The Technicalities of the Professional Role of a Broker

Brokerages are, of course, a business, and the brokerage industry’s technological evolution has meant that service and account-service channels have to be as flexible as the technology itself. While our perspective is that we ultimately should be able to achieve the level of service and flexibility that every business would like to offer their customers, this reality is a consequence of limitations in the underlying technologies that enable the industry. Technologies such as systems for transaction processing, client-service portals, billing systems, and billing distribution protocols are designed to satisfy a technical necessity to serve the interests of an industry service provider, not necessarily those of the client.

How does this translate to you? Our clients in our brokerage may tell us that they use their brokerage’s platform to make bills to clients. When they do that, they can only accept the bills from clients whose brokerage provides the platform to the client. It’s not that the brokerage doesn’t want to communicate with the client. It’s just that the brokerage’s platform may not be designed to allow you to pay the client directly. In fact, to the extent that the brokerage has a payment capability, we are depending on the broker to pay the bill to the client.

You might ask, what do you mean when you say the brokerage’s platform is not designed to allow you to pay the client directly? For the purposes of this article, the term payment can refer to a variety of things, including invoices to customers, invoices sent by the brokerage to their clients, and periodic fee-based billing for the brokerage’s services. If we had a platform designed to allow you to pay the client directly, then we would have to build in support for paying the client directly from our client-service platform. When you buy the phone on which you are going to communicate with the brokerage, the brokerage will have to pay the phone provider for the phone and its access to your communications. Similarly, if you use our client-service platform to bill your client directly, the brokerage would have to pay the brokerage’s phone bill.

Generally speaking, we have a limited range of capabilities that we can provide to our clients, but think about the extra lengths the online gaming equivalent of brokers go to, to bring you that next best casino bonus you can take advantage of. If you aren’t a broker, or if your client’s brokerage doesn’t have a platform to accept payments from clients, then we aren’t going to allow you to bill your client directly. For example, if you have a client account at Bank of America, and you pay your client via Bank of America’s bill-payment portal, you can’t bill your client directly using Bank of America’s billing protocol. Nor would we support it, because Bank of America’s billing protocol would require us to interact with Bank of America’s billing engine, which would restrict our ability to bill the client directly from our client-service platform.

In fact, most of the brokerage market has a payment system in which a brokerage rep sends an invoice to the client, typically in an envelope or via a fax. Because of the limitations of the underlying systems, this setup isn’t very flexible in terms of payment options, such as making electronic payments, or sending the client a bill with an electronic signature or self-paid instructions.