Should You Become a Stockbroker in This Day and Age, When Online Trading Is So Popular?
It appears like a stockbroker's life is both glamorous and exciting and a little risky. Movies like "The Wolf of Wall Street" and "Boiler Room" have given audiences the impression that working in this industry is both profitable and perilous. Most brokers have a job that one can't accurately capture in fiction. If you are the appropriate kind of person, this sector of work has the potential to be very satisfying. It is essential to acquire a deeper understanding of the responsibilities associated with a profession in the stock market before diving headfirst into the field.What Is the Role of a Stockbroker?
The majority of the time, stockbrokers serve as an intermediary. The purchase and sale of stocks take place on stock exchanges like the New York Stock Exchange and the NASDAQ. The vast majority of consumers who want to trade stocks are required to work with brokers who will make deals on their behalf. Although this wasn't always the case, cheap brokerage firms like Charles Schwab, TD Ameritrade, E-Trade, and Fidelity now handle the majority of stock trades for individual investors using electronic platforms. However, human brokers are still responsible for the majority of trades, particularly those that involve large institutional investors. Stockbrokers are knowledgeable about the markets and are able to provide guidance regarding the optimal times to buy and sell stocks. They are responsible for locating the most affordable options for their customers. A broker receives a commission in the form of a flat fee or a percentage of the value of the transaction in exchange for conducting trades and providing advice to clients. The commission can take either form. Because more people are trading online now, there is less of a need for traditional brokers. However, there are still numerous instances in which an investor would collaborate with a broker to carry out a stock trade. For instance, they might want to make sure that the stock sale takes place at a particular price, or they might have several trades that they want to take place in a particular order. Both of these things are possible.Stockbroker –– the benefits and drawbacks of being one
The career of a stockbroker is certainly not one that is free of highs and lows. The following are some of the advantages and disadvantages:The advantages of being a stockbroker
- Excellent choice of profession for individuals who have extensive experience with the stock market.
- The environment of intense competition in the workplace.
- It provides the opportunity to increase one's income significantly.
- Excellent opportunity for motivated individuals who can sell well.
The disadvantages of being a stockbroker
- Must have the ability to cope with setbacks and pressure.
- The environment of intense competition in the workplace.
- It could involve working an overly long amount of hours.
- Because of the advent of online trading, they may have a difficult time cultivating a clientele for their business.
Becoming a Stockbroker –– how to do it
Even though there are no mandated educational prerequisites for working as a stockbroker, certain degrees and bodies of coursework can provide you with a competitive edge in the field.Education
A bachelor's degree in business could be a good option for you to look into. A significant number of stockbrokers additionally hold a master's degree in finance or a master's degree in business administration (MBA). In addition to this, it is beneficial to have some education in the areas of mathematics, statistics, and analysis.Experience
It is common practice for stockbrokers to begin their careers with a company or bank in a position other than that of a broker. There are even others that start off as college interns. It is in this setting that people acquire new knowledge while they are working. To become a broker, one must demonstrate a comprehensive knowledge of financial markets, applicable laws, regulations, and accounting best practices.Examinations
The General Securities Representative Exam, often known as the "Series 7" exam, is a test that brokers must take and pass to get licensed by the Financial Industry Regulatory Authority (FINRA). A person must be sponsored by a FINRA member firm or a member of another self-regulatory organization analogous to FINRA to take the exam (SRO). The Series 7 examination is challenging and consists of 125 questions with multiple-choice answers that must be completed in 225 minutes. In addition to that, you will also need to take a second test called the Securities Industry Essentials Exam. This test has 75 questions and lasts for 105 minutes. A broker who passes these exams will be able to buy and sell the vast majority of securities; nevertheless, further exams may be necessary to trade particular things. For instance, a person who wishes to buy and sell municipal bonds might be required to pass the Series 53 exam. To get registered in a variety of states, you are also required to pass other examinations, such as the Series 66 and Series 63 examinations.The Environment of the Occupation
The job of a stockbroker will require long hours at your office if you want to be a successful one –– particularly in the beginning when you're working to build up your pipeline or list of clients. Because you will be paid on commission, you will need to have a great capacity to sell to succeed in this position, which entails advising customers. If you have an excellent ability to connect with people, can easily create rapport with them, and can accept rejection effectively, then you will have a decent probability of gaining new customers. Due to the fact that one broker can quickly assist a customer in buying stock in the same way that another broker can, the profession is typically quite competitive. The Bureau of Labor Statistics of the United States projects that the number of employment available for brokers will increase at a roughly average rate between the years 2019 and 2029. The sector isn't expanding at a breakneck pace, but neither is it contracting at an alarming rate.Online Discount Brokerages
Most investors are now able to purchase and sell stocks and maintain their own stock accounts, which was unheard of in the past when it came to investing in stocks without going through a human broker. People are able to trade stocks through discount corporations using an online platform, and the cost of each trade is typically less than ten dollars. Stock trading is no longer something that wealthy people can only do. Most individuals can now buy and sell stocks at cheaper costs because of the rise of discount brokerages, which have also removed previous hurdles. However, this does not mean that brokers cannot provide a valuable service to their clients. People who want to invest money can get experienced guidance and assistance from them, as well as assistance in making intricate trades. A human broker isn't required if all you want to do is buy 20 shares of a well-known company and you're a typical investor with common investment goals. You can complete the entire process online.The Prospects of Obtaining Work
There will always be individuals and organizations that require assistance when purchasing or selling stocks. Every day, the New York Stock Exchange facilitates the trading of millions of different stocks and other securities, and not all of these transactions take place on computers. There are now fewer brokers than there were before. In 2019, FINRA reported there were 624,996 registered representatives, which is a decrease from the all-time high of 672,688 registered representatives in 2007. This is an excellent decision if you are still enthusiastic about it and prepared to put in the effort to make it a reality because the demand for knowledgeable, astute, and reliable brokers is not going away anytime soon.