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Money broker |
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Money brokerA type of agent who arranges short term loans between banks (which are seeking to lend money) and borrowers such as institutions. The money broker is not involved in the process of lending/borrowing but merely acts as an intermediary earning a commission.Similar MatchesContra brokerContra brokerThe broker on the buy side of a sell order or the sell side of a buy order. Introducing brokerIntroducing brokerAn individual or firm who can perform all the functions of a broker except one. An introducing broker is not permitted to accept money, securities, or property from a customer. Association of Private Client Investment Managers and StockbrokersAssociation of Private Client Investment Managers and StockbrokersAn association formed in 1990 to represent the interests of stockbroking and investment management firms which specialise in the provision of services for private investors (Also known as private clients). Member stockbrokers are members of the London Stock Exchange and regulated by the Financial Services Authority (FSA). Investment management firms are also regulated by the FSA.http://www.apcims.co.uk. Insurance brokerInsurance brokerA person specialising in insurance matters and who gives advice on the subject as well as arranging cover. Remuneration would normally be by way of commission from the insurer. StockbrokerStockbrokerA broker dealing in stocks and shares on behalf of a client.As an investor, you will need to use a broker for most share dealing, and you should choose one that is a member of the London Stock Exchange and regulated by the Financial Services Authority (FSA). There are three types of service on offer:1. DiscretionaryThe broker has general discretion as to how he manages your portfolio.You can narrow the discretion by giving the broker guidelines. For instance, you can ask him to pick shares that provide high income rather than capital growth, or to investing only in 'ethical' companies.For his services you pay a commission on dealing (usually around 1.65%) and possibly a quarterly or annual management charge based on the value of your portfolio. If you are paying a management charge, your dealing commission should be lower (around 1%).Beware of the discretionary broker who churns your portfolio. Churning means frequent dealing which creates commissions for the broker but may not be in your interests.2. AdvisoryThe broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.Charging structures will vary from broker to broker. Some charge more for an advisory service than for a discretionary service, because there is more work in having to contact you before every deal.Under FSA rules you will have to fill out a form describing your financial situation and your objectives, so that the broker can provide a suitable service.3. Execution onlyThe broker's primary function is to execute the buy/sell instructions which you give him. He does not give advice either proactively or at your request.Varying degrees of administrative help will be provided - e.g. summaries of your year's trading for your tax return; e.g. factual education.Execution-only brokers make their money from dealing commissions, and the market is very competitive. Typically, the percentage charged on a purchase or sale depends on the value of the transaction, with the percentage dropping as the value rises. There will usually be a minimum charge.Note that you don't actually need a broker in all circumstances:When a company has a new issue, you can subscribe for shares directly on the basis of its printed or online prospectus.You can invest in unit trusts by filling in one of their advertisements in the newspapers, or getting in touch on the internet.You can even deal through a bank, accountant or solicitor.But if you want to deal at all frequently it makes sense to use a broker. Further SuggestionsBrokered CDStockbroker Financial Intermediaries Managers and Brokers Regulatory Association Board broker Broker, Real Estate brokerage fee Value broker Customs Broker Nominated Broker Commission broker broker to broker Mortgage broker Broker Listing broker mortgage broker Broker dealer Mortgage broker Brokered market Bond broker Foreign exchange broker Independent broker carrying broker Share broker advisory broker execution only broker |
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