Brokerage houses are pretty much like offices everywhere, except for the presence of the fascinating paraphernalia of the market. The customers' room in the usual large brokerage house has a quotation board on one wall. The arrangement of items may vary, but basically they all offer the same data.
For each stock listedand it is a pretty large board that shows much more than the leaders in any particular group the quote board will indicate the present and past year's high and low, the previous day's opening, high, low, and closing prices, and the successive prices of the current day's sales. There may also be a panel of commodity prices. Very likely there will be either a ticker machine or a projection of its tape on a screen that enlarges the figures sufficiently for them to be read across the room. There may also be a Dow-Jones ticker, which taps out news, statistics, and whatever economic and financial information the extensive D-J organization may dig up.
Generally, chairs or benches are ranged in front of the quote board so that customers may take their ease while learning what the new day brings.
This is all for your convenience. Of course, you can get the same information simply by phoning your broker, but his office welcomes your visit.
What you do not see is your firm's research department, accounting department, and vault though you can if you wish. The research department consists of a staff of securities analysts who study and report on the performance and prospects of various stocks. Many analysts hit the road frequently to examine companies firsthand. Some specialize in oils, others in railroads or utilities. Much of their work is continuing study of one company after another, but they are also available for specific analyses at a customer's request. (No one will do a special run-down on duPont to see whether you should buy 10 shares, however!)
The accounting department is, of course, responsible for keeping track of the thousands of transactions completed, and for maintaining records of each customer's position.
Many brokerage houses are also investment banking firms, prepared to share in underwriting new securities issued by companies seeking more capital. A company issuing stock does not sell directly to the public. It sells the entire issue to a syndicate of underwriters, which resells it at a small mark-up, or "spread," to the public. In this case, no commission is charged because the broker's expenses and profit on the distribution are included in the premium you pay.
Brokerage houses may also "take a position" in a stock. This simply means that partners or officers, or the brokerage company itself, may follow their own advice and buy one stock or another. Since the subsequent performance of these stocks may depend on how many other people become interested in them, brokerage houses scrupulously report their holdings to the public. As a customer, you can then decide whether Blank stock is a good buy because your smart broker has a piece, or whether his report on Blank is tinged with undue enthusiasm because he holds it.
The ramifications of brokerage are many, but the central concern of every good house is the service it provides its customers. Not just its rich customers, either. Read the ads. Analyze the educational and promotional literature brokerage houses are putting out, and you will see that much of it is directed at the small investor. Have no fear that you will get a cold eye or a second-class treatment because you have only a few hundred dollars to invest, or simply want to start a $40-a-month investment plan. These days, everyone is welcome.