What is a Brokerage Fee? Definition and Overview


A brokerage fee is a fee charged by an independent agent or financial institution in exchange for facilitating transactions between two or more parties. 

Brokerage Fee

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Brokerage fees can cover a variety of transactions and transaction-related services, including:

•    Sale and purchase of financial products
•    Negotiations
•    Advice on transactions


Brokerage Fees – Additional Overview

Brokerage fees are often a combination of flat rates and percentages. 

For example, a stock broker will execute the purchase of 2,000 shares of ABC company stock at $3 per share. 

The broker charges a flat rate of $30 for the first 1,000 shares, and a rate of 2 cents per share after that. In other cases, the broker may simply charge a percentage on the total sale, such as 1.5% of a $100,000 dollar transaction.

What is a Brokerage Fee? Definition and Overview

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Brokerage fees are collected from both buyers and sellers. Lower brokerage fees are often found through discount brokers, who provide a minimal service of executing transactions. 

Higher brokerage fees are charged by full-service brokers, who offer a variety of brokerage services include reports and professional advice. 

Investors who typically buy and hold stock, without making a lot of transactions, are typically drawn toward discount brokers.

On the other hand, investors who frequently buy and sell stock may benefit from more expensive and comprehensive services offered by a full-service broker.



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