A broker is an individual or firm that acts as an intermediary between investors and the securities markets. They are licensed professionals who buy and sell stocks, bonds, options, and other securities on behalf of their clients.
Brokers can be divided into two main categories: full-service and discount. Full-service brokers provide a wide range of services such as financial planning, portfolio management, and research, and they typically charge higher fees than discount brokers. Discount brokers, on the other hand, offer a more limited range of services, and they charge lower fees.
The main role of a broker is to facilitate the buying and selling of securities on behalf of their clients, they do this by executing orders and providing market information. They also provide advice to their clients on which securities to buy and sell, and they are also responsible for keeping records of transactions and maintaining clients’ accounts.
In addition to traditional brokerage firms, there are also online brokers, also known as digital or robo-advisors, that allow individuals to trade securities over the internet. They typically offer lower fees and are geared towards self-directed investors who prefer to do their own research and make their own investment decisions.
It’s important to note that before choosing a broker, investors should carefully consider their investment objectives, risk tolerance, and financial situation, as well as the services and fees offered by the broker. Additionally, it’s important to ensure the broker is registered and regulated by the relevant financial regulatory bodies.