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What Is an Investment Broker?

Investment brokers may specialize in handling stock investments.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 25 July 2014
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    Conjecture Corporation
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Investment brokers are professionals who handle investment transactions on behalf of their clients. An investing broker may function as an independent provider or be associated with an investment brokerage firm. With either arrangement, the investment broker conducts buying and selling activity in accordance with the level of authorization provided by the client.

There are many different types of investment brokers today. Some focus their attention on handling investing opportunities that include the buying and selling of shares of stock. Others prefer to concentrate on managing investments such as commodities or bonds. In some parts of the world, professionals who manage currency trading on behalf of their clients are referred to as currency brokers.

In terms of education, the typical investment broker will have a strong background in finance and investing. This often includes completing formal studies in a university setting, as well as gaining practical experience working with an investment firm. Along with this formal training and experience, a natural aptitude for detail and the ability to work with figures goes a long way in helping an investment broker be successful.

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Supporting the goals of the client is essential to the function of an investment broker. The broker will work with the client to define those financial goals, assess the types of investments that the client feels comfortable with, and generally help to establish a working investment portfolio that meets with the client’s expectations. Once this foundation is put in place, the broker will actively seek investment opportunities that are in the best interests of the client, as well as be on the lookout for market trends that indicate any current holdings are likely to decrease in value within a given time period.

In order to function as an investment broker, an individual must have a finely tuned sense of integrity. Information provided by the client is considered proprietary and not available to anyone that is not directly associated with the investment account. Along with respecting the privacy of the client, an investment broker must also be careful to not make use of proprietary information for his or her personal gain. In many countries, stiff regulations are in place to prevent this type of activity.

Gaining a reputation as a competent investment broker takes time. The broker must establish a proven track record of making accurate predictions about market trends, as well as demonstrate a consistent dedication to managing the investments of his or her clients in a professional manner. As the investment broker builds this reputation for accuracy and reliability, he or she is likely to have no problem securing clients and enjoying a long and rewarding career.

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