What it is
In financial markets, a broker is a licensed person or company that carries out customers’ orders to buy or sell securities, like stocks.
Brokers act as middlemen between investors and the exchanges where trading happens. They typically charge commissions for their services.
What it means for you
When investing in stocks, you’ll need the help of a licensed broker to execute trades on your behalf.
You can’t buy stocks directly on your own because stock exchanges only allow authorized members or trading participants to carry out orders.
Brokerage services may offer other investment products such as bonds and pooled funds. Some brokers also give customers additional support through recommendations, market research, news, and other investing tools and services.
Before choosing a broker, you should check whether they’re legitimate, offer the products and services you need, and charge reasonable commissions and fees.
There are different types of brokers depending on the assets they offer and the industry they belong in, such as real estate brokers.
