We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is a House Account?

John Lister
By
Updated: May 16, 2024
Views: 32,938
Share

A house account is typically established by a brokerage firm to manage its own investments, a practice that underscores the firm's commitment to aligning its interests with market performance. Nasdaq describes it as a A high-priority account at a brokerage firm that is handled by the main office or an executive rather than a salesperson.

The U.S. Securities and Exchange Commission (SEC) highlights that brokerages, which facilitate transactions for over 51 million U.S. households, may also designate house accounts to be overseen by top executives at their headquarters, ensuring seasoned oversight of critical investments. Beyond the financial sector, the term adapts to describe the strategic management of accounts in various markets. 

This introduction to house accounts aims to demystify their function and significance, offering readers a clear, expert-backed understanding of how these accounts shape investment strategies within brokerage firms.

A brokerage firm may decide to invest its own profits in a financial market. When this happens, it will usually seem foolish to do this through another broker and pay those fees. Instead, the firm will use its own staff and technology to buy and sell securities held in its own name. For administration purposes, these transactions will be carried out in a separate account known as the house account.

In a wider context, a house account can exist in any industry with sales representatives and clients. Used this way, the term indicates that an account is judged important enough to be handled by the central office management team rather than by the sales representative. This will often be the case with long-term clients or those personally known to management staff. Sales reps tend not to like house accounts as they do not earn commission on them.

It's also possible for this type of house account to exist with a brokerage. In this setting the distinction is not between management and sales representative because the sales rep of a brokerage rarely has any involvement after attracting a client. Instead the distinction is between an ordinary account where the transactions may be carried out by relatively junior staff at a branch office, and a house account which is carried out in the main office and usually overseen by senior staff or even a company executive.

The term house account is also used by some banks to indicate a money market account set up specifically for homeowners to use for household expenditures. The idea is to be able to earn interest while still being able to make enough withdrawals to pay household bills. This is useful in countries where standard checking accounts do not pay interest. Using the term house account in this way is usually a purely marketing activity with no legal meaning.

Share
SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
John Lister
By John Lister
John Lister, an experienced freelance writer, excels in crafting compelling copy, web content, articles, and more. With a relevant degree, John brings a keen eye for detail, a strong understanding of content strategy, and an ability to adapt to different writing styles and formats to ensure that his work meets the highest standards.
Discussion Comments
By GreenWeaver — On Aug 18, 2011

I have to say that in sales you see a lot of house accounts. I think that the reason that you do is because there is usually a lot of turnover in sales jobs and when a sales representative leaves the position his or her accounts revert back to house accounts in which no one earns commission.

You still have to service house accounts and in some cases if your company is large enough you might be able to generate additional business for other departments within the company and possibly earn commission there.

John Lister
John Lister
John Lister, an experienced freelance writer, excels in crafting compelling copy, web content, articles, and more. With...
Learn more
Share
https://www.smartcapitalmind.com/what-is-a-house-account.htm
Copy this link
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.