Brokers - who are they and how do I know if I need one?

A broker is someone who is licensed to buy and sell investments for individuals. Brokers are required to pass an exam and register with the Securities and Exchange Commission (SEC) in order to practice. If you want to invest your money in stocks or bonds, you'll need a broker. There are different types of brokers depending on what level of service you'll need:

Full-service brokers offer clients a wide range of services including research on investment opportunities, helping clients develop investment goals, as well as buying and selling stocks for clients' portfolios.

Discount brokers execute buy and sell orders for clients, but don't offer as many services as full-service brokers.

Deep-discount brokers typically trade for investors that buy and sell large blocks of stock.

Online brokerage companies offer full and discount services for investors who would rather do their investing online.

Brokers are paid by commission - meaning that they'll take their fee as a percentage of the amount you direct them to invest.