Stockbroker

A stockbroker (also stock broker) is a broker in the securities industry whose main business is buying and selling equities on behalf of investors or issuers, although some also trade their own account. Stockbrokers are usually classified into full-service brokers and discount brokers depending on their fee structure and services they provide - the cheapest stockbrokers usually offer investors electronic trading platforms and internet-based assistance only. In the U.S. their activities are regulated by the Securities & Exchange Commission (SEC).

Niche (stock)market

Stockbrokers have evolved rapidly from their original phone and trade business into serving different niches since internet use began spreading widely in mid-1990s. Investors subsequently demanded lower fees for do-it-yourself broking and stockbrokers like Scottrade and TD Ameritrade now offer both deep-discount broking for the self-propelled and regular discount broking with assistance. More established retail-based stockbrokers tend to offer full-service brokerage but most, like Merrill Lynch, have recently been acquired by mega-banks like Bank of America. Asset managers are stockbrokers but also charge higher fees for making asset allocation decisions and are used mainly by institutional investors.

Some of the best-known recent casualties in the investment banking business, like Bear Stearns and Lehman Brothers, began business as retail stockbrokers before branching out into wholesale financing. Other stockbrokers that recently specialised in higher-end broking and financing, like Morgan Stanley and Goldman Sachs, have been pushed by the credit crisis into refocusing on retail customers once more.

Trading's not gambling

Wall Street and other high-end stockbrokers are among the largest customers of online gaming casinos and regularly drop six-figure amounts in single sittings several years after Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA). One Internet-gaming information site reports that thousands of U.S. stockbrokers are regular online-casino players and speculates they may be looking for some upside in an otherwise down environment for brokers.