Broker
A broker is an individual, and a brokerage is a firm with multiple brokers. The term 'broker' is often used to describe both. A broker or brokerage acts as a middle agent between an investor and a securities exchange. In financial markets, brokers (or brokerages) make trades - buying and selling assets -based on customer requests. They may also provide other financial or management services, like market analysis or investment advice. There are two main types of broker:
- Full-service brokers: Offer a range of services, including making trades and providing investment advice. Morgan Stanley, Goldman Sachs, Bank of America and Merrill Lynch are full-service brokers.
- Discount brokers: These lower fee brokers made trades for clients but typically do not provide investment advice. They focus on cost-effective trading. Some well-known discount brokers include Fidelity Investments, TD Ameritrade and Tastyworks
In the US, full-service brokers register as financial advisors with FINRA or the SEC, in Australia they register with Australian Securities and Investments Commission (ASIC), and in New Zealand, they register with the NZX or the Financial Markets Authority (FMA).
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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