What Is A Broker/Dealer? SII Investments Explains...
There are two main roles of a broker/dealer. The broker acts as the entry point to the stock market on behalf of a client. In order for an individual to purchase and sell stocks, he or she must have a brokerage account. The broker sets up the account and facilitates activities with the stock markets. Many, if not all brokers, provide financial advisors a server to process web-based trading and a computer system to keep track of accounts. As a broker/dealer, SII Investments, Inc. (SII) offers its registered representatives the support and service, technology and resources they need to provide their financial clients with investment solutions tailored to meet their objectives.
The dealer (or sometimes referred to as the principal), refers to the compliance and supervision of trades and sales staff. As a dealer, the broker/dealer has acquired the necessary licenses required by law. The industry is highly regulated by FINRA and the SEC in order to prevent fraud and mismanagement. The dealer ensures that all compliance is being followed and that the transaction is a suitable situation for the client.
Essentially, an independent broker/dealer is the catalyst for financial transactions. Their oversight is needed to protect individuals from fraudulent activity, and their access gives financial advisors a portal to work with investor's money. In other words, the broker/dealer is a silent player in an investor's activities.
The following graph highlights the structure of the financial industry. The regulatory bodies, FINRA and SEC, are the base. They supply the regulations and oversight that drive the activities of the financial industry. Independent broker/dealers, like SII Investments, are the next level within the industry. They act as the liaison between the regulatory bodies and the registered representatives. SII Investments provides the tools to execute transactions and supervise the activities of the registered representatives. Registered representatives consult with clients to manage asset accounts and to develop a financial strategy based on the client's needs.