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Username: BobM

Rating:
Guru Stars

Asked to: Apinya Kamon

Date Created: 11 Nov 2015
Category 40
Tag 194
Question How do financial advisors execute trades?
Advice from Guru
Hello BobM,

Today, almost every investor invests through online brokerage accounts. Investors often believe that their trades are directly connected to the financial exchanges and securities markets. However, real-life brokers, also known as financial advisors, receive the trade requests from online accounts and decide what market to send the trade to for execution. The same process occurs if an investor picks up the phone and calls a financial advisor.

Trade execution and order fulfillment isn't as fast as it seems. By the time an order goes from the computer or telephone to a financial advisor and then to the actual market, the price may fluctuate.

Once financial advisors receive the order, they have a duty of best execution, which means they must execute trades in the market with the most favorable execution for that trade. Advisors actively decide what market is best, and then execute the trade accordingly.

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