Playing with money is not an easy deal to crack. Only a handful of experts are able to make the most out of this opportunity. They put their money on a particular stock and watch it increase at a gradual pace. So if you’re also interested in finance and think that managing other’s money is your cup of tea, then why don’t you think about becoming a Stockbroker?
Doesn’t it sound glamorous? We have already seen cool characters in the movies, like the pursuit of happiness & The Wolf of Wall Street. We love the film and, of course, the storyline.
So, if this does make you excited, read this piece as it will help you a lot. Here not only we’re going to tell you all about how to become a stock broker, but also their working and how much you can earn as a broker. So think about a career in Brokerage Sales or the investment market!! But first, let’s know a little bit about what is this profession?
Who are Stock Brokers?
A stockbroker is a person who provides investment management services and financial advisory to other people. In short, they sell or buy stocks on behalf of others.
The term “Stockbroker” may vary from country to country like in the US & Canada it is known as Shareholder registered representative, a trading representative (in Singapore) or commonly known as an investment broker or investment adviser or financial adviser. Some people also call them wealth managers or investment professionals.
Now you might think about what they actually do?
Also Read: What Is Stock Exchange And How Does It Work?
What Does Stock Broker Do?
Their work might sound complicated, but actually, it is quite interesting. Investment professionals are regulated broker-dealers who provide investment management services and financial advisory.
Whenever there is an exchange of stocks, whether buying or selling, there is an involvement of a third person or middle man to execute this trade. This middleman is known as “Stockbroker”. They basically perform these functions:
- Set investment goals
- Help and advice investors
- Take investment decisions
Their services include transactions such as the purchase or sale of stocks in return of commission or fee, which may be based on the percentage of assets. In the following paragraphs, you will get to learn about it.
Types of Stockbrokers
Yes, there are also various types of stockbrokers in the market. Read each one carefully and then decide which one you want to become. They basically perform pretty similar work but have a little bit different in the functionality. Let’s know about each of them:
Full-Service Brokers are those who work full time from a firm or company such as Morgan Stanley (NYSE: MS) or Bank of America/Merrill Lynch (NYSE: BAC). Even today, this is the most traditional approach to buying or selling investments. They have a typical office space or cubicle with a guaranteed salary. So if you like to work in this type of environment, become a full-service broker.
In simple words, a discount broker is a broker who buys and sells orders at a reduced commission rate. Which everyone is looking for! Right? But they never give you the investment advice, unlike a full-service broker.
Working as a bank broker is quite different from working in a stock market company like Merrill Lynch or Fidelity. In the past, not many people chose to be bank brokers, but nowadays, it is a booming area.
How to Become a Stock Broker?
After you had decided that you want to be a stockbroker and the type of specialization in the field of stockbroking. It’s time to know how to become one? And what is the basic education you need to become a broker?
The answers to all your questions lie in the forthcoming paras. To become a legal stockbroker first and the foremost thing is to complete a degree. Some prefer only a Bachelor’s degree, and some do masters in business administration. Some students take finance courses in addition to the science, mathematics and English classes.
Is There Any Special Training Required?
Some people also take foundational business administration courses like accounting, legal issues in business, economics, marketing, organizational behavior, and information systems and management.
These courses cover vital topics such as portfolio management, risk management, financial markets & institutions, management of business capital & investment and corporate finance. You can always select your classes according to your interests and the field in which you want to gain more knowledge.
If you already enrolled in a college program, what you can do to enhance your skills is to join a company as an intern. These internships give a valuable experience that will help you determine your career path & getting your dream job.
Does a Stock broker Require Certificate or License?
Every stock broker must hold a legal license in order to sell & buy stocks. Yes, it is a must thing!! There is always a national body that gives the certificate or license to become a stockbroker.
Like in the US, The Financial Industry Regulatory Authority (FINRA) oversees stockbroker registration and licensure, whereas, in Australia, it is given by the Australian Securities and Investments Commission (ASIC).
To get the license first, you’ve to enroll in the specific classes and clear them. These classes have a series of exams, which you have to clear one by one and have to demonstrate your expertise in financial services.
How long Does it Take to Become a Stockbroker?
This totally depends on the course that you’re currently studying. If it is a bachelor’s, then it will take four years and if you want to do the masters then two years more in addition to four years so a total of six years.
After completing the degree, you’ll become a stockbroker, but whether you’ll become a successful stockbroker or not, it totally depends on your marketing skills.
(definitely, we are sure you’ll become an excellent stockbroker!!)
How Much Does a Stockbroker Earn?
Do you know how much a broker earns? Like any other job, this also has job security, and you’ll be able to make “Decent Money.”
According to the U.S. Bureau of Labor Statistics, the median pay for stockbrokers is around $63,000, whereas some make more than $208,000 a year. Surprisingly more than enough, right? Stock broker salary totally depends on the warehouse or firm where he works!
Stockbroker’s salary depends on the place where he works. Like if he is working independently, he might charge per hour or just get the percentage of the particular assets he sells.
How to Find a Job in the Stock Market?
Many students find a job while doing their internships and certification courses. (we already told the importance of this in the previous part of the blog). Some people find their dream job by networking or having good contacts.
How to become a Successful Stockbroker?
Even after you completed your course or degree, the most important thing is how to become a successful stockbroker, which is in demand 24/7 all 365 days. Right?
For that, you have to be good at specific skills. What are they?
If you want to be a successful stockbroker, you have to learn certain things that’ll help you to gain more clients. If you’re a newbie and don’t have a clue about how to do this? Don’t worry, read the below paras, because we are giving some skills that surely going to help you:
Communication is the basic building bridge between a client and a broker. When you deliver your thoughts in the right way, the client will get accurate information. Right? So work on your communication skills!!
After this, another critical skill that will help to become a successful broker is Sales skills.
Excellent sales skills will allow your client to get the overall idea of the investment project. You need to market your company as well as yourself to build your portfolio.
When you’re dealing with money, you need to be sharp in numerical calculations. Assure your client with the securities as here securities are in numbers. You will need to be able to convince your client in every prospectus that WHY you’re the person to trust with their money!!
So if you’ll work on these skills definitely, you’ll have a bright future as a stockbroker.
The Bottom Line
Isn’t the work of stockbroker sound enthralling and riveting? We bet, it is…Right? This is not all, there are actually a lot more things that you can achieve that you have ever imagined. The task and work may seem a little complicated, but once you understand the working, this is nothing for you.
So if you get excited after reading this piece of content, don’t you wish to give it a try? As there are many opportunities in the field of the finance industry, you’ll love to work as a “Stockbroker.” For more finance-related information & guidance, visit Financeshed.