A broker is an independent intermediary in the financial market, guiding and assisting individual investors and large investment firms in India.
There are two types of intermediaries:
- Institutional brokers help large companies by providing different services such as investment banking, financial advice, etc.
- Individual stockbrokers help individual investors by offering advisory and brokerage services, primarily in the stock market. They can also offer currency trading services.
Its function is to buy and sell shares on the stock exchange on behalf of investors. Its role on the stock exchange platform is regulated by the SEBI (Securities and Exchange Board of India) and is limited to the following responsibilities:
- They operate as a pure intermediary and should not assume any position or risk in the financial markets. However, they can help institutional clients buy or sell securities in the financial markets.
- Brokers should have a solid knowledge of financial markets and how they work to quickly guide clients on their needs and goals. In addition, they should be able to analyze stock performance and market trends.
- Brokers can access different databases and research information to interpret market data and predict the extent of volatility. It helps them to provide the best advisory services to their clients.
- Brokers should be able to recommend various investments based on the requirements of their clients. They can establish it by relying on consistent communications with financial institutions such as banks, stock exchanges, private companies, and institutional investors.
- The broker receives a commission for each successful transaction, must respect the confidentiality of its investors and ensure efficient transactions.
- They should support high value-added services to provide the best standards to their customers.
- Brokers are allowed to assist banking services related to stock market investing. They help customers with the transactions associated with their bank account, demat account and merchant account.
- Aside from attending the stock market, brokers are qualified to deal with other financial stocks such as the derivatives market.
- Brokers also have an effective team to analyze their clients ’financial situation and understand their goals to help them make a financial plan with the right investment recommendations.
Many established brokers like Motilal Oswal facilitate the activities of their clients in the Indian stock market. Motilal Oswal does this through quality research, timely updates and the use of advanced technology.