What Does A Stockbroker Do?
Often characterized as people in business suits who work on Wall Street and earn tons of money, stockbrokers are usually seen as those uniquely corporate characters of the world of finance. However, not many people actually quite understand what a stockbroker does. Before you decide to enlist in a finance program at a local college, it’s a good idea to get a grip on what stockbrokers do, how much they earn, and why you might (or might not) want to be a stockbroker.
How You Get Paid As a Stockbroker
What many people do not realize about being a stockbroker is that it is mainly a sales job. In other words, you are selling stocks on behalf of the companies that are issuing them out, or you’re selling other financial products on behalf of the company that you work for. In other words, you’re not really a decision maker for a company as much as you are a guide for customers when it comes to choosing the right stocks for their portfolios. Stockbrokers are paid in commission, and very rarely have a salary to speak of that isn’t a direct effect of the amount of stocks they sold.
You can find stockbrokers who work in just about every city in the United States, so it’s not only a New York job. Many stockbrokers work in a corporate office where a strict dress code is enforced. However, there are stockbrokers who work from home as the heads of their own firms. Either way, if you have good sales skills, being a stockbroker can be an extremely lucrative field. Being a broker is a very competitive career choice, so you will have to deal with a lot of competition, and the occasional dirty marketing trick from a competitor. It’s not a low stress job, and it’s very easy to fluctuate in terms of income.
It is very possible not to make any money at all as a stockbroker. However, for those who stay in the field, the average stockbroker will make around $70,000 per year. Brokers who are highly adept at selling stocks and other financial products can easily make as much as $150,000. People who manage to open up their own brokerages and hire stockbrokers to sell for them can make even more money. The bottom line here is that it is a very results-oriented business.
What Qualifications Do You Need To Become A Stockbroker?
In order to become a stockbroker, you need to pass both the Series 7 and Series 63 tests. Both tests prove that you’re educated about the way that stocks work, and that you’re knowledgeable about the products that you want to sell. These allow you to sell the financial products like stocks and securities. Many stockbrokers only have a high school degree, but in some states, it may be better to have a Bachelor’s degree.
For many brokerages, budding stockbrokers also need to show that they have a proven sales track record in the field of finance. This will mean that they have to have a little experience in a field like insurance or in loan brokering. This in turn may require you to have one or two other licenses, or pass other tests, in order to get hired at a top brokerage. Still, this is not the average hiring standard for brokers. Even so, it never hurts to have added certifications and licenses to help sell other products as well.
What Can Help You Succeed As A Stockbroker?
Much of whether or not one can succeed as a stockbroker will depend on the individual’s personality. People who are very outgoing, unafraid to hear rejection, and also have a very thick skin, will often do much better in this field than people who don’t. Of course, the number one indicator that you are going to be a good stockbroker is drive. Driven individuals are more likely to put in the work that gets the clients, and that’s what will decide whether or not you will succeed. If you aren’t motivated to keep charging ahead, you will end up not making much money as a stockbroker, and it is very likely that you will give up.
Because being a stockbroker is a commission-only position, people who want to become brokers really should have a financial cushion that allows them to work while they get their first bunch of clients. People who are flat broke and decide to become stockbrokers often do not stay in the field long enough to earn serious money, simply because it’s nearly impossible to begin making loads of cash immediately.
As much as it is important to have winning qualities if you want to be a stockbroker, the company that you choose to work with will also make a huge difference in whether or not you will be able to make a good living. Companies in smaller towns, as well as companies that don’t offer too much training, are generally companies that will not be able to give you a good leg up. Nationally known companies might have more thorough training programs, but they also may have lower commissions. For many people, the best bet that they can make is to move to a major city like New York, and get hired by a top brokerage firm in the city. This often allows you to get hands-on experience trading on the stock exchange floor, which in turn can be some of the most valuable experience you can get as a broker.
Is Being A Stockbroker Right For You?
Stockbrokers do work a very high stress job, and they often need to keep a close eye on major stock trends. If you are not very interested in finance, or if you are not a good sales person, you might want to look for another career. However, if you are willing to take risks and bet on your own personal success, being a stockbroker can be one of the best career choices you can make.