WHAT IS A BROKER? MEANING & TYPES OF BROKERS ~ Pramod Bidiyasir

WHAT IS the BROKER? MEANING & TYPES OF BROKERS

What is the Broker

A broker is a person, firm, or a company that acts as an intermediary and performs financial transactions on behalf of another party.

A broker usually charges a fee or commission for the services you provide. In a normal routine, you can definitely come across one or the other form of broker. So, let's collect more information about several types of brokers, their functions and importance.

Brokers are an important element in the sale and purchase of financial instruments. They have the necessary tools to conduct business and are now a worldwide phenomenon. Such third-party intervention is voluntarily hired by a buyer or seller to conduct convenient transactions.

The combined AUM (assets under management) by some group brokers such as Mohra, Charles Schwab, Fidelity, Allied Investments, etc. was reported to be around $ 18.4 trillion by the end of 2019.

👉Who is a broker?

A broker is, usually, a middleman involved in a transaction between a person and a product or service. They are certified to provide that particular product or service to the client to meet their needs. They ensure that the customer gets the best value by guiding them throughout the process. In exchange for their services, a fee or commission is charged depending on the type of broker.

You must have heard about the brokers on the stock exchanges. However, the terminology is not limited to that. Brokers exist in financial markets, real estate, commodities and even art and antique markets. They cater to both individual and organization-based clients and are typically part of brokerage firms. They also exist, sometimes independently, with a license to transact in the market.

Do you know that the concept of 'broker' first began in the Roman Empire in the second century BCE in the time of Julius Caesar?

Anyway, the main duty of a broker is only customer-support. He helps you buy and sell securities ranging from equity, debt to currency and even insurance policies, and acts as your personal advisor during the entire process. Help does not end here. A specific broker also takes care of the after-sales services and keeps in touch with you. They often provide advisory and research services to help you make more informed decisions for future transactions.

If you feel that your broker is only charging for services and not providing you with insight, then it may be time to switch!

👉Different types of brokers:

Primarily, brokers can be classified into four main categories:

1.Stock Broker

Let's start with the basics. Stockbrokers are licensed intermediaries affiliated with specialized stock exchanges in the world who trade on behalf of investors. If you invest in the capital market in any form, then you must have used a stock broking firm to do the transaction. There are two types of stock brokers:

A) Full service broker

They serve one-on-one deals when it comes to trading in the securities market. Apart from providing a platform for trading, they also act as personal financial advisors and advisors. From buying and selling securities like mutual funds, IPOs, ETFs, currency, etc. to portfolio management and tax-saving services, a full-time broker covers it all for you.

They are usually money management companies or banking bodies with which a subsidiary branch of broking services is associated.

B) Discount Brokers

Discount brokers are less comprehensive broking bodies than full-service brokers. Their main focus is to provide you a platform to trade securities on the stock exchange and charge commissions or brokerage for the same. The services of the discount broker do not include advisory and consulting elements. However, they often provide free researched data and other educational materials to their clients.

Discount brokers are suitable for anyone who is just starting out on the stock market and does not want to pay high commissions for trading or likes to do their own research regarding securities.

2. Forex Brokers

The term foreign currency is a port of foreign exchange and exchange that facilitates the exchange of foreign currency. Forex brokers provide you with a platform to buy and sell foreign currency in the capital market. In the foreign exchange market, transactions are done in a pair of ways i.e. a pair of two different currencies are bought or sold at the same time.

Most forex brokers cater to retail clients. However, when they are associated with the banking parent body, they also serve institutional customers. Common currencies traded with foreign exchange brokers range from USD / EUR to USD / JPY and every second in between.

3. Mortgage Broker

A mortgage broker is someone who helps you when trying to get a home loan. He researches different interest rates offered by different banks to get you the best deal. A mortgage broker, however, should not be confused with mortgage bankers who provide their own funds for your mortgage purposes.

He acts solely as an intermediary between a mortgage lender and a borrower, helping them

to achieve mutual benefit. The purpose of a mortgage broker is to save your time and money during the process of obtaining a loan.

4.Real Estate Brokers

The job of a real estate broker begins after the mortgage broker ends (in some cases). After you have access to money to obtain a loan and purchase a property, real estate brokers work towards finding the perfect one for you. They will look for many homes keeping in mind your needs, choice and budget.

In addition to finding property, they also sometimes assist in legal contracts and transportation. The three interrelated and often confused between terms related to real estate brokers, ie real estate agents and realtors. Well, to illustrate it briefly, real estate brokers hire real estate agents to assist clients in the property buying process and are licensed members of the National Association of Realtors who are highly professional in the industry and are part of the Code Have to work accordingly. Of morality.

5. Insurance Broker

As the name suggests, an insurance broker is one who helps you when choosing the best insurance policy. These are certified individuals who have access to hundreds of policies and their extensive research. They advise you on the best price policy for your needs.

An insurance broker can also tailor customized insurance and risk mitigation policies according to your goals and risk appetite.

About

Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you