What is a broker/dealer?
A broker/dealer is a company that buys and sells investment products on behalf of investors. In our case, investors dont contact us directly; rather, we receive instructions from the 1,000-plus financial professionals who are affiliated with us. Commonwealth advisors are independent business owners who have relationships with their clients, and we function as the unseen back office that processes client transactions for them. Ours is a heavily regulated business. The SEC (Securities and Exchange Commission) delegates the supervision of financial advisors to FINRA (Financial Industry Regulatory Authority). FINRA, in turn, requires every financial advisor to affiliate with one, and only one, broker/dealer, so that the chain of responsibility is clear.
A broker/dealer is a company that a registered investment professional is required to affiliate with in order to buy and sell investment products on behalf of investors. The Securities and Exchange Commission (SEC) delegates the supervision of financial advisors to the Financial Industry Regulatory Authority (FINRA). FINRA, in turn, requires us to choose one, and only one, broker/dealer to partner with on your behalf. Why Commonwealth Financial Network®? The fact that we’ve chosen to work with Commonwealth Financial Network® (Commonwealth), an independent broker/dealer, means that our firm remains independent, too. We are free to act solely in your best interest, without bias and without pressure to promote a particular product or strategy. It’s a model that differs from that of some other, larger financial firms known as wirehouses, whose financial representatives are accountable not just to their clients, but also to the parent company that employs them. Commonwealth is also independ
Performing a double role for clients, a broker/dealer takes on both the responsibilities of a broker and a dealer. In their roles as dealers, a broker/dealer will act on the behalf of the brokerage firm, initiating transactions that involve the firm’s account. As brokers, the broker/dealer will focus on the needs of clients of the firm, handling transactions that are placed on behalf of client accounts. While functioning on behalf of the firm, the broker/dealer will go about the usual business of buying and selling securities on behalf of the brokerage. This will involve all the usual aspects that are involved with creating transactions. The broker/dealer engages in trades that involve both the buying and selling of various stocks, bond, and other securities. As in all types of financial transactions, the broker/dealer will perform due diligence in investigating the background of an investment opportunity, making sure the investment is in the best interests of the firm, and seek to sec
