A stockbroker’s lifestyle appears glitzy and a touch reckless. The work has been portrayed as profitable but dangerous in movies like The Wolf of Wall Street and Boiler Room.
Fiction seldom accurately captures what the majority of stockbroking. If you’re the appropriate sort of person, it may be a rewarding job sector. You should familiarize yourself with the duties of this vocation before deciding to go in with both feet and pursue a career in the stock market.
What Is a Stockbroker?
Usually, stockbrokers act as a middleman or intermediate. Those who want to enter the stock market need a broker to execute deals on their behalf because they should be bought and sold through stock exchanges like the NYSE. Some brokerages handle electronic stock trades. However, many deals are still handled by human brokers, particularly those for significant institutional investors.
Stockbrokers have a thorough understanding of the markets and may advise clients on when to purchase and sell. Their responsibility is to locate customers at the most affordable costs. A broker receives a commission in the form of a fixed fee or a percentage of the transaction’s value in exchange for placing transactions and advising customers.
Brokers are less in demand in the era of internet trading. However, a broker is still frequently preferred by investors who wish to conduct stock trades. For instance, they could wish to guarantee that the stock sale occurs at a particular price or that a number of trades take place in a particular order.
Stockbroker Pros and Cons
Pros:
- Excellent job choice for those with extensive stock market expertise.
- Chance to make a significant income.
- Suitable for ambitious individuals with great selling abilities.
Cons:
- Must be capable of handling pressure and rejection.
- Competitive work.
- May have long hours of work.
- Difficult to have a clientele because of the internet boom.
Requirements to be a Stockbroker:
No specific educational prerequisites are required to be a stockbroker. However, some degrees might help you gain an edge in stockbroking.
Education
A business bachelor’s degree can be something you should think about. Many stockbrokers hold a master’s degree in business or finance. In addition, a background related to statistics and analysis is a good plus.
Experience
The career of a stockbroker usually starts with an experience in banking and gaining knowledge and familiarizing themselves with the financial market.
Exams
A broker should pass the Series 7 exam by FINRA. In addition, he or she should be sponsored by a member firm of FINRA or a comparable self-regulatory body in order to take the exam.
It takes 225 minutes to complete the 125 multiple-choice questions on the challenging Series 7 test. It must be taken in conjunction with a second, 75-question, 105-minute Securities Industry Essentials Exam.
These tests will allow a broker to purchase and sell the majority of securities, although more tests could be necessary to trade certain assets. The Series 53 test may be necessary for someone who wishes to purchase and sell municipal bonds, for instance.9 Other compulsory examinations include the Series 66 and Series 63 exams for registration in different states.