Types of broker
There are two types of broker:
- Private-client, also called retail brokers, act for investors.
- Corporate brokers act on behalf of companies. When a company is thinking about issuing more shares it might contact its broker for advice on market conditions and an estimate of the likely price that it can get away with. The broker liaises with the stock exchange and investors. The broker will represent (public relations stuff) the company to the market, providing information and analysis on the firm for investors.
Given that this book is for investors, we will concentrate here on private-client brokers.