Stock Broker Entry Requirements

Being a stockbroker takes a lot of study. It requires an understanding of not just the stock market and economy, but the ability to analyze economic data on individual businesses. Stockbrokers handle sales of more than just stocks. Often they create portfolios that contain bonds and fixed investments. A stockbroker receives income from commissions and service fees, regardless of the products she sells. The position is one of the higher-paid positions in the financial services industry.

College

You don't have to have a college degree to get a license as a stockbroker, but it certainly helps you secure a position with a company. The college degree helps you feel comfortable talking to all types of people, including those who are well-educated. It also indicates your ability to absorb information, something necessary in the stock market.

Licensing

In order to become a stockbroker, you need a series 7 NASD license. Many entry-level positions also require that you secure an insurance license for life insurance because many of the products sold by stockbrokers are annuities, which require a life insurance license to sell.

Training

Training for the series 7 test doesn't have to be formal and taken in a classroom. You can study for the exam on your own. The test is quite difficult and lasts several hours. It's in sections so you have a break in the middle. If you want a life insurance license, often state insurance laws require hours of classroom or online training before you take the examination. The classroom hours and examinations are basic information about the stock market and really don't prepare you to sell. They do, however, prepare you to pass the test.

Licenses

Once you pass the examination, you have to apply for the licenses. The securities series 7 license has stringent background checks. Negative financial information about you might require additional forms for explanations. A criminal record involving financial transactions will usually bar you from receiving a license. You have to include a fingerprint card with the application for a background check. The requirements for life insurance licensing are similar but vary from state to state.

Benefits

The licenses don't guarantee a position, but often make you far more attractive than a candidate without one. In those cases, the company must pay for the license and licensing time without any guarantee of a return. If you're already licensed, they simply need to train you in their product line and procedures. If you already have a position with a security company, they'll send in the necessary paperwork for you.

Geography

Some entry-level stock broker positions are in brokerage subsidiaries of banks. You have a specific group of branches for business and you never own your own client base. If the bank chooses to move you, you lose the people you secured as customers. The benefit is that there is a ready-made customer base. Stock brokers with brokerage firms don't have the problem, but their task of securing clients is often more difficult.