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How to Become a Licensed Stockbroker – A Complete Guide

Do you want to learn what it takes to become a licensed stockbroker? If YES, here is a complete guide plus requirements needed to become a stockbroker from home without a degree.

All profession requires the practitioner to have a mastery of a complex set of knowledge and skills through formal education, informal education or practical experience. Majority of the profession that are existing in this world are professional and organized ones and they are governed by a professional regulatory body that sees to the code of conduct and license of the practitioners.

The profession of a stockbroker is one that requires the practitioner to pass a licensed examination before he could be certified to practice in many countries of the world, especially in countries like United States of America, United Kingdom, Canada and Australia. After you have been certified and licensed to practice as a professional stockbroker, you can invest and stand on your own with your capital or seek employment opportunity in some reputable stock market firm.

The profession of a stockbroker is a formidable profession in human’s life, because it is the only major profession that requires the practitioner to stand as a middleman in various business transactions.

What is a Stockbroker?

A stockbroker is a professional individual that is trained and licensed to participate in stock market. A stockbroker often act as an agent in the market, he will stand in between the buyer and the seller and collect a commission for his own service in the transaction. A stockbroker is always closely in connection with an investor. He always ensure he provide valuable service and information that would assist the investor in making an accurate and adequate investment decision.

Duties of a Stockbroker and their Job Description?

  • Recruitment of customers for the stock market
  • Granting a reception customer service
  • Disclosure of relevant information to investors
  • Initiation of trade for both buyers and sellers
  • Recommendation of investments for client
  • Proper management of client’s goods and money
  • Taking proper care of investors goods

Tools or Equipment Used by a Stockbroker?

  • Computer
  • Writing Materials
  • Software
  • Calculator

How to Become a Stockbroker – A Complete Guide

Facts, Figures and Labor Market Situation

  • The profession of a stockbroker might seem to be a stressful one because it requires the practitioner to spend long hours at work, but the profession is a good career in the sense that the career offers high levels of responsibility, good opportunities for promotion and an excellent financial rewards including huge amount as salaries and large bonuses for the practitioners- especially for those in United State of America, Canada, Australia and United Kingdom.
  • According to the 2010 Fastest Growing Jobs Report by CareerCast.com, the profession of a stockbroker is projected to be the fastest growing job with the largest income growth over the next six years. This projection was made known to be true due to the favorable income growth trailing the profession.
  • As a stockbroker advances from self-employed, individual services and general services, the profession is rated by experts as a fastest growing one with the U.S Bureau of Labor Static projecting 25% job growth for the profession and income growth potential of up to 452% between now and 2016.
  • Just as the buying and selling of goods is becoming rampant in every countries of the world, the profession of a stockbroker is also flourishing just because many investors depends on the services of the stockbrokers to manage their investments for them.
  • The profession of a stockbroker is an excellent career path for people to follow because the job is having a glorious future and that is why the people that are on the verge of venturing into the profession doesn’t have anything to fear and those that have already secure the job are already on a life-long career that is sustainable.

The Impact of the Internet and Technology on the Profession of a Stockbroker?

  1. Apart from the fact that the internet offers a dynamic and irrevocable Importance to various professions, there have also been technological tools evolving in the whole world and all the technological tools coupled with the access to an uninterrupted internet access have continued to make many professions grow beyond an envisaging level.
  2. The truth is that the profession of a stockbroker is one of those professions where the full impact of the internet and technology could be greatly felt. But notwithstanding, just as the internet and technology is making positive impact in making the profession unique, the internet and technology is as well serving as an hindrance causing a setback to the profession of a stockbroker.
  3. It used to be a cumbersome and a very slow process before transactions were always completed in the stock market in the ancient days but since the advent of internet and technology, there have been a very speedy transaction process taking place in the places where stockbroker works.
  4. Another area where the internet and technology is evident is the innovation of the trade alert, where investors can easily get alert about their investments. The stockbroker can easily alert the investors and buyers about the channel of goods and service in the market.
  5. The internet and technology is having negative impact on the profession of a stockbroker in several ways. Investors can now communicate, sell and deal with their customers just with the help of the internet via online transaction, even without employing the service of a middleman known as a stockbroker.
  6. The internet and technology has made the buying and selling of goods to be very easy between the sellers and buyers, thus, sidelining the stockbroker.
  7. In the past, investors do pay the stockbrokers for financial and market advice, for managing their goods for them and they will still share their profits with the stockbroker but internet and technology has made life easier for the investors, as they can now easily do all their transactions online, even without the help of any stockbroker.

Professional Bodies and Associations for Stockbrokers

  • Chartered Institute of Stockbrokers (CIS)
  • Stockbrokers Association of Australia (AAS)
  • Australian Stockbrokers Foundation (ASF)
  • Independent Financial Brokers of Canada (IFBC)
  • Insurance Brokers Association of Canada (IBAC)
  • The London International Insurance Brokers
  • National Association of Stockbrokers (NAS)

Career ideas / Sub-sectors That Exists Within the Stockbroker Profession

  • Investment Advisers
  • Forex Traders
  • Stock Managers
  • Stock Markers
  • Firm Brokers
  • Stock Market Advisers
  • Financial Advisers
  • Stock Exchangers

Benefits of Becoming a Stockbroker?

  • Prestige: The profession of a stockbroker is considered to be a very prestigious job and that is because before you can become a stockbroker, you will need to pass through a rigorous task that includes passing several exams. The great deal of prestige can be attributed with the high sense of responsibilities that is associated with the profession.
  • Juicy salary: Stockbrokers always receive an exuberant pay for their services. Irrespective of the firm where they are employed, a hardworking stockbroker receives between 30% to 50% share of total commissions on transaction they generated over a year. The profession of a stockbroker is no doubt a profession with juicy and fascinating salary scale for the practitioner.
  • Independent: Apart from the fact the profession of a stockbroker is a profession that gives room for the practitioners to stand independently and work on their own; the practitioners of the profession can as well live off of the commission garnered. A stockbroker can build his own formidable business from the salary and bonus earned from his work

Factors Discouraging People from Becoming Stockbrokers?

  • Lack of adequate training: The stockbroker is a complex professional. This is due to the fact that the training involved to become a stockbroker is indeed a herculean task. Therefore many persons are discouraged from joining the profession due to this, as many persons are afraid of going into difficult professions.
  • Financial reward: While it is strenuous to become a stockbroker, the reward at the end of the day is usually meager. Many persons are discouraged from the profession due to this meager reward despite the stress they face on the job.
  • Obsession with productivity: As public companies, brokerages became obsessed with productivity and the managers got higher bonuses for running more profitable departments. This resulted in the consistent hire-and-fire method devised especially against the lower tier professionals. This productivity obsession discourages people from going into the profession.
  • The nature of the profession: The stockbroker profession is a bit restrictive and tends to gear towards punishment. A typically compliant department forbids even the sending of tweets and personal Facebook accounts are discouraged. This serious and restrictive nature of the profession discourages people from wanting to venture into it.

How Much Do Stockbrokers Earn Monthly/Annually?

  • In the United Kingdom

The starting salaries range for stockbrokers in the United Kingdom ranges from £24,000 to £30,000 a year. With experience and appropriate qualifications, earnings can increase to be between £45,000 and £80,000 a year. Also, with bonuses, senior stockbrokers with an extensive client base and higher value trades can earn over £100,000 a year. These annual bonuses are mostly common in stock brokering, and are based on personal and company performance.

  • In the United States

For Stock Brokers in the United States, bonuses and commissions account for a significant portion of income and add up to 126 percent of their $51K annual pay. In the world of Stock Brokers, total cash compensation can vary between $35K and $146K. Each package generally includes bonuses and profit sharing proceeds, and in exceptional cases, those amounts can reach heights of $20K and $7K, respectively.

Stock Brokers in the early stages of their careers take home approximately $47K on average. The average for people in the five-to-10 year group is only a little larger at $55K. Stock Brokers see a median salary of $82K after reaching one to two decades on the job. Average wages for those with more than 20 years of experience come out to around $118K.

  • In Canada

The salary of stockbrokers in Canada also conforms to the earnings of their colleagues in other parts of the world. Though “Despite recent strength, up-and-down markets both domestically and internationally has upped the stress on stockbrokers, and market volatility makes failure in the eyes of their clients a more likely possibility for those in the industry.” The salary of stockbrokers is put at an estimated C$90,000

  • In Australia-: The salary of stockbrokers in Australia ranges between AU$40,000 – AU$70,000 annually. Averagely, a stockbroker earn about AU$69,924 per annum.

Can You Become a Stockbroker by Taking Online Courses?

There is no online courses available that can be taken to enable someone become a stockbroker. The only online programs available are the prerequisites to becoming a stockbroker. The programs include knowledge in accounting, mathematics, economics etc. This can be assessed online. But for online courses that could be taken to become a stockbroker, there is none available.

Educational Requirements Needed to Become a Stockbroker?

  • Earn a degree: The first step to becoming a stockbroker is to pursue a bachelor’s degree in business, economics, accounting, mathematics, finance or a closely related field. Although you can hunt for this job immediately after graduation, it is best to find another financial services job, such as financial analyst. After gaining some financial services experience, you can apply to brokerages and move into stock brokering without having to join the employer’s graduate-training program. Without experience, you will start out as a trainee, learning the business of stock brokering from experienced brokers.
  • Master the Skills: To be an accomplished stockbroker, you must be a quick thinker with strong math and decision-making skills. When shares for Company A become available at a good price, you must, within a short time, analyze the company’s performance, predict whether the share price will increase and determine whether to invest your client’s money in the company. An appetite for details and strong computer skills are also important, as you must consider all factors that can affect stock price and monitor various stock markets on your computer.

Certifications Required to Become a Licensed Stockbroker

Just like other professions. Becoming a stockbroker requires certifications that are critical to attaining the feat. This is because stockbrokers are not only important but also essential in any societal economy.

This last step to qualify fully as a stockbroker is:

Obtain a licensing qualification that is recognized by the Financial Conduct Authority and join its Financial Services Register. Examples of FCA recognized qualifications in the United Kingdom include the following:

  • Chartered Institute for Securities and Investment’s Level 4 Certificate Investment Advice Diploma
  • Chartered Insurance Institute’s Certificate in Securities Advice and Dealing
  • Financial Industry Regulatory Authority’s Series 7
  • Association of International Wealth Management’s Certified International Wealth Manager Diploma

Continuing Education Information for Licensing/certification:

In the United States, the Financial Industry Regulatory Authority (FINRA) requires stock brokers to register as representatives of the firms where they work. This also entails working for a firm at least four months and passing FINRA’s Series 7 exam. Most states also require brokers to pass the Uniform Securities Agents State Law Examination. Brokers with a bachelor’s degree and four years of work experience can earn the CFA Institute’s Chartered Financial Analyst designation by passing three separate exams.

Career Opportunities Open to Stockbrokers?

  • Financial services performance: Stockbrokers perform financial services for their organization’s clients as related to stocks and other securities. They thus analyze and interpret portfolios and assist in creation of strategies to meet financial goals of the client.
  • Advisory roles: As a stockbroker, you can decide to delve into advising their clients on current and prospective investments. They do this by managing client portfolio with care and integrity, ensuring that their financial well-being is protected.
  • Management: A stockbroker is a manager in his/her own right as he/she helps clients and financial establishments manage their portfolios and provide advice on which investments might have the best returns, as well as process transactions on their clients’ behalf.
  • Multiple clients’ opportunities: Stock brokers’ clients may be individual investors and/or companies; this is due to the fact that the career gives an opportunity for that. They thus need to maintain an up-to-date understanding of the stock market and monitor changes in the market throughout their workday.

How Long Does It Take to Become a Stockbroker?

Becoming a stockbroker is not as easy as it seems to most people. This is because stockbrokers are critical financial managers and analysts. Apart from the required degree in accounting, business or economics, the number of years required to be a professional stockbroker usually ranges between 4-6 years. This gives the aspiring stockbroker the ability to earn the degree, master the skills, and also get certified in the long run.

Skills and Traits Needed to Become a Successful Stockbroker?

  1. Interpretation ability: A stockbroker must possess the requisite ability to interpret complex information and also act accordingly with the information. This ability must be honed and developed to ensure optimal performance as a stockbroker and to be able to be a successful one too.
  2. Ability to work under pressure: Stockbrokers must be ready to work under pressures at all times. This is because the profession is a stressful one which requires a lot of pressure in most situations. Thus anyone who wishes to be a successful stockbroker must develop this skill very well.
  3. Confidence: A stockbroker must be confident in whatever he does. This is because anyone who lacks confidence in himself/herself cannot succeed as a stockbroker. Because a stockbroker must be able to make self-judgments and also take risks at all times. Confidence is a skill that must be worked upon very well.
  4. Communication skills: Communication especially in the 21st century is a skill that must be possessed by all. Stockbrokers are also not left out of this, as it is essential for stockbrokers to horn their written and oral communication skills. This skill is not only important but essential as stockbrokers must be able to communicate effectively with clients and organizations.
  5. Good mathematical skills: Having a good mathematical skill for a stockbroker cannot be over-emphasized, this is because Mathematics is the bedrock of the profession, and most of the jobs to be carried out by stockbrokers must be analyzed mathematically. Therefore, stockbrokers must ensure that they develop this skill appropriately.
  6. Working as a team player: There is no way you can be a successful stockbroker without working with a team. This is because the profession is mainly one that involves co-operation and team work. Therefore, to be a successful professional in the field, you must work with a team and also act on your own initiative.
  7. Detail-Oriented: A stockbroker must have a strong appetite for details and must consider all factors that can affect stock prices. This appetite for details is very critical in the stock-brokering profession, as it is only with the necessary details that you can ensure that your clients’ interests are well represented and guided in the market.
  8. Computer skills: In the 21st century, a stockbroker must be computer literate and able to use it effectively to analyze his jobs well. This skill is very necessary as most jobs of the stockbroker is done using this method.

Tips and Advice to Help Advance your Career as a Stockbroker

  • Earn the necessary certifications: To become a successful stockbroker, you must ensure that you acquire all the certifications that are required of you. This is because it is only through this, that your journey towards even making it as a stockbroker can be fulfilled
  • Seek relevant information: Seeking of information from the right sources is critical to ensuring that you succeed as a stockbroker
  • Follow relevant blogs: The internet today brings information to you even from the comfort of your homes. This must be utilized if indeed you want to succeed.
  • Develop your mathematical skills.
  • Develop strong communication skills
  • Must be a smart worker
  • Must be a hard worker
  • Must be able to work with little or no supervision.
  • Must be able to think outside the box at all time
  • Must have good peoples skills
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