What is a broker? A broker is an independent person or a firm that manages, organises, and executes the financial transactions on behalf of the buyer or seller. You could also say that they are the third party facilitator of a deal between buyers and sellers. A broker would then charge commission in exchange for their services.
From a client’s standpoint, a broker usually advises you on the market condition, the products that you want to buy or sell by providing relevant data. A licensed broker can perform trades on your behalf, of course, with your consent. There are a few types of broker that you can find in the financial market, with stock brokers being the most common ones.
A stock broker is a professional trader that specializes in the stock/commodity market. They usually buy or sell shares on behalf of their clients, depending on which ones are the most favourable stocks for the clients. This is mostly because it is hard for individual investors to buy shares directly from the stock market due to certain requirements on approvals and permission to finalize transactions.
Next, credit brokers are professionals that deal with consumer credit. They provide services to clients that need help with loans or mortgages. Credit brokers essentially link someone who is looking to lend consumer credit (debtor) to someone who can provide it (creditor). Similar to credit brokers, leasing brokers are specialists in the field of leasing equipment, most commonly, cars.
Forex brokers, also known as retail forex brokers, are intermediaries that buy and sell currencies on behalf of their clients. They usually come in the form of a financial service company that provides a platform and access for clients to trade currencies. The advantages of having a forex broker are such as having 24-hour market access, the ability to speculate currency pairs all around the globe. Check out best broker forex vietnam for more information.
Moving on, in the real estate industry, they have real estate brokers too. The main role of a real estate broker is to search for buyers, sellers of real estates (e.g. houses, office buildings/lots, factory lots and shop lots). They are often mistaken as real estate agents but their roles are much more than that of an agent. Real estate brokers provide oversight and direction to their firm, supply the people and process so that agents can ensure that transactions for their clients can be carried out successfully.
Business brokers, also known as business transfer agents, are professionals that assist their clients in the matter of buying and selling businesses, usually small private businesses. They usually provide services of business valuation, due diligence, and handling discussions and negotiations between parties. This is because transferring a business is rather a complicated process. In order for a business to be successfully sold or transferred, the valuation of the business must be fair for both buyer and seller. The past records of the business’ accounts must also be organised because it will affect the future direction of the business (due diligence).
Therefore, it can be said that the role of a broker is important in the market because there are many rules and regulations behind a simple act of transaction or deal between buyers and sellers.