Stockbroker Education
Stockbroker education varies quiet widely, though most commonly stockbrokers have at least a 4-year degree. There is no minimum education requirement to qualify for a stockbroker's license. The only requirements are to pass the series 7 and series 63 exams. Obviously, some majors are better suited to jobs in the financial sector, such as economics, business management, finance and even computer science. However, there are many stockbrokers with liberal arts degrees, and a surprising number with no degree whatsoever.
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Significance
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When selecting a stockbroker, it may be in an investor's best interest to discuss the stockbroker's education. Some investors may only feel comfortable with a stockbroker from and ivy league college with an economics or finance degree. Others may be fine with a stockbroker with a non-finance degree from a lesser-known school as long as the stockbroker has relevant experience. Since most of what a stockbroker knows about the real world stock market has been learned in his firm's training program and he is not allowed to deviate from his firm's research recommendations, there is no reason a stockbroker with only a high school diploma would provide any worse service than a stockbroker with a Ph.D.
Types
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The four most common college majors for stockbrokers are economics, accounting, finance and business administration. Often college students will intern at brokerage firms in their last year or two of school. After several years in the brokerage business, many stockbrokers will go on to earn their MBA.
Misconceptions
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The most common misconceptions about stockbrokers and stockbroker education is that they are all well educated and they're all wealthy. Nothing could be further from the truth. While true in some cases, most have rather mundane degrees from average colleges across America and, according to Salary.com, the median expected salary for a typical stockbroker is $53,221. Since the advent of the Internet and online investing, stockbroker income has declined precipitously. For example, in 1992 the average income for a stockbroker was $118,000. Now it is less than half that.
Considerations
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The series 7 exam is an exhaustive 6-hour test most often compared to the bar exam for attorneys. It covers all areas of investment theory, law, ethics, mechanics, and options theory. Anyone who successfully passes the series 7 exam is qualified to discharge the duties of a stockbroker, regardless of their education.
Expert Insight
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Retail stockbrokers (stockbrokers who deal with the general public) are considered the bottom rung of the investment services ladder. However, some are very well educated and/or have been retail stockbrokers for many years and have vast experience. For those investors uncomfortable with doing everything for themselves on the Internet, a retail stockbroker's experience and advice can provide valuable investment insight to improve the overall performance of a given portfolio.
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Comments
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raiders1020
Jan 17, 2009
Author is right on about the salary misconception. I have an MBA & will barely pull in $40k including bonuses. The discount brokers have destroyed salaries. It's good pay if you either 1) don't have a degree or 2) just graduated from college. Otherwise, the pay doesn't compare with working in other industries. (There is too much regulation, tests, recorded phone calls, lack of privacy to do things like pickup a part-time job, what you can write on a blog, etc.) People in other industries don't have to worry about all of this regulation. I've worked in other industries, got the crazy idea to be a stockbroker, & do not plan to stay in this industry much longer.
