Broker Dealer Organization Structure

The Organizational Design of a Broker Dealer: Definitions, Roles & Responsibilities

Broker Dealer Organizational Structure

Broker Dealer Organizational Structure Outline

Broker Dealer Organization Chart Template

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Broker Dealer

A Broker Dealer is a firm (sometimes a boutique or part of a large bank) that buys and sells securities and other financial instruments either for external clients (broker) or for their own profit (dealer). Broker-dealers also offer financial advisory services, publish investment data, raise capital for clients and take part in market-making activities (providing liquidity).

Common Broker Dealer job titles: Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Investment Officer (CIO)

Lines of Business

Lines of Business (LOB) refer to specific products and services offered by the brokerage firm to both individual and commercial clients. Major LOBs typically include Corporate Finance, Investment Banking, Investing & Lending, Investment Management and Sales & Trading. Employees working within these front office areas are responsible for developing and pricing products/services, generating new business and managing client relationships. LOBs are supported by back and middle office staff members, who work to perform non-customer-facing tasks such as trade execution, compliance and risk management, customer service and technology support.

Common Lines of Business job titles: Trader, Financial Analyst, Investment Banker, Financial Analyst, Commercial Loan Officer, Wealth Management Analyst

Corporate Finance

Corporate Finance deals with the sources of funding and the capital structure of corporations. Corporate finance is primarily concerned with maximizing shareholder value through long and short-term financial planning and the implementation of various investment strategies to do so. Both capital investment decisions (deciding which projects should receive investment funding, and whether equity or debt capital should be used to finance that investment) and investment banking falls under corporate finance.

Common Corporate Finance job titles: Financial Analyst, Corporate Finance Associate, Corporate Financial Analyst, Corporate Accountant

Investment Banking

The Investment Banking Group works with institutional clients to develop strategic advisory assignments (mergers and acquisitions), divestitures, corporate defense activities, risk management, restructurings and spin-offs, and debt and equity underwriting of public offerings and private placements (domestic and cross-border transactions), as well as derivative transactions related to these activities. Investment Banks also offer a sophisticated collection of investment services to large institutional clients - usually referred to as Prime Brokerage services. After moving up the ranks within an investment banking operation, top employees (typically senior vice presidents and managing directors) are responsible for managing relationships with key clients and seeking out new business opportunities for potential high-worth investors or partners.

Common Investment Banking job titles: Investment Banking Associate, Investment Banking Analyst, Investment Banker

Investing & Lending

The Investing and Lending function works with corporate and institutional clients, as well as high-net-worth individuals or families, to originate loans, provide financing and make investments in debt securities and interest rate derivative products. This group may perform tasks such as credit origination, asset-based lending and private capital investing/infusions for corporations.

Common Investing & Lending job titles: Credit Analyst, Loan Officer, Account Analyst

Investment Management

The Investment Management function provides wealth advisory services, including portfolio management, financial counseling, brokerage and other transactional services to high-net-worth individuals and institutions. This function is usually split into two concentrations; Private Wealth Management (also known ans Retail Management) and Asset Management (also known as Institutional Management). While Private Wealth Management oversees accounts owned by high-net-worth individuals, Asset Management accounts are owned by large corporations, banks, financial institutions, etc.

Common Investment Management job titles: Wealth Management Analyst, Financial Analyst, Portfolio Risk Analyst, Investment Associate, Wealth Strategist

Sales & Trading

The Sales and Trading function is responsible for facilitating client transactions across all of the major asset classes. They make markets in fixed income, equity, currency, and commodity products on major stocks, options, and futures exchanges worldwide. Sales and trading functions may also provides financing, securities lending, cash management, and other prime brokerage services to institutional clients (such as large corporations, government institutions, etc.).

Common Sales & Trading job titles: Trader, Investment Analyst, Trading Analyst, Investment Associate

Back Office Operations

Broker Dealer Back Office Operations refers to a set of essential administrative and support services related to executing trades, managing assets and supporting client transactions. The Back Office is responsible for managing several activities such as customer service, trade execution, trade confirmation, trade settlement, compliance and risk management and software engineering (trading platforms, high-frequency trading, etc.). Back Office staff members support both the brokerage firm's operation and individual lines of business such as Investment Banking, Commercial Lending, Sales & Trading, and Wealth Management.

Common Back Office Operations job titles: Operations Specialist/Analyst, Trade Support Specialist, Trade Analyst, Client Services Representative

Client Services

The Client Services function essentially acts as a brokerage firm's customer service branch, ensuring that every customer's business is fully supported. Client Service professionals act as a central point of contact for customers, working alongside other departments or functions to answer any inquiries concerning financial products and services as well as provide customers with long and short-term investment strategy advise.

Common Client Services job titles: Customer Service Representative, Client Service Associate, Client Support Representative

Compliance & Risk Management

The Compliance and Risk Management Group is tasked with ensuring that all trading activities and client interactions are compliant with the strict federal regulations that govern broker-dealers. The Securities and Exchange Commission (SEC), as well as the Financial Industry Regulation Authority (FINRA), strictly govern broker-dealers in the United States. To meet their standards of service, a Chief Compliance Officer must supervise all activities to avoid fines and other penalties for non-compliance. The Compliance and Risk Management Group drafts and enforces standards to which all employees must adhere. They must meet frequently to assess and amend these standards. Their services include anti-money laundering (AML) programs that monitor for and report suspicious activity, regulatory audits, training regarding compliance, and compliance testing of broker-dealer transactional, filing, and submissions processes.

Common Compliance & Risk Management job titles: Risk Management Analyst, Investment Risk Associate, Compliance Auditor, Investment Operations Associate, Compliance Officer, AML Specialist

Reporting & Analysis

The Reporting & Analysis function of brokerage firms is responsible for the company's recordkeeping and financial strategy analysis. This function manages customer accounts (includes updating account information if necessary), keeps accurate records of company transactions (positions, trades, transfers, etc.), analyzes company financial strategies and produces reports to be distributed to management, stockholders and regulatory bodies describing the company's activities and any recommendations for future policy change to keep the company as competitive as possible in constantly shifting financial markets. The Securities and Exchange Commission (SEC) strictly regulates the minimum requirements of records that broker dealers must maintain, how to safeguard the records and how long those records and other documents relating to a broker dealer's business must be kept. All records must be available for distribution should any examination or audit be conducted.

Common Reporting & Analysis job titles: Analyst, Risk Reporting Analyst, Business Analyst

Technology & Engineering

The Broker Dealer Technology & Engineering Group is responsible for developing technology-related solutions for complex financial issues - they develop trading platforms (for use by clients and/or internal trading teams), automate trading activities, configure data collection and analysis methods and design overall IT infrastructure to meet the strategic needs of the business and ensure that the company is managing risk appropriately. They also provide around-the-clock support for company applications and systems.

Common Technology & Engineering job titles: Machine Learning Architect, Desktop Support Administrator/Engineer, Data Scientist, Network Engineer, Platform Engineer

Trade Operations & Support

The Trade Operations and Support function is responsible for the middle and back office processes related to the exchange of securities and other financial products. Tasks commonly carried out within the Trade Operations and Support Group include trade confirmation, trade verification, trade matching, settlements, collateral management and reporting. In some cases, this department may also have sub-groups that are responsible for risk mitigation, liquidity management, technology support and client services (customer service).

Common Trade Operations & Support job titles: Trade Support Analyst/Associate, Back/Middle Office Associate, Trade Support Specialist, Trade Assistant, Operations Specialist, Operations Analyst

Trade Operations & Support

The Trade Operations and Support function is responsible for the middle and back office processes related to the exchange of securities and other financial products (commodities, derivatives, fixed income, FX, etc.). Tasks commonly carried out within the Trade Operations and Support Group include trade confirmation, trade verification, trade matching, settlements, collateral management and reporting. In some cases, this department may also have sub-groups that are responsible for risk mitigation, liquidity management, technology support and client services (customer service). This group typically supports the Investment Banking, Treasury Services and Investment Management lines of business.

Common Trade Operations & Support job titles: Trade Compliance Analyst, Trade Support Analyst, Transaction Capture Analyst, Securities Operations Specialist

Investment & Market Research

The Investment Research function provides client-focused research in the equity, fixed income, currency and commodities markets. This function serves mutual funds, hedge funds and pension funds, among others, and is often split into six groups: Equity, Credit, Economic, Portfolio Strategy, Commodities and Global Market Research. The Equity Research Group analyzes macro, sector and company fundamentals to identify investment opportunities for stocks covered globally. The Credit Research Group makes investment recommendations for the corporate debt and credit derivatives of issuers in various sectors. The Economics Research Group formulates macroeconomic forecasts for economic activity, foreign exchange and interest rates. The Portfolio Strategy Research Group formulates policies, before forecasting and providing recommendations on both asset and industry sector allocations for major equity markets. The Commodities Research Group analyzes market fundamentals to formulate forecasts for commodities in five main areas; oil, natural gas, base metals, precious metals and agriculture. The Global Markets Research Group provides research and high-level advisory services to policymakers, regulators and investors.

Common Investment & Market Research job titles: Analyst, Financial Analyst, Portfolio Management Analyst, Private Market Analyst