What Is a Stockbroker?

By Frank Bass – Updated Dec 18, 2025 at 11:59 AM EST

Key Points

Stockbrokers act as intermediaries, facilitating the buying and selling of stocks for investors.
Full-service stockbrokers tend to charge the highest commissions.
Stockbrokers usually have at least a bachelor's degree and hold various securities licenses.

Stockbrokers are licensed individuals or companies that facilitate the sale and purchase of securities. While a growing number of stockbrokers are competing with online discounters and robo-advisors, there’s still a role for people who can help investors increase their wealth. Read more here to learn about the types of stockbrokers, how they’re regulated, and how you can benefit from them.

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A broker working on stock research. — Image source: Getty Images.

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What is a stockbroker?

Simply put, a stockbroker is a middleman between investors and markets. They buy and sell securities on behalf of their clients, handling stocks, bonds, exchange-traded funds, and mutual funds, among other investments.

Although stockbrokers need to have a wide range of skills to excel in the field, the most successful brokers possess three strong attributes:

Analyzing. Stockbrokers should have a comprehensive grasp of financial products and markets. They need to be able to use quantitative tools to find the best investments for clients.
Communicating. Stockbrokers need to have the ability to discuss sometimes-complex topics in language that everyday investors can understand and appreciate.
Selling. Most stockbrokers earn money from commissions. If they can’t sell financial products, they don’t earn commissions -- and they’re soon out of business.

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Individuals working as stockbrokers generally have college degrees in a business-related field and pass licensing tests after being sponsored by a regulated firm. The tests include the General Securities Representative Exam (also known as the Series 7 Exam) and the Securities Industry Essentials (SIE) Exam. Both tests are administered by the Financial Industry Regulatory Authority (FINRA), a private, nonprofit organization that regulates the securities industry.

According to FINRA, more than 628,000 people were registered as representatives in the industry in 2023, the largest number since 2018. Almost 3,300 firms were regulated by FINRA, marking a steady decline since 2006, when more than 5,000 firms fell under its jurisdiction.

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Discount stockbrokers

Discount stockbrokers offer many of the same services as their full-service counterparts, but they offer smaller commissions and are often focused on investors who make frequent trades. They also often provide more extensive research tools and trading options than full-service stockbrokers since much of their client base consists of day traders and other investors who are trading heavily. Examples of discount stockbrokers include Robinhood and Public.

Online stockbrokers

Also known as direct-access stockbrokers, online stockbrokers offer some of the smallest commissions, usually based on individual trades. Because they’re online, they’re usually very quick, which appeals to day traders. Some will charge a monthly fee for advanced research and trading options.

It’s worth noting that while there are clear differences among the types of stockbrokers, many companies offer all three types of services. Fidelity, Schwab, and Vanguard, for example, offer full-service, discount, and online options for investors.

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About the Author

Frank Bass is a contributing Motley Fool stock market analyst and editor covering energy, healthcare, consumer, and financial sectors. Frank has decades of experience in financial journalism, holding reporting and editing roles at The Wall Street Journal, The Associated Press, and Bloomberg. He also currently edits research on the global energy transition. He holds a bachelor’s degree in journalism from Texas Tech University and is a graduate student at the University of Alaska Fairbanks. Fun Facts: Frank has hiked The Long Trail in Vermont from end to end, and currently lives in a semi-dry cabin in Interior Alaska.

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Charles Schwab is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Frank Bass has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Charles Schwab and recommends the following options: short December 2025 $95 calls on Charles Schwab. The Motley Fool has a disclosure policy.

What Is a Stockbroker?

Key Points