A broker is an individual or company that acts as an intermediary between an investor and an exchange, executing their financial transactions for a commission fee. Brokers can carry out transactions for forex, stocks, commodities or any other financial market on behalf of their investor. These are normally executed through a trading platform. Both retail traders and institutional traders can request brokerage services.
A broker must be licensed to provide financial advice and execute trades, and they are usually authorised and regulated by the Financial Conduct Authority (FCA) in the UK. For example, at CMC Markets, we comply with Client Assets (CASS) rules to ensure all client funds are protected, holding them in separate bank accounts to the company. However, remember that most investors lose money when trading with a broker on leveraged products like spread bets or CFDs, so the process isn’t entirely risk-free.
Learn more about our trading account types.