A Comparative Guide for Investors in Colombia
In Colombia, those wishing to invest in financial markets can do so through various types of intermediaries. Among the most common options are Colombian brokers and international brokers.
Both provide access to financial instruments, but they may differ in aspects such as:
- available markets
- regulatory framework
- cost structures
- service models
- platform type
Understanding these differences can help investors evaluate the characteristics of each type of intermediary before opening an account.
What is a broker?
A broker, or financial intermediary, is an entity authorized to execute buy and sell orders for financial instruments on behalf of investors.
Depending on the type of broker and the market in which it operates, these intermediaries may provide access to assets such as:
- stocks
- bonds
- ETFs
- investment funds
- financial derivatives
Brokers operate under specific regulatory frameworks that vary by jurisdiction.
What is an international broker?
An international broker is an intermediary that offers access to financial markets outside the investor’s country of residence.
Depending on the platform and the regulations under which they operate, these brokers may allow access to assets such as:
- US-listed stocks
- International ETFs
- Global bonds
- Financial derivatives
- Digital assets on some platforms
These intermediaries typically operate under the supervision of regulatory authorities in their respective jurisdictions, such as the United States or Europe.
What is a Colombian broker?
A Colombian broker is an entity authorized by the Financial Superintendency of Colombia to intermediate transactions in financial markets.
They generally allow investment in instruments such as:
- Stocks on the Colombian Stock Exchange
- Corporate or government bonds
- Investment funds
- Structured products
Some local intermediaries may also offer access to international markets through agreements with foreign intermediaries.
Differences between international and Colombian brokers
Market access
International brokers typically offer direct access to global financial markets.
Colombian brokers primarily operate in the local market, although some intermediaries may provide access to international markets through specific agreements or mechanisms.
Costs
Commission structures can vary depending on:
- the broker
- the type of product
- the service model
Some international platforms may offer different commission structures for certain products.
With Colombian brokers, costs can also vary depending on the intermediary and local regulatory and operational factors.
There is no uniform cost structure across all platforms.
Platform Model
Service models can differ among intermediaries.
International brokers
frequently offer digital platforms designed with a mobile-first approach
allowing users to manage trades from mobile applications or web platforms
Colombian brokers
may offer traditional or hybrid models
some combine digital platforms with in-person support or direct advice
Regulation
Regulation depends on the country where the intermediary is registered.
International Brokers
operate under the supervision of foreign regulatory authorities.
Colombian Brokers
operate under the supervision of the Financial Superintendency of Colombia.
The level of protection depends on factors such as regulatory oversight, custody agreements, and the compliance practices of each entity.
Minimum Investment Amounts
Minimum amounts may vary depending on:
- the type of broker
- the asset traded
- the type of account
Some platforms allow investing smaller amounts through fractional shares or other instruments, subject to the platform’s terms.
Examples of International Platforms Used in Colombia
Currently, there are digital platforms that offer brokerage access to international markets from Latin America.
For example, platforms like Hapi provide brokerage access to US markets through a mobile platform, with the possibility of investing smaller amounts in dollars, subject to the platform’s terms, the type of product, and account approval.
Hapi Securities LLC is a self-directed broker-dealer and does not provide investment advice. Clients are responsible for their own investment decisions.