What does brokerage mean?
Brokerage refers to the business of serving as an intermediary between parties in a transaction, most commonly buyers and sellers of financial securities, real estate, or commodities. A brokerage earns its revenue through commissions or fees charged on each transaction it facilitates. The word also denotes the fee itself and, by extension, the firm that provides such services — as in a brokerage house or online brokerage. The term carries a professional, commercial register and appears most often in finance, real estate, and insurance contexts. With the rise of discount and online brokerages, the word has become familiar to everyday investors, no longer confined to Wall Street jargon. Understanding brokerage is useful because it captures both an activity — intermediating deals — and the institutions and fees built around that activity, making it central to discussions of markets, trading costs, and financial advice.
The business of acting as an intermediary between buyers and sellers, typically for a commission.
"The firm expanded its brokerage division to include international equities."
A fee or commission charged for facilitating a transaction.
"He negotiated a reduced brokerage on the property deal."
A company or firm that provides intermediary services, especially in securities or real estate.
"She was hired by a leading New York brokerage."
Used when referring to multiple brokerage firms; rarely used for the abstract sense of the business or the fee.
"Online brokerages have slashed trading fees over the past decade."
The word 'brokerage' traces back to the Old French 'broche' — meaning a tapster's spigot — hinting at its surprisingly humble origins in wine selling before it conquered Wall Street.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of brokerage
Brokerage derives from 'broker', which entered English from Anglo-Norman 'brocour', likely of Old French origin, originally referring to a wine dealer or retailer who sold from the tap. The suffix '-age' forms nouns denoting an action, function, or fee, so brokerage came to mean both the broker's business and his commission. Its use expanded from the wine trade to commercial intermediation generally, becoming firmly established in financial contexts such as stock exchanges by the 17th century.
How brokerage is actually used
Primarily used in formal, financial, and commercial contexts. In American English, 'brokerage' often stands alone to mean a brokerage firm (e.g., 'she works at a brokerage'), whereas British English more commonly uses 'brokerage firm' or 'broker'.
Easily confused with brokerage
Bankerage is not a standard English word; brokerage specifically refers to intermediary services between buyers and sellers.