Since the beginning of financial stock market trading, why has it ever been necessary for investors and publicly-traded companies to use intermediaries such as a broker?
Since the beginning of financial stock market trading, why has it ever been necessary for investors and publicly-traded companies to use intermediaries such as a broker, a trading platform like a stock exchange, or a trading company to buy and sell stocks between investors and publicly-traded companies? I know this is a very broad ajd basic question, but in other words, why didn't investors and the publicly-traded companies just work together on an individual basis without the commission fees and other expenses of brokers and trading platforms like a stock exchange or modern online trading companies? Why is there a need for any kind of intermediary with their commission fees and other expenses?
Great question, and i like your innovative approah and thought process. As broad as your question is, the answer is also very broad. In the securites world there is a LOT of regulation on the issuing, selling, and buying of securities. The basis of which is to protect the consumer (you) from fraud and other bad practices. In my opinion, working with an advisor or professional should be viewed as an advantage to you, not a fee. Now if you are a DIY investor, the platforms to trade on your own are so low, I think the value is better than ever before. When i read your question i immediately applied the same question to other industries and ultimately came back to the fact that there should be value in the services you are paying for. Here are some of the examples I thought of to help illustrate the need for brokers/trading platforms:
- Why do I need to go see a doctor in order to get a prescription? Why cant I just go directly to the pharmaceutical company?
- Why would I take my car to a mechanic? If I can just get the computer code and learn how to change the part myself?
- why take my car to the carwash, when i can wash it at home?
I think you are starting to see the basis for my response in there has to be a "value add". I noticed this question went unanswered for a few weeks now, I be that other advisors have skipped it because it's not an "opportunity" type of question. I just dont operate that way i guess. If you have any other questions feel free to reach out directly to me and we can chat about whatever.
Jordan Jones, RFC