The prime responsibility of a broker is to bring buyers and sellers together. The work and advisory services of a broker complement and enhance a corporate's wider IR and communications programme. Generally, the relationship with a broker starts by having its research department (‘the research desk’) initiating coverage on a certain company. This entails that the research analyst will write (sell-side) reports on a certain stock.
As brokers are talking to investors all day, every day, they have a good feel about the sentiment, movements and depths of the markets, they are the ones with the feet on the ground as it comes to questions, doubts and interests investors might have. With this, brokers have the tools and resources to reach the largest possible base of buyers. A broker can inform a (listed) corporate about details behind share development or movement in the market, give more detail about buyers or sellers in the market or how a deal was build up.
Broker role in listing process
During the listing process a (corporate) broker can provide listing sponsorship, research and/or promotional services to companies throughout the listing process. Once a corporate has been listed they can also act as a liquidity provider to protect the share against excessive volatility on the market, guarantee transactions at all times at the best price and boost the volume of transactions in the order book.
Broker role in roadshows
Corporates might decide, and often do so, to go on broker-sponsored roadshows. Next to testing the waters with potential investors and provide access to these parties, brokers can also help with logistics like flights, arranging drivers and accompanying management during meetings. This way corporate IR can focus on preparing management on the actual content of the meeting. After the roadshow brokers can facilitate an evaluation in which they include feedback of investors.