First, let's talk about what a broker is. A broker is a person, or a firm, that makes investments based on the wishes of the investor. They can advise, or simply do what the investor says (buy this, sell that, sell when it gets to this rate, etc).
Brokers form associations with other brokers who use the same exchange system they do, like the New York Stock Exchange (NYSE). Exchanges can be physical places (think those scenes in Wall Street movies where people are waving bits of paper and yelling) or virtual (there could still be yelling, but probably on a smaller scale). Typically, the broker must first join the exchange to become part of the association that forms around it. The purpose of the association is to share resources, especially for individuals or smaller firms. The members share the work of taking and executing orders, and share in the cost and profit of those orders.
Associations can be state based; for instance, Michigan has its own: The Michigan Business Brokers Association (MBBA). They can also be international, such as the International Business Brokers Association (IBBA), which was formed in 1983 and now has members all over the world.
Broker associations can even have a specialized purpose, like the National REO Brokers Association. This group works together to manage all aspects of the very specialized process of getting people who experienced foreclosure back into homeownership.
Think of broker associations like The Order of the Phoenix in the Harry Potter series: a group of people with magical skills coming together to wave their financial wands and produce results.
Related or Semi-related Video
Finance: What is AICPA?6 Views
Finance a la shmoop what is the AICPA alright people when you think wild and [People dancing in a club]
crazy parties rock stars jumping into swimming pools from the seventh floor [Man jumps off rooftop into swimming pool]
teenagers in skimpy swimsuits running down the halls of hotels you don't think
of the AICPA why because it stands for the American Institute of Certified
Public Accountants and their parties are just different [Group of people sipping cocktails]
yeah the AICPA is responsible for setting US accounting standards it
sets ethical standards so there isn't a CPA somewhere writing off weekly [Roosters preparing to fight]
trips to a cockfighting arena as, you know travel expense it sets all kinds of
professional standards as well like common tax practices, financial statement
auditing practices and quality control for accounting firms so that no matter
which accounting office you visit the coffee in the lobby can't be cold [Man drinking coffee]
come on AICPA you can do better than that all right well the AICPA also puts
together and grades the exam you have to take if you want to become one of those [Boy studying for exam]
accountant people the uniform CPA exam ...Fail to pass that
baby and you may only be able to get a job counting actual beans not the [Man counting beans on conveyor belt]
financial ones so yeah the AICPA is the wizard behind
the curtain of the world of CPA-ing certified public accounting yeah they're
they're just concerned with a different kind of green like AC/DC green [Man singing AC/DC into microphone]
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