Broker Dealers and Clearing Houses

I have been calling financial planners this week to ask them if they would like to help us test some new software . On of the things I ask them is what firm they use as a custodian. I am mainly talking to financial planners who manage their clients assets for them. That means that the planner is able to trade and manage assets in the client’s account. Planners custodian their accounts with companies like Schwab, TD Waterhouse, and Ameritrade. What is confusing is that there is also the concept of a broker dealer, and a clearing house. It is important to know who the clearing house  is because that will be the source of account downloads. If I understand it correctly big companies like Schwab and Waterhouse do both the broker dealer function and the clearing house function. But there are broker dealers who use  a separate clearing house like Pershing. In talking to planners it  is important for me to know the difference  because it will impact our testing. I am enjoying learning all this new stuff.

Author: marionvermazen

I am a traveler, hiker, avid reader, Sun alumnus, computer geek, Spanish and French language student, knitter and genealogist. I am retired after working for almost 30 years in the Computer Industry. I live in Reno, Nevada with my husband Duke.

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