An agent is a person who is vested with the power to act on behalf of someone else. These agents act on the behalf of their clients and negotiate with third parties, and make decisions for other people.
Agents in the financial sector are generally of two types, including stockbrokers and attorneys. The former takes decisions regarding the investment decisions for their stock market portfolio. If you are being represented by an agent, you are called the principal. This power exchange between individuals is also called a fiduciary relationship, where the agent performs transactions that are authorized by the clients.
People can also take up the services of the “agency by necessity” where the agent will be acting for the client if the client is handicapped or physically incapable of taking decisions.
An agent can be hired to manage different things like careers, sports, business representatives, etc. These agents take action because they are accredited experts in the industry and are aware of the dos and don’ts of the related subject. For instance, as a musician moves in his/her career, they would hire a music agent who would help them close a signing deal and arrange touring dates, etc.
Different types of agents
Agents are of three types: special agents, universal agents, and general agents.
Universal Agents
Universal agents are proficient in several fields and take action as per the needs of their clients. These agents have the power of attorney many times for legal proceedings and are also given the right to financial transactions for the best interest of their clients.
General agents
General agents are people who act on the behalf of their clients for specific transactions and decisions that are set within a period. They can broadly take decisions but for a limited area. A good example of a general agent would be a talent agent.
While, if a person is acting as an agent without licenses or registration, they will attract penalties that can lead to a loss of credibility in the industry. Hence, to act as an agent, a person should ensure that they have the right certificates, licenses, and registration.
Special agents
Special agents are given the power to make either a single or many transactions within a given period. And they are agents that people hire for services frequently but not continuously. These include real estate agents, travel agents and insurance agents.
Examples of an agent
People take up the services of agents to vest them with the power to make decisions where they lack the expertise themselves. For example, stock market enthusiasts hire stockbrokers to buy shares on their behalf in the market. Same way, athletes or actors hire agents who are familiar with the rules and regulations of the industry and can help them to establish a name for the same.
People who are looking to buy homes also hire brokers to find a suitable home for them, and also because these agents can negotiate better for them. Businesses hire agents to succeed in ventures and rely on the skills of the agents to help them achieve their goals and complete the deals with the prospects.
Other considerations
People can also take up the services of the “agency by necessity” where the agent will be acting for the client if the client is handicapped or physically incapable of taking decisions. For instance, business owners will hire an agent to handle issues that occur in their absence of them. Another example would be when a CEO will not be able to catch a flight but a decision needs to be made, then the agency by necessity services will be used. This kind of agent hiring is mostly done in the time of emergency.
