Stock Broker

Brokers are individuals that act as the intermediaries for the seller of securities, and the investors that buy them. The word "broker" applies to several circumstances. One can be a real estate broker or a car broker. This word can also describe a salesperson since they bridge the seller of the goods to the consumers. Brokers are important because they carry out the standards of the markets with the purpose to sell more goods. A good broker is trusted to work for their interests.

A transaction on a stock exchange cannot be completed without a broker since only members of the stock exchange and registered representatives can enter a transaction. The broker is the primary access of a normal stock buyer to the market. There are various types of stock brokers. Execution-only brokers are tasked to only follow the client's instruction to buy or sell. Other stock brokers can advise their clients on which stocks to buy and sell, but leaves the financial decision to the investor. Discretionary dealing is where the stock broker trades stocks based on his client's objectives.

Stock brokers are usually sought for their advice. Thus, they share similar roles with investment advisors and financial advisors. Brokers can also trade on the market on their own behalf.

The services of a stock broker are sought for their information and their expertise. They are the active hand of individual investors or corporation. Since they have the monopoly of the 'middleman', they can advise and perform consultations for their clients on certain investments.

Usually, stockbrokers are there for investor education. They explain how the stock market works and they gather information that will serve the client's interest. They help investors determine the best investments based on the client's objectives. For many investors, the words of a trusted stock broker can be regarded as scripture since it is their primary source of expert opinion.

After investment options are sorted out, the stock broker sends the order on the floor of the securities exchange. After the transaction is accomplished, the stock broker informs the client on the price of the security, transfers the title of the stock to the client and he works to complete the deal. Stock brokers take the normal nine to five shift, but they should also be prepared to work more hours to get a deal done. Budding stock brokers spend most of their time on the phone building their client base.

A college degree is not required to become a stock broker, but the job market prefers that you have one. Stock brokers have to be duly licensed by passing the General Securities Representative Examination and by posting a bond. Brokerage firms usually take their applicants into a four-month intensive on-the-job training to prepare their employees for the licensure exam. This training is the doghouse for young brokers. Not only will you have to match the standards of the firm , but you will also be competing with fellow trainees for a few numbers of vacant slots. Aside from the general licensure exam, most states also require the Uniform Agents State Law examination. These tests are done to ensure the candidate's knowledge of all aspects of the market.

Being a stock broker requires constant training even if you are well into your career. Most brokers take classes and train up to two years while working full time. Attendance in seminars and forums are important throughout their careers to keep them informed on the development of their field.

It is rare for people straight out of college to become stockbrokers. Usually, one should have prior work experience, preferably on a related field, to become a stockbroker. This is not to say that it is impossible not to get into the system by other means. Highly talented individuals who have a knack for numbers and the market can easily outwit conventional brokers. A strong background in economics, finance, math, computers, and business management will go a long way in advancing your career.

Like all career tracks, personal development comes with experience and time in the industry if you want to survive in the long run. With intense competition that takes place for professionals who want to establish themselves in the market, it does not take a lot of mistakes to fall behind. A stock broker is one of the most competitive jobs in the financial industry or anywhere else. Long hours, all-nighters, and stress take toll on even the most ambitious stock brokers. Novice stock brokers are also discouraged when they have not established a sufficient client base to keep themselves going. This phase usually lasts for two to five years into the career. The job can cause much anxiety for the light-hearted.

Once you have grabbed a foothold in the industry, you will gradually experience increasing rewards such as higher salary, more benefits, and less strenuous working schedule. Brokers who have survived the first years will start looking up for promotion. By this time, having an M.B.A. degree is common if you want to get key management positions. Successful stockbrokers use their intensive training and work experience to score larger accounts or critical management posts. Few brokers reach partnership in their firm. For natural talents who find the market as a fun game, they tend to stick around long after retirement.

The expansion and contraction of job opportunities in the stock market is based on the state of the economy and the condition of the stock exchange. Stock traders understand that they are part of a boom-bust cycle as exemplified by the great crash of 1920 and the great depression that followed. The reality is, if there are no investors who want to buy the market, stockbrokers will have fewer clients to deal with. To ease such erratic cycle of job opportunities and layoffs, fundamental safeguards have been implemented by the government to protect the market.

The marketability of stock brokers today in light of different financial options such as pension funds, and mutual funds, allow them to be advisors for the average investor. Investors are more comfortable talking to stockbrokers for advice than turning to different agents or sellers of financial plans. The prospect of a stockbroker goes as the economy goes. At the same time, the deregulation of the industry gave stock brokers and account executives the leeway to expand their responsibilities and readily adjust to the demands of the market. Stockbrokers who are able to profess multidisciplinary skills will find themselves having more clients. For example, a hypothetical stockbroker who has a strong background in engineering will have a better read on the stock prices of heavy industries or telecommunications. This shows us that being a stockbroker is beyond knowledge of numbers. In a competitive business, it is critical to use every advantage in your arsenal to increase your client base.

Having a university education is a given if you want to enter the market. If you want to become successful in it, a graduate course such as an M.B.A. will be very helpful. The most apt university degrees for aspiring stock broker are Economics and Business Administration.

Math and Statistics majors can also thrive in this market because of their technical skills. Still, no degree is an automatic pass to become a stock broker and there is nothing written in the law that says only an economist can become a stock broker. What is more important is that you have the aptitude for the rigors of the job and you have the analytical tools in your disposal.

Aside from the strict role that comes in being a stock broker, there are intricacies of the job that require special skills to become a successful stock broker or account executive. A stock broker is much like a sales clerk since you are constantly communicating to increase your client base. In this regard, stock brokers are not much different from insurance and real estate agents. You have to put yourself as an exceptional stock broker that a normal client will want to do business with. You can apply your own strategies to get more clients and increase your contacts.

Acquiring contacts is only the tip of the iceberg. Part of being a stockbroker is making bold decisions that will either make you or break you. With the nature of the market, it is understandable to be wrong sometimes. However, if you have more misses than makes then expect to lose clients. Stockbrokers have the usual profile of being a communicator who project confidence and competence to the client. Investors are hard to deceive, and they will take the time evaluating you considering the responsibility that you will be entrusted with. If you are tasked to forecast a certain stock, you should bring answers in a snap or risk losing clients. Thus, half of the job is studying the market because you cannot be unprepared when you face a client.

Stockbrokers thrive on commissions. While you have a set a monthly salary, income still varies wildly. Trainees are given allowances between $250-$750 per week depending on the size of the company. The average starting salary is $17,000. After five years, your salary can reach up to $30,000 while brokers with 10 to 15 years of experience can figure at $65,000.

No stockbroker expects to get rich on their salary only. Instead, they thrive on a large client base and selling stocks on commission. This practice is the main reason why the business is very competitive. The incentive to get better clients is the reason for this high-paced job. Part of scoring a good commission is offering extensive services that include guidance of a client's investments. There are stock brokers who work in discount brokerage firms or online brokerage that are paid a salary.

Brokerage firms grades a stockbroker's salary based on the projected clients that you can acquire in a period along with the number of clients and accounts that you have maintained. This is usually considered a stipend or allowance since the real money comes from commissions. Ironically the more clients that you bring in or interest, it is unfortunate that the proportion of house-salary on your income decreases. Instead, they organize training, give you support, and coaching so that you can become a better stockbroker.

The financial incentive of successful stockbroker is the main reason why the job can be attractive on the surface. Many naive thinkers believe that being a broker can be simplified to a game. While many find excitement almost akin to gambling, you cannot seriously consider a career just to make quick money. Much of the misunderstanding that comes with the job is based on their wrong reading on how the market works.

First, you should understand that the market is a cycle. Sooner or later, the market will catch up on you and bring you down, or you can ride the wave and profit from it. In this business, there is no such thing as an unfair market. It is the stock broker's burden to analyze the market and use it to his or her advantage. Another misconception that young stockbrokers have is that clients are ever-flowing. Even if that is the case, most likely they will not find you. You have to step up and sell yourself. Attend key meetings with potential investors. Advertising your services does not hurt either.

Finally, you will not last in this business if you come in with the sole purpose to make money. If you take this job just to become rich, it will not be enough of a motivation to keep you going. Successful stockbrokers can also play the noble position, whether taking care of a company that you strongly believe in or giving advice to the average Joe on how to increase his wealth and have a better quality of life. Experienced stock brokers enjoy the "game" because it matters a lot for them and their clients. Stock brokering is not a get rich quick scheme.