Broker

Definition: A person, employed by a broker-dealer, who handles customer accounts and investments.  This includes recommending the specific investments customers should buy and sell. It can also refer to the broker-dealer firm as a whole.

Example: An account executive at Merrill Lynch calls her customer and explains that she and her firm have identified a company whose share price they believe will increase. She recommends that the customer purchase 100 shares of the company. After the customer approves of the suggestion, the broker makes the purchase for the customer.

Investeach explains: Brokers must pass the Series 7 exam to prove that they know what they are doing. They must also register with the industry’s self-regulatory organization (SRO), the Financial Industry Regularly Authority (FINRA) and follow all of its extensive rules and regulations.

The Internet has transformed the way people invest. There is an almost limitless amount of information available that people can use to educate themselves. The Internet has also made it possible to keep up with news and investment prices in real time. Finally, by accessing the web site of their broker-dealers, people can do their own investing while paying very low on-line commissions. Still, investing can be a complex, time-consuming and stressful activity that many people are only to happy to put in the hands of a good broker.

Riddle me this:

1. What qualifications must a person have to become a broker?
2. What organization has the most extensive set of rules governing brokers?
3. How has the Internet transformed the way people invest?

Also known as: Account representative, Account executive.

2017-08-30T23:17:13+00:00