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What Is an Investment Broker and Do You Need One?

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You may already be aware of the job title ‘investment broker’ but you could be wondering as to what these people do. You might also like to know if there is anything that these people offer that could be advantageous to you; could they help make you money? There is a common misconception that investment brokers are only the concern of the big investor but this is in fact far from the case.

What is an Investment Broker?

In its simplest terms, an investment broker is an individual who makes investments on behalf of clients.  They will have varying amounts of freedom but their job will be to buy and sell stock or other types of investment in the hope of making a profit. A broker can work independently or they may work as part of a large firm. There is a wide range of different types of broker and they will often only focus on one particular type of investment; for example, you might get a broker who deals only with buying and selling foreign currency (you will usually here these referred to as a currency broker). In the UK the most usual place for a stock broker to work is with the Stock Exchange ( this is according to Stock Trader UK; http://www.stocktrader.org.uk/stock-brokers.html).

The success of a broker will be determined on their ability to keep clients happy. This usually means that they are able to make the client money. The life a broker can be very stressful but many of them strive on this. Most brokers will have been educated with at least a degree in economics or finance; the Princeton Review (http://www.princetonreview.com/Careers.aspx?cid=150) does mention that there are brokers with no formal education More than formal education the important thing is that these people understand the world of investment completely. They have to be registered to be able to trade in most types of investment.  This type of work has been previously described as a form of gambling but a broker would probably not last very long if they were relying on luck.

Can an Investment Broker Help You?

As already mentioned there are a variety of different types of investment broker. Many individuals who want this type of service will go through a firm and so will have no direct contact with the individual broker. Many banks in the UK will offer a service whereby your money will be handled by their investment brokers.

If you do decide that you want an individual broker then it is vital that you check their credentials and make it clear what they can and can’t do on your behalf. These days you can even find a whole host of investment services that you can find online; it is important to be extra careful here and only deal with a reputable online broker firm.  There is a lot of risk associated with investing in this way but the potential rewards can be very tempting.

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Meet the Author

Anthony Carter currently resides in Fife, Scotland with his wife Lisa, and their three wonderful children. As a senior editor for various publications, if he's not reading and writing, you would find him photographing and traveling to some of the most far-flung locations around the world.

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