Here’s everything you need to know about brokerage firms

For those who are new to the entire concept of buying and selling, brokerage firms are what facilitate an easy transaction. You will not have to knock on many doors to get your work done. All you have to do is select the right brokerage firm that will help you with your deals without many hassles. If you are among those who are a novice in this area, here’s an outline of everything that a brokerage firm does and information about the top brokerage firms, which will help you to make the right choice.

What are brokerage firms?

• Brokerage firms are those financial institutions that act as a mediator while buying or selling financial securities.
• The main function of brokerage firms is to facilitate an easy transaction while buying or selling financial securities. One can hire a brokerage firm to take care of the dealings, and in return, the brokerage firm receives remuneration in the form of commission.
• These brokerage firms have for their clients, individuals who buy and sell public stocks through the firm’s stockbrokers.

What are the different kinds of brokerage firms?

• Brokerage firms are known to be mediators while dealing with the buying and selling of stocks for individuals who have hired their services.

What are broker-dealer firms?

• Traditional brokerage firms act as the middlemen in the transaction between the buyer and the seller.
• However, broker-dealer firms provide brokerage services and dealer services as well.

Which are the top brokerage firms?

If you want to buy or sell shares and are confused about which brokerage firm to choose for a smooth transaction, you will benefit largely if you opt for one of the top brokerage firms in the industry.

Here are some of the top brokerage firms that facilitate an easy transaction.

• Fidelity
• Firstrade
• Charles Schwab
• Ameriprise Financial
• Edward Jones
• TD Ameritrade
• Raymond James Financial
• Merrill Edge
• Scottrade
• TradeKing

How to choose the right brokerage firm?

For a smooth transaction, it is imperative that we choose a top brokerage firm so that we are spared the misery of failed dealings. So, here are some important tips to choose the right brokerage firm.

• The cost is the first factor people consider while opting for any kind of services. So, ensure that the top brokerage firm you chose for yourself provides services at a reasonable price.
• Ensure that you read through the fine print and check for clauses and sub clauses regarding the minimum trade you have to conduct.
• It can be a top brokerage firm only if it has a satisfied customer base. Ensure that you check for the customer reviews of the brokerage firm before deciding to opt for it. A disgruntled customer is a red flag that indicates poor services.
• Check whether the brokerage firm is tied to a mutual fund company because in such cases, the stockbrokers are more interested in securing profits for their organization instead of their clients.