Introducing Broker - IB

Sort of a schmoozing broker. "Client-Bob, meet my other broker partners at the brokerage here..."

Most brokers are handling client accounts. They answer phone calls from clients who want to buy or sell, or who know why their investments are not making them money. (Or are making them money; both count in this case.)

An introducing broker doesn't do all the dirty work. Instead, they had the prior relationship with Client-Bob, owner of Bob's Land O' Fun and Botox. But the introducing broker either was full-up for clients, or Client-Bob had specific needs that one of the introducing broker's partners had a better feel for. Like...they spoke Russian. Or they knew complex estate planning well. Or they specialized in internet IPOs, which were the only thing that Client-Bob wanted to invest in.

So the introducing broker sends Client-Bob to someone else, and is owed a big fat favor down the line. Welcome to Wall Street Backscratching 101.