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What is an Investment Broker

An investment broker works on a commission; this is in the form of a fee that is usually taken off whatever investment trade they are instructed on. The duties of the broker should be made clear in any agreement made out between the broker and his client. Any brokerage agreement will also contain mandatory requirements set down by the law and financial commission.

An investment broker is not only an intermediary; they will also execute transactions on behalf of their client. These are always paid for by the person who is making the investment. An important part of a broker's job is to explain the potential risks certain investments carry. If the financial commission believes a person has lost money because of negative advice from a broker there will be serious consequences. Not only does the investment broker face losing his brokerage license, they can also be fined hundreds of thousands of pounds.This is as well as any civil case the investor decides to take.

When hiring an investment broker there are two different types of orders you can instruct them to carry out. A stop-loss order will instruct your broker not to trade until the stock hits a certain limit. It can also mean a stock is not to be sold until it reaches a certain price. The type of order you need depends on whether you are the investor or the seller. A limit order is where your investment broker has orders to sell or buy stock within a certain price limit. This order carries more risk than a stop-loss order, and can result in you losing part of your investment or stock if not executed properly.

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