Introduction to a Stock Broker for Kids and Teens
This video explains the concept of a stock broker in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about stock brokers, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Kindergarten
- Elementary School
- Middle School
- High School
The topics covered are:
- What is a stock broker
- How are full service and discount stockbrokers different
- How do stock brokers help me
- How do I find a stock broker
What is a stock broker?
A stockbroker is a person or a company that buys and sells stocks and other securities like ETFs and mutual funds on behalf of their clients – either institutional or individual investors.
Most stockbrokers work for investment banks or brokerage firms, act as a middleman between the stock exchange and the investors, and charge commission for their services.
There are two types of stockbrokers – full service and discount.
How are full service and discount stockbrokers different?
Full service brokers provide many personalized services to their clients – including portfolio management, investment and tax advice, retirement and estate planning, etc.
Full service brokers usually charge high fees and commissions, and are preferred by high net worth individuals and institutional investors.
On the other hand, discount brokers do a much simpler job – they just execute trades on behalf of their clients.
The vast majority of individual investors use online trading platforms offered by discount brokers, due to much lower fees and commissions.
How do stock brokers help me?
Individuals like you and me cannot easily trade stocks on our own – in order to do that, you or your firm need to be a member of a stock exchange like the New York Stock Exchange (NYSE) or NASDAQ.
So stock brokers act as a middleman between you and the stock exchange, and execute your trades on the stock exchange.
How do I find a stock broker?
Individual investors like you and me should opt for an online broker especially considering the ease of trading and the cost savings offered by them.
Compare multiple discount brokers and go for the one that requires a low minimum investment, charges very little or no commission, and has no ongoing account maintenance fees.
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
