what is a broker dealer 
a broker dealer b d is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers the term broker dealer is used in u s securities regulation parlance to describe stock brokerages because most of them act as both agents and principals a brokerage acts as a broker or agent when it executes orders on behalf of its clients whereas it acts as a dealer or principal when it trades for its own account understanding a broker dealerbroker dealers fulfill several important functions in the financial industry these include providing investment advice to customers supplying liquidity through market making activities facilitating trading activities publishing investment research and raising capital for companies broker dealers range in size from small independent boutiques to large subsidiaries of giant commercial and investment banks there are two types of broker dealers there are over 3 378 broker dealers to choose from according to a 2022 report from the financial industry regulatory authority finra some of the largest broker dealers include fidelity investments charles schwab and edward jones 1