Definition of wirehouse

Originally named ‘wirehouses’ because of an advanced communications system they employed, today the term simply refers to large financial institutions that offer multiple services in various locations, such as a bank.

The term typically refers to full-service brokerages that offer research, order execution and investment advice all under the same roof. [1]

A wirehouse is a large integrated broker with a national, as opposed to regional, business.  Wirehouses once collected trade orders from branch offices in distant cities using dedicated telegraph lines, hence the term wirehouse.

Telegraphs were replaced by phones, which in turn were replaced by dedicated proprietary computer lines.  Now most traders routinely route their orders directly to their brokers over the internet. 

The brokers at most wirehouses provide financial research and financial advice to their clients.  Many wirehouses also have investment banking divisions.

More generally, the term wirehouse refers to any large financial institution that uses electronic systems to transmit information among its branches.

Commercial banks and insurance companies that maintain multiple branch offices thus may be considered wirehouses, but the term now is rarely applied to financial institutions that do not have large brokerage operations.

Examples of wirehouses include Morgan Stanley Smith Barney, Bank of America Merrill Lynch, Wells Fargo Advisors, UBS Wealth Management and Charles Schwab.  [2]

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