Brokers

Brokers are the bridge between buyers and sellers of any security or asset such as a stock or a home. They typically work on commission, so it is important to know if and how they work for the buyer and seller.
Frequently Asked Questions
  • What are the best trading platforms and brokerage accounts for beginners?

    Choosing the right brokerage account can be daunting but the best trading platforms have a lot of tools to help new investors learn about investing and trading to begin your investing journey. Clear and concise content on trading platforms and mobile apps are some key features to consider. The best platforms also have a good mix of beginner and experienced trading instructions, low fees and account minimums, customized portfolio management tools and strong educational content and investing calendars, along with multiple ways to reach customer service.

  • What is a trailing commission?

    A trailing commission is simply a fee that you pay a financial advisor each year that you own an investment, which gives the advisor a financial incentive to do a thorough review of an investor's portfolio and provide guidance.

  • What are soft commissions?

    Soft commissions are ways that customers of financial firms can pay for their services through commission revenue instead of vial direct payment. Soft commissions are also known as soft dollars, and the practice can be seen as unethical or unfair. One example would be a mutual fund receiving research and advising services in return for sending order flow through a brokerage desk.

  • Can you sue your broker?

    Losing money on one’s investment can often lead to lots of blame to go around, and one may be tempted to sue a broker or other parties that may have been involved in some investment decisions. While suing for damages for bad investments or mismanagement of funds may be an option, the decision to file a lawsuit can be a long and costly process.

  • Do financial advisors get paid by mutual funds?

    Financial advisors build financial plans for their clients, including goals for investments, budget, insurance, and savings, and for that service advisors are reimbursed by mutual funds for those advisory services. Advisors can advise their clients toward certain investments and may execute trades in the financial markets by proxy for their clients.

    Advisors who are also brokers get paid commissions by a mutual fund.

  • What is a cross?

    A cross is a financial term that can have several meanings. The most common reference of a cross is when a broker executes a transaction on a trading floor or exchange. In foreign exchange markets, a cross trade involves two non-U.S. dollar currency exchange transactions. In technical analysis, golden crosses and death crosses are commonly identified chart patterns that may occur.

Key Terms

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