A stock broker buys and sells shares, or other securities, on behalf of clients, and also provides financial advice.
Most stock brokers work on commissions, depending on the decisions they make.
The different roles you could fill when you become a stock broker vary substantially.
What many people imagine when they imagine a stockbroker is the man on wall street, buying and selling frantically before the close of business.
And indeed, this is what many stockbrokers do.
Today’s stockbrokers also fill other roles, communicating with clients and providing financial advice.
While part of the role of a stockbroker is to make quick decisions at the stock exchange that make money for their clients, just as important is winning those clients in the first place.
To do this, you’ll need strong sales ability, along with being a good communicator.
Of course, the best way to keep clients is good performance.
Once you attract a client base you will need to work hard to keep them there.
Education Requirements to Become a Stock Broker
To work on the New York Stock Exchange as a broker, you will need to pass something called the series 7 general securities registered representative exam, or just the series 7 exam for short.
While this exam was implemented by the New York Stock Exchange itself, it is now managed by the Financial Industry Regulatory Authority, or FINRA.
If you’re still in high school, it’s a good idea to take business and math subjects.
While you don’t need a college degree to work on the stock exchange, most financial firms won’t give you a job unless you have one.
Take a four year bachelors degree in finance, accounting, or business administration is a good idea.
To reach the peaks of this career path, you might like to consider gaining a masters degree in business administration.
Many in the financial industry gain this qualification later in their career and study part-time.
Stock Broker Job Description
When you become a stock broker, you can look forward to a busy job with a lot of variety.
You will spend a great deal of time speaking with your clients.
This could involve a meeting to gauge their financial position and goals, or just keeping them up to date with current trends.
Quite a fair amount of time will be spent reading reports, and researching the market.
You’ll need to be in the financial loop so as to be able to make the best decisions for your clients.
When you become a stock broker, you do spend some time trading stocks and other securities.
You might do this physically at the stock exchange; however it is much more common for this to happen remotely online.
The internet has changed a lot of the way business is done when it comes to the stock market.
Many of the actual transactions are attended to by broker’s assistant, or clerks.
Here are some of the duties of a stock broker:
- Build relationships with clients
- Tailor financial plans to suit the needs of clients
- Communicate with colleagues
- Keep up to date with current financial trends
- Buy and sell stocks and other securities
Stock Broker Salary and Career Path
When you become a stock broker, it’s most likely that you will start your career in another position within the financial industry.
You may work as a brokerage clerk or similar.
With a bit of experience you will be working as a stock broker.
Many go on from this role to work as financial planners, or go on to become economists.
Here are some similar roles to that of stock broker:
The median wage of a stock broker is around $70,000 a year.
The top performers in this industry can earn well over $100,000.
It’s important to keep in mind that this is a performance based role.
If you’re not able to secure clients and provide results, then you may not be able to achieve the income you might have imagined.
If you’re looking for a career in the financial sector, and want to earn based on your performance rather than salary, then you might like to become a stock broker.
Frequently Asked Questions
What does a stock broker do?
Stock brokers usually work for individuals or companies.
Their main aim is to manage the financial portfolio of the clients and to get the best possible return on their money.
A stock broker would have to buy and sell on behalf of his or her client.
The selling and buying can be done electronically, physically on the trading floor or by phone.
Stock brokers would get a certain commission from the deals and that’s, basically, how they earn a living.
However, some professionals might also be simply consulting their clients on the best financial deals.
The typical responsibilities of a stock broker include researching the financial markets; monitoring the investments of the client; consulting investment analysts; pitching for new clients; trading, and so on.
Professionals should be able to work in a fast-paced, stressful environment and make decisions extremely fast.
How much do stock brokers make?
The truth is that stock brokers are not the kind of people that earn millions; in fact, some might even be losing money.
The salaries vary tremendously and fully depend on the commissions that the stock broker was able to make after closing good deals.
On average, you can expect to earn anywhere between $40.000 and $127.000; however, there are stock brokers that lose money and there also are professionals that make hundreds of thousands (and even more).
It has been reported that the salaries are the highest at TD Ameritrade, Inc – the average wage is around $75.000 per year.
If you are just getting started, you can earn around $47.000 as a stock broker.
How much does it cost to become a stock broker?
Even though a stock broker should have profound knowledge in a lot of financial questions, there is still no single degree that an individual can earn to become a broker.
You might apply for the position with a high school diploma if you manage to acquire the necessary licenses.
However, in case you want to work for an investment bank or a brokerage firm, you will be required to obtain a degree in business or finance.
A year in a university will cost you anywhere between $8.000 and $30.000.
In order to obtain a stock broker license, you would need to pass certain exams.
The exam fees start from $60 per exam and go up to $245.
What is the demand for stock brokers?
Even though this particular job market heavily depends on the overall state of the economy, stock broking is a growing profession.
The United States might need 32.500 stock brokers more in the next decade.
The job growth of the field is currently 10%.
How long does it take to become a stock broker?
It will take you 4 years to earn a bachelor’s degree in business or finance and another 2 years in case you decide to go for the master’s.
You might want to complete an internship during your last year of college.
You can choose to undergo pre-license courses; however, a lot of aspiring stock brokers go straight for the exams.
The Series 7 exam will take you 6 hours, while the Series 63 examination should be completed in 75 minutes.