Brokers and asset managers

Between you and the exchange sit two kinds of specialist: the one that executes your trades and the one that manages money on your behalf.

Brokers (corretoras)

A broker is the licensed intermediary that gives you access to the market. You cannot place an order directly on an exchange yourself; the broker does it for you. A broker typically provides:

• Market access — routing your buy and sell orders to the exchange.
• A platform — the app or website where you trade and see your holdings.
• Custody and reporting — record-keeping of what you own and the documents you need.
• Research and tools, in many cases.

Brokers earn money through commissions, spreads or fees. In Brazil they must be authorized by the regulators, and your assets are typically held in your name in central custody — a key protection.

Asset managers (gestoras)

An asset manager makes investment decisions on behalf of others, pooling many people's money into funds. Instead of picking every asset yourself, you buy into a fund and a professional team manages it according to a stated strategy. Asset managers:

• Decide what to buy and sell within the fund's mandate.
• Aim to deliver a return appropriate to the fund's risk profile.
• Charge a management fee (and sometimes a performance fee).

The division of labor

The broker is the gateway through which orders flow; the asset manager is the decision-maker for pooled money. An individual investor might use a broker to buy stocks directly, a gestora's fund to delegate decisions, or both at once.