Investment Bank vs Brokerage Firm: Difference and Comparison

The investment bank is a financial organisation dissection that forms new charges, dues and security tools. Investment banks sell their services to individual, organizational, economic, and pension fund shareholders.


Finance Quiz

Test your knowledge about topics related to finance

1 / 10

What is a 401(k) plan?

2 / 10

The appreciation in the value of security or asset is called as:

3 / 10

What is the primary goal of financial planning?

4 / 10

What is a balance sheet?

5 / 10

What is the difference between stocks and bonds?

6 / 10

Which one is/are financial assets?

7 / 10

What is the full form of "LLC"?

8 / 10

The shares of well-established, financially strong and big companies having remarkable Record of dividends and earnings are known as:

9 / 10

What is the definition of a liquid asset?

10 / 10

Share capital is

Your score is


They also provide advice to many business people and big companies and organizations. Investment banks play a significant role in providing services to various companies and government entities to get capital financing. JP Morgan, Citigroup, UBS, HSBC, etc., are the most popular multinational investment banks worldwide. 

A brokerage firm is a firm that deals with transactions on account of the client. Many brokerage firms also provide investment advisory services to companies, business people, etc.

They extract their profit from commissions on the orders which are given. They collect a percentage, or a fee, of the total value of each transaction.

They get orders in a variety of ways.

Key Takeaways

  1. Investment banks provide various financial services, including mergers and acquisitions advisory, underwriting, and capital raising for corporations and governments.
  2. Brokerage firms facilitate the buying and selling securities, such as stocks and bonds, on behalf of clients for a commission or fee.
  3. Investment banks cater to institutional and corporate clients, whereas brokerage firms serve individual investors and traders.

Investment Bank vs Brokerage Firm

The difference between an Investment bank and a brokerage firm is that it has customers who want to buy and sell things, whereas an investment bank has customers who want to uplift their money.

Investment bank vs Brokerage firm


Comparison Table

Parameter of ComparisonInvestment BankBrokerage Firm
ConceptThey take care of large and confusing complex transactions such as underwriting.The brokerage firm is a financial services company that allows ordinary people to buy and sell stocks and commodities.
TermThe term period of an Investment bank is from medium to long.The term period of a brokerage firm is from short to medium.
What do they offer?Investment bank offers customer-specific services, including financial and tax advice.Brokerage firm offers many services, including money management, estate planning, etc.
Source of IncomeThe income source of an investment bank includes fees, commissions or profit on trading activities.Brokerage firms earn a lot of income from real estate advisory, providing loans to clients, health cards, gold refining, etc.
Common ExamplesEvercore Partners, HSBC, RBC Capital Markets, Wells Fargo Securities, JP Morgan, etc.BSE Ltd, Angel Broking Pvt Ltd, Karvy Stock Broking, Black Rock, etc.


What is Investment Bank?

An investment bank is a commercial organisation carrying out complicated monetary and banking transactions. These banks aim to create a relationship and a strong connection between the vast organizations and the shareholders and the stockholders.

This bank provides excellent services to its clients, including helping governments and institutions with full and proper security measures, helping investors buy stocks and commodities, providing advisory services, and so on. Popular multinational investment banks include Goldman Sachs, Citibank, SCB, JP Morgan, etc.

Investment banks have outside customers but also trade their accounts. Thus, a dispute of engrossment can take place.

The banks produce their income by charging fees for their advisory services.

What are the services that the Investment Banks provide?

  1. Approval of proving the security measures.
  2. Raising the capital
  3. Research services
  4. Advisory services
  5. Asset Management services
  6. Union and investment services
  7. Income and wealth services
investment banking

What is Brokerage Firm?

Brokerage Firms help with providing security measures, buying and selling stocks and commodities, etc., for profit. In Brokerage firms, the money is given by the buyer to the seller for share transfer.

The brokerage firms act as dealers and lend services to the shareholder or the stockholder, which helps them to trade in securities and charges an amount as undertaking for their services. Brokerage firms are of many types that provide a variety of products and services at a different range of costs and fees.

The most popular Brokerage firms include UBS, TD Ameritrade, BSE Ltd, etc.

What are the four different types of Brokerages?

  1. Full-Service Brokerage
  2. Discount Brokerage
  3. Captive Brokerage
  4. Independent Brokerage

What are the services that the Brokerage Firms provide?

  1. Services regarding the execution of trades
  2. Storage or safekeeping of securities
  3. Investment advise and research services.
  4. Cash Management Services
  5. Low commission services
brokerage firm

Main Differences Between Investment Bank and Brokerage Firms

  1. Brokerage firms are commercial and monetary organizations that help you buy and sell securities. They direct the central man between the buyer and the seller. In contrast, Investment Banks is the commercial and financial services organization or institutional division that enables themselves in advisory-based commercial transactions on account of individuals, institutions, and government organizations.
  2. There is a high exposure to risk in Brokerage firms, whereas the risk factor is low in investment banks compared to brokerage firms.
  3. Investment Banks obtain their income from profit from trading practices, fees, commissions, etc. In contrast, brokerage firms accept revenue from devices like commercial and tax advice by providing good loan facilities to their customers, etc.
  4. The client foundation of brokerage firms is much higher than investment banks.
  5. Brokerage firms relate day-to-day drift in the merchandise, whereas Investment Banks relate to the long-term profit-earning ability of the program or the strategy.
  6. For the proper upliftment of the Brokerage Firms, efficient and orderly continuous trailing and supervision of shares and commodities are needed to avert deprivation. In contrast, Investment Banks require a vital and dynamic observation by the investors to earn a profit when the market is on a larger scale.
Difference Between Investment Bank and Brokerage Firm
One request?

I’ve put so much effort writing this blog post to provide value to you. It’ll be very helpful for me, if you consider sharing it on social media or with your friends/family. SHARING IS ♥️

Leave a Comment

Your email address will not be published. Required fields are marked *

Want to save this article for later? Click the heart in the bottom right corner to save to your own articles box!