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What are the Types of Brokers and Brokering Services?



What are the types of brokers, business broker, discount broker and Brokering Services

Before someone can come up to ask the question, ‘what are the types of brokers?’ He must first know who a broker is. The next question will be in like manners, what are the brokering services we have? To this respect, we have brought the information a step closer to you.


What are the types of brokers, business broker, discount broker and Brokering Services


Actually, before I begin, I would love to talk briefly on who a broker is.

A broker is an independent party, whose services are used extensively in some industries. A broker’s responsibility is to bring sellers and buyers together and thus he is the third-person facilitator between a buyer and a seller. A typical example would be a stockbroker who facilitates the sale of a property.

Types of Brokers

Wikipedia names 25 broker types, some of which are synonymously out of context.

For the context of this post, we will bother on three main types of brokers. Stay with us!

The Discount Broker

Who is a discount broker?

This is the first type of broker we will discuss.

A discount broker is someone who executes many trades on behalf of a client in which he charges a reduced amount called commission.

Furthermore, a typical discount broker offers an online trading platform that attracts self-investors.

Full-Service Broker

This man offers varieties of services. He does market research, investment advice, retirement planning in addition to a full investment product.

This is the main difference between him and a discount broker whose only service is the investment product.

Because of the added services clients receive, their commission as expected is usually higher.

Instead of receiving payments on a commission basis, some full-service brokers now charge based on fees of investment products.

Real Estate Broker

In the real estate industry, a broker is a licensed professional who represents the seller of a property.

He does tasks like determining the market value of the property, listing, advertising and advising clients.

I know so many people will be expecting to see stockbroking as a type of broker but a stockbroker is actually seen as either a full service or discount broker.

Moving on, let us discuss briefly the brokering services we have.

Brokering requires trust. Trust is its essential ingredient. Learn the essential pillars to gaining trust in business

Brokering Services

There are numerous brokering services available to the normal man. They are otherwise known as intermediaries.

Many businesses are in need of intermediaries, as a result, new brokers have a chance to gain valuable market share quickly after entering the business.

However, the business potential for brokers is not for the unserious businessman. Firstly, you will need to know what it takes to create a successful, competitive business from the start.

Alternatively, get trained in the business of freight brokering while creating business relationships that allow for easy connection to potential customers. In the same vein, get a license.

Read also, there are investment tips for young businesses. It is necessary you read about them.

Business brokering

A business broker is a  professional who assists in the buying and selling of businesses.

He acts as a middleman between the buyer and the seller.

A typical business broker does the following work;

  • Prescreens your business
  • Negotiation
  • Assists in the paperwork

Financial brokering

This is one of the most common brokering services we have.

A finance broker is a go-between who usually arranges loans that suits unique needs and circumstances for a fee. A finance broker deals with the lenders for you and arranges a loan for you.

Some finance brokers are called “mortgage brokers”.

Mortgage brokers are finance brokers who specialize in arranging home loans or investment property loans.

To do this, a Finance Broker leverages their knowledge and experience across a broad spread of products from multiple lenders. He then recommends products that suit the client’s needs and objectives.

Leasing broker

A leasing broker brings together three parties, business owners and managers wanting to lease equipment for their businesses, equipment manufacturers and retailers wanting to sell equipment, and lending companies willing to purchase the equipment and lease it back to the business owner.

Additionally, Lease brokering can be either in the forms of an independent or franchised leasing broker.

His job description is to help business owners lease the equipment they need to start, operate, and expand their businesses, including everything from computers to machinery to heavy equipment to specialized tools and lots more.

Freight broker

Freight brokers can run their own business or work for a freight broker company.

Equally, they are responsible for arranging the transportation and tracking of a load hauled by a freight carrier.

Similarly, they make it easier for shippers to find quality carriers that are reliable in hauling a load. They, of course, keep the line of communication open with the carrier in order to update the status of the shipper’s load.

Jobs or Career path of  a Broker

We will mention a few industries a broker can work in. Coupled with the jobs he can take up.

  • Insurance
  • Finance/Investment
  • Real Estate

In like manner, a broker of any sort should undertake courses in business, finance, accounting, or economics are important. This is because he will be dealing with figures and the knowledge of the numbers will aid his decision.

It will actually be a funny scenario if an expert one hires is deceived because he doesn’t possess the expertise his job demands.

As a matter of fact, the profession of brokering has become increasingly popular in this contemporary world.

If you have a passion and see this as a career prospect, why not get trained and begin to make some money?

Do get back to us in the comment box, we will like to he’s from you.

Victory is a Certified Finance Personnel. She loves to write and relate to people.

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What Is INCOME BOND: Definition and Benefits




Maybe you’re an investor and seeks to know what an income bond is but, don’t know who to ask. Good thing you’re here. This article will give you all the details you need to know about income bonds including the basic tips, restructuring and it benefits the issuer.

What Is an Income Bond?

An income bond is a type of debt guarantee in which the investor promises to pay only the face value of the bond and coupon payments are paid only if the issuing company has sufficient profits to pay the coupon payment. In the context of corporate bankruptcy, an adjustment bond is a type of income bond.

Basic Tips

An income bond is a bond that promises only the repayment of capital and does not guarantee any interest rate or coupon. Instead, interest is paid to creditors as income flows to the issuer as specified in the banknote specification.

Lease bonds are often issued during a corporate debt restructuring, for example, after the deposit of Chapter 11 in bankruptcy.

Detailed Explanation

A traditional corporate bond is one that makes regular interest payments to bondholders and, upon maturity, repays the principal investment.

Bond investors expect to receive the reported coupon payments periodically and are exposed to default risk if the company faces solvency problems and is unable to meet its debt obligations.

Bond issuers that have a high level of default are generally given low creditworthiness by a bond rating agency to reflect that their securities issues have a high level of risk. Investors who buy these high-risk bonds also require a high level of return to compensate them for lending their funds to the issue

However, there are a number of cases where the guarantor does not guarantee a coupon payment. The face value in maturity is guaranteed to be paid, but interest payments will only be paid based on the issuer’s income over a period of time.

The issuer is responsible for paying coupon payments only when he has income in his financial statements, which makes such issues profitable for the issuing company that is trying to raise the capital needed to grow or develop its business. activity.

Interest payments on income securities, therefore, are not adjusted but vary depending on the particular level of income that the company considers to be sufficient. Failure to pay interest does not result in a loss as would be the case with traditional securities.

Debt Restructuring and Income Bonds

Revenue securities are a rare financial instrument that generally has a corporate purpose similar to that of preferred shares. However, it is different from the preferred shares in the late dividend payment and the preferred shareholders are found in the following periods until they are paid. Providers are not required to pay or receive any unpaid interest on income guarantee at any later time.

Revenue bonds can be arranged so that unpaid interest payments are increased and matured during the maturity of the bond issue, but this is not usually the case; therefore, it can be an important tool in helping an organization to avoid bankruptcy during a financial crisis or reorganization.

Lease bonds are often issued by companies with a problem in trying to get money quickly to go bankrupt or by bankrupt companies in restructuring programs that seek to maintain their operations while bankrupt. In order to attract investors, the agency would be willing to pay a higher bond rate than the average market rate.

In the case of a Chapter 11 bankruptcy resolution, a business may issue revenue bonds, known as restructuring bonds, as part of a company’s debt restructuring to help the business cope with its financial difficulties.

The terms of such collateral often include the clause that when a business generates good revenue, it must pay interest. If the income is negative, no interest payments are due.

Revenue bonds look similar to the shares you prefer. If no dividend is paid on preferential shares in a given year because of insufficient income, dividends are collected for that year and paid the following year if there is sufficient income.

This is not the case with income bonds, and therefore is different from each other. In the end, although it involves the creation of an instrument, it resembles an agreement between two parties and can be arranged according to the wishes of both parties.

How Does Income Bond benefit the Issuer?

This type of bond works very well in times of financial crisis or financial health of a company, as long as investors believe in signing up. The direct benefit of this guarantee is that it can prevent the company from going bankrupt.

NSI Income Bond

NSandI is a UK-based savings organization dedicated to raising low-cost government funding from the public. Revenue bonds are one of the many NSI savings products offered to the public.

Who can open an Income Bonds account

NSI Income Bonds are available to an individual aged 16 and over. You can create a Revenue Assurance account for yourself or someone else as a joint venture Account.

You can also open one as a deposit for sponsors (also as a company) Sponsors), whether alone or in partnership with other sponsors. Beneficiaries of Investments must be made to individuals.

Any company that had an Revenue Guarantee Account up to and including January 1, 1990
keep holding and investing in an account.

You can open as many Revenue Assurance accounts as you wish, but there is a hold limit
(See “How much can you keep?”).

How to open an Income Bonds account

When you open an account, you can request:
• Online or by phone with your UK payment card
• By post using a personal cheque drawn on your UK bank or building society
account, or a banker’s draft or building society branch cheque.

If you are an attorney or an agent asking for an account on behalf of someone else, you are
You must apply by post if your authority is not yet registered with us. (Please note
General terms and conditions – “Application as an attorney or representative or trustee”.)

Related: Funding Opportunity – GrayMatter Capital

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What Are SHORT-TERM INVESTMENTS: Definition, Examples, and Banks




What Are Short-Term Investments?

Short-term investments, also known as marketable securities or temporary investments are those you make for less than three years. You are sacrificing a potentially higher return for the certainty of having the money.

Many short-term investments are sold or converted to cash after as little as 3 to 12 months. Often times when you make a short-term investment, you do so because you need the money at a specific time. For example, if you are saving for a down payment on a house or a wedding, the money should be ready.

How short-term investments work

The objective of any short-term investment, both for corporate investors and individual/institutional investors, is to protect capital while offering a return similar to that of a Treasury bill index fund or other similar benchmarks.

Companies with a strong cash position have a short-term investment account on their balance sheet. As a result, the business can afford to invest excess cash in stocks, bonds, or cash equivalents for higher interest rates than a regular savings account.

There are two basic requirements for a business to qualify for a short-term investment. First, it has to be liquid, like a stock traded on a major stock exchange that is frequently traded or on US Treasuries. Second, management must intend to sell the security in a relatively short period of time, such as 12 months.

Marketable debt securities, also known as “short-term paper” that mature in one year or less, such as US Treasury bills and commercial paper, are also considered short-term investments.

Marketable stocks include investments in common and preferred stocks. Negotiable debt can include corporate bonds, that is, bonds issued by another company. However, they must also have short expiration dates and must be actively traded to be considered liquid.

Examples of short-term investments

Some common short-term investments and strategies used by companies and individual investors are:

  • Payment receipts (CD): These deposits are offered by banks and generally pay a higher interest rate as they lock the cash for a period of time. It is insured by the FDIC up to $ 250,000.
  • Money Market Accounts: The returns on these FDIC-insured accounts exceed the returns on savings accounts, but require minimal investment. Note that money market accounts are different from money market funds that are not insured by the FDIC.
  • Treasury: There are a variety of these bonds issued by the government, such as Notes, bills of exchange, floating-rate notes, and inflation-protected securities (TIPS).
  • Pension fund: These funds offered by professional asset managers/investment companies are better suited for a shorter period of time and offer above-average risk returns. Just keep the fees in mind.
  • Municipal bonds: Issued by local, state, or non-state agencies, these bonds can offer higher yields and tax benefits because they are often exempt from income taxes.
  • Peer-to-peer loans (P2P): Excess money can be brought into play through one of these lending platforms, linking borrowers with lenders.
  • Roth IRA: For individuals, these vehicles offer flexibility and a variety of investment opportunities. Contributions, but not earnings, to Roth IRAs can be withdrawn at any time with no penalties or taxes owed.

Best short-term investments in 2021:

Below are the short-term investment options with high returns you should consider in 2021

Savings accounts

A savings account at a bank or credit union is a good alternative to having cash in a checking account, which generally pays very little interest on your deposit. The bank regularly pays interest on a savings account.

Savers do well with comparison store savings accounts because it’s easy to find the banks with the highest interest rates and set one up.

Liquidity: Savings accounts are very liquid and can add money to the account. However, savings accounts generally only allow up to six free withdrawals or transfers per statement cycle. (The Federal Reserve has allowed banks to waive this requirement as part of its market contingency measures.) Obviously, beware of banks that charge account management or ATM access fees so that you can minimize them.

Risk: Savings accounts are insured with banks with the FDIC and with credit unions with the NCUA, so you won’t lose money. There is no real risk to these short-term accounts, although investors who hold their money for longer periods will have trouble keeping up with inflation.

Short-term corporate bond funds

Corporate bonds are the bonds of large companies that are issued to finance your investments. They are generally considered safe and pay interest on a regular basis, possibly quarterly or twice a year.

Pension funds are collections of these corporate bonds from many different companies, generally in many industries and sizes of companies. This diversification means that an underperforming bond will not detract much from the total return. The pension fund pays interest regularly.

Liquidity: Money market accounts are very liquid, although federal law places some restrictions on withdrawals.

Risk: A short-term corporate bond fund is not insured by the government and therefore may lose money. However, bonds tend to be quite safe, especially if you are buying a widely diversified collection. Additionally, a short-term fund offers the least risk of changing interest rates, so rising or falling interest rates don’t affect the fund’s price too much.

Cash management accounts

A cash management account allows you to put money in a variety of short-term investments, and it behaves very similarly to a general account. You can invest frequently, write checks on the account, transfer money, and do other typical banking activities. Cash management accounts are often offered by Robo-advisors and online brokers. Therefore, the cash management account offers you a lot of flexibility.

Liquidity: Cash management accounts are extremely liquid and money can be withdrawn at any time. In that sense, they may even be better than traditional savings and money market accounts, which limit monthly withdrawals.

Risk: Cash management accounts are often invested in safe, low-yielding money market funds, so there is little risk involved. With some Robo-advisor accounts, these institutions deposit their money in FDIC-protected partner banks. Therefore, you should ensure that you do not exceed the FDIC deposit insurance if you are already doing business with one of the partner banks.

Short-term US Treasury funds

Government bonds are like corporate bonds, except that they are issued by the federal government of the United States and its agencies. Government bond funds buy assets such as treasury bills, treasury bills, treasury notes, and mortgage-backed securities from government-sponsored companies such as Fannie Mae and Freddie Mac. These bonds are considered low risk.

Liquidity: Government bonds are one of the most traded assets on stock exchanges, making government bond funds highly liquid. They can be bought and sold every day the exchange is open.

Risk: While these bonds are not backed by the FDIC, the bonds are the government’s promise to pay you back. These bonds are considered very safe as they are backed by the full faith and solvency of the United States.

Also, a short-term bond fund means that an investor takes low-interest rate risk. Therefore, rising or falling interest rates do not have a major impact on the fund’s bond price.


Payment receipts

You can find certificates of deposit or CDs at your bank, which generally offer a higher rate of return than other banking products, such as savings accounts and money market accounts

CDs are term deposits. So when you open a CD, you agree to keep the money in the account for a certain period of time, ranging from weeks to many years, depending on how long you want. In exchange for the security of having this money in your vault, the bank pays you a higher interest rate.

The bank regularly pays interest on the CD. At the end of the CD’s useful life, the bank returns your principal plus any interest you’ve earned.

Liquidity: CDs are less liquid than other bank investments on this list. Generally, if you accept the terms of the CD, you allow the bank to charge you a penalty for finalizing the CD early. Therefore, you must be especially careful not to tie up your money and then have to access it before the term expires.

Risk: CDs are FDIC insured, so you won’t lose money on them. The risks of a short-term CD are limited, but one of the risks is that you will lose a better price elsewhere while your money is tied up on the CD. If the interest rate is too low, you can also lose purchasing power due to inflation.

Best Short-Term Investments Banks

Below is a list of best short-term investments for your money


When you need to invest your money for only several weeks or months, you don’t need to pour money into investments that are not easy to liquidate, have withdrawal fees, or are too risky in the short term. A course on Financial Intelligence can help you get started on a good note.

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Discretionary Investment Management: Overview, Advantages and Risk




What is discretionary investment management?

Discretionary investment management is a form of investment management in which buying and selling decisions are made by a portfolio manager or investment advisor on behalf of the client. The term “discretion” refers to the fact that investment decisions are made at the discretion of the Portfolio Manager. This means that the client must have the greatest confidence in the skills of the investment manager.

Discretionary investment management can only be offered by individuals with extensive investment industry experience and advanced training. Many investment managers have one or more job titles such as Chartered Financial Analyst (CFA) and Chartered Alternative Investment Analyst, Chartered Alternative Investment Analyst (CAIA), Chartered Market Technician (CMT), or Financial Risk Manager (FRM).

Understand discretionary investment management

In general, there are two types of investment management styles:

  • Non-discretionary investment management
  • Discretionary investment management

Non-discretionary investment managers are distinguished by the fact that they conduct all research and recommendations of the investment process. However, clients reserve the right to make the final investment decision. This is effective because investment managers do not have to risk making the wrong decision and the client remains responsible for the decisions that are made while continuing to receive professional research and advice.

The limitation, however, is that decisions can be made much more slowly and not more efficiently when the final decision is left to the customer. Therefore, discretionary investment management can be more effective in implementing investment strategies in a timely manner, as there is no need to consult the client before making an investment decision.

However, discretionary investment managers do not have complete freedom of choice. Managers must make decisions based on client preferences, which are generally set out in an investment policy statement (IPS). The IPS is a detailed document that describes clients’ investment preferences and restrictions and is highlighted by the client’s risk-return profile. The document will be flexible over time as customer preferences and tolerances can change dynamically over time.

How discretionary investment management works

Discretionary Investment Managers demonstrate their strategies using a systematic approach that facilitates performance reporting and specific investment strategies are used. Investments are not personalized or tailored to a customer.

Rather, investments are made according to customer strategies. In other words, customers are grouped according to their key goals and risk tolerance. Then each group will have the same investment portfolio created from the money pool deposited by clients. The customer’s real account is segregated and the funds invested are weighted with the individuals’ capital investments.

Advantages of discretionary investment management

The benefits of using a discretionary investment management include:

  • Convenience: Customers don’t have to waste time worrying about the return on their investments. You can easily put your capital with a professional who will oversee your investments on your behalf.
  • Excessive Return: When properly incentivized, investment managers seek to outperform clients who are above their benchmark.
  • Access to Expertise: Investment Managers are typically professionals who understand the financial markets and invest more than the average person. In theory, this should result in a better return than a personal investment.
  • Economies of scale: Customers can pool their capital and access economies of scale in the form of lower trading fees and block operations.

Discretionary Investment Management Disadvantages

The risks associated with using a discretionary investment manager include:

  • Fees: Discretionary Investment Managers charge a fee for their services and take a portion of the ultimate return a client receives.
  • Underperformance: Due to the unpredictability of financial markets, there is a strong possibility that the Investment Manager will underperform its benchmark.
  • Confidence in the Manager: Clients must have the greatest confidence in the Investment Manager in order to make the best investment decision. However, many clients may feel anxious if they start losing money and want to withdraw their capital from the discretionary investment manager, which limits the manager’s ability to execute their strategies.

Discretionary investment management vs. Advisory Investment Management, Which service is best?

Discretionary investment

Discretionary investment management means that business decisions for clients are made at the discretion of the portfolio manager within the parameters set by the client at the beginning. This means that a company can make routine changes and realignments to a client’s portfolio without first contacting them. However, if a company wants to make a change outside of the agreed mandate, it must first get the customer’s consent.

Discretionary management is often outsourced to a discretionary fund manager (DFM), but a client can also grant an advisor discretionary permissions.

What is advisory investment management?

Advisory investment management means that the advisor makes recommendations based on the client’s circumstances, goals and risk tolerance. However, you cannot respond to these recommendations until the customer has granted specific permission.

Are there any similarities?

Regardless of the service, the advisor is responsible for ensuring that the investments made are continuously appropriate and correspond to the goals and risk profile of the client.

Within portfolio management there are usually two offerings: bespoke and managed (model) portfolio service. A managed portfolio is a model portfolio developed by a DFM or advisor and typically has different risk profiles and objectives to suit a wide variety of clients. A bespoke service is fully customized and tailored to more specific needs.

What are the main advantages and disadvantages?


  • Advisory management supports customer loyalty and loyalty the customer remains in control as every action must be approved
  • Discretionary management takes advantage of market opportunities immediately. Easily outsourced to benefit from specialized investment knowledge and systems, as well as reducing ongoing fund spending and making a wider choice of investments


Advisory management: Every action must be approved by the customer. This is time-consuming and can result in lost investment opportunities. Intense work for the customer and the consultant

Discretionary management: Less control over the client’s daily investment decisions
Is there a difference in cost?

The costs in the investment industry are very different and each product has to be considered separately. Usually, there is not much of a cost difference between the two management styles, especially when portfolio management is outsourced. Specialized DFMs often benefit from institutional purchasing power and the resulting lower fund costs. transferred to the customer.

Which service is best?

While there are pros and cons for both, it comes down to personal preference. Clients who want to be closely involved in day-to-day investment decisions can opt for an advisory service, otherwise a discretionary service may be more suitable.

The past two years have seen periods of market turmoil when advisors would be better positioned to serve their clients if they had discretionary powers. By the time the advisory process is complete, it may be too late to anticipate or even react to market movements. The consensus is that volatility persists and so this should be taken into account when deciding on advisory management.

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