What is a broker?

In financial markets, a broker is an individual or person who buys and sells financial instruments on behalf of an individual or corporate client. As a client agent, the broker is obliged to execute an asset transaction at the best price offered by the market.

Where have you heard of brokers?

Whether you're talking about finance or other markets, you 've probably heard the term "broker" before. Brokerage firms tend to release news whenever there is volatility in the financial markets. If you have ever invested in stocks or shares, you will almost certainly use broker services. Their role as facilitators of buyers and sellers makes them very important people in the financial system, thereby creating efficiency and liquidity in the market. Brokers or brokerage firms usually charge fees based on commissions, generally based on the customer's sales price or percentage of the purchase amount. However, some brokers charge a fixed service fee or a percentage on top of the fixed service fee.

What you need to know about brokers...

Brokers act on behalf of clients and must seek the best deal on their behalf. Some brokers are "execute-only", I .e. simply execute the client's instructions at the best price. Some brokers offer investment advice to recommend clients in areas of financial activity that may be highly rewarding. Some brokers offer discretionary portfolio management to make investment decisions without consulting clients.

In most jurisdictions, brokers are required to be professionally certified and regulated by regulatory authorities. However, regardless of the level of service provided, brokers must bear in mind that the interests of their clients are higher than their own.