Rashedul alam

Business

brokerage-firms-business

How to Open Brokerage Firms Business

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You may be interested in learning how to open a brokerage business firm if you have an affinity for this industry, a solid knowledge of the business and you feel comfortable negotiating deals that involve large sums of money. A Brokerage firms business sale and buy and for a percentage of the offer, negotiates their transactions. 

This is how brokerage firms help and intermediate in the purchase and sale of stocks and investments, take their respective commissions from those who buy or sell stocks. Whose commissions will depend on the sale or purchase and brokerage being the main factors for their commissions?

                     You may read also: Types of stocks and their characteristics

Different types component of brokerage firms business

  • Brokerage firm’s intermediary
  • What is the brokerage contract?
  • A general look
  • Stockbrokers
  • Brief history
  • Registered brokerage
  • The exchange of shares
  • Brokerage firms percentage
  • Brokerage firms can also conduct value-for-money transactions
  • Investment advisors
  • Knowledge of the market
  • Brokerage firms handle two types of accounts
  • Operation orders

Brokerage firm’s intermediary

 brokerage firms business

image source:  google image

Intermediary between buyers and sellers, to make the process of the operation easier.  In addition to offering customers a variety of investment instruments, they also offer advice. Stock brokers help their customers, the buyer or the seller, save time. Basically, brokers work as a representative of one or both parties. They are practical, at every step of the operation, and according to the best interests of both parties. Your profits come from commissions on the orders given, charging a percentage of the total value of each transaction or a flat rate

  You can read also: Four Profitable Business Ideas Very Creative And Simple As Brilliant

What is the brokerage contract?

 brokerage contract

image source: google image

Brokerage is a kind of commercial contract whereby a person called a broker, who must have knowledge in the market, is an intermediary to put in contact two or more people, with the objective of celebrating a commercial business, without being bound With the parties, since its fundamental role is to be a simple intermediary to facilitate the rapprochement of the parties.

A general look

Brokerage firms perform the same services as individual brokers, acting as intermediaries in various stock transactions. Stockbrokers offer three core stock-related services to their customers: they buy and sell stocks; Advise their clients on what actions to buy or sell; And can carry out transactions on behalf of the customer, if authorized by the customer.

Stockbrokers

Brokerage Firms Business

image source: google image

Brokerage firms use stockbrokers, individuals who perform the transaction of specific stocks on the stock exchange floor. In the United States, before these companies can hire stockbrokers, they must pass the General Securities Representative Exam. Brokerage firms and brokers are regulated by the government

Brief history

In 1790, the first stock exchange of the United States was founded in the city of New York. Originally, transactions were mainly between banks and companies; The companies sold shares in order to increase the capital of the banks without having the hassle of obtaining a loan.

Registered brokerage

In the 1820s, people began to invest in stocks and companies also began to trade with each other. Stockbrokers and brokerage firms were formed as a way to professionally mediate these transactions. Today, the law requires that all stock transactions be carried out with the help of a registered brokerage firm or an independent broker.

The exchange of shares

Traditionally, brokerage firms have obtained the majority of their gains from brokerage transactions. Companies act as legal representatives of their clients on the stock exchange.

Brokerage firms percentage

The client of the brokerage firm informs the company about the shares he wants to buy or sell, how many shares and, at what price. The brokerage firm sends a broker who performs these functions on behalf of the client. The company receives a percentage of this sale as its share. If the transaction loses customers’ money, the brokerage firm also loses money.

Brokerage firms can also conduct value-for-money transactions

 Buying or selling shares of their own company. In this case, the company decides what stocks it would like to invest and sends an agent to the floor of the stock exchange to perform the same operation as if it were a customer.

Investment advisors

Brokerage Firms Business

image source: google image

Brokerage firms can act as financial and investment advisors. In this role, the company studies the client’s immediate financial needs and long-term financial goals. The company designs an action plan advising the client on what actions to buy or sell. The brokerage firm leaves the final decision to the client. For this service, the company usually charges a fee.

Knowledge of the market

Brokerage is a kind of commercial contract whereby a person called a broker, who must have knowledge in the market, is an intermediary to put in contact two or more people, with the objective of celebrating a commercial business, without being bound With the parties, since its fundamental role is to be a simple intermediary to facilitate the rapprochement of the parties.

Brokerage firms handle two types of accounts

Advisor account:

In which the agent can only make a limited number of investment decisions without consulting the investor. These decisions have to be in accordance with the objectives established by the investors.

Discretionary account:

In which the broker is more independent, and is allowed to make decisions without having to consult others. The investor gives the broker the right to make meaningful investment decisions without his permission. These also have to do according to customer’s stated investment objectives. Brokerage houses must be authorized by the Securities and Exchange Commission to buy and sell securities for their clients and own accounts.

Operation orders

Stock brokers come in a large variety, either small businesses or large companies with offices around the world. Brokerage firms can work from commodities and bonds to finding a food source for a restaurant manager. And now the operation orders can be by phone or online.

Therefore, when operating through the bank that has been chosen, that entity must transfer the transaction to its broker. This usually a company of the bank that finally moves to us will be the stock exchange fees, broker and bank commissions, so That some experts advise to carry out the operations directly through a broker being able to avoid saving the commission something that finally our pocket will thank us.

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Author: Jack726

Freelancer

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