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Broker

Person who arranges transactions between a buyer and a seller for a commission

A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent—one who acts on behalf of a principal party in a deal.

Definition

A broker is an independent party whose services are used extensively in some industries. A broker's prime responsibility is to bring sellers and buyers together and thus a broker is the third-person facilitator between a buyer and a seller. An example would be a real estate broker who facilitates the sale of a property.

Brokers can furnish market research and market data. Brokers may represent either the seller or the buyer but generally not both at the same time. Brokers are expected to have the tools and resources to reach the largest possible base of buyers and sellers. They then screen these potential buyers or sellers for the perfect match. An individual producer, on the other hand, especially one new in the market, probably will not have the same access to customers as a broker. Another benefit of using a broker is cost—they might be cheaper in smaller markets, with smaller accounts, or with a limited line of products.

Some brokers, known as discount brokers, charge smaller commission, sometimes in exchange for offering less advice or services than full service brokerage firms.

A broker-dealer is a broker that transacts for its own account, in addition to facilitating transactions for clients.

Brokerage firms are generally subject to regulations based on the type of brokerage and jurisdictions in which they operate. Examples of brokerage firm regulatory agencies include the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), which regulate stockbrokers in the United States.

Etymology

The word "broker" derives from Old French broceur "small trader", of uncertain origin, but possibly from Old French brocheor meaning "wine retailer", which comes from the verb brochier, or "to broach (a keg)".

Types of brokers==

Auto transport broker
Broker-dealer
Business broker
Commodity broker
Corredor Público
Customs broker
Data broker
Freight broker
Insurance broker
Intellectual property brokering
Inter-dealer broker
List broker
Matchmaking
Message broker
Mortgage broker
Pawnbroker
Power broker
Prime brokerage
Real estate broker
Shipbroking
Shipping agency
Sponsorship broker
Stockbroker
Office broker
Yacht broker

References

(2003). "Management of a Sales Force". McGraw-Hill/Irwin.
(March 5, 2019). "What is a Discount Broker?". [[Investopedia]].
JOHNSTON, KEVIN B.. (February 23, 2019). "Top 15 Broker-Dealer Firms in 2018". [[Investopedia]].
{{OEtymD. broker

Info: Wikipedia Source

This article was imported from Wikipedia and is available under the Creative Commons Attribution-ShareAlike 4.0 License. Content has been adapted to SurfDoc format. Original contributors can be found on the article history page.

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