How do Brokers Work

Are you not familiar on the work of a broker and its different functions in earning profits as a reputable job? Brokers or brokerage firms are rampant and widespread in the business society that serves different purposes on any business deals and transactions such as in real estate properties or as an investment advisor, let us explain more on how do brokers work.

Maybe you are wondering why brokers exist in our society especially in dealing some business transactions and investment opportunities.

Brokers and brokerage firms are seem to be the rescue center of some real estate investors and stock market traders to ensure the success of all their business dealings. But brokers have other forms based on the service it can offer to its clients and we will further cite you some examples.

There are different types of brokers today and one of them is the commodity broker, who deals with commodity contracts between the buyer and the seller. Custom brokers are intermediary for importers and exporters while mortgage brokers are the liaison of mortgage loans to individuals and businesses. And the most popular brokering job is the stock broker who can regulate buying and selling of shares or stocks by representing the investors and do the rest of the transaction to the market makers. Other types of brokers are insurance broker, sponsorship broker, business broker, joint venture broker, prime broker, information broker, and marriage broker. Mostly these brokers are part of a brokerage firm or do the works independently.

The Works of a Broker

If we will base on the different job description of a broker, there are three important jobs that a broker can do for his client. They can work as a representative, as an advisor, or even both. One good example of this is the job of a stock broker. Stock traders or investors in the stock market need stock brokers that will complete the transaction for them, because basically traders are not allowed to go directly in dealing with the market makers. As a representative of the trader, a stock broker has the expertise in the field of stock exchange and is officially assigned in the floor to complete the dealings. Stock brokers earn from a commission as part of the winnings of his clients in selling his shares. So, this only means that once the transaction failed then he earns nothing.

Aside from being a representative, brokers also act as an advisor for investors who are willing to gamble their investment based on their market analysis. Unlike the first job, being an advisor has sure earnings whatever the outcome of the transaction. The third job of a broker is the combination of the two functions. If the client had requested the broker to do the decision-making as well as to represent him in dealing the transaction, he surely wins earning for this job based on the contract they have discussed with his client. This is the main reason why many want to be a licensed broker as their chosen profession.


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