A broker is an expert in one or more financial products. They provide advice, insight, research and
access to the financial markets.
A brokerage is a legally licensed entity complying to its local financial regulatory body that
employs a broker.
Why use a broker?
A broker is an invaluable resource when it comes invesment matters such as when to buy and sell and
have access to several trading services such as stock borrowing. Especially for new market entrants
brokers are extremely important. They can guide you on what type of invesment account to open,
explain what risks are invloved with investing and help you to place your first trade. They will
have knowledge of why markets move in certain ways, understand a companies financial statements and
help you focus on your investment goals while sifting out the "market noise". They will quickly
understand your risk tolerances and explain which investment products would suit you allowing your
money to work for you sooner. When your financial professional understands your contraints their
asset selection will help you achieve your financial goals realistaically and allow you to sleep at
night.
A discount broker usually refers to the brokerage firm. Here you will be provided with budget
service, no advice and won't likely have a specific financial professional to help you find your
way.
A full serivce broker is generally a relationship with a specific broker at a brokerage firm. These relationships are long term and you and your broker will likely become friends and share personal financial information along the way. You will always receive premium service, have access and insight to what's going on with your account with your desigated broker and can always phone them up for any immediate needs. |
