What it Takes to Be a Stock Broker

When we consider what it takes to be a stock broker, we should know what a stock broker does. For a commission, a stock broker must be able to buy and sell stocks on orders placed by buyers and sellers. Many stock brokers go on to assume more responsibility by managing the assets and stock portfolios of their clients. They will be more involved in deciding the kind of stocks or investments that will best benefit their clients.

History

The New York Stock Exchange

Before the electronic age, it used to be that only the wealthy could afford a stock broker and have access to the stock market to buy and sell stock. But with the Internet, electronic trading and communications, an investor with only a few thousand dollars now can trade stocks and bonds like anybody else. With the infusion of new investors, the opportunities for licensed stock brokers has increased and investment firms seek for intelligent, motivated individuals seeking a career in finance.

Education

Get a good education.

Education is important when you examine what it takes to be a stock broker. Even though there is no education or degree requirement, a college degree is almost mandatory. Many colleges offer business degrees with majors in business administration, finance and economics. In high school, prepare yourself by taking courses in mathematics and economics. One shouldn't forget the importance of English courses, where the ability to speak and write effectively are crucial to interacting with clients.

Trainee

Financial institutions hire trainees.

A potential stock broker must first seek employment as a trainee at an established financial institution such as a bank, investment or brokerage firm or an insurance company, all of which offer similar investment services. They will then train with a senior broker in all aspects of trading stocks and bonds. These institutions generally will sponsor a trainee and pay for any training and license fees attached to becoming a stock broker.

The Series 7 Exam

Pass the Series 7 Exam.

If you want to become a full-line or general stock broker, both of which deal with a full line of securities rather than a specific set of securities, you must take and pass the Series 7 Exam. This exam, which consists of 250 multiple-choice questions in two sections, is administered by the Financial Industry Regulatory Authority (FINRA) . It qualifies an individual to make all types of trades, excluding commodities and futures. Many investment firms offer trainees classes, books and test exams to prepare them for the exam. Registration for the exam includes a background check and fingerprinting. You also must register with FINRA and the Securities Commission in any state where you will do business.

Characteristics

A desire to help people

To be a successful stock broker, an individual must have integrity and a strong desire to help clients achieve their goals. A stock broker should be dedicated and respect the trust that has been placed on him or her and not do anything that would risk a client's position. Conviction and confidence are also key when it comes to dealing with the pressure of handling other people's money.

References

• Securities Securies Exam Preparation: "How Do I Become a Stockbroker?"
• Investopedia: Exam prep - Series 7 Exam
• FINRA: Industry Professionals