full-service broker will be based on your risk appetite and that prove to work to your advantage.
