Understanding Broker-Dealers: The Hub of Financial Markets A (B-D) is a person or company that buys and sells securities—such as stocks, bonds, and mutual funds—either for their own account or on behalf of their customers. They serve as essential intermediaries in the financial ecosystem, providing the infrastructure necessary for modern trading. Dual Roles: Broker vs. Dealer
Because they handle vast amounts of public money, broker-dealers are heavily regulated to ensure market integrity and investor protection: Broker-Dealer (B-D) Explained: Roles, Types & Functions broker-dealer
The hyphenated name reflects the two distinct capacities in which these firms operate: Understanding Broker-Dealers: The Hub of Financial Markets A
: Many provide research and guidance to clients on which securities to buy or sell. Dealer Because they handle vast amounts of public
: The firm trades for its own account, buying and selling from its own inventory. They often profit from the "spread" —the difference between the purchase and sale price. Key Functions and Services