Should You Work with a Brokerage or a Stock Transfer Agent?

Your company’s finances are its lifeblood. Regardless of what your business does, creates, or offers, money makes it move. As such, it is imperative that your company’s equity is carefully tracked and handled. Every share investors hold is important, as is the information you hold on those investors. Keeping track of it all can be tricky, especially if you do not know who to trust the task to.

Broker or Stock Transfer Agent?

You may have been advised to hire a broker or a stock transfer agent. But which one is right for your business? The truth is, they do very similar jobs – but one is better suited to the needs of a business.

Brokers are focused on their clients’ stock portfolios. They act as a middleman between those clients and the exchanges that might be difficult to understand. They buy and sell securities or stocks on behalf of each client, using their extensive knowledge of the market and its trends to make the most informed decisions.

A transfer agent does a very similar job, moving stocks on behalf of their client. However, transfer agents generally work for companies and business owners. Their focus is much more on a single stock – that of their employer. The services they provide include monitoring market trends to help establish valuation, issuing and cancelling stock certificates, and maintaining meticulous ownership records.

Which One is Right for You?

Both a broker and a transfer agent could handle the bookkeeping and movement of stocks that a business requires. The services offered by brokers are much more geared toward individual investors, though. Stock transfer agents are more suited to the needs of a business looking to cultivate a strong pool of investors and take great care of shareholders. While your company’s individual owners might benefit more from working with a broker, your business more likely requires the specialized focus that a dedicated transfer agent offers.

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