What Stockbrokers Do and How to Become One

The life of a stockbroker appears extravagant and even wild. Films such as the Wolf of Wall Street and Boiler Room have made the job appear lucrative, yet extremely risky.

Fiction does not really convey the work environment of the majority of brokers. It’s a rewarding job if you’re the most suitable person. Before you begin an employment on the financial market on all your might, you have to know more about the requirements for the job is about.


What Is a Stockbroker?

Stockbrokers are, for majority of the time middlemen. Stocks are purchased and sold through stock exchanges such as those of the New York Stock Exchange and the NASDAQ The majority of investors who are looking to trade stocks require brokers to execute trades on their behalf.

Although it’s not always the scenario, making stock transactions occur for investors of all kinds is typically handled electronically by discount companies like Fidelity, TD Ameritrade, E-Trade, and Charles Schwab. 1 Human brokers can still manage some trades, particularly for institutional investors with large amounts of capital.

Stockbrokers understand the market and are able to provide advice on the most optimal times to purchase and sell. It is their responsibility to offer clients the most favorable rates they can get. In exchange for trading and offering assistance to clients, brokers receive an income that is a flat rate or a percentage of the amount for the deal. 

In the day and age of online trading it is becoming less of a need of brokers. 3 But there are many occasions that an investor would like to collaborate with a broker in order to complete the trade of stocks. For instance, they might wish to ensure that a stock sale is completed at a particular price, or have numerous trades that they want to complete in a certain purchase.


Stockbroker Pros and Cons

The work of a broker isn’t without its fluctuations and challenges. Here are some pros and cons


  • Excellent career path for those with a deep understanding of the market.
  • It is a great opportunity to earn a substantial income.
  • A good fit for ambitious people with strong selling abilities.


  • You must be able to manage rejection and pressure.
  • Work environment that is competitive.
  • Could require prolonged work hours.
  • They may have difficulty developing a client number due to growing popularity the popularity of trading online.


How to Become a Stockbroker

Although there aren’t any particular requirements to attend school to become stockbrokers Certain levels of education or classes will give you a head start on the job. 4


You may want to think about getting a bachelor’s degree in business. A lot of stockbrokers have a master’s degree in administration (MBA) or an MBA in finance. It’s also beneficial to have some experience in math, statistics as well as the analysis. 


Stockbrokers typically start their careers with banks or a company as a non-traditional broker. They may even start with college internships. They gain knowledge while working. In order to become a broker they must demonstrate a profound knowledge of financial markets regulations, laws and accounting procedures. 4


Brokers have to be able to pass their General Securities Representative Exam, often referred to by”Series 7. “Series 7” test, which is administered through the Financial Industry Regulatory Authority (FINRA). To be able to take the test one is required to be sponsored by an FINRA member company or be a participant in the same self-regulatory group (SRO). 

It is a Series 7 exam is hard and comprises the 125 multiple-choice question that have to be completed in 225 mins. It is required to be taken in conjunction with the Essentials of the Securities Industry Exam that consists of 75 multiple-choice questions and takes just 105 minutes. 

These tests will allow brokers to purchase or sell the majority of securities. However, there are other tests necessary to trade certain items. For instance, someone who wishes to purchase or sell municipal bonds could require the Series 53 test. 9 There are additional exams that are required that are required, such as those for the Series 66 and Series 63 examinations, that must be registered with various state. 


Work Environment

To become an effective stockbroker, you’ll have to spend a lot of time, especially when you’re building your pipeline, or client list. The job is to give clients guidance and demands an ability to sell since you’ll be paid by commissions.

If you are able to connect with people, are able to establish rapport quickly and manage rejection effectively you’ll stand a decent chance of gaining new customers. This job is highly competitive as any broker can assist customers buy stocks just as another one. 


It is estimated that the U.S. Bureau of Labor Statistics estimates that the number of jobs for brokers will expand at an the rate of averaging between 2019 and 2029. While the field isn’t expanding exponentially but it’s not shrinking either. 


Online Discount Brokerages

It was once a rarity to buy stocks without the assistance of an agent, but today, the majority of investors can purchase or sell stocks and run their own stocks accounts. Discount companies allow investors to trade their stocks through an online platform with less than $10 for each transaction. 

Discount brokerages have dissolved barriers and reduced the cost of purchasing or selling stock for a majority of people. Stock trading is no longer only for the rich. It doesn’t mean that brokers don’t offer a useful service. They can assist in making complex trades possible and offer professional advice to those who wish to invest funds. If you’re a typical investor looking to buy 20 shares of a reputable firm, a broker isn’t necessary. It’s all on the internet.


Job Prospects

Certain individuals as well as institutions will require assistance to purchase and sell stocks. A huge number of stocks and other securities are traded through the New York Stock Exchange alone every day. Not all transactions are made through computers.

The broker count has decreased. FINRA recorded 624,996 registered representatives in 2019, a decrease from a record of 672,688 in 2007. 

The need for knowledgeable reliable, knowledgeable brokers will not go away anytime in the near future, which is why this is the best option if are still convinced and are willing to do the effort required to get it done.

the authorAaron Krause

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