• A broker-dealer is a financial institution that trades securities on behalf of clients, but which may also trade for itself.
  • A broker-dealer acts as a broker or agent when he executes orders on behalf of his clients, and as a dealer or principal when he trades on his own behalf.
  • There are thousands of broker-dealers that fall into two broad categories: a telecommunications company that sells its own products, or independent broker-dealers that sell products from outside sources.