A firm handling a customer’s order is entitled to be compensated for executing the customer’s order. How the firm is compensated depends on the way the firm executes the order. Firms are also entitled to be compensated for the risk they take when acting as a market maker and holding stock in their inventory accounts. Even when considering the fact that firms are entitled to be compensated for their services and the risks they take, the prices paid by customers inclusive of commissions and mark ups must be reasonably related to the price of the security. Series 57 candidates must be aware of the different circumstances that justify the fees charged to customers as well as the conditions that would make fees unreasonable.

Need Help Passing Your Series 57 Exam?

Broker Vs. Dealer

Related Articles
  1. Trading

    Evaluating Executive Compensation

    Find out how to determine whether a CEO is being overpaid.
  2. Personal Finance

    5 Tech Companies With High Stock-Based Compensation (GOOGL, AMZN)

    Examine stock-based compensation among large tech firms to determine which factors are driving equity compensation and how executive grants are determined.
  3. Small Business

    What is a Firm?

    A firm is a business or organization that sells goods or services on a for-profit basis.
  4. Personal Finance

    Financial Career Shift: Get In The Driver's Seat

    Before you agree to work for another investment firm, be sure you know what you're getting into.
  5. Retirement

    How Non-Qualified Deferred Compensation Plans Work

    These tax-advantaged retirement savings plans have their pros and cons, and employers and employees must follow strict guidelines.
  6. Financial Advisor

    FAs Should Factor Clients Into Succession Plans

    Financial advisory firms are finally taking succession planning seriously. Here's how.
  7. Financial Advisor

    CEOs' Retirement Savings Are Safe: Are Yours?

    CEOs make huges salaries, yet corporate boards still feel compelled to guarantee huge retirement packages.
  8. Taxes

    How Non-Qualified Deferred Compensation Is Taxed

    The tax savings of non-qualified deferred compensation plans are not the only tax fact you need to know before signing up for one.
  9. Financial Advisor

    Top Broker Excuses For Poor Investments

    It is not uncommon for investors to lose money through misselling or other forms of mismanagement.
  10. Managing Wealth

    Highest-Paid CEOs

    John Hammergren of McKesson topped the list of the best-earning CEOs for 2011. Find out how much he made and who else was on the list.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center