The increased need for financial services causes the rise of brokerage companies. Commercial brokers link buyers and sellers. They help sellers by searching for buyers and gain through commissions. Brokerage firms mainly deal with assets. Go through this article to understand the functions of brokerage firms.
Functions
Brokerage firms execute the sale of assets in the financial markets. They act as intermediaries who look for buyers and sell to them on behalf of the owners. They can also act as agents who represent sellers in the trade of assets.
A brokerage firm in the real estate industry will provide information on the location and the price of a property. Buyers can consult them if interested.
These firms also create a technical base where transactions will take place. They receive payments on behalf of the sellers and earn their commission. They are responsible for conducting the transaction process.
Customer data is protected by brokerage firms. They do not disclose confidential information about their clients. They are responsible for the storage of customers’ critical details.
Types of Brokerage Firms
- Full-Service Brokerage
Just as the name suggests, these brokerage firms do all the activities involved until a transaction is complete. They offer researched up to date information to the customers. They take their clients through all the stages involved in the trade.
- Discount Brokerage
These are cheaper brokerage firms compared to full-service firms. They offer services according to what the customer requires. Customers are charged according to the number of services they need
- Online Brokerage
These are brokerage firms that only offer a platform for their clients to perform their transactions. They do not conduct any transactions because clients do it themselves.
- Independent Brokerage
These firms do not have any alliance with other companies or organizations. They give services to clients who approach them. They act independently when providing their services.