Learn About Being a Stockbroker
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What does a stockbroker do?
Stockbrokers buy and trade financial securities for their clients. Some stockbrokers may also act as a financial and stock market consultant. Stockbrokers have the following responsibilities:
Manage client portfolios, deciding about when to buy or trade financial securities
Work closely with clients to understand their financial goals and risks
Consult clients on the buying and selling price of different stocks
Stay updated on the latest regulations regarding stocks, taxes and financial news
Use market knowledge to maximize client returns
Many stockbrokers work in a full-time position, often working with a brokerage account. Most stockbrokers work for a base salary and then earn additional income and bonuses through the commission of their trades. The average expected salary of a stockbroker can vary depending on geographical location, the income of clients and the stockbroker’s experience in the industry.
Common salary in the U.S.: $67,727 per year
Some salaries range from $14,000 to $194,000 per year
There are a few educational and training requirements that may assist you in becoming a stockbroker, which include:
A minimum of a bachelor’s degree in a related field is often a requirement to become a stockbroker. Many hiring managers will prefer a master’s degree in business administration (MBA). Relevant coursework that will assist you as a stockbroker includes finance, business, accounting and economics. Students can expect to complete an internship in both types of degree programs.
Many stockbrokers will receive training while attending college. An internship is a great way to learn the various requirements and responsibilities of a stockbroker. Bachelor’s degree students may complete an internship during the summer or in the last year of their degree. A master’s degree in business is beneficial because most programs focus on training in the different financial sectors, including stocks and trading, through observation and conferences. New stockbrokers may also receive on-the-job training in an entry-level position where they will be supervised by experienced stockbrokers.
Stockbrokers are required to apply for the Series 63 certification through the Financial Industry Regulatory Authority (FINRA). This requires the completion of all educational work and a collection of exams. Additional certifications are not usually a requirement as a stockbroker, but can be a great way to increase your competitiveness as a job candidate. You might earn the following certifications:
Series 6 Licensure: The Series 6 licensure is a limited investment securities license. This license is ideal for stockbrokers who want to work mainly with packaged investments, such as mutual funds. Interested candidates must successfully pass the exam, which covers topics like variable annuities and unit investments.
Series 7 Licensure: The Series 7 licensure is considered the general securities representative licensure. This license is good for stockbrokers who want to trade individual stocks. The licensure requires completion of the exam, which covers topics in fixed-income investments, life insurance, bond quotes and call options.
Series 3 Licensure: The Series 3 licensure is ideal for brokers who work with commodity futures contracts. Interested candidates must complete the exam, which covers topics in options and managed futures.
Series 65 Licensure: The Series 65 licensure is ideal for stockbrokers who offer financial consultation through a financial agreement other than commission. This covers stockbrokers who work for an hourly fee. Interested candidates must successfully complete the exam, which covers topics in rules, regulations, disciplines and economics.
There are several hard and soft skills that can assist you in your role as a stockbroker:
Mathematical skills: Good mathematical skills are important as a stockbroker. Stockbrokers will often have to calculate percentages, profits and dividends quickly and accurately.
Communication skills: Strong nonverbal and verbal communication skills are required as a stockbroker. Stockbrokers will often use their interpersonal skills to develop trust and build relationships with clients. The ability to communicate is necessary to understand the client’s financial needs.
Decision making: A stockbroker is tasked with making important financial decisions for each of their clients. The ability to make fast decisions based on market data is crucial in this role.
Negotiation skills: Stockbrokers often use negotiation skills to negotiate commissions, trade costs and the number of portfolios they manage. The ability to compromise and to persuade are important.
Stockbroker work environment
Stockbrokers typically work in a financial institution, regularly communicating with clients and other stockbrokers. Stockbrokers can expect the following work environment characteristics:
Frequent use of computers and other technical equipment
A stressful work environment at times
Regular communication with clients
A fast-paced work environment that is constantly changing
Local and international travel often required
Stockbrokers work in a fast-paced environment that can be stressful. The stock market can drastically change from when it opens until it closes and stockbrokers need to be comfortable in a volatile market. Regular communication with clients is crucial, as stockbrokers will have to update them on returns and request additional portfolio to spend as needed. Some stockbrokers may be required to travel to meet with personal and corporate clients that live in other states or other countries.
How to become a stockbroker
Stockbrokers must complete certain educational requirements and then develop the skills that will assist them in their trading role. You can become a stockbroker with the following steps:
Earn a degree: A minimum of a bachelor’s degree is a requirement to become a stockbroker. Complete all educational requirements to earn this degree and take advantage of any internship opportunities. A master’s degree in business administration will give you the direct experience that you need to succeed as a stockbroker and can also make you a more competitive candidate when applying for jobs. Use your training during your master’s program to learn the different areas of the financial security business and decide which type of trading is right for you.
Find an entry-level trainee position: Continue your training by finding an entry-level trainee position. This will give you the opportunity to develop your skills while completing training hours that are required for your licensure exam.
Study and pass the licensure exam: Decide which licensure you want to obtain. Many have educational requirements and a requirement of minimum hours worked. Once you meet the minimum requirements and have studied for the exam, schedule and take it to become a stockbroker.
Apply to open positions: Once you have completed the educational requirements and successfully passed the licensure exam, you can begin applying for open stockbroker positions. Use your cover letter and resume to highlight your experiences and interest in each position.
Stockbroker job description example
Crater Financial, Inc. is looking to add an experienced stockbroker to our team. The ideal candidate will have a strong background in personal investment trading, especially with packaged investments. Some corporate client investment experience will be useful in this unique role. Licensure through the Financial Industry Regulatory Authority (FINRA) in the state of Texas is a requirement. Strong skills in communication, decision making and mathematics are important to succeed in this role. A minimum of a bachelor’s degree in finance is required and a master’s degree in business administration is recommended.
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