Are we safe to keep big portfolios with a single broker?

[katezman]

Hello,

May be a Lame question.

I was wondering if our investments are safe to keep locked in stocks with a single broker say Emkay or Zerodha (ILFL)?

Emkay said that our stocks are safe with CDSL/NSDL and a broker actually will not hold them. So I was wondering if we have say 1 crore of investment in stocks, can a broker silently sell them off and make bukk out of our investment?

Also their opening booklet have so many terms they and make us sign on all of them seeking our agreement.

So I was wondering from experts here, if they have come across or heard of such incidents from renowned brokers such as Emkay, Zerodha, Geojit etc..

Thanks in advance.

 

[market oracle]

Hi there, yes what the brokers told you was right. But you should be careful which one to choose as small discount brokers like zerodha and others who copy them have made many mistakes in equity settlements. There was an incident where one famous discount broker (not mentioning name) forgot to add one zero to the holdings.. I spotted it fortunately amd got it corrected. So it is better to choose Emkay or other old brokers. In the alternative, you could keep re checking ur balance if u want to he with such small brokers. It depends on your approach. If you value safety first, choose a well known broker, else take risk of errors and other hassles with disc. Brokers.. There are some small ones who are good. Like RKSV securities. Your choice! Best of luck.

 

[market oracle]

I felt that it is not worth the risk. To save out a few hundred rupees

 

[cloudTrader]

To remain on the safer side just as a good investor diversifies the portfolio he/she should also choose to break up the investments with different renowned brokers.

There was an incident with a retired defense personnel where his portfolio worth lakhs of rupees was sold off by Motilal Oswal Securities without his knowledge. He had to fight a long battle through the consumer forum to get justice . In the process there was tremendous mental stress for him and he had to suffer a lot health wise.

The power of attorney which we sign in favour of the broker at the account opening time [mostly] gives an undue advantage to the broker for handling the portfolio. The fraud can be done through this POA agreement.

 

[osho343]

1cr ...........good one is sbi or hdfc the oldest and govt one............

 

[Biker]

Just dont give POA. If u already have than revoke it. No matter how hard your broker pressurizes u.. just dont sign it. Also SEBI has not made it mandatory.

Also the POA format of IL&FS (used by discount brokers mostly) is very open.. giving powers to sign forms, affidavits, etc and can transfer shares to any a/c of broker, etc... so dont sign ilfs poa especially.