How Much Money Do Stockbrokers Make?
In the United States, only licensed brokers are allowed to trade securities, such as stocks. Most brokers have a set of clients for whom they place orders. Brokers must have extensive knowledge of the stock market,and generally work long hours.
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Features
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Most stockbrokers are required to seek out new clients for whom they can place orders. Although brokers may receive an annual salary, the majority of their income is made through commissions that are charged to clients for trades. Those stockbrokers who perform better -- those who issue more trades, using larger amounts of money -- receive far more compensation than their peers.
Types
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The compensation a broker receives depends in part on the nature of his position. Stockbrokers fall into two types: full-service and discount. Full-service brokers both fill orders and offer financial advice to clients. Full-service brokers are expected to both meet the needs of current clients and continually find new ones. To provide motivation, employers compensate them with commissions. By contrast, discount brokers are comparatively no-frills, placing trades for clients, but offering no financial advice. Because most discount brokers do not seek out clients, but only fill orders, most of their compensation is derived from a fixed-salary, although they may have performance targets as well.
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Salary
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According to Salary.com, the average salary for a stock broker is $55,300 per year. Most stockbrokers made between $48,078 and $59,865 per year, while those in the 10th percentile made $41,620 and those in the 90th percentile made $64,021 as of October 2010. While this data was similar to that found by the website Payscale, Payscale notes that the commissions for these same brokers varied enormously. Commissions ranged from $4,913 to $162,778, while bonuses -- generally given for meeting or exceeding performance targets -- ranged from $2,067 to $8,692 as of September 2010.
Considerations
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How much money a stockbroker makes depends on a number of factors besides performance. Typically, stockbrokers in more expensive areas will be paid more to compensate them for a higher cost of living. Similarly, more experienced brokers are often paid more than those who have recently entered the profession.
Benefits
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According to the Bureau of Labor Statistics, the benefits for stock brokers, like others who work in the securities industry, are generally very good. Not only do brokers receive basic benefits, such as health care, retirement and life insurance, but also discounts on services the employer offers. Also, some benefits are built into the work, such as paid lunches with clients and opportunities to travel.
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References
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