A brokerage company is an organization that provides intermediary services in the market. Such firms can be found in various highly specialized areas. For example, in exchange trading, insurance, shipping, and so on.
Stock Market Intermediaries
A stock brokerage company is a professional trading participant. This company concludes transactions at the expense and on behalf of the client who hired it. A private investor, as well as a large organization or a fund, can act as a customer. The benefit that customers receive is that investors who do not have the necessary permissions participate in the auction. Technical assistance to the client is provided by a brokerage company. This, among other things, allows the investor to keep abreast of the latest news, to know the nuances of the current market situation. The intermediary, thus, helps the client to make profitable transactions.
Insurance and leasing
Intermediary functions in these areas of activity can be combined, since the tasks that are solved in them are similar. In this case, the purpose of the brokerage company is to ensure that the insurance or leasing services provider contacts the client. In some cases, the intermediary receives a discount from organizations. This, in turn, allows him to make better offers to customers than if they contacted a leasing or insurance company directly.
Customs area
Registration of transported goods requires specific knowledge of established procedures and standards. In addition, customs clearance involves interaction with the bureaucratic state apparatus. This work, in turn, requires a special approach. In this regard, the procedure for processing the goods is often trusted to professionals - customs brokers. The recipient of the values in this case only needs to present a package of documents. The organization will take up the rest of the work on cargo clearance.
How to choose an intermediary?
There are so many deals on the market today. Existing high demand creates a corresponding supply. Consequently, a variety of brokerage companies are present in the market. Reviews of intermediaries are one of the key selection criteria. It is desirable, of course, that the opinion was from real, and best of all, familiar people, business partners. An important point is the period during which brokerage companies operate. The rating of intermediaries operating in the market, as a rule, also contains the main technical and financial indicators of the organization. These, in particular, include access to analytics and the size of the commission. In margin trading, the key parameters, on the basis of which the client decides to cooperate with a broker, are the minimum deposit and leverage. Undoubtedly, an organization providing intermediary services must be licensed.
Work specifics
Before making certain operations with assets, a credit brokerage company carries out its own analysis of the military, political, economic situation in the state. The organization studies the tax policy, finds out what is the country's attitude towards investors. Applications are accepted by brokers in electronic and paper form. Telephone conversations are also available (calls are usually recorded). A necessary condition for cooperation is an agreement with a broker. It is either in electronic or paper form. The document must clearly state the terms of cooperation. In particular, the site on which the auction will be conducted, the procedure and timing of the transfer of money to the client, the report form and so on are indicated.
Cost of services
It is established by brokerage companies themselves. Price may vary. The task of any intermediary is to provide access to customers of all levels in world markets, high-quality service and trading services in accordance with existing technologies and advanced economic trends. Accordingly, the price of a mediator’s work is set depending on the number of its offers and the quality of work.
Domestic brokerage companies
St. Petersburg (St. Petersburg), like the capital of the country, is considered a major financial center. Many well-known intermediary organizations have emerged and are successfully operating in these cities. The best and most reliable brokerage companies in Russia are as follows:
- FINAM.
- "Opening".
- "BCS".
- Sberbank
- "VTB 24".
- "Alfa Bank".
- Aichi Invest.
Separately, it should be noted such brokerage companies of St. Petersburg:
- Infull.
- "Business Broker".
- ViTradeGarant.
- Alphabet.
- Versailles Finance.
Brokerage companies in Moscow:
- IFC Finprogress.
- "Credit Consulting Brokerage".
- STForex.
- Agency of financial decisions "Financial Broker".
Comparison criteria
Existing brokerage companies can be compared according to the following criteria:
- Year of foundation.
- Reliability rating.
- Trade turnover for all customers of the organization. This criterion allows you to determine the place that the company actually takes in the investment field.
- The degree of development of the regional network.
- Level of information support (does the company provide training courses, is there daily analytics, a personal consultant, are online quotes visible, is it possible to register a demo account).
- The amount of overhead. In particular, the commission for intermediary services, the percentage for crediting and withdrawing funds, the price of depository services, and the cost of software are estimated.
The most important point is the last. Often, it is the size of the overhead that determines the choice of a broker.
Reliability
Its indicators can be considered based on the data of the main rating agency of the Russian Federation NRA. The highest reliability is defined as AAA, the next level is AA +, then AA:
- FINAM. Founded in 1994, rating AA +. The main activities are investment and intermediary.
- "Opening". The company has been operating since 1995, with an AAA rating. The financial institution offers intermediary, insurance, banking services, as well as money management.
- "BCS". The company was founded in 1995, its rating is AAA. The main services are mediation and investment.
- Aichi Invest has been operating since 2000 . The rating of this company is AA +. The main activities are intermediary and investment services.
Banks
The above companies are mainly brokerage. For them, mediation is the main activity. A number of banks operate in Russia, which also provide brokerage services. This business acts as an accompanying one for them. It is believed that companies that directly provide brokerage services work better, since this is their main activity. However, this is not quite true. In practice, the bank's commission for intermediary services is much lower than that of brokers. This is explained by the fact that they do not need to additionally finance offices and train employees to work in the market. This can be done by existing bank employees. Specialized investment companies need to spend money on this - part of their direct income. Therefore, their commission is higher than that of the bank.
Characteristics of banks providing brokerage services
One of the well-known organizations is Sberbank. He has been working since 1841. His rating is AAA. The main business is directly banking. Sberbank has been providing brokerage services since 1994. VTB24 has been operating since 2000. His rating is AAA. Since 1995, Promsvyazbank has been operating. Its reliability is at the AA + level. In 1990, Alfa Bank appeared. Brokerage services were introduced in 1995. Its reliability is AAA. Many investors prefer banking organizations. However, there are those who turn directly to specialized brokerage companies.