brokerages

Brokerages are financial intermediaries that facilitate the purchase and sale of securities and other financial instruments between investors. They provide access to markets, execute orders, clear and settle transactions, and may offer custody and account services. Some brokerages also provide investment advice, research, and portfolio management, depending on their business model.

Brokerages vary by service level. Full-service brokerages offer financial planning, research, and personalized advice, typically with higher commissions. Discount or online brokerages emphasize self-directed trading with lower fees and streamlined platforms, sometimes offering limited research and educational resources. Clearing brokers settle trades for other broker-dealers and institutions. Some firms operate as hybrid models, blending advisory services with self-directed trading.

Products and services include equities, bonds, mutual funds, exchange-traded funds, options, futures, and margin lending. Many brokerages provide access to international markets, IPOs, and other specialized vehicles. Revenue arises from commissions or spreads, payment for order flow, interest on cash balances, margin lending, and various account maintenance or inactivity fees.

Regulation and protection: In the United States, brokerages are registered as broker-dealers with the SEC and FINRA and are generally members of SIPC for customer protection. They must comply with suitability standards, disclosure requirements, best-execution obligations, recordkeeping, and anti-money laundering rules. Regulatory frameworks differ by country but share similar aims of investor protection and market integrity.

Choosing a brokerage involves evaluating fees and commissions, product availability, platform usability, execution quality, research tools, customer service, and account features such as fractional shares, tax-advantaged accounts, and margin terms.