broker

Broker

1. An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

2. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.

3. A licensed real estate professional who typically represents the seller of a property. A broker's duties may include: determining market values, advertising properties for sale, showing properties to prospective buyers, and advising clients with regard to offers and related matters.

Notes:

Traditionally, only the wealthy could afford a broker and access the stock market. The Internet triggered an explosion of discount brokers brokers that let you trade at a smaller fee, but don't provide personalized advice. Because of discount brokers, almost anybody can afford to invest in the market.

See also: Agent, Analyst, Broker-Dealer, Churning, Cold Calling, Contra Broker, Dealer, Dialing and Smiling, Discount Broker, Front Running, Full Service Broker, Market Maker, Principal, Registered Investment Advisor (RIA)

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Broker

An individual who is paid a commission for executing customer orders. Either a floor broker who executes orders on the floor of the exchange, or an upstairs broker who handles retail customers and their orders. Also, person who acts as an intermediary between a buyer and seller, usually charging a commission. A "broker" who specializes in stocks, bonds, commodities, or options acts as an agent and must be registered with the exchange where the securities are traded. Antithesis of dealer.

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broker

1. An individual or a firm that brings together buyers and sellers but does not take a position in the asset to be exchanged. Some observers believe a broker provides an unbiased opinion on a security since there is little self-interest involved in the transaction. Compare dealer.

2. See registered representative.

What should I look for in a broker?

When interviewing prospective brokers, you should look for one with a clean NASD record, great referrals, and stability in his or her business. In addition, he or she should not be transaction oriented but should instead be concerned about your values and goals and be willing to realize that the best trade may be no trade. In summary, you should look for a financial advisor rather than just a "broker."

George Riles, First Vice President and Resident Manager, Merrill Lynch, Albany, GA