DEFINITION of 'Broker-Reseller'

A broker-reseller is a type of broker that acts as an intermediary between large brokerages and their clients. Broker-resellers typically take stock orders from clients and then use major brokerages to execute the trades. The broker-resellers have their own clients, but lack the size and therefore funding to form a sufficient infrastructure for their own timely trade execution. The broker-resellers route their trades through the systems of the larger brokerage firms to gain a more efficient and therefore faster trade execution for their clients.

BREAKING DOWN 'Broker-Reseller'

A broker-reseller takes its client trade orders and routes them through larger brokerages' systems for exeuction. While all major brokerages belong to reputable governing organizations, such as the National Association of Securities Dealers and similar bodies, not all broker-resellers have taken all the examinations and various other steps to be considered qualified as standard brokers. Therefore, an investor should be sure to perform the necessary due diligence on a reseller before any money changes hands.

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