Of course, some of that money is invested in enterprises that will not succeed, but most of it is funding what many observers believe is a new, post-industrial world economy, in which manufacturing is performed everywhere, not just in the western countries, and businesses depend on information as much as on energy. Though we divide the industry up into brokerages and mutual funds, within the two segments there are significant differences among the players. You'll want to make sure you not only know which segment you're interested in, but also how the particular company with which you're interviewing is distinguished from the competition. Brokerage A broker acts as the intermediary between the buyer and seller in a securities transaction. The buyer and seller, not the brokerage firm, assume the risk.
Brokers charge their clients a commission.
And managers are restricted in what kinds of investments they can make. Bull markets tend to make many funds look good, but a downward turn or a jump in interest rates can have a significant negative impact that may take longer to correct for a fund than in the nimble independent investor's portfolio. Job Prospects Even though automated, online trading poses a long-term threat to brokerage employment levels, securities firms like Morgan Stanley Dean Witter, Merrill Lynch, Citigroup, and Salomon Smith Barney are hiring like mad here and now. The number of brokers increased by 28 percent between 1994 and 1999, as securities dealers recognized that online investors tend to have fewer assets, while wealthier clients do not invest online and are willing to pay for extra personal services. Meanwhile, booming capital markets, an inexorable demographic bulge moving toward retirement, the inadequacy of social security benefits, and increased awareness in all age groups of the importance of meaningful retirement assets have encouraged a surging interest in securities investing.