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What is a Stockbroker and what do they do?
By Truc Nguyen, Read bio | Updated on July 31, 2026
Summary
A stockbroker is a licensed professional or firm that helps investors buy and sell investments like stocks, ETFs, bonds, and mutual funds. Today, the term can refer to both investment advisors who provide guidance and online brokerage platforms that allow self-directed investors to trade on their own. Choosing the right option depends on how much support, flexibility, and control you want over your investing journey.
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Is there a difference between a stockbroker and an online brokerage? What about Investment Advisors? Do I need a broker to be able to buy and sell securities on major stock markets? If you want to learn more about the difference between a stockbroker and online brokers, this article may be for you.
Stockbroker in Human Terms
Think of a stockbroker as the bridge between you and the stock market.
Years ago, investors typically worked directly with a person who placed trades on their behalf and offered investment advice. Today, many investors use online brokerage platforms that let them buy and sell investments themselves using a website or app.
Whether it’s a person helping manage your portfolio or an online platform that lets you trade independently, the goal is the same: helping investors access the market.
What is a Stockbroker?
In the financial industry, a broker, or stockbroker, is referred to as a person or firm that functions as an intermediary between an investor and a securities exchange. Essentially, a broker facilitates transactions, buying and selling assets on behalf of clients. With the rise of discount brokerage firms offering online trading platforms, the term “stockbroker” is now often used interchangeably to refer to these firms as well. For example, TD Direct Investing is technically a brokerage firm even though some people may refer to it as their stockbroker.
Stockbroker is really an umbrella term that today refers to two types of services:
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Investment advisor – A licensed individual or company who provides investment advice to clients and works on their behalf to buy and sell stocks, Exchange-Traded Funds (ETFs), and other securities on major stock markets, such as the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSX).
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Online broker (sometimes called a discount brokerage or direct investing) – A licensed brokerage firm that provides a platform that investors can use to buy and sell stocks and other securities on their own. Online brokers do not provide investment advice, but they may provide tools and resources to help investors make their own investment decisions. Investors who work with an online broker are referred to as self-directed investors.
Investment Advisor VS Online Broker
Both investment advisors and online brokers help investors access the market, but they offer very different levels of support, guidance, and control.
Here’s a simple comparison:
Feature | Investment Advisor | Online Broker |
Who makes investment decisions? | Advisor helps guide decisions | You make your own decisions |
Investment advice | Yes | Generally No personalized advice |
Portfolio management | Often included | Self-managed |
Trading platform access | Sometimes limited | Full self-directed access |
Research and tools | Provided through advisor | Available directly to investors |
Cost structure | Management fees or commissions | Trading commissions and account fees |
Best for | Investors who want guidance | Investors who want more control |
Level of involvement | Lower | Higher |
Neither option is necessarily better than the other. The right choice depends on your investing goals, experience level, and how involved you want to be in managing your investments.
Do you have the time and knowledge, or the time to gain knowledge to invest on your own? Are you excited about the thrill of being part of the stock market? Then, you may consider opening a self-directed account.
Take Note
Working with an investment advisor and using an online broker are not necessarily “better” or “worse” options. They simply offer different levels of support and involvement.
If you want professional guidance and portfolio management, an advisor may be a better fit. If you prefer making your own investment decisions and learning as you go, a self-directed online brokerage account may make more sense.
Many investors even use a combination of both approaches over time.
Stock Trading in Canada
To invest in or trade stocks in Canada, you’ll need an investment account with a licensed brokerage.
What is a brokerage account?
In Canada, there are a range of investment accounts to choose from, depending on your investment goals, knowledge, and comfort levels. These come in the form of either registered or non-registered accounts.
Registered investment accounts, including RRSPs, TFSAs, RDSPs and RESPs offer tax incentives that may help your investments grow, but are subject to investment limits and other rules and restrictions. Non-registered accounts, like cash and margin accounts don’t provide the same tax incentives. They can, however, offer more flexibility.
It's important to remember that trading comes with its fair share of risk, even for seasoned traders. Whether you take the DIY approach, or you have an investment advisor help with your investing goals, the more you know the better off you are towards making informed decisions.
Learn more about your investing options in the article on How to Invest Your Money.
7 Things to Consider Before Choosing a Stockbroker
Whether you choose to work with an investment advisor or invest on your own through an online broker, here are a few things to think about before getting started.
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How Much Support You Want
Investment advisors can provide guidance, portfolio recommendations, and ongoing support, typically for a fee. Online brokers, on the other hand, give self-directed investors the tools and resources to make their own investing decisions. -
Your Investing Goals
Think about what you’re investing for. Are you saving for retirement, building long-term wealth, generating income, or working toward a major purchase? Your goals may influence the type of account and investments you choose. -
The Type of Account You Need
Brokerage firms may offer both registered and non-registered accounts. Registered accounts like TFSAs and RRSPs can provide tax advantages, while non-registered accounts may offer more flexibility. -
What You Want to Invest In
Different brokers may provide access to different investment products, including stocks, ETFs, mutual funds, bonds, and options. It’s important to understand what investment choices are available to you. -
What You Want to Invest In
Different brokers may provide access to different investment products, including stocks, ETFs, mutual funds, bonds, and options. It’s important to understand what investment choices are available to you. -
Trading Platforms and Tools
Some investors may prefer simple, beginner-friendly platforms, while others may want advanced charting tools, research, and real-time data. Consider the experience you want now and in the future. -
Educational Resources and Research
Many online brokers provide market research, webinars, articles, videos, and learning tools that can help investors build confidence and knowledge over time.
FAQs
How do stockbrokers make money?
Stockbrokers and brokerage firms may earn money through trading commissions, account fees, advisory fees, interest charges, or asset-based management fees.
Investment advisors often charge a percentage of the assets they manage on behalf of clients. Online brokers may instead charge commissions on trades or fees for certain account services and advanced tools.
Understanding how your broker is compensated can help you better understand the costs associated with investing.
Do you need a stockbroker to buy stocks?
In Canada, investors typically need access to a licensed brokerage platform or investment advisor to buy and sell stocks on public markets.
Today, many investors use online brokers that allow them to open self-directed accounts and place trades themselves through desktop or mobile trading platforms, such as TD Direct Investing.
How much money do I need to have to use an online broker?
There is no minimum to get started. Some online brokerage services such as TD Easy TradeTM don’t have any investment minimums and in fact, you can buy and sell TD ETFs at no commission. However, if you're looking for a broader range of securities to invest in, consider TD Direct Investing. There are no investment minimums. Plus, if you meet basic investment minimums or make 3 trades a quarter or sign up for regular monthly contributions (auto deposits) of $100 or more, you can avoid the $25 quarterly maintenance fee.
What are brokerage fees?
A brokerage fee is the amount of money your brokerage firm (or online broker) charges you to maintain your brokerage account and access trading platforms, market research reports, and other tools. These fees vary from one broker to the next and are generally charged as commissions on trades you perform. Investment advisors usually charge you a percentage of the assets under management to manage your money.
How can I transfer funds to my brokerage account?
Transferring funds can be easy and may not require much time at all. In fact, it can be done in 3 simple steps:
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Make sure you have online access to your banking information such as bank balances, deposits, and withdrawals
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Establish a link between your brokerage account and your bank account
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Initiate a transfer from your bank account to your brokerage firm to fund your account
TD Direct Investing makes it easy to transfer funds from your TD Canada Trust account with the funds transfer feature. You can also deposit funds into your account at any TD Canada Trust Branch or even over the phone. Transfer requests from your TD Direct Investing account made during normal business hours are processed immediately and dated the same day.
Can I withdraw all the money from my brokerage account?
Yes, but it's not like withdrawing cash from an ATM or from your savings account. You or your investment advisor will need time to sell enough of the securities you hold (like stocks, bonds or mutual funds) to cover the amount you want to withdraw. This can often take a few business days. Also, you may need to pay account closing fees if you're transferring to a different broker or cashing out. The rules for withdrawal of retirement accounts are different depending on your age. Some registered account types, such as RRSPs or RIFs, have restrictions on the contributions and withdrawals.
Conclusion
Some investors prefer working with an investment advisor who can provide guidance and portfolio management. Others prefer the flexibility and control that comes with self-directed investing through an online broker.
The important part is choosing an approach that matches your goals, experience level, and comfort with investing. As your knowledge and confidence grow, your investing strategy may evolve too.
Whether you’re just getting started or exploring new ways to invest, understanding how stockbrokers work can help you make more informed financial decisions.
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