Client Brokerage definition?

[vansh]

This may seem so obvious, but I cannot fully understand the terminology after reading the CFAI book on Client Brokerage ie XYX purchase product/service with “Client Brokerage”. Can someone please simplify the definition of Client Brokerage, I’m getting confused whether it is a service or a fee.

 

[stringf]

You gotta trade with someone for your clients. Perhaps you want to go to a broker with hefty brokerage fees well in excess of the industry average because he offers you free trips to the caribbean if you direct the trades that you need to make on behalf of your clients his way. Then you are using “client brokerage” to pay for your caribbean trips. Your clients are paying the hefty brokerage fees so you can get free trips to the caribbean and that’s a no-no.

 

[JoeyDVivre]

Unless the trips to the Caribbean are of sufficent benefit for the client to justify the expense. A stressed-out broker can make some bad mistakes. Might hurt the clients…

 

[vansh]

Thanks for the clarification.
stringf Wrote:
——————————————————-
> You gotta trade with someone for your clients.
> Perhaps you want to go to a broker with hefty
> brokerage fees well in excess of the industry
> average because he offers you free trips to the
> caribbean if you direct the trades that you need
> to make on behalf of your clients his way. Then
> you are using “client brokerage” to pay for your
> caribbean trips. Your clients are paying the
> hefty brokerage fees so you can get free trips to
> the caribbean and that’s a no-no.

 

[stringf]

Good luck with that explanation with the conduct review board Joey