A more thorough explanation:

A broker-dealer is a person or firm that engages in the business of conducting securities transactions for the accounts of others. They act as intermediaries between buyers and sellers of securities and may buy and sell securities for their own account before selling them to customers. Broker-dealers are usually registered with the Securities and Exchange Commission (SEC) and with the state in which they do business.

For example, if you want to buy stocks, you can go to a broker-dealer who will help you buy the stocks from someone who wants to sell them. The broker-dealer will charge you a fee for their services.

Broker-dealers must follow certain rules and regulations to protect their customers. They must maintain financial responsibility standards, segregate customers' funds and securities, and maintain an industry-wide fund to satisfy the claims of customers whose brokerage firms become insolvent.