A broker-dealer is a firm that buys and sells securities for customers (as a broker), for its own account (as a dealer), or both, and generally must register with the SEC and join FINRA.
A typical broker carries out orders to buy and sell, recommends investments, and may agree to monitor some accounts. It is usually paid per transaction, through a commission or markup each time you buy or sell, and you may pay other fees tied to the account and the investments.
Broker-dealers must follow Regulation Best Interest when they recommend investments to retail customers, and FINRA writes and enforces the rules for the firm and its people. The individuals who deal with customers are registered representatives.
Many broker-dealers are also registered investment advisers. If yours is, it is a dual registrant, and the type of account you open decides which standard and which fees apply.
How to check
Search the firm on FINRA BrokerCheck. A brokerage firm's record shows its registrations, history and disclosures, including regulatory actions and arbitrations.
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