When an individual investor wants to buy or sell some shares, they will typically place an order with their broker containing instructions on how much to trade and what price to pay. The broker will then relay those instructions to a dealer on the relevant exchange, who will carry them out.
As well as specialist stockbrokers, many investment firms and high-street banks will offer a stockbroking service.
There are three main types of stockbroker:
- Full service brokers develop a strategy and place trades on behalf of their client without their input
- Advisory brokers recommend trades but will trade only when their client tells them to
- Execution-only brokers will not offer advice and will place trades only when their client tells them to
At IG, we offer an execution-only share trading service, allowing you to place trades via our online platform or over the phone.