What Does Brokerage Firm Mean?
A brokerage firm is a business that serves as a transactional middle between a buyer and a seller. It earns its income from a commission collected for every finished deal. It can also function as a professional adviser for people who engage in trading securities.
Insuranceopedia Explains Brokerage Firm
A brokerage firm is mostly composed of brokers, people who buy and sell goods on behalf of others. Their brokers usually specialize in securities, financial instruments like stocks or bonds. People go to these firms either to buy or sell these instruments. For every completed transaction, the firm earns a commission, which serves as its source of income. A brokerage firm can also give professional advice about financial matters for a fee.
Where insurance is concerned, a broker is also the term for one who sells insurance. Like the brokers at a brokerage firm, these insurance professionals earn a commission from every insurance policy they sell. In a complex insurance market like Lloyd's of London, brokers also act as middlemen between insurance buyers and insurance syndicates.