Series 6: 7.5.1.7. Commissions, Markups, And Markdowns

7.5.1.7. Commissions, Markups, and Markdowns

Broker-dealers and their associated personnel are typically not paid as a percentage of assets under management. Instead, they make money through commissions, markups, markdowns, and spreads. When the firm acts as a broker, it is paid through commissions. When the firm acts as a dealer, it is putting its own money at risk, buying or selling securities out of its own inventory. It profits by the spread between what it bought the security for (bid) and what it sells it for (ask). A dealer also makes money off of markups on securities that it sells and markdowns on securities that it buys.

FINRA expects charge