Stock Broker Benefits
Stockbrokers perform as agents or intermediaries on behalf of institutional or retail clients. They benefit from constant opportunities to evaluate, compare and contrast investment trends and opportunities.
At a full-service broker-dealer, stockbrokers read professional research reports about a complete range of financial products and services. They have access to sophisticated financial information platforms such as Bloomberg and their firm's proprietary product data.
Experienced stockbrokers provide valuable services to clients by identifying and short-listing suitable ideas.
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Stockbroking benefits
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Many stockbrokers transact purchases and sales of securities and financial products for their own accounts. Using real-time information about securities markets and trade flows, stockbrokers have the opportunity to take advantage of so-called trading opportunities identified by their firms. However, if the stockbroker chooses these stocks for clients and his own account, he must provide clients with the better price if any differences exist.
Compensation benefits of stockbroking
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Many experienced stockbrokers earn compensation competitive with non-sales finance positions. Stockbrokers earn median incomes of $85,580, according to recent Bureau of Labor Statistics data. Starting salaries ranging from the high teens provide new stockbrokers the time to build a book of business. Building a substantial client base takes years, so short-term incomes at the median are unlikely.
Stockbrokers, like many other salespeople, receive commission and fee income based upon what they sell.
Because the Financial Industry Regulatory Authority wants to assure investors their interests are being protected, many stockbrokers make fewer individual securities purchases and sale recommendations. Many firms primarily pay stockbrokers on the basis of assets under management, not by transaction. Most full-service stockbrokers serving institutional or individual investors recommend financial products and securities based on long-term needs and not short-term transactions.
Some stockbrokers hire colleagues to manage their personal accounts. Time in the market has proven more important to investor success than attempts to time the market.
Stockbrokers never receive access to so-called hot new issues. Clients of the broker may indicate interest in and receive these shares after evaluating the pre-offering prospectus.
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Stockbroker benefits
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Most stockbrokers receive generous medical and health benefits, including dental, vision and life insurance. Their member firms may offer 401k and other tax-deferred programs.
In some smaller Wall Street firms, opportunities exist to invest in private placements called Reg D investments. Brokers, like any other investor desiring to make such an investment, must file suitability reports.
Additional benefits to stockbrokers include developing an understanding of how securities markets trade. For example, the ability to understand how to order the best execution of a stock traded over-the-counter often means great savings to the investor. With substantial positions of 1,000 shares or more, stockbroker access to firm traders provides refined buy-sell information.
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