How to Get A Good Stockbroker In Nigeria

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How can I get a good stockbroker in Nigeria? This is a question I get often in the course of my work. Many would be investors  are reluctant to start investing in stocks because of the sad stories they have heard about dishonest stockbrokers. Unfortunately, it is not possible to trade stocks without them.

By all means, yes! There are many excellent stockbrokers in Nigeria and they are easy to find if you know how to go about it. How to get good a stockbroker in Nigeria is what this post is all about.


Stockbrokers play very significant roles in the stock market. 

It is an organized market.  Hence, only individuals who are trained in securities trading and approved by  the relevant financial authorities are allowed to buy and sell stocks at stock exchanges.   In Nigeria, stockbrokers are registered by the securities and exchange commission  and admitted by the Nigeria Stock Exchange as dealing clerks. 

Of course,  there are many other investment professionals, such as investment advisors, financial advisors and fund managers. But only approved stockbrokers can buy and sell stocks and other securities on the floors of the Nigeria Stock Exchange.  So to buy and sell stocks in Nigeria, you must do so through a stockbroker. 

Nowadays online trading is becoming popular. However, the reality is that these online trading platforms are owned and managed by approved stock broking firms.  And it is their responsibilities to account for the trades and see through its settlement. 

So whether you are trading online or offline, you will need a stockbroker. The choice of a stockbroker is perhaps, the first most important decision you have to make once you decide to invest in stocks.


Usually stockbrokers are associated with stockbroking firms.  While the stockbroking firms are the dealing members of the Nigeria Stock Exchange.   Individual stockbrokers are registered and approved as dealing clerks by the Exchange.  Sometimes people talk about the stockbroking firms as stockbrokers.  Thus, the terms are often used interchangeably.

Going by the recent reforms by the Securities and Exchange Commission, stockbroking firms are categorized into four. These categorization are based on the scope of services they can render and levels of their capitalization. The three categories are: sub-broker, broker, dealer, and broker/dealer. 


This is an approved market operator who is only authorized to act as an agent to a dealing/trading member of the stock exchange.  A sub-broker assist investors to buy and sell shares through a Trading Member.


A broker  is a trading member of the stock exchange who is only authorized to buy and sell stocks on behalf of its customers. Thus, a broker can only trade on behalf of investors but cannot buy and sell for himself.


A Dealer is also a trading member of the Stock Exchange. But dealers can only trade on their own accounts, i.e buy and sell for themselves only.  They are not permitted to buy and sell stocks on behalf of investors.


Houses with Broker/Dealer authorization are trading members of the stock exchange who have the full authorization. They can  trade on their own accounts as well as trade on behalf of investors.  

Also Read Why You Should Start Investing In Stocks Now

What This Means:

If you are dealing with a sub-broker you will have to ask questions. You want to know which of the broker or broker/dealer they represent and do a due diligence on the firm. The difference between one stock broking house and the other lies in their individual credibility ratings and the quality of their services. 

Some stockbroking houses somehow try to differentiate service levels by offering different account management types. For instance, a basic brokerage account will allow the stockbroker to execute your mandates on the floors only, while a premium account gives you access to investment advice, research information and guidance. 

But generally, most stock broking houses provide their clients with free market reports, stock recommendations, basic economic, and market intelligence.


There has been reported cases of fraudulent practices by stockbrokers and this is the reason you have to be very careful when choosing one to handle your transactions. 

In choosing a stockbroker or a stockbroking firm to carry through your trades, settle for one that meets the following criteria.

#1. Registration of the stock broking house 

I have said earlier that stock brokers are usually employed by stock broking houses. So the first step is to identify the stock broking house which the stockbroker represents and ensure that he is duly authorized by the SEC and NSE.

You can get the full list of stockbroking firms in Nigeria from the websites of SEC and Nigeria Stock Exchange. There are over 300 registered stock broking houses in the country.   On these lists you will found active and inactive firms with the contact addresses of their Chief Executive Officers.  You will also find a list of firms that have been suspended from trading and those that have been delisted for various reasons.

One sure of way you can use to get a good stockbroker in Nigeria is through referrals.  Ask people you know who have been dealing with stockbrokers to recommend the houses they have used and thereafter conduct your own due diligence.

#2. Credibility

In recent times there have been reports about stock brokers who engage in unprofessional, unethical and sometimes outright fraudulent practices. The Securities and Exchange Commission, The Economic and Financial Crimes Commission, The Special Fraud Unit of the Nigeria Police, the law courts and even the Investment and Securities Tribunal have been inundated with cases against stockbrokers at a time. 

Common amongst the complaints  against stock brokers in Nigeria include conversion of clients funds, non-execution of mandate and unauthorized sell of clients stocks to mention but a few cases.  It is therefore important that you ascertain the credibility of the stock broking house you intend to deal with before giving your mandate to such a house.

Factors that may guide you include the age of the institution, its standing in the Nigeria Stock Exchange and its goodwill.  Other factors you may consider are the caliber of its board and promoters and how structured the organization is.

3.  Technology and Research 

You would want to deal with an institution that has functional online platform that will enable you check and track your transactions, view your account, place orders and access useful information regarding your portfolio from remote locations without necessarily visiting their offices or being in physical contact. 

Some houses have technology platforms that enable their clients to trade on their own from the comfort of their homes and offices.

In addition to functional technology infrastructure, stock market investments thrive on timely and useful information.  Therefore when considering a stockbroker you may want to ascertain their research capabilities.  How often do they send market information to their clients? Do they offer investment tips with regards to performance of quoted companies? Can you rely on them to distill economic data and predict the direction of the market?

Yes, you could do your own research as most of these data are available on the website of the Nigeria Stock Exchange but you will certainly benefit from the expertise of market operators whose engagement daily form part of the market story i.e. the stock broker.

4. Accessibility

Is your stock broker reachable?  Is he available to discuss your portfolio when there is need? Is he willing to answer your questions? These are very important because the more you are able to engage personally with your stock broker, the better for your investing experience. 

Some stock broking houses satisfy this requirement by engaging full time relationship managers with adequate investment management knowledge.  They re able to relate with customers, answer questions on their portfolio and also offer simple investment advice.

5. Cost 

Though transaction charges are as prescribed by the securities and exchange commission and the Nigeria Stock Exchange, stockbrokers often charge for value added services given to their clients. Some may charge you for account opening processes, others may open account for you free.  Some charge you for certificate dematerialization processes, others may not or may charge little amount to cover cost of stationary.  Initial deposit requirements differ amongst stockbrokers. 

Some stock brokers would open account for you with as little as N5,000 or even less.  However most of the top stockbroking firms in Nigeria will only open account with N5 million.   

So you can choose to deal with a firm that serve your income bracket.  This initial deposit which is either in cash, stock portfolio or a combination of both is used primarily to trade for you.


The stock broker is very important agent in stock investing processes.  Your experience can be fulfilling if you make the right choices or sad if you are unfortunate to work with an unprofessional broker. I suggest that you take your time; do your research, ask for and get referrals.  Conduct necessary checks before deciding on the stock broker to entrust your investment with.

Watch out for signs of unprofessionalism when discussing with your stockbroker. A qualified financial professional will always guide his utterances and actions.  This is because he understands that such behaviour may earn him sanctions.  Or an expulsion by the Chartered Institute of Stockbrokers which is the professional body for stockbrokers in Nigeria.

Now that’s from me.  Do you have other ideas? Please share with us your experiences with stockbrokers, good bad or ugly.


Buchi creates content and leads the Team at Kobotalk Management Services; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.

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