Brokers - who are they? What does a broker do?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Everyone has used the services of a broker at least once, often without even knowing it. After all, brokers today are too tightly integrated into modern life, their services have become incredibly in demand. But not everyone knows who they are. Brokers are intermediaries between a client and a specific company or its representative, they can also work as a "middle link" between certain individuals. Their work is regulated by several legislative acts.

Now brokers have taken a firm place in the field of intermediary services, so many people turn to them for help, especially when they need to save time, but not money. They always take a small percentage of commissions for their services. As practice has shown, the best brokers are individuals or legal entities that provide a wide range of services at a low cost of work and prompt order fulfillment.

Field of activity of brokers

Depending on the economic field of activity, all brokers can be conditionally divided into the following groups:

• Financial brokers are persons who are engaged in financial intermediary activities related to the circulation of funds. These include stockbrokers (brokers), financial analysts, consulting companies and agencies.
• Non-financial brokers are persons who are not directly involved in the processing of financial flows, but can contribute to the active use of financial resources. This group includes real estate brokers, customs brokers, law firms, analytical advisory groups, other brokers.

Form of ownership of brokers

Depending on the activity of intermediaries, they may have a different form of ownership. The most common brokers are legal entities, most often private enterprises or joint-stock companies, that operate on a general taxation system.

Many customs brokers are legal entities due to the specifics of their activities. But stock exchanges in most cases are individuals, less often private entrepreneurs. Such brokers do not work directly with finances, but receive their commissions for each successful operation and work directly with individuals, much less often with legal entities (due to the peculiarities of taxation on profits).

Features of activity

Brokers always act as intermediaries between specific persons, regardless of the form of ownership. They take on the responsibility to expedite the completion of the task, help to process documents, including for goods when crossing the border. At the same time, they take a specific amount of money for their services, whichis fixed in the mediation agreement, which is signed after agreeing on all the nuances. Such an agreement must contain the following items:

• Subject of the contract (what exactly the broker must do).
• Cost of services.
• Responsibility of the parties to the contract, their rights.
• Terms of the contract.
• Full bank and legal details of the parties.

Broker's services can be ordered by each person, taking into account the line of business. Their cost may vary depending on the specific situation on the market and must necessarily be fixed in the contract. Only in the case of legal advice or assistance in the sale or purchase of real estate, the cost of broker services remains fixed.

Responsibility before the law and the client

Depending on the terms of the contract and the direction of intermediary services, brokers bear administrative and criminal liability. Administrative is limited to fines or cancellation of a license to provide brokerage services. Such liability is common among insurance brokers, real estate brokers or legal advisors. Criminal liability is often used for customs violations or fraud.

Financial brokers

Financial brokers are engaged in mediation in the provision of financial services. They work on stock exchanges, buy and sell stocks, securities, commodities and currencies. Bestbrokers in this area are companies that trade in the stock market or binary options. They offer good conditions for their clients, provide trading platforms and are ready to conduct trainings and education for everyone.

What are "binary options brokers"? This term refers to those who are engaged in intermediary services in the field of binary options trading. These are high-risk companies, often without certificates or licenses. There are very few brokers who have the necessary licenses to trade on the binary options market, but they are considered the best.