Sort of a schmoozing broker. "Client-Bob, meet my other broker partners at the brokerage here..."
Most brokers are handling client accounts. They answer phone calls from clients who want to buy or sell, or who know why their investments are not making them money. (Or are making them money; both count in this case.)
An introducing broker doesn't do all the dirty work. Instead, they had the prior relationship with Client-Bob, owner of Bob's Land O' Fun and Botox. But the introducing broker either was full-up for clients, or Client-Bob had specific needs that one of the introducing broker's partners had a better feel for. Like...they spoke Russian. Or they knew complex estate planning well. Or they specialized in internet IPOs, which were the only thing that Client-Bob wanted to invest in.
So the introducing broker sends Client-Bob to someone else, and is owed a big fat favor down the line. Welcome to Wall Street Backscratching 101.
Related or Semi-related Video
Finance: What is a Broker-Dealer?16 Views
Finance a la shmoop.. what is a broker-dealer? It's one of [Homeless guys holding help signs]
these guys who's making less than minimum wage right no that'd be a broke
dealer and you won't find too many of them in Lake Tahoe but yeah a broker is [Man talking about broker-dealers in Lake Tahoe]
just someone who takes a commission for selling stuff they live wherever there
are transactions in cars, boats, planes, homes and securities like stocks and
bonds so yeah it's a broker - dealer sort of like a writer-director
sexual deviant in Hollywood... Key takeaway here the broker dealer brokers
securities ie they take a commission and they deal in securities like they carry [People playing blackjack]
their own inventory of ten million shares of Amazon this week's selling
them for twelve hundred ninety dollars and 32 cents a share and buying them for
twelve hundred eighty eight dollars seventy nine cents a share making a
spread of...
equals a dollar fifty-three a share the dealer makes a spread of a buck fifty [Dealer and market transferring cash and stock]
three every time she trades a share of the Walmart killing behemoth yeah it's
sort of a Goliath slaying Goliath story there that Amazon Walmart thing we're
watching it so think about broker-dealer making money on both sides of the trades
that's the way to go if you're going to Wall Street make money no matter what [Man walking on Wall Street]
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