What do Stock Brokers do? Definition & Examples of Broker

A stockbroker is a regulated financial market representative who facilitates the buying and selling of securities for various clients. In this post - we will be talking about stockbrokers, the types of stockbrokers, and what they actually do. So, if you know about investment, then this is the perfect place for you to learn about stock brokers who have a crucial role to play in this sector.
What do Stock Brokers do

Table of Contents

Who is a Stock Broker?

Stockbrokers are individuals who purchase and sell stocks and other assets on a stock market or over the counter for regular and institutional clients in exchange for a fee or commission. Institutional stockbrokers deal with fund managers and other financial institutions, although retail investors exist as well.

Types of Stock Brokers

Before looking for a stock broker in India, you first need to know how the different stock brokers work. The choice of a stockbroker should be based on the traders’ trading requirements and strategies. The following are the different types of stockbrokers:

a) Full-Service Broker

A full-service stockbroker provides clients with a wide range of financial services. Clients are often assigned to specifically licensed stockbrokers. Brokerage firms have research divisions that provide analyst opinions as well as access to initial public offerings (IPOs).

Stockbrokers who provide trading features and online access demand greater commissions. Furthermore, the online platforms of full-service stockbrokers often cater to long-term clients. Therefore, the platforms provide fewer indicators and tools for day traders.

b) Online Brokers

An online stockbroker, often known as a direct access stockbroker, provides services to active day traders at the lowest possible commission – typically charged per stock. Online stockbrokers provide direct access platforms with routing and charting capabilities, as well as access to different exchanges, market makers, and electronic communication networks (ECN).

Online stockbrokers also provide the benefits of accessibility and quickness, enabling order execution by point-and-click. The systems also allow for the execution of sophisticated options and stock orders.

3) Discount Stock Brokers

A discount stockbroker offers financial products, mutual fund access, banking services, and other services. They provide many of the same goods and services as a full-service stockbroker but with lower commissions.

As a result, more active swing and day traders may find inexpensive stockbrokers to be preferable. Furthermore, because the platforms cater to active day traders and investors, they offer more research tools and trading alternatives than full-service platforms.

Services Offered by a Stock Broker

Let us take a much deeper look at the services that a stockbroker traditionally delivers to its clients.

  • Stockbrokers provide accurate advice on the purchase and sale of stocks and other securities. Because they understand the markets, they may advise a client on which stocks to purchase and sell, as well as when to buy and sell them. They conduct extensive studies on securities before making such suggestions.
  • They handle their clients’ investment portfolios and deliver regular portfolio updates to their clients. They also respond to any investment queries that a client may have.
  • Stockbrokers keep their clients informed of any new investment opportunities in the stock market.
  • They buy and sell shares on their client’s behalf and manage the accompanying paperwork. They also serve as record keepers, keeping track of all transactions, statements, and so forth.

Who Regulates the Stockbroker?

Securities and Exchange Board (Act 1992), the Securities Contract Regulations (Act 1956), and the Securities and Exchange Board of India, 1992 govern the stockbrokers. Further rules, regulations, and bylaws that SEBI may establish from time to time must be followed by the stockbrokers.

Every stockbroker in India must be a member of a stock exchange and be registered with SEBI. Stockbrokers publish their registration information on their websites and in official documents. The Sebi website also contains information about registered stockbrokers.

What Skills Does a Stock Broker have?

  • The ability to work in a high-pressure atmosphere.
  • Strong interpersonal and speaking skills, as well as good bargaining and presentation abilities.
    Time management abilities.
  • Understanding of economics and accounting.
  • The ability to form long-term partnerships.
  • A willingness to take chances.
  • Persuasion abilities and excellent negotiating skills are required.

How Can You Become a Stock Broker?

There are no official educational prerequisites to becoming a Stockbroker. However, you may be able to obtain this position through apprenticeship programs such as a financial services professional degree apprenticeship or an investment specialist higher apprenticeship.

If your degree is not in business or finance, you must demonstrate to employers that you understand how financial markets operate. It could help you find a job at an investment bank or a comparable company. Above all, you must continue to get continuous training throughout your career and stay current on new procedures and regulations.


A stock broker, just like any other person, is an important person in the stock market. Doesn’t he just make things so much easier? Otherwise, who would be handling your funds properly, right? This post gives you a glimpse of stock brokers and how they work.

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