Brokerage firms handle two kinds of accounts:
- Advisory account: in which the broker can only make a limited number of investment decisions without consulting with the investor. Those decisions have to agree with the goals stated by the investors.
- Discretionary account: in which the broker is more independent, and is allowed to make decisions without needing to consult others. The investor gives the broker the right to significant investment decisions without his or her permission. These too have to made in accordance to the clients stated investment goals.
Brokerage firms have to be licensed by the Securities and Exchange Commission to buy and sell securities for their clients´ and own accounts.
Brokerage firms come in a wide variety, either small firms or big firms with offices around the world. Brokerage firms can work from commodities and bonds, to finding a food supply for a restaurant manager. And now the trading orders can be over the phone or online.