What is a broker and how does it work?

What is a broker? A broker is a person or company authorized to buy and sell stocks or other investments. If you want to buy stocks, you will almost always need a broker — essentially, a middleman — to place those orders on your behalf. These days, many people open a brokerage account with online brokers rather than working with a person.

Are online brokerage firms the future of investment advice?

With advancements in technology and the internet, online brokerage firms have experienced an explosion of growth. These discount brokers allow investors to trade at a lower cost, but there's a catch; investors don't receive the personalized investment advice that's offered by full-service brokers.

What is the difference between a broker and a market maker?

Key Takeaways 1 Brokers are intermediaries who have the authorization and expertise to buy securities on an investor's behalf. 2 There are full service and discount brokers depending on the level of service a client needs. 3 Market makers are typically large banks or financial institutions. More items...

Does NerdWallet offer brokerage services?

NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Brokers serve as intermediaries between investors and exchanges, buying and selling stocks on behalf of clients.