Broker
IntermediateA broker is a person or firm that arranges transactions between buyers and sellers in return for a fee or commission, without usually owning the asset being traded.
In financial markets, a broker acts as an agent. When you ask a broker to buy shares, they find a seller and execute the trade on your behalf at the best available price. They earn a commission or fee for this service.
Brokers exist in many markets. Stockbrokers handle shares and other securities. Insurance brokers help clients find suitable insurance policies. Mortgage brokers help borrowers find home loans. Real estate brokers help buy and sell property.
The key point is that a broker works for the client and does not take the other side of the trade. This differs from a dealer, who buys and sells from their own inventory and profits from the difference between buying and selling prices. Many firms act as both, which is why they are often called broker-dealers.
Brokers are usually regulated and may have a duty to act in their clients' best interests, depending on the jurisdiction and the service provided. Understanding how a broker is paid helps clients spot possible conflicts of interest.
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