A boutique is a small, specialized shop that deals with a limited clientele and offers a limited product line. It stands in contrast to larger retail establishments like department stores, supermarkets, or warehouse clubs, which offer a wide array of products or services. The term can also apply to small, specialized brokerage firms as compared to financial supermarkets.
A custodial account is a type of account created for a minor by a parent or guardian, often held at a bank or brokerage firm, where the minor cannot make securities transactions without the approval of the account trustee.
A load fund is a type of mutual fund that requires investors to pay a sales charge, typically to compensate financial advisors and brokers who sell the fund’s shares.
A market letter is a newsletter provided by brokerage firms to their customers or sold by independent market analysts. The analysts are typically registered as investment advisers with the Securities and Exchange Commission (SEC). The market letter offers financial advice, market analysis, stock recommendations, and other investment-related information.
A member firm, also known as a member corporation, is a brokerage firm that holds at least one membership on a major stock exchange. While exchange rules stipulate that the membership is officially in the name of an employee, it is the firm that utilizes the membership.
A nonmember firm is a brokerage firm that does not hold membership in an organized exchange. These firms execute trades through member firms, on regional exchanges, or in the third market.
A power of attorney form used to transfer ownership of a registered security from the owner to another party. This document is essential in executing the transfer of securities efficiently and legally.
Trading authorization is a document giving a brokerage firm employee acting as an agent (broker) the power of attorney to buy and sell transactions for a customer.
A wire house is a national or international brokerage firm whose branch offices are linked by a communications system that allows for the rapid dissemination of prices, information, and research related to financial markets and individual securities.
