Open main menu

A brokerage firm, or simply brokerage, is a company that facilitates the trade of goods or services using either brokers, online marketplaces, or electronic trading platforms. Types of brokerage firms include stockbrokerage, commodity brokerage, mortgage brokerage, insurance brokerage, real estate brokerage, pawnbrokerage, business brokerage, joint venture brokerage, yacht brokerage, business brokerage, shipping agency, and travel agency.[1]

A discount brokerage is a firm that charges a relatively small commission, usually in exchange for offering less advice or services than full service brokerage firms.[2]

A boutique brokerage focuses on a smaller clientele base.

A broker-dealer is a brokerage firm that transacts for its own account, in addition to facilitating transactions for clients.[3]

Brokerage firms are generally subject to regulations based on the type of brokerage and jurisdictions in which they operate. Examples of brokerage firm regulatory agencies include the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), which regulate investment brokerage firms in the United States.

Brokerage firms are compensated via commissions, or in the case of mutual fund distributors, via mutual fund fees and expenses.[4]

ReferencesEdit

  1. ^ "Different Types of Brokers and Their Roles". National Association of General Merchandise Representatives. March 28, 2018.
  2. ^ "What is a Discount Broker?". Investopedia. March 5, 2019.
  3. ^ JOHNSTON, KEVIN B. (February 23, 2019). "Top 15 Broker-Dealer Firms in 2018". Investopedia.
  4. ^ CHEN, JAMES (December 6, 2017). "Third-Party Distributor". Investopedia.