Financial services brokerage firm
A brokerage firmor simply brokerageis a financial institution that facilitates the buying and selling of financial securities between a buyer and a financial services brokerage firm. Brokerage firms serve a clientele of investors financial services brokerage firm trade public stocks and other securities, usually through the firm's agent stockbrokers. The staff of this type of brokerage firm is entrusted with the responsibility of researching the markets to provide appropriate recommendations, and in doing so they direct the actions of pension fund managers and portfolio managers alike.
These firms also offer margin loans for certain approved clients to purchase investments on creditsubject to agreed terms and conditions. Traditional brokerage firms have also become a source of up-to-date live stock prices and quotes. A discount broker or an online broker is a firm that charges a relatively small commission by having its clients perform trades financial services brokerage firm automated, computerized trading platforms rather than by having an actual stockbroker assist with the trade.
Most traditional brokerage firms offer discount options and compete heavily for client volume due to a shift towards this method of trading. Other ways to lower costs for these brokers is by executing orders only a few times a day by aggregating orders from a large number of small investors into one or more block trades which are made at certain specific times during the day.
They help lower costs in two ways:. Since investor money is pooled before stocks are bought or sold, it enables investors to contribute small amounts of cash with which fractional shares of specific stocks can be purchased. This is usually not possible with a regular stockbroker. Many broker-dealers also serve primarily as distributors for mutual fund shares. These broker-dealers may be compensated in numerous ways and, like all broker-dealers in the United States, are subject to compliance with requirements of the US Securities and Financial services brokerage firm Commission and one or more self-regulatory organizationssuch as the Financial Industry Regulatory Authority FINRA.
The forms of compensation financial services brokerage firm be sales loads from investors, or Rule 12b-1 fees financial services brokerage firm servicing fees paid by the mutual funds. From Wikipedia, the free encyclopedia. Comparison of online brokerages in the United States. Retrieved 10 October British Columbia Securities Commission.
Thomas Smith 6 March Regulation of Investment Companies. Lexis Nexis Matthew Bender. Retrieved from " https: Brokerage firms Financial services. Views Read Edit View history.
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