Broker-Dealer

A broker-dealer is a financial firm or individual that acts as both a broker (executing trades for clients) and a dealer (trading on its own behalf) in stocks, bonds, and other securities. Large institutions like Charles Schwab (SCHW), Fidelity, and Morgan Stanley (MS) operate as broker-dealers, offering services to retail and institutional investors. They generate revenue through commissions, spreads, and market-making activities. Regulatory bodies like the SEC and FINRA oversee broker-dealers to ensure fair trading practices.