Sometimes middlemen are blood-sucking-leech-level-annoying, and sometimes they’re a necessity. Likely an evil one.
A financial intermediary is a middleman in a financial transaction. Banks (commercial and investment) use financial intermediaries, as do funds (think: mutual, pension, etc.) before sealing the deal. For a small fee.
Why might you want a financial intermediary? Financial intermediaries usually know a lot more about risk, asset management, and investment banks than you do, so it’s no wonder they help banks and funds get their ducks in a row. In the same way that you’d probably want a lawyer in a court case, banks employ financial intermediaries for large financial transactions.
Their collective motto: "Check yoself before you wreck yoself."
See: Investment Banker. And Shmoop has a whole Wall Street Careers section on this lovely topic, should it tickle your commission bone.
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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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