On behalf of clients, an agency broker facilitates trades on the securities market. People who hire an agency broker expect the broker to negotiate the best possible deals on their behalf. The agency broker receives a fee in exchange for this service. The fee is usually a commission based on the transaction’s value, but there may be additional fees as well. When buyers and sellers enter into agreements with agency brokers, all fee information must be disclosed.
Brokers, in general, are individuals who facilitate transactions between buyers and sellers. In the case of an agency broker, the broker also acts as a representative for one of the transaction’s parties. This indicates that the broker is representing either a buyer or a seller’s interests. When a client approaches an agency broker to discuss a sale or purchase, the broker must find a way to fill the position quickly and at the best possible price.
An agency broker, like other participants in the securities market, is expected to keep a close eye on the market. The day begins with a review of financial news and reports that have been generated overnight. This data is used to determine the market’s current state and make predictions about its future direction. The broker records buy and sell orders in the order book as clients contact him to discuss transactions, and then works to fill them.
Order fulfillment can be done in a variety of ways. The agency broker can contact other brokers to connect with their buyers and sellers, or deal directly on the trading floor, keeping the need for the best price in mind. Representatives from brokerage firms typically work at securities exchanges, where they can execute trades on behalf of their employers. The client is notified when the trade is completed, and the securities are transferred to the client’s ownership.
Every step of the way, agency brokers must keep meticulous records in order to document how they conducted individual transactions. They are liable for improperly completed transactions, such as sales below the client’s requested price. A client may have grounds for a lawsuit if a broker fails to execute a trade as ordered, and the broker may be fined or otherwise penalized. These securities professionals also owe a fiduciary duty to their clients, and they must act in their clients’ best interests at all times.