An agency broker acts as an agent for buyers or sellers in securities market trades, charging a commission fee. They must follow the market closely and keep meticulous records, with a fiduciary duty to protect their clients’ interests.
An agency broker facilitates securities market trades on behalf of clients. People who use the services of an agency broker trust the broker to make the best possible trades on their behalf. In exchange for this service, the agency’s broker charges a fee. The fee is usually a commission based on the amount of the transaction, although there may also be other associated fees. All fee information must be disclosed when buyers and sellers enter into agreements with agency brokers.
Brokers in general are people who make agreements between buyers and sellers. In the case of an agency broker, the broker also acts as an agent on behalf of one of the parties to the transaction. This means that the broker is representing the interests of a buyer or seller. A client approaches the agency’s broker to discuss a sale or purchase and the broker must find a way to fill it efficiently and at the best price.
Like others involved in the securities market, an agency broker is expected to follow the market closely. The workday starts early with news review and financial reports generated overnight. This information is used to understand where the market is and to make projections about where the market is going. As clients contact the broker to discuss transactions, the broker records these buy and sell orders in the order book and works to fill them.
Service requests can be made in several ways. Keeping the need to have the best price in mind, the agency broker may liaise with other brokers to connect with their buyers and sellers or trade directly on the floor. Brokerage firms often have representatives on stock exchanges who can execute trades on behalf of their employers. Once the trade is completed, the customer is notified and the securities are transferred to the customer’s property.
Agency brokers must keep meticulous records every step of the way so they can document how they performed individual transactions. They are responsible for improperly performed transactions, such as sales below the customer’s requested price. If a broker fails to execute a trade as requested, the customer may have grounds for action and the broker may also be fined or penalized. These securities professionals also have a fiduciary duty to their clients and must protect their clients’ interests in all transactions.
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