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Go For Broke: What Is a Broker-Dealer and Why Would You Need One?

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Are you interested in learning how to invest in the stock market and buy other securities? If so, you aren’t alone. An estimated 56 percent of Americans own a stock or bond!

Investing is a great way to build wealth besides the income you earn from your job or side hustle. As an individual investor, you may need the help of a brokerage house to make your trades.

Read on to learn what a broker-dealer is and why you need one today!

Broker-Dealer Defined

If you are new to the world of investing, the term ‘broker-dealer’ may be unfamiliar to you. What is a broker-dealer? These are brokerage firms that with a license to buy and sell securities before delivering them to a client.

Some of the most popular broker-dealers in the world include Charles Schwab, TD Ameritrade, and Raymond James, among others. These are U.S.-based businesses with an international presence in the financial world.

Leverage The Wealth of Resources

The best broker dealer offers resources besides buying and selling securities. They are large businesses with intricate structures. They have different departments to serve the needs of their customer base.

When you buy or sell a security through a broker-dealer, you will pay a small brokerage fee. This is a percentage of the total amount of the transaction.

As a client of a firm, you will receive broker-dealer services that include around-the-clock customer support and publications from some of the most knowledgeable people in the industry.

These publications and internet presentations give you access to valuable information that will help you learn the ins and outs of investing!

Keep Your Investments in One Place

Broker-dealers also offer state-of-the-art platforms for you to access your investments all in one place. You can use their online banking programs to securely log in to your accounts across numerous financial institutions.

You can link these savings and checking accounts to your brokerage account. This allows you can review all your finances in one place. These broker-dealers also offer simple online transfers from one account to another.

As you build a relationship with your broker-dealer, they may allow you to trade on margin. This is a form of credit that gives you the ability to buy securities without using your own money.

Use a Broker-Dealer For Your Transactions

Using a broker-dealer is a great way to leverage technology and expertise in finance. Before you pick a broker-dealer, spend time considering your options and what is most important to you.

If you want to avoid high fees on transactions, review each firm’s fee schedule to learn what it will cost to invest using their brokerage services. Once you set up an account and deposit funds, you can begin using their services to trade stocks and other securities.

Check out our blog section for other great posts with tips and tricks to help you build a more secure financial future!

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