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How To Become A Stockbroker – Forbes Advisor

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How To Become A Stockbroker: Education, Licensure And Career Outlook

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If you’re quick and enjoy a fast-paced work environment, you could pursue a career as a stockbroker.

Stock brokerage is more than just market analysis – in fact, it can be quite social and exciting work. Most companies require applicants to have a bachelor’s degree and pass a few qualifying exams. This guide explains how to become a stockbroker, including education, licensure, and career data.

What do stock brokers do?

Stock brokers buy and sell stocks at the direction of their clients. Being a stockbroker requires business and social skills, as these professionals are responsible for building and advising their own clientele. Some clients may not know the market, so it is up to the broker to assess the situation and simply explain their recommendations.

Role and responsibilities

The stock market is constantly changing. Brokers monitor day-to-day changes, track economic trends, understand their clients’ portfolios, and make adjustments to increase profits. This career is fast-paced, with a lot of money at stake.

How to become a stockbroker

Most stockbrokers must obtain a degree and license before they can practice. Keep reading to learn more.

Securities Dealer Education Requirements

If you want to become a stockbroker, the first step is to get a college degree. A bachelor’s degree is required for most entry-level positions, and it’s especially helpful to specialize in a business-related field. These courses provide insight into the industry and can help you hone your skills in finance and economics.

To get a feel for the position and flesh out your resume, consider doing a summer internship. You’ll gain hands-on experience and build relationships that can help you in your job search.

Take the necessary exams

With your bachelor’s degree in hand, it’s time to get a license. Securities dealers must register with the Financial Industry Regulatory Authority (FINRA). FINRA is a not-for-profit organization that has been authorized by Congress to regulate brokerage firms and stockbrokers, representing more than 624,000 people.

To become a registered securities professional, you will need to pass two exams. You can take the Securities Industry Essentials® exam before you land a job. This test covers basic information about the securities industry, such as regulatory bodies, best practices, and the structure of the market as a whole.

Next, you must pass a qualifying exam. This test requires an association with a FINRA-registered firm. The Series 7 exam, which is aimed specifically at general securities representatives, covers the details of your chosen field.

Most states also require brokers to pass the Series 63 or Uniform Securities Law Examination. This test is administered by the North American Securities Administrators Association but facilitated by FINRA. It focuses on state-specific laws and regulations.

Certification is not a one-time affair, however. FINRA requires licensees to maintain their certifications through annual continuing education programs. This includes online training on regulations, ethics and compliance, as well as your company’s training programs.

Consider higher education

Stockbrokers advance in their careers by gaining more clients, and earning a master’s degree also helps. Earning an MBA can demonstrate that you have the financial and communication skills needed to take a leadership position in the industry.

Changes in the brokerage industry

Technology has changed the brokerage industry over the past few decades. Most trading is done online, rather than as an auction on the trading floor.

In 2017, there were 205 brokers from 125 companies on the floor of the New York Stock Exchange (NYSE), already a significant decrease from the NYSE’s peak. Now there are only 22 companies on the directory. The NYSE has physically reduced its space and more stockbrokers are allowed to work from home.

Who Uses Stock Brokers?

Online discount brokers like Charles Schwab and Robinhood allow individuals to invest with little or no fees. Many investors use these robo-advisors instead of human brokers.

However, individuals and companies who have large sums of money to invest always work with stockbrokers to make personalized decisions. In turn, brokers receive a commission on the transaction.

What skills does a stockbroker need?

Above all, stockbrokers must know how to stay calm under pressure. Given the volatility of the market, these professionals must quickly analyze all available information, while considering all potential risks. They need to know how to make decisions that they can defend with their clients.

Stockbrokers benefit from math and computer skills. They use computer programming and investment formulas to analyze various situations.

Equally important is the social aspect of this work. At first, stockbrokers make cold calls to convince potential customers to entrust their money to them. Brokers must be confident and persuasive, and they must be able to distill their analysis and recommendations for their clients. Stockbrokers who excel in this area can build a larger clientele through referrals.

How Much Does a Stock Broker Earn?

Stock brokerage can be a lucrative career. According to the US Bureau of Labor Statistics (BLS), sales agents in securities, commodities and financial services – which include stockbrokers – earned a median annual salary of $62,910 in May. 2021. In contrast, the median salary for all occupations nationally was $45,760.

There is significant earning potential for stock brokers at the top. According to the BLS, the wealthiest 10% of these workers earned an annual salary of $205,440.

New brokers generally earn a salary while they learn the field and build their clientele. As their accounts grow, commissions make up a larger portion of brokers’ income. Full-service brokers may charge a commission of 1% to 2% of their clients’ assets under management.

Career Prospects for Stock Brokers

As online commerce becomes easier and more popular, there is less need for humans to facilitate transactions. Instead, an online brokerage firm may seek to hire sales agents who have financial expertise and customer service experience to help advise online investors.

That said, the BLS projects a 10% growth in securities, commodities, and financial services sales agent positions between 2021 and 2031, twice as fast as the growth projected for all occupations in the United States. national scale. And as people leave the industry or retire, the BLS predicts the creation of 46,600 jobs each year for these professionals.

As the U.S. population ages and fewer people have pensions to rely on, retirees can seek personalized advice from stockbrokers, according to the BLS.

Frequently Asked Questions About Stockbrokers

Is stockbroking a good career?

Brokerage involves handling large sums of money, which makes the job stressful and fast-paced. Since their clients work during the day, brokers can expect to advise clients in the evenings and on weekends. However, the United States continues to be an economic hub, which means there will be a demand for stockbrokers, and the best earners can earn over $200,000 a year.

Do brokers make a lot of money?

Stockbrokers earn more than the average American. In May 2021, securities agents earned a median annual salary of $62,910. Larger customer bases and more successful transactions lead to higher revenues.

How Much Do Newbie Brokers Earn?

At first, new stockbrokers are paid a salary. As they gain more clients and move up the ranks, they may accept lower pay in favor of higher commissions. Stockbrokers with one to four years of experience earn an average of nearly $60,000 a year, according to Payscale.

Do you need a degree to be a stockbroker?

Most companies require applicants to have a bachelor’s degree. There is no specific major requirement, but a business degree is particularly helpful. Earning a master’s degree can be helpful for advancement, but it’s not necessary.


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