What is Broker?
A broker is a professional who works as a go-between between a buyers and sellers in a real estate transaction. The broker is responsible for selling and purchasing assets on their customers. Government agencies employ them.
There are around three hundred brokerage businesses in total located across the world. Zerodha is one of India‘s most prominent and well-established brokerage organizations, and it has been in operation for over a decade.
Brokers are not required to adhere to or comply with high-level legal concerns or duties. This is in sharp contrast to the predicament faced by advisors. Brokers have the opportunity to express their personality and independence.
Their clientele is members of the official authority and is entitled to official benefits. When a particular investment is sold, these brokers or brokerage companies get a fee from the seller. They perform or participate in the role of intermediary between a buyer and a seller, assisting in bringing the two parties together. The following are the primary tasks of a broker:
- Establishing positive customer relationships.
- Clients should be followed up with.
- Complete a variety of administrative responsibilities, such as document preparation.
- This person carries out sales.
- They have a reorganizations guarantee that the consumer is pleased.
What is Advisor?
An advisor is a person who has extensive expertise in a particular profession. These individuals assist in sharing their knowledge with their customers and guiding them in any sector in which the client wishes to be directed. Their clientele is from various sectors, with most of them being from the business world. Advisors are compensated for their time to provide advice to their clients.
There are now more than two lakh advisers working throughout the world. Advisors and advising agencies are required to adhere to high-level legal mandates. Compared to brokerage firms, they do not get the same amount of legal freedom. They may be harshly disregarded and fined if they do not comply with these restrictions. An adviser is a mentor or a guide who helps their customers achieve success in their respective industries by mentoring or guiding them. Their responsibilities are as follows:
- They need to be fully educated about all facts to advise their customers.
- Answer any customer’s questions and strive to ensure their complete pleasure.
- Keeping their clientele up to speed on all of the latest developments.
- Demonstrates a kind and compassionate approach toward the people they counsel and their clients.
Difference Between Broker and Advisor
- Brokers engage in financial transactions on their customers’ behalf, while advisers advise their clients on various topics. Brokers and advisors work in multiple capacities.
- Brokers are not required to adhere to legal issues, while advisers must adhere to stringent legal requirements.
- There are around three hundred brokerage businesses globally, with approximately two lakh financial advisers among the overall population.
- Brokers are compensated for any investment transaction, while advisers are paid solely for consultation and tiny pieces of advice provided to their customers.
- Indian brokerage businesses such as Upstox, Zerodha, grow, angle broking, and 5paisa are among the most prominent advising firms in the country.
Comparison Between Broker and Advisor
| Parameters of Comparison | Broker | Advisor |
| Significance | A broker is a person who acts on behalf of others in the sale and purchase of goods and services. | An adviser receives compensation for providing advice to their customers. |
| Payment Method | Brokers are compensated with a commission when they sell a particular investment. | Advisors are compensated for providing little pieces of advice to customers in various professions. |
| Total Number | In the globe, there are over three hundred brokerage houses to choose from. | The world presently has around two lakh advisers working for them. |
| Legal Obligations | Brokers are not exposed to complex legal proceedings. | A high degree of legal expertise is essential for advisors to keep their positions. |
| Companies | Several online trading platforms, such as Upstox, Zerodha, angel broking, groww, 5paisa, and Share Khan. | Examples of such businesses include Dana investment advisor and check capital management. |