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How to Get Good Stockbrokers In Nigeria

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Are there good stockbrokers in Nigeria?  How can I get one?  I hear people ask these questions very often.

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 the stockbroker.

By all means, there are many excellent stockbrokers in Nigeria and they are easy to find if you know how to go about it. This is what this post is all about: How to get good stockbrokers in Nigeria.


Stockbrokers play very significant roles in the stock market. 

Being an organised and regulated financial market, only individuals who are trained and approved by the stocke exchanges and the securities and exchange commission are allowed to trade in the stock market.  Stockbrokers are trained in securities trading and approved by the Nigeria Stock Exchange as dealing clerks.  This confers in them the privilege of being the only professionals in the investment trade that are allowed to buy and sell stocks on behalf of their clients.

Thus, while there are many other investment professionals, only the stockbrokers can buy and sell stocks and other securities on the floors of the stock exchange.  So whether you are an institutional investor or a small retail investor, you must go through the stockbroker to be able to buy and sell stocks in Nigeria.

Though with technology it is possible for a savvy individuals to trade stocks online, the reality is that these online platforms are owned and managed by approved stock broking firms whose responsibilities it is 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 stock broker 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 reform by the Securities and Exchange Commission, stockbroking firms are categorized into four, based on the scope of services they can render and levels of their capitalization. The three classifications are: sub-brokers, brokers, dealers and broker/dealers. 

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

A broker on the other hand, is a trading member of the stock exchange who is only authorized to trade on the floors of the stock exchange on behalf of investors but cannot trade on its own account. 

Conversely, a Dealer is also a member of the Stock Exchange but its authorization does not permit him to trade on behalf of investors.  Dealers can only trade on their own accounts.

Houses with the authorization of Broker/Dealers are trading members of the stock exchange who have the full authorization to trade on their own accounts as well as trade on behalf of investors.  So when you are looking for a stock broking firm to help you trade, you will probably be looking out for a firm with a  broker or broker/dealer authorization.

Also Read Why You Should Start Investing In Stocks Now

If you are dealing with a sub-broker you will have to ask to know which of the trading members of the stock exchange they represent and endeavour to do your own due diligent on the dealing member 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. 

Thus, a basic brokerage account will allow the broker 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 and business 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 tock broking house which the stockbroker represents and ensure that the is duly authorized by the SEC and NSE.

There are over 300 registered stock broking houses and you can get the full list from either the Nigeria Stock Exchange or the Securities and Exchange Commission websites.  On these lists you will found active and inactive firms with the contact addresses of their Chief Executive Officers.  You will also find 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, its goodwill, the caliber of its board and promoters and how structured the organization is.

3.  Technology and Research: You would want to deal with a stockbroker who 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 savvy 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 who are trained not necessarily in stock broking but with adequate investment management knowledge to be 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 while others will open with N5 million.  Stockbrokers use initial deposit requirement as a differentiation factor and to define sometimes their business model.  Brokers who are more on the retail side would open account for you with little amount of initial deposit while institutions adopting the wholesale model will open account with larger amount. 

So it is your duty to choose a broker with a model that serve your income bracket but know that the 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 and conduct necessary checks before deciding on the stock broker to entrust your investment with.

When discussing with a potential broker be on the look out for tale tale signs of unprofessionalism. A qualified stockbroker will always guide his uterances and actions because such behaviour may earn him sanctions by the regulatory bodies or an expulsion by the Chartered Institute of Stockbrokers which is the professional body for stockbrokers in Nigeria.

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


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Buchi provides small business owners with strategic, financial, and digital support to help them build strong, successful and profitable enterprises.

He is a Blogger at night and by day, Team Lead at Stalwart Investment Partners Ltd, a research, business and investment advisory firm.

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