Different Types of Brokers and Their Roles
A broker is an individual or party that negotiates transactions between a consumer and a seller; they also get a portion of the total sales when the negotiation is finalized. A broker also serves as a consumer and a seller; others define them as an agent.
Brokers do exists in different types of industries such as real estate, food, logistics or clothing industries. They serve as the third person or a facilitator between the buyer and the seller.
This type of broker works with different insurance companies, providing the best available policies for his clients. The insurance broker is different from a typical agent; however they do have similarities with the service that they offer such as; providing structure policies, settling customer’s claims and usually works on a commission basis.
- An insurance broker is specialized in one specific type of insurance or deal, these are; health, life, home, auto and other types of insurance.
- Some insurance brokers are required to undergo training and must acquire formal licenses from the Security and Exchange Commission or other government associations that deals with investments.
Real Estate Broker
A real estate broker is a person who helps the seller sells a property; he serves as an intermediary between buyers and sellers.
- Although they have a big role between the seller and the buyer, a real estate broker does not have the power or right to make important decisions on the client’s behalf.
- He must also acquire a formal license before proceeding with any transactions; he is required to take a 90-hour course and must pass an exam on a real estate law.
This type of broker usually has salespersons known as the real estate agents; their role is to assist the broker in the selling process.
The main role of a stock broker is to trade stocks on behalf of his clients through a brokerage account. These stocks are the mutual funds and bonds.
- Stock brokers usually charge a $15 commission per trade.
- There are also two kinds of stock brokers, called discount brokers and full-service brokers.
A high-end broker’s job is to study and plan the condition of the economy.
- This type of broker usually have a team of researchers.
- High-end brokers study the status of the market, giving advises to their clients on when the best time to buy or sell a property is.
Clients of a high-end broker are usually people in the high society level.
Online brokers work through different brokerage websites. Presenting investment database information for their clients via the Internet is their main role. Database information includes graphs, charts and investment tips.
A discount broker carries out buy and sells orders at a reduced commission, compared to a full service broker. He does not provide investment advice.