{"id":2554781,"date":"2025-03-13T07:00:08","date_gmt":"2025-03-13T11:00:08","guid":{"rendered":"https:\/\/www.valuewalk.com\/?post_type=guides&p=2554781"},"modified":"2025-07-29T07:12:00","modified_gmt":"2025-07-29T11:12:00","slug":"broker","status":"publish","type":"guides","link":"https:\/\/www.valuewalk.com\/investing\/broker\/","title":{"rendered":"What Is a Broker?"},"content":{"rendered":"\n
\"What<\/figure>\n\n\n\n

A broker is an individual or firm that\u2019s involved in the buying or selling of assets for investors.<\/strong> These can include stocks (equities), bonds, exchange-traded funds (ETF), mutual funds, and other products.<\/p>\n\n\n\n

Explains the Broker Meaning<\/span><\/h2>\n\n\n\n

The most accurate broker definition is someone who is authorized to act as an intermediary between investors and exchanges. Their job is to buy and sell assets \u2013 often stocks \u2013 on behalf of their clients. However, some of these brokers will also give investment advice as part of their service.<\/p>\n\n\n\n

In addition, there are discount brokers, including online platforms<\/a>, that enable investors to complete financial trades without such advice. These will generally be considerably cheaper.<\/p>\n\n\n\n

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What Does a Broker Do?<\/span><\/h2>\n\n\n\n

It depends on the services they offer. Typically, a broker will carry out someone\u2019s instructions to either buy or sell certain investments. However, some brokers can make recommendations, suggest investment strategies, and even monitor the performances of assets.<\/p>\n\n\n\n

These providers are often referred to as full-service brokers and are favored by investors wanting more advice and support with their financial needs. However, the more services required, the more you\u2019ll pay.<\/p>\n\n\n\n

How Does a Broker Make Money?<\/h3>\n\n\n\n

Brokers are typically paid a commission every time an asset is bought or sold, according to the US Securities & Exchange Commission. \u201cYou may pay other fees and costs related to servicing your account and the investments that you buy, sell or hold,\u201d it stated.<\/p>\n\n\n\n

This can be a lucrative industry. According to the US Bureau of Labour Statistics, the median salary for a broker in the US stood at $67,480 in 2022. This equated to $32.44 per hour.<\/p>\n\n\n\n

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US Bureau of Labour Statistics<\/figcaption><\/figure>\n\n\n\n

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In the UK, meanwhile, average annual salaries range from \u00a324,000 ($30,244) for someone just starting out in the industry to \u00a3125,000 ($157,525) for an experienced practitioner, according to the National Careers Service.<\/p>\n\n\n\n

Do You Need a Broker?<\/h3>\n\n\n\n

The answer is yes \u2013 and no. You don\u2019t need an advice-giving broker who will charge you a fee for accessing their services. However, you will require a brokerage system of some description to complete investment transactions.<\/p>\n\n\n\n

The final decision will depend on your investment experience, knowledge, and confidence, as well as your trading requirements.<\/p>\n\n\n\n

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How to Find a Broker<\/span><\/h2>\n\n\n\n

There is no shortage of investment brokerages, but how do you find the best brokers for your needs? There are a few steps to consider.<\/p>\n\n\n

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<\/span>Decide What You Want From a Broker<\/div>
What do you need from your broker? Are you looking to trade particular assets? Is your aim to trade the odd stock, or are you looking for more of an advice-led service? Put together a list of potential brokers that can cope with these demands.<\/div><\/div>\n
<\/span>Make a Shortlist<\/div>
The next step is finding out how much these services will cost \u2013 and compare rival brokers. Are there limitations with certain providers? Research to see what existing users have to say about the services of the various brokers on your list. <\/div><\/div>\n
<\/span>Background Checks<\/div>
You need background checks on your shortlist. It\u2019s very simple to set up a professional-looking website and easy for would-be investors to fall victim to fraudsters. Check they are licensed, depending on where you live. For example, in the US, you can perform a quick check on investor.gov. <\/div><\/div>\n<\/div>\n\n\n\n
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Discount vs. Full-Service Brokers<\/span><\/h2>\n\n\n\n

There are different types of brokers. Choosing which is most suitable will depend on your experience and investment needs. Here is our table showing the benefits of both full-service and discount brokers.<\/p>\n\n\n\n

Full-service brokers<\/strong><\/p>\n\n\n\n