Stock Broking

What Is a Stockbroker?

A stockbroker is a financial professional who executes orders in the market on behalf of clients. A stockbroker may also be known as a registered representative (RR) or an investment advisor.

Most stockbrokers work for a brokerage firm and handle transactions for a number of individual and institutional customers. Stockbrokers are often paid on a commission basis although compensation methods vary by employer.

Brokerage firms and broker-dealer companies are also sometimes referred to generically as stockbrokers. These include both full-service brokers and discount brokers, who execute trades but do not offer individualized investing advice.

Most online brokers are discount brokers, at least at their basic levels of service, in which trades are executed for free or for a small set-price commission. Many online brokers now offer premium-level services with higher fees. Investopedia maintains lists of the best online brokers and best robo-advisors to help you find a broker that fits your needs.

KEY TAKEAWAYS

1. A stockbroker is a financial professional who buys and sells stocks at the direction of clients.
2. Most buy and sell orders are now made through online discount brokers. This automated process reduces fees.
3. Wealthy individuals and institutions continue to use full-service brokers, who offer advice and portfolio management services as well as completing transactions.