Many people don’t have the time or energy to manage their own stock portfolios. Individuals and institutions alike outsource this job to a stockbroker.
If you’re interested in becoming a stockbroker, know that the competition is fierce. Many people leaving school are looking to become stockbrokers. Do you have what it takes to make your way in this career?
Being a stockbroker isn’t easy. You’ll face long hours and need strong dedication.
If you think you can do it, give it a shot. Continue reading below to find out how to become a stockbroker. Slay the competition and join the ranks.
How to Become a Stockbroker: Make a Deal:
The world of finance is one filled with glamourized notions of wealth and excitement. If you’re successful, this could be a reality.
You should first think hard about this decision. This career isn’t for everyone. Introverts and extroverts alike can find themselves with a successful finance career.
You’ll face challenges, as the process of becoming a stockbroker is intense and demanding.
First, consider your skillset.
A stockbroker spends many hours of the workday on the phone. You’ll need to be able to communicate well with clients and other traders.
Research is essential. You’ll need an in-depth understanding of the stock market. You should be able to relay this information to your clients in a digestible fashion.
Let’s talk about education.
Often, stockbrokers don’t need to fulfill any specific education requirements.
That doesn’t mean, however, that you will get away without a college education. The competition is tight. A bachelor’s degree is almost always necessary if you want to stand out.
A master’s degree would be better. This will show your prospective employers that you’ve acquired additional skills and abilities.
You won’t need to have a specific major, but a degree in finance or business will help. Think about degrees in accounting, business, economics, or finance.
Many brokerage firms and investments banks offer internship programs. This will give you an opportunity to work in a finance environment. You’ll have the opportunity to learn the ins and outs of the profession.
You’ll have a higher chance of getting hired once you graduate. Think of an internship as a sort of extended interview.
To work as a stockbroker, you’ll need to obtain the necessary licensing. To obtain the licensing, you’ll need to pass two exams. These are the Series 7 and Series 63 exams.
These can be pricey but you can get a personal, business or student loan for this purpose from NowLoan.co.uk or similar brokers.
The Series 7 exam covers the trading of different types of securities. The Series 63 focuses largely on state laws and regulations.
You’ll need to find a sponsor before you can sit for the exams. You’ll probably need to get hired by a brokerage firm or investment bank before you take the exams.
They should be registered with the Financial Industry Regulatory Committee (FINRA) or another similar authority.
Some firms and banks may require additional certifications. You should ask about this during the hiring process.
Certain licenses and certifications will increase your chances and earning potential.
Becoming a stockbroker is no easy task. Potential hires are subject to harsh scrutiny.
Brokerage firms and investment banks will run a background check to examine your criminal and financial history. If you have a history of serious legal trouble, you’ll be thrown out of the hiring pool.
If you have proven to be financially irresponsible, this will damage your chances. This means you shouldn’t have any recent tax liens, repossessions, or bankruptcies.
Remember, you’re interested in a finance career. Your job will be to give advice to clients about managing their investment portfolio.
If you can’t handle your own finances, how can you be trusted to handle another’s?
Finding a Firm:
Not all firms and investment banks are the same. Some are larger or smaller. Some work internationally.
Find one that fits your desires and personality.
New stockbrokers often find large firms to be intimidating. You’ll be surrounded by people who know what they’re doing.
Smaller firms are good for those who want a more communal feel. These environments tend to be a bit warmer. They also tend to offer higher commission rates.
The downside to a smaller firm is the size. The name is less-known. It may be more difficult to find potential clients.
To do this, you must meet most of the same requirements as a regular stockbroker.
Working on Commission:
As a stockbroker, you’ll get paid on commission. The client pays a commission on the trades you execute. It’s up to you to build a clientele and gain confidence.
The commission from each trade will get split between you and the firm. Your firm may offer you a higher or lower commission rate based on the number of trades you execute.
If you execute more trades, you’ll likely get a larger share of the commission. The firm has a vested interest in generating revenue.
Many firms increase your share of the commission if you generate more revenue. This acts as an incentive and a means of generating more business.
Many new stockbrokers back out of the game. You’ll need to demonstrate a strong work ethic and drive.
The most successful stockbrokers are those who put in the hours and dedicate their soul to the profession. That’s why you should be absolutely sure you want to become a stockbroker before you make the choice.
Getting Started in Finance:
The world of finance is somewhat enigmatic to the average citizen. If you’re thinking about a finance career, you’re probably already aware of some of the quirks.
This guide is meant to give you an introduction to the basics of how to become a stockbroker.
Take the time to think about the requirements and decide if this is a career for you. To find out more, check out our other finance related topics.