What are Brokerage Firms?
Investing in the stock market can be really tricky as it is difficult to find a party to make a deal; therefore traders rely greatly on the brokers as they have the most knowledge about the buyers and sellers. Brokers do not always work independently, instead they are also a part of a brokerage firm in Pakistan. Brokerage firms are basically a collection of equity broking agents who bring together a number of buyers and the sellers. When the deal is made then the broking firm gets the commission. These firms actually act as the middlemen who get a seller connected to a buyer. The brokerage firm’s commission can be fixed or a portion of the total transaction made. The commission is mostly dependent on the types of services a buyer or a seller avails from the firm.
How do brokerage firms operate?
The best brokerage firms in Pakistan have a number of services for all types of buyers and sellers, it depends on the buyer or the seller what they choose or what is suitable for them according to their requirements. There are typically three types of services that brokerage firms provide,
Full-service brokerage:
When the brokerage firms in Pakistan provide full-service to a trader then they work as the professionals who act as financial advisers; these individuals manage all the decisions relating to investment and provide assistance whenever the buyers or the sellers need support.
Discount brokerages:
A lot of brokers in Pakistan stock exchange provide discount brokerage service; a less expensive than the full-service brokerage. This type of brokerage service is provided only when a client needs it and is not a full-time service. The firm that provides the discount brokerages would only serve a trader over consultation, no in-depth financial relationship could be established. In this case research and most of the other trading activities are carried out by the buyers and sellers themselves.
Robo-advisors:
As the name suggests, robo-advisors are actually the online stock trading platforms which provide the cheapest services to the traders. This is an automated investment advisory that a platform provides using different algorithms. These are a new form of financial advisors that provide their services with minimum human resources which is the main reason that they do not charge much.
These days’ brokerage firms provide all types of services depending on the traders and their capacity to pay for the service as the needs and size of the accounts of the traders differs.
