Stockbroker Description
A stockbroker is a financial professional who deals with stocks and both tracks and monitors the stock market on a continual basis. Though stockbrokers have insight in other areas of investing, their primary focus is on trading stocks by both buying and selling stocks on behalf of their clients who are generally individual investors. The primary function of a stockbroker is to help guide investors and offer ideas and suggestions about the stock market based on their evolving knowledge of the stocks they cover.
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Education and Training
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Stockbrokers are usually college educated and have, at a minimum, a four-year college education. Those who studied and excelled in business, economics and/or finance are generally better positioned, from an education standpoint, to succeed in being a stockbroker. Those who hold an MBA tend to secure better starting positions as a stockbroker.
In addition, stockbrokers need to be licensed to trade stock. Known as a Series 7 license, this is the stockbroker equivalent of passing the bar exam for a lawyer. The Series 7 exam is a prerequisite to securing a job as a licensed stockbroker.
Career Development
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After securing the position of a stockbroker, to succeed you must continually advance your knowledge of the financial markets. The best stockbrokers pick specialty areas to cover and offer their clients the added benefit of having a broker who not only understands the market as a whole, but also has in-depth knowledge of specific areas. An example of this would be a stockbroker who specializes in health care and can guide clients about very precise information in regards to stocks in that sector.
Good stockbrokers also advance in their careers by servicing their clients well and building a reputation of being available, honest and trustworthy.
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Work Environment
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Though the bulk of stock activity in the United States occurs on Wall Street, one can be a stockbroker anywhere in the country, provided they have a land line, cell phone, email and Internet access. In today's online driven world, physically being located on Wall Street is not as necessary as it once was. Though those who physically work on Wall Street get to participate in the instantaneous and fast-paced world of the stock market, a stockbroker can be just as successful working in a remote location in the Midwest.
Benefits
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Stockbrokers have high earnings potential. One of the benefits of being a stockbroker is the fast-paced environment in which they work. There is not a lot of room for boredom to set in for a stockbroker; there is constant activity. The other benefit that attracts many to the position of stockbroker is the high earning potential. Starting salaries of $31,000 were reported in 2006 by the U.S. Bureau of Labor and Statistics and maximum earnings can go in the high six-figure range.
Misconceptions
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One of the main misconceptions about stockbrokers is that they become instant millionaires based on the high trading fees they charge. Though trading fees are recognized, the broker works for a firm (usually) and is paid a salary plus commissions, and very high earners take years to achieve that status.
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References
Resources
- Photo Credit wall street with flag image by Tomasz Cebo from Fotolia.com money image by Horticulture from Fotolia.com
