There are may different types of prime broker, which all offer very specific services to very specific types of customers. Many prime brokers will develop products that suit their customer’s needs. This guide explains what different types of prime brokers do.
Boutique Prime Brokers
Boutique prime brokers can provide an entire operational framework and reading infrastructure for small and start-up hedge funds that are too small for tier 1 prime brokers. Boutique prime brokers will often have direct relationships with larger prime brokers and resell services on a wholesale basis to their clients.
Mini Prime Brokers
A mini prime broker is simply a prime broker that accepts small institutional accounts. These are more appropriate for start-up and new hedge funds.
Small Hedge Funds
We work with the best prime brokers for small to medium sized hedge funds that can assist with your trading and fund strategy, including custodian services, regulatory umbrellas, research, analysis and outsourced back office systems.
Start-up Hedge Funds
The top tier prime brokers are shutting down all their smaller accounts so start up hedge funds need a mini prime broker or mid-tier prime broker.
Large Hedge Funds
A hedge fund prime broker is the main account a hedge fund holds it’s positions with. Hedge funds may use executing brokers for buying and selling positions and then give up those positions to their main account at the end of the day.
Prime Of Prime Brokers
A prime of prime broker will provide retail brokers with market access. This is common in CFD and Forex platforms where the forex brokers act more as marketing matching and the prime of prime broker provides the liquidity back office, platform and administration of the accounts.
For more information on prime brokers use our find a prime broker service
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
