WHAT DOES A STOCKBROKER DO: Top Guide on Becoming a Stockbroker

What Does A Stockbroker Do on a daily basis
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A career as a stockbroker may be a good fit for you if you enjoy selling, are self-motivated, and have an interest in finance. A stockbroker can be a fantastic career for a dedicated and ambitious person because it offers great earning potential and the satisfaction of building your own client base. When deciding whether a job as a stockbroker is suited for you, learning about the key tasks of a stockbroker as well as the educational requirements is a smart place to start. In this post, we’ll look at what a stockbroker does on a daily basis, what steps you should take to pursue this career and some of the most often asked questions regarding stockbrokers.

Who Is a Stockbroker?

For the most part, stockbrokers serve as intermediaries. Stocks are purchased and sold on stock exchanges like the New York Stock Exchange and the NASDAQ, and most people who want to trade stocks require the assistance of a broker.

While this hasn’t always been the case, discount brokerage firms like Fidelity, TD Ameritrade, E-Trade, and Charles Schwab now handle the majority of stock trading for individual investors.

However, many trades are still by human brokers, particularly those involving major institutional investors.

Stockbrokers are knowledgeable about the markets and can advise clients on the optimum times to buy and sell. It is their business to locate the greatest costs for their clientele. A broker receives a commission in the form of a fixed fee or a percentage of the transaction value in exchange for conducting transactions and providing advice to clients.

Brokers are in lower demand in the age of online trading.

However, there are situations when an investor prefers to engage with a broker to complete a stock transaction. They may, for example, want to ensure that a stock sale occurs at a given price, or they may have a number of trades that need to occur in a precise order.

Types of Stockbrokers

The following are the types of stockbrokers you should know and their unique functions.

#1. Full-Service Stockbroker

A full-service stockbroker provides clients with a wide range of financial services on a daily basis. Clients are usually assigned to specifically licensed stockbrokers. Research departments of brokerage firms provide analyst recommendations and early access to initial public offerings (IPOs).

Financial planning, business, and personal home loans, banking services, and asset management are all services provided by full-service stockbrokers. For trading options, clients can either contact their personal stockbroker or use mobile and internet platforms.

Stockbrokers who provide trading features and online access, on the other hand, demand greater commissions. Furthermore, because full-service stockbrokers’ online platforms are typically for long-term clients, they offer fewer indicators and tools for day traders.

#2. Discount Stockbroker

Financial products, mutual fund access, banking products, and other services are all available through discount stockbrokers. A cheap stockbroker on a daily basis provides many of the same products and services as a full-service stockbroker, but at a lower cost.

As a result, more active swing and day traders may find inexpensive stockbrokers tempting. Furthermore, because the platforms are for active day traders and investors, they offer more research tools and trading alternatives than full-service platforms.

#3. Online Stockbroker

An online stockbroker, often known as a direct access stockbroker, provides services on a daily basis to active day traders at the lowest possible commission — usually on a per-stock basis. Direct access platforms with routing and charting capabilities. As well as access to numerous exchanges, market makers, and electronic communication networks, are available through online stockbrokers (ECN).

Online stockbrokers also provide the benefits of accessibility and quickness, allowing for point-and-click order execution. Complex options and stock orders can also be on the platforms. Access to heavy-duty platforms is normally accompanied by a monthly cost that includes both software and exchange fees; however, the software fees may be small depending on the client’s actual monthly share volume.

What Does a Stockbroker Do?

A stockbroker is a licensed individual or organization who has the right to purchase and sell stocks and other assets on behalf of clients. They are possible through a commission, which can be in the form of a flat charge or a percentage of the transaction’s value. Stockbrokers must have a thorough understanding of the markets and be able to advise clients on the best times to buy and sell. They’re in charge of discovering the finest stock pricing for their clients. Their key responsibilities include:

  • Providing clients with reliable investing advice
  • Managing the investment portfolios of clients
  • Performing a thorough analysis of financial reports
  • Keeping up with the most recent financial news
  • Keeping clients informed about the state of their investment portfolios on a regular basis
  • Adapting investment methods in response to customer needs and market conditions
  • Cold calling and networking are effective ways to find new clients.

Understanding the Role of a Stockbroker on a Daily Basis

Access to one of the main exchanges, such as the New York Stock Exchange (NYSE) or the NASDAQ, buy or sell equities. You must be a member of the exchange or a member firm to trade on these exchanges. The financial industry regulatory authority licenses member firms and many of the individuals who work for them as brokers or broker-dealers (FINRA).

While an individual investor can buy stock directly from the firm that issued it, working with a stockbroker on a daily basis is far more convenient.

Until recently, getting access to the stock markets was prohibitively expensive. It was only cost-effective for high-net-worth individuals or large institutional investors, such as pension fund managers. They employed full-service brokers and were willing to pay hundreds of dollars for a trade to be executed.

Discount brokers were able to provide online services with inexpensive, fast, and automated access to the markets thanks to the emergence of the internet and related technological advances. Micro-investors have recently been by apps like Robinhood and SoFi, which allow even fractional share purchases.

The Average Salary for a Stockbroker

A stockbroker’s average annual pay is $68,194 and can range from $14,000 to $195,000 depending on geographic area, experience, and industry. Many stockbrokers are paid a commission based on the value of the products they sell, and most companies also give them a minimum salary. New stockbrokers typically get a salary until they establish a client base. After which the compensation gradually diminishes and commissions become increasingly important.

How to Become a Stockbroker

While there are no precise educational prerequisites for becoming a stockbroker, certain degrees or coursework can help you go ahead in the field.

#1. Pursue a Bachelor’s Degree

For entry-level careers in securities, commodities, or financial services, most firms require a bachelor’s degree. Although a four-year degree in business, economics, finance, or accounting is desired, no specific degree is required. Statistics, mathematics, and quantitative analysis are some of the courses that will be most relevant for this job.

You may also wish to pursue a master of business administration to acquire a competitive advantage over other candidates. Employers frequently reward MBA graduates with higher-level employment, better remuneration, and larger signing bonuses.

#2. Complete an Internship

Look for internship opportunities while pursuing your degree. During the summer, several brokerage businesses will hire interns to work in their offices. Internships provide crucial connections for when you’re ready to find a job after graduation. In addition to offering a real-world application for their expertise. This is also a terrific method to gain access to additional job training that many brokerage firms provide to new stockbrokers, providing you an edge over other job seekers.

#3. Get Hired by a Brokerage Firm or Investment Bank

You must be by a Financial Industry regulatory entity firm or another regulatory authority to become a stockbroker. Getting a sponsor usually entails being by a brokerage business or an investment bank. You must develop and be able to demonstrate a strong understanding of financial markets, accounting practices, and regulations in order to become a stockbroker.

#4. Take and Pass the Licensing Exams

Stockbrokers must pass the national association of securities Darters’ general securities registered representative (Series 7) exam in order to earn their license. The Series 7 exam has 125 multiple-choice questions and takes 225 minutes to complete. It must be in conjunction with the securities industry essentials exam, which has 75 questions and lasts 105 minutes. For the stockbroker to trade particular things, he or she may need to take additional exams. Certain exams, such as Series 66 or Series 63, are also in some states. You’ll need to verify your state’s requirements to see which examinations are in view.

How to Become a Stockbroker without Qualification?

There are no official educational prerequisites to become a stockbroker; however, you may be able to enter this field through apprenticeship programs such as a financial services professional degree apprenticeship or a higher investment specialist apprenticeship.

If you don’t have a degree in business or finance, you’ll need to demonstrate to employers that you know how financial markets work. It could help you land a job in an investment bank or a comparable firm.

Above all, you must continue to get training throughout your career and stay current on new procedures and rules.

Stockbrokers in the 21st Century

Discount broker firms hire brokers to operate as over-the-phone agents (known as voice brokers) who answer brief queries or as branch officers in a physical location. They may also consult with clients who have subscribed to the online broker’s premium tiers.

Investment banks and specialized brokerage firms employ a smaller number of stockbrokers. Large orders for institutional clients and high-net-worth individuals by these firms.

Another recent advancement in broker services is the emergence of Robo-advisers. Which provides algorithmic investment management via a web or mobile app interface. Because there is little one-on-one connection, fees are low.

Licensing Requirements for Stockbrokers

Registered brokers in the United States are required to hold the FINRA Series 7 and Series 63 or 66 licenses, as well as be sponsored by a registered investment business. In the United States, floor brokers must also be members of the stock exchange where they work.
In Canada, aspiring stockbrokers must work for a brokerage business and complete the Canadian Securities Course (CSC), the Conduct and Practices Handbook (CPH), and the 90-day Investment Advisor Training Program (IATP).

Applicants in Hong Kong must work for a licensed brokerage business. It also passes three exams administered by the Hong Kong Securities Institute (HKSI). To acquire a license, those who pass the exam must still be by the financial regulating agency. 

To become a trade representative in Singapore, you must pass four tests offered by the institute of banking and finance: modules 1A, 5, 6, and 6A. The Singapore Exchange (SGX) and the Monetary Power of Singapore (MAS) have licensing authority. 

Stockbroking is strictly regulated in the United Kingdom, and brokers must get certifications from the Financial Conduct Authority (FCA). Unique qualifications are determined by the broker’s and employer’s specific responsibilities.


Is a stockbroker job considered an in-demand career?

According to the Bureau of Labor Statistics, job growth for commodities, securities, and financial services sales agents is expected to be 4% from 2018 to 2028, which is about the same as for other occupations.

Should I get a certification as a stockbroker?

Obtaining a certification, as well as an MBA, might help you stand out in the employment market. A Chartered Financial Analyst credential is a fantastic choice for a stockbroker.

How do you build a client base as a stockbroker?

There are numerous methods for locating new clients. The following are a few of the most common:

  • Making cold calls in order to establish new accounts
  • contacting pre-qualified prospects offered by your company or a marketing firm
  • Requesting referrals from relatives or friends
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  4. STOCK BROKER SALARY: Average Salary In US Across The Globe
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