A stockbroker is a financial market representative who operates in securities. Their main job role dictates obtainment of purchase and sale orders and implementation of the same. Market applicants or investors depend on their know-how and familiarity regarding market dynamics to invest in stocks and other investment options. Share brokers either work individually or as part of a brokerage firm.
A broker is officiated post their registration with a recognized stock exchange or by working for a brokerage firm. Such brokers impose a charge in the form of fee, commission, or mark-up. This charge widely differs from broker to broker. Some dealers charge a flat fee, while some levy a percentage of the securities value traded.
Joseph Scott Audia says that the share market brokers’ foray is dominated by discount brokers. This set of brokers has mustered extensive popularity owing to their low charges which make the security market more accessible to laymen. A key distinction between a discount broker and regular a stockbroker is that the latter is necessary to have a profuse knowledge of the market and has to go through difficult examination routines while these parameters are not compulsory for a discount broker.
The different types of share brokers are listed below –
- Traditional brokers provide a vast assortment of products and services to its customers. These services involve securities’ trading, investment advice, retirement planning, management of investment portfolio, taxes on capital gains, etc. Full-time stockbrokers charge a hefty commission, however, given the range of their services, such cost might justify.
- Discount stock brokers dominate the band of brokers. Along with their inexpensive nature, they also offer convenience to the laymen in terms of time and place utility. Investors with minimal disposable income can also start investing in the stock market through discount brokers. However, not all discount brokers offer the same level of expertise as a traditional broker and thus are a less profitable option for companies and individuals who can afford hefty investment corpus and costs.
Joseph Scott Audia says that the rise of online stock brokers and investment platforms is testimonial to the intensity of impact the internet has had over the stock market. Earlier, only high-end individuals could transact in the stock market by paying high charges to full-time brokers. However, after the ease in accessibility of stock market and share stockbrokers on the internet, the stock market has percolated to a much more convenient level.
The shift of the stock market has considerably elevated the volume of transactions which took place and also forged the way for start-ups and small-scale businesses to raise capital by releasing stocks in the market. The stockbrokers play a crucial role in aiding investors to handle in the stock market day in and day out.