When trading in a principal capacity with a client, the broker informs the client and charges the client a markup or markdown from the prevailing market price.
In the UK: Stockbrokers act the same in the UK as in the US, except that when trading in a principal capacity with a client, the broker is obliged to inform the client and no commission is charged.
Today, most of the once well-known corporate brand names including mid-sized firms such as Smith Barney have been swallowed up by global financial conglomerates.
Discount brokers (such as E-Trade, Scottrade, and TD Ameritrade) have taken a large share of the business by offering highly discounted commissions, but the companies do not offer investment advice in return--all they do is execute orders.
A stockbroker sells or buys stock on behalf of a customer.
The stockbroker works as an agent matching up stock buyers and sellers.
However, in the 1820s a shift to New York City began and for more than one hundred and fifty years Wall Street has been synonymous with the stockbrokerage business.
Thus, a conflict of interest arises concerning a stockbroker who offers his/her service as a financial planner, because their revenue is generated as a direct result of your investment in the stock/mutual fund that they broker to you.
Other jurisdictions are thought to have similar rules.
The term boiler room in business refers to a busy center of activity, often telemarketing or other types of sales.
It typically refers to a room where tele-marketers work, often selling stocks, and using unfair, dishonest sales tactics, sometimes selling fraudulent stocks.
The term carries a negative connotation, and is often used to imply high-pressure sales tactics and sometimes, poor working conditions.