A broker is a person (or organization) acting as an intermediary between two parties to a transaction. He acts in accordance with the instructions of clients, using their money in transactions, and receives a certain fee for his services: fixed, or expressed as a percentage.
Brokerage is required to be licensed. In addition to intermediary services, a broker can also provide consulting services.
Securities Market Broker
This is the most common specialization. This is due to the fact that a private individual cannot become a full-fledged participant in exchange transactions, according to the law, all operations must be performed through professional licensed brokers.
The main financial markets where securities, currencies, and other assets in demand are traded and where brokerage services are required are the stock exchanges and Forex (binary options can be considered a separate subspecies of it).
Brokers on stock exchanges are usually large companies that work closely with banks. Specialists analyze the market, identify its trends, and can provide advisory services regarding the planned transaction.
What other brokers are there?
A business broker provides intermediary services between a buyer and a seller of a business ready for sale. More often, brokers represent the interests of sellers, but buyers also seek to use the services of professionals in finding the best option, and with further transaction support.
Credit broker is an intermediary between the borrower and the financial institution. His services are appropriate:
when applying for consumer and business loans and loans;
to select the optimal loan scheme;
to accompany the transaction and negotiations with the creditor.
The leasing broker analyzes the market for services and establishes relationships between suppliers and transport companies, and helps to reduce transaction costs. The fee for services is paid by the leasing company.
A customs broker helps to simplify the delivery of goods to other countries or, conversely, from abroad. Its services make it possible to expedite the processing of customs documents.
A real estate broker prepares and executes the purchase / sale of a living space, or a lease transaction.
Features of work
The tasks performed by brokers and the size of their commission are fixed in the mediation agreement. It indicates the very subject of the contract, responsibility and rights of both parties, the timing of the task.
As a rule, under the terms of the contract, these intermediaries bear administrative responsibility, and if it is not fulfilled, they can be punished with fines or revocation of the license.
This type of liability is provided for insurance intermediaries, persons, specialists providing intermediary services in real estate, consultants – lawyers. In establishing the fact of fraud by the broker, a criminal penalty is imposed.