How Are Brokers Different from Dealers?

Afia Ferdous Mousumi

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2.1 How are brokers different from dealers?

Brokers:

The first role is broker will buy or sell a securities on the client’s behalf and charge a commission for the service.  

Dealers:

A dealer will buys and sells the securities for their own behalf and taking more risk.

Brokers are different from dealers:

Dealers and brokers are terms identified with securities. Almost both have the same task but they are different in many form.

• A dealer is a person who deal the business on their own behalf where broker is a person who executes the deal on behalf of others.
• Dealer will buy and sell securities on their account and a broker will buy and sell securities for their clients.
• Broker has only a small experience in the field in comparison to dealers and it has also been seen that brokers become dealers once they get experience.
• Dealers have all the rights and power regarding the buying and selling of securities but brokers hardly have this power and these rights.
• A broker is normally paid a commission for executing the business and a dealer is not paid a commission and they are a primary principal.
  

2.2 What is an investment fund?

Investment fund:

Organization that invest the merge funds of retail investors for a payment. By collecting the funds of a big number of little investors into a specific investment, an investment organization gives individual investors access to a wider range of securities or bond than the investors themselves would have been capable to access. There have some types of investment funds like mutual funds, exchange funds, money market funds etc.