When it comes to financial planning, there are a lot of terms that you should be familiar with. If you’re going to make smart decisions about your money, your investments and your financial future, then the more you understand, the easier it is to make the right decisions. One of the basic terms you should be familiar with is “stock broker.” No doubt you’ve heard the term before, but maybe you don’t exactly understand what a stock broker is or what they do. If that’s the case, read on for a definition of stock broker, as well as information about this important piece of your financial puzzle.
What is a Stock Broker?
A stock broker is defined as a professionally-trained person who buys and sells stock on behalf of his or her clients for a commission or other fee. These sales usually happen on the stock market through various securities exchanges. The stock broker is usually associated with specific brokerage firms, but can also be an independent agent.
How Are Stock Brokers Trained?
To become a broker, one must typically hold at least a bachelor’s degree in finance or business administration. This ensures that the broker begins with a basic knowledge of how business and the markets work. Usually, brokers also train in highly competitive environments before the firm allows them to handle their own clients. All of this training helps to ensure that your broker has a solid understanding of what is best for you and your investments.
Are Stock Brokers Necessary?
It used to be that the answer to his question was pretty much yes. However, with the rise of various financial websites, it is possible to cut out the broker completely and buy and sell on your own. However, in doing so, you are missing out on the years of training and professional experience that the stock broker can bring to the equation in the form of knowledge and advice. For this reason, while a stock broker might not be necessary to buy and sell, a broker is necessary if you want to get the most out of your financial transactions.
If you are looking for someone to help you make decisions about your financial future, a stock broker can help. Trained to understand the ins and outs of the financial markets, a stock broker is there to offer advice and help you get the most out of your investments.