Introduction to Becoming a Stockbroker

A stockbroker serves as the middleman between those who invest in stocks and the stock market itself—they buy and sell securities on behalf of those they are representing in exchange for a fee or commission. Many investors or potential investors turn into clients with the hopes that their investments are being managed by informed, up-to-date professionals whose will maximize their opportunities and profit that can be had. Brokers are also able to ensure that the rules of trading are enforced by themselves and their peers, and that each investment is secure and safe. Though stepping into the profession can be highly valuable in terms of annual salary and benefits, much research and work is required prior to being equipped to secure a position in the field. As catchy as the term may sound in the movies and online, the term ‘stockbroker’ has even gone a bit out of style in the past few years due to the negative, greedy connotations the occupation title has picked up—when looking into formalized resource, though it may sound unusual or inconsistent with the term “stockbroker”, “financial adviser” is the way to go these days.
One should note that the stock market, like any business or market, fluctuates. The success of any stock exchange organization depends heavily on factors such as client base, location and even how much commission is made during a given period of time. Needless to mention, those who are stockbrokers for US companies and work in locations in New York or the nearby Northeast tend to make more money than their counterparts on a national scale, as the pulse of business and technology occurs where the largest stock exchanges are based (such as NASDAQ or NYSE). To work and live in closer proximity with these tycoons is an investment in itself; while it means significantly greater competition and savviness required to break into the market, benefit and salary turnout are undoubtedly superior. Though a career in stockbroking and firms is certainly plausible in less-populated cities and towns of the world, the more rural stock exchange in question may not be large enough to support fat salaries from client commission regardless of how skilled the broker is. Location factor aside, one’s earnings are largely rooted in the commission they make—being able to handle as many clients as possible at once and working hard to invest on their behalf are those that bring home the most benefits.

Great stockbrokers can be found in any individual who deals well with clients (which would entail great speaking and writing skills, a sensitivity for customer service and honest communication, etc.) and possesses extensive knowledge on making investments, or even the capacity to possess great knowledge.  However, as with any increasingly competitive market in the world, the field has become selective focusing more on those employee candidates who have pursued post-secondary education or specialist stockbroker training. A bachelor’s degree in finance, mathematics, accounting, economics, or business management would be an ideal starting point so that firms are ensured candidates have received a well-rounded, quality-ensured background. Pursuing an MBA (or Master of Business Administration degree) may be a great second step in order to again present the formalized education appeal among the portion of one’s competition who has earned bachelor’s degrees, but immediate immersion in the field following a 4-year degree may also serve as a great option. Internships with brokerage firms are, when accessible, a great way to gain exposure in the field. Though educating oneself is important, going the extra mile outside of primary commitments will also increase general know-how and fluency in the language of the market—one should look into recommended training programs and reading literature about money management. While not directly on the job market (perhaps in education or pursuing internships) creating investment portfolios are a long-term commitment but a very necessary means of building credibility and demonstrating know-how to potential employers.
As the world of finance doesn’t revolve specifically around the stock market, remember to keep in mind that there are different types of brokers: the most popularly asked-about are of course the full-service brokers who strive to get into companies such as Morgan Stanley. The pay of discount brokers, on the other hand, is based on salary pay (as opposed to a full-service broker’s commission). Lastly, one has the rather steady and easily-understood option of working as a bank broker. In order to handle large amounts of money on behalf of companies and clients responsibly, there are licenses to be earned and examinations to be taken. What is referred to as a “general securities (GS)” license is given by passing the General Securities Registered Representative (Series 7) Examination. This exam is provided by FINRA; passing allows for one to sell all securities and investments. Prior to taking the exam, several months of work experience within your desired field (particularly a brokerage firm) is required along with a substantial amount of literature being read. Also required in most of the United States is the 75-minute Uniform Securities Agent State Law Examination, administered by NASAA (or the North American Securities Administrators Association).
While the examinations themselves are two smaller obstacles in the large picture, one should remember that these hard qualifications must be updated and maintained well. Knowing that one must keep up-to-date in the ever-changing world of finances is essential to a modern and reasonable understanding of how to stay successful—depending on the current requirements established at the date exams are taken, continuing education classes are often asked of license-holders. Such work in order to keep knowledge fresh shouldn’t be taken up in vain, however; sometimes the foundational components of becoming a stockbroker are taken for granted. Being immersed in a fruitful college environment or being a free, open-minded intern in a blooming and cutting-edge field is something that dwindles with time, an access that cannot be as easily reached when one has finally secured a career position. Because of this, looking forward to conferences and conventions as well as continuing to voluntarily attend classes about new innovations is the key to a progressive and open-minded market. Taking these steps not only will benefit an individual’s career, but the world of investing as a whole.

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