01 / 12
What Is a Stockbroker?
👤 ↔ 🏦 ↔ 📊
A stockbroker helps investors access the securities market.
If you want to buy or sell shares on a stock exchange,
you normally do not walk directly into the exchange and
place an order yourself.
A stockbroker is a licensed intermediary that helps
investors buy and sell securities through the market.
In simple terms, the stockbroker acts as a link between
you and the securities market.
Simple meaning:
A stockbroker helps you carry out investment transactions
in the market.
02 / 12
Why Do You Need a Stockbroker?
Stock markets operate under rules and systems designed
to make buying and selling securities organised and fair.
A stockbroker provides investors with access to the market
and the systems needed to place orders.
👤
You
→
🏦
Stockbroker
→
📈
Market
The broker receives your instructions and handles them
according to the applicable market rules and procedures.
03 / 12
Think of a Stockbroker as a Bridge
🌉
You → Stockbroker → Stock Market
Imagine you want to travel somewhere but you cannot directly
access the road on the other side of a river.
A bridge gives you a route to reach the other side.
In a similar way, a stockbroker provides a route for an
investor to access the securities market and place orders.
The stockbroker is not the same thing as the stock exchange.
They have different roles.
04 / 12
What Does a Stockbroker Do?
A stockbroker can perform several important functions
for an investor.
- Help you open an investment account.
- Receive your buy and sell instructions.
- Send orders into the market.
- Provide information about transactions.
- Provide account and portfolio information.
- Assist with the settlement process.
The exact services offered can differ between brokers,
so investors should understand what their chosen broker provides.
05 / 12
Buying Shares Through a Broker
1
Choose a company
2
Decide what to buy
3
Give your order
4
Broker processes it
Suppose you have researched a listed company and decide
that you want to buy its shares.
You give the stockbroker your instructions. The broker
then processes the order according to the applicable
market procedures.
Placing an order does not always mean that the transaction
will immediately happen. A buyer and seller must be matched
according to the market's trading rules.
06 / 12
Selling Shares Through a Broker
👤
Investor
→
🏦
Broker
→
📊
Market
The same basic process applies when you want to sell shares.
You give your broker instructions to sell. The order is then
handled through the market according to the applicable rules.
The price at which your shares are sold depends on the
market and the order conditions.
07 / 12
Stockbroker vs Stock Exchange
🏦
Stockbroker
Helps investors trade
VS
📊
Stock Exchange
Provides the marketplace
These two terms are sometimes confused, but they are not
the same.
The stock exchange provides the organised marketplace
where securities can be traded.
The stockbroker is the intermediary that helps investors
access that market and place transactions.
Easy way to remember:
Exchange = marketplace
Broker = intermediary
08 / 12
Stockbroker vs Investment Adviser
A stockbroker and an investment adviser can also have
different responsibilities.
A broker generally helps execute transactions for clients.
An investment adviser may provide investment advice or
recommendations, depending on their licence and services.
🏦
Stockbroker
Helps with buying and selling securities.
🧠
Investment Adviser
May provide investment advice, depending on their
authorised services.
Always check what services a financial professional is
actually authorised to provide.
09 / 12
What Are Brokerage Fees?
Stockbrokers may charge fees or commissions for the services
they provide.
These costs can affect the amount of money you receive from
an investment transaction.
Simple Example
Imagine you buy shares worth K5,000.
If a transaction fee applies, your total cost may be
more than K5,000.
Similarly, when you sell shares, applicable charges
may reduce the amount you receive.
Always ask your broker about the complete costs before
placing a transaction.
10 / 12
Choosing a Stockbroker
Choosing a broker is an important decision because you may
use the broker for many investment transactions over time.
Before opening an account, consider:
- Whether the broker is properly licensed.
- The services they provide.
- Their transaction fees and other charges.
- How you can place orders.
- How you receive account information.
- Their customer support.
Important:
Do not send your investment money to an unverified person
simply because they promise easy profits.
11 / 12
A Simple Investor Journey
📚
Learn
→
🔎
Research
→
🏦
Broker
→
📊
Market
A sensible investment journey starts with learning and
research.
Once you understand what you want to invest in and the risks
involved, a stockbroker can help you access the market and
carry out your transaction.
Learn → Research → Choose carefully → Use a licensed broker.
12 / 12
🎓
Lesson Complete!
Well done! You now understand what a stockbroker is
and why investors use one when buying and selling shares.
Remember:
A stockbroker is an intermediary that helps investors
access the securities market and carry out transactions.
Always check that the broker is properly authorised and
understand the fees and services before opening an account.
The most important thing is to learn first and make
investment decisions carefully.
A stockbroker is an important part of the investing process. If you want to buy or sell shares through the stock market, you normally need to use an authorised intermediary to access the market.
Think of a stockbroker as a bridge between you and the securities market. You decide what you want to buy or sell, and the stockbroker helps you place and process your transaction according to the applicable market rules.
For example, imagine you have researched a company and decide that you want to buy K5,000 worth of its shares. You would give your instructions to your stockbroker. The broker then handles the order through the market. If there is a matching seller and the order is successfully executed, the transaction can proceed to settlement.
It is important to understand that a stockbroker is not the stock exchange. The exchange provides the organised marketplace where securities are traded, while the broker acts as an intermediary helping investors access that marketplace.
Stockbrokers may also provide other services, such as investment accounts, transaction records, portfolio information and assistance with settlement. The services offered can differ between brokers.
Investors should also understand the costs involved. Brokerage fees, commissions and other applicable charges can affect the final amount paid when buying or received when selling investments.
Before choosing a stockbroker, check that the broker is properly authorised and understand its services, fees, account requirements and methods of placing orders.
In this lesson, you will learn what a stockbroker does, how buying and selling shares through a broker works, how brokers differ from stock exchanges, and what to consider before choosing one.
