What is an Institutional Brokerage?

An institutional brokerage is a brokerage firm that focuses on clients who are in business to hold and grow assets. Often, the focus is on institutions such as corporations, pension funds, mutual funds, or insurance companies. Depending on the way that the brokerage is structured, it may or may not provide services to retail or individual clients, unless their trading levels are similar to those of an institution.

It is not unusual for an institutional brokerage to specialize on some specific type of fund or corporation as its core clientele. For example, the brokerage may prefer to work with insurance companies only, helping those clients to grow the underlying assets that help support their business. A different brokerage may be more focused on aiding corporations in utilizing mutual fund opportunities as a means of growing retirement benefits for employees. This type of specialization is often viewed as a benefit, since the institutional brokerage that is focused on a specific area of investment is expected to be an expert and able to provide more complete information to their clients.

Most institutional brokerage firms offer a wide range of services and support to their clientele. Along with the basic investment services, the brokerage is also likely to offer various forms of investment research, opportunities to attend seminars on various financial issues and strategies, and various forms of administrative support. Many firms today will offer online access to accounts, as well as weekly or monthly newsletters containing items of interest to the clients. While just about any institutional brokerage will offer real time support during normal business hours, there are those that also offer direct contact with a broker after hours and even on weekends. Depending on the nature of the institution involved, this type of support may be very important.

Choosing the right institutional brokerage involves looking closely at the fees and charges associated with different types of transactions, and the avenues of communication that are made available to the investor, including how easy it is to reach someone during off peak periods. It is also important to consider the ability to execute orders online or by telephone, and the quality of service and support received in terms of investment advice and research. If the brokerage tends to serve a broader clientele, care should be taken to determine the firm’s level of proficiency with the particular type of institution, making sure that it is a good match for the prospective client.