Difference between Broker and Dealer

Dealer and the broker both have their important roles in the financial industries. Dealer is the one who is engaged in buying and selling of the securities and agent act as intermediary in buying and selling. Broker can become dealer once he has gained enough knowledge and experience in the field.

Broker

A broker is a person or a firm who is acting as an intermediary between buyer and seller usually the company and customer. Broker represents the client and is involved in giving his valuable advice in purchasing a product or a policy. Brokers have limited or no rights of buying and selling the securities. This is due to the fact that a broker has less experience than the dealer.

Dealer

Dealer is a person or a firm who is buying and selling securities for his own account. He is engaged in commercial sale and purchase and act as principal. A dealer is experienced enough to make decisions on his own. Dealers are the market makers as they promote long term growth of the market.

	Broker	Dealer
Definition	Intermediary between client and company.	Market makers for the securities.
Role	A broker executes trade on behalf of his customer.	A dealer executes trade on his own behalf.
Freedom of work	Broker restricted freedom rights, he depends upon his customer’s choice.	Dealer can make his own choice with buying and selling of products.
Assets	Broker does not have his own assets, rather he depends upon commission made by buying and selling by others.	A dealer is the primary principal and does not have commissions and have their own assets.
Experience	Broker has little experience but he can be a dealer by gaining more experience.	Dealer is an experienced broker and has passed through all phases.

Venn Diagram