Brokerage House (Brokerage Firm) Definition

Definition

The word brokerage house identifies your business that charges a commission for facilitating a number of investment and financial services. During their stockbrokers, brokerage houses enable investors to purchase and sell publicly traded securities such as bonds and stocks.

Explanation

Also known as a brokerage business, a brokerage house provides services to its own clients who want to trade stocks, bonds, and other securities. In exchange for providing such services, the business charges a rather compact commission. The brokerage house can additionally use a team of analysts that provide tips to investors. Besides trade solutions, like easing the buying and sale of securities, brokerage houses may also supply loans to licensed investors to buy securities on margin.

Depending on the investor’s comparative understanding of the various marketsthey could Pick from the number of brokerage houses, such as:

  • Full Service Brokerage: the prices charged by these firms is going to probably be comparatively high since they offer their customers a broader number of services like estate planning, tax information, and security investigations.
  • Discount Brokerage: the prices charged by these firms will probably likely be relatively low due to their main support offering is the buying and sale of securities. To keep costs low, a number of those firms connect to their customers via the corporation ‘s internet site. Investment information is going to likely be limited.
  • Online Brokerage: those firms compete for investors by simply charging low trade fees. Customers can put sell and buy orders via the business ‘s internet site. Inorder to maintain cost , these firms tend not to apply analytic staff or offer investment information.