Stock brokers, also known as securities sales agents, buy and sell shares and stocks for their clients and earn a percentage of the profits. In this article, you’ll learn about the steps to become a stock broker, license requirements, federal and state qualifications, salaries of high- and low-commission stock brokers, and the future outlook for stock broker jobs.
A college degree is not required to become a stock broker, but most professionals working in the stock market have a Bachelor’s Degree in economics, accounting, finance or business management to prepare for this competitive field. Some brokerage firms hire students for internships during their last year in college, and the students who do the best are often offered jobs when they graduate.
Stock brokers must eventually be licensed. But before this point, aspirants have to work at a brokerage firm for at least four months and pass the Series 7 exam, offered by the Financial Industry Regulatory Authority (FINRA). Some of the following degrees can be helpful in building a successful career as a stock broker:
Several states require future stock brokers to take a second test called the Uniform Securities Agents State Law Examination (Series 63), which certifies candidates as securities agents. This exam tests an aspiring broker’s knowledge of customer protection laws, the securities business, and principles reflected in the Uniform Securities Act. Most brokerage firms offer training to help future stock brokers pass these exams.
For the next two years, stock broker trainees focus on continuing education, public speaking, sales techniques and full-time work. For those interested in executive positions, an MBA can lead the way to a higher salary, signing bonus, and higher-level position.
A stock broker buys and sells stocks and shares for his or her clients — whether individuals or corporations — and receives a percentage of the profit.
Some of the daily job duties of a stock broker include:
The larger the client base, the better the income for a stock broker, so it is a job well suited to extroverted people. Some stock brokers even teach finance classes to meet potential clients.
According to a 2006 report by the U.S. Bureau of Labor Statistics (BLS), there are almost 320,000 stock brokers in the United States. As individual retirement accounts (IRAs) and 401Ks continue to replace traditional pension plans, people call on stock brokers for guidance. By 2016, the BLS predicts an increase in stock broker jobs by 25 percent. But even with this demand, competition is tough, and there are usually more applicants than jobs.
In terms of stock broker salary, a commission from transaction fees and a percentage of client profits can be earned, but most firms also provide brokers with a steady income by paying a minimum salary against this commission.
According to a BLS report in 2006, the median annual earnings of brokers were $68,500. The lowest 10 percent of earners made less than $31,170, but the highest 10 percent of earners brought home more than $145,600.
According to Salary.com, the median salary for a stock broker is $52,524. PayScale.com’s stock broker salary information says the average pay for a stock broker, per years of experience, ranges between $37,189 and $101,130. SimplyHired.com lists a higher average pay for stock brokers of $88,000 per year.