What is a broker?
In financial markets, a broker is someone who buys and sells financial instruments on behalf of clients, who can be individuals or companies. As the agent of the client, the broker is obliged to get the best price available for the assets that are being traded.
Where have you heard about brokers?
Brokers make the news whenever there is volatility in financial markets. Keeping a cool head while investors are panicking is a key skill for brokers. Low-cost broking firms sometimes advertise their services direct to the public.
What you need to know about brokers...
Brokers act for their clients and must seek the best deals on their behalf. Some brokers are 'execution only', meaning that they simply carry out their clients' instructions at the best possible price. Others also offer investment advice, suggesting potentially fruitful areas of financial activity to their clients. Some offer discretionary portfolio management, making investment decisions without reference to the client.
In most jurisdictions, brokers need professional accreditation and to submit to a regulatory agency. But whatever the level of service they provide, brokers must always put their clients' interests before their own.