By Tanya Robertson Updated February 15, 2022
In addition to "stockbroker," the titles of securities, commodities or financial services sales agents also apply. On the job, stockbrokers are responsible for providing investment management services to clients on behalf of various financial firms and institutions. The Bureau of Labor Statistics reported a $64,770 median stockbroker salary in 2020. To become a stockbroker, you must have the right skills, experience, education and licensing.
Required Skills for Stockbrokers
Becoming a stockbroker isn't for everyone. In fact, it takes a specific set of skills to be successful in this field. Since clients rely on stockbrokers to invest their money wisely, it's important for stockbrokers to have excellent customer service skills, along with the ability to make clients feel comfortable with their recommendations. Traits such as confidence and persuasiveness also help.
In addition, stockbrokers must have excellent math and decision-making skills, because they need to make split-second decisions with large sums of money at risk, cautions The Princeton Review. Above all else, stockbrokers must have initiative and be able to build a portfolio of clients through referrals and an extensive amount of cold-calling.
Education for Becoming a Stockbroker
While no specific degree is required for becoming a stockbroker, most do have at least a bachelor's degree, notes Maryville University. Common majors include finance, accounting, economics and general business disciplines.
Stockbrokers looking to advance within the field eventually end up pursuing a Master of Business Administration (MBA) degree. Some MBA programs even offer students the option of concentrating their degree in areas such as finance or accounting, which can prove beneficial to stockbrokers. MBA graduates tend to command higher-level positions, larger sign-on bonuses and better compensation packages at stock broker companies.
Stockbroker Licenses and Certifications
All stockbrokers are required to obtain certain licenses and certifications. However, some entry-level employers will hire new unlicensed stockbrokers with the understanding that they will obtain proper licensure within a few months of employment.
While licensing requirements vary by state, all stockbrokers are required to pass the National Association of Securities Dealers' General Securities Registered Representative Series 7 examination. In addition, many states also require stockbrokers to pass the Uniform Securities Agents State Law Series 63 examination, and the Uniform Investment Advisor Law Series 65 examination.
Once licensed, stockbrokers working at financial firms are required to register with the Financial Industry Regulatory Authority after four months on the job. Other specialized licenses and certifications may also be available to stockbrokers who wish to deal with certain investment products or services. For example, one voluntary certification is the Chartered Financial Analyst certification that's offered by the CFA Institute
Experience Requirements for Stockbrokers
Most stockbrokers begin gaining experience by taking on an internship during their last year of college. After the internship ends, successful candidates are often hired on as full-time employees. Candidates who don't receive a job offer as a result of their internship will need to pursue other entry-level positions.
For candidates without prior industry experience, employers typically offer intensive on-the-job training programs. When hiring experienced stockbrokers, employers typically want a minimum of one to three years of recent brokerage experience.
FAQs
A bachelor's degree in finance or business administration is typically required for stockbrokers. A strong understanding of financial laws and regulations, accounting methods, principles of economics and currency, financial planning, and financial forecasting are all useful for working in the field.
What tests do you have to take to become a stock broker? ›
In California, either the Series 63 or the Series 66 exam is also required in conjunction with the Series 7 Exam. The more common of the two is the Series 63, Uniform Securities Agent State Law Examination. The Series 66, Uniform Combined State Law Examination is also accepted.
What are the requirements to become a stock broker? ›
Stockbrokers buy and sell investment securities on behalf of their customers. There are no specific education requirements for becoming a stockbroker, but many firms require that the applicant holds a college degree. The Series 7 and Series 63 licensing exams are required to become a stockbroker.
Do stockbrokers need to know math? ›
Answer and Explanation:
A stockbroker is required to have the knowledge of statistics, algebra, probability, trigonometry, calculus one, calculus two and geometry. A systematic mathematical calculation is also helpful in the determination of risk and its minimization in the financial market.
Is Stockbroking illegal? ›
Engaging in stockbroking activities without the necessary licenses can lead to legal consequences, including fines and potential criminal charges. If you're considering working with a stockbroker, it's important to ensure they are properly licensed and regulated by the appropriate authorities.
Do you have to be smart to be a stock broker? ›
No, no need of smart to be a trader even if you have an average person but more controlled emotionally then you will be a good trader comparison to a smart person who have less control on his/her emotions.
How hard is the stock broker exam? ›
The Financial Industry Regulatory Authority (FINRA) does not report on a Series 7 exam pass rate, but the Series 7 pass rate is estimated to be around 65%. With 3 hours and 45 minutes to complete 125 questions at a required score of 72%, the Series 7 exam doesn't offer a large margin for error.
Do you go to school to be a stock broker? ›
Do you need a degree to be a stockbroker? Most firms require applicants to have a bachelor's degree. There isn't a specific major requirement, but a degree in business is especially helpful. Earning a master's degree can be helpful for advancement, but it's not necessary.
What classes should I take in high school to be a stock broker? ›
Helpful electives to take in high school that prepare you for this occupation include:
- Banking and Finance.
- Computer Applications.
- Consumer Law.
- Foreign Language.
- Personal Finance.
- Principles of Sales.
It's possible still to find professionals calling themselves “stockbrokers,” especially at smaller broker-dealers, where some people still specialize in crafting securities transactions for clients.
Stockbrokers get paid more than most workers. Estimates of the median combined salaries and commissions received by people who sell stocks and other securities to investors range from $62,910 to $149,664 a year.
Do stock broker make you money? ›
Most investment accounts hold a small amount of cash, and a broker sweeps that cash into a deposit account that earns interest. A small portion of that interest is paid to the investor, and the brokerage firm pockets the rest. Brokers also sell trades to market makers, which earns them a small fee per trade.
Is a stock broker a good career? ›
Stockbrokers can earn high salaries throughout their careers and achieve. One of the major benefits of this job is that you earn commissions and bonuses that can significantly enhance your base salary.
Is stock broker stressful? ›
The brokerage industry can be rewarding, but also demanding and stressful. You may face long hours, tight deadlines, high expectations, and intense competition.
Do you need algebra for stocks? ›
Since stock market investing includes mathematical formulas, many consider it highly complicated. They struggle with making trading and investing strategies and conducting fundamental and technical analyses. However, stock market math does not require advanced mathematics.
Do stock brokers make a lot of money? ›
Stockbrokers get paid more than most workers. Estimates of the median combined salaries and commissions received by people who sell stocks and other securities to investors range from $62,910 to $149,664 a year.
How much money do stockbrokers make? ›
The average stock broker salary in the United States is $59,096. Stock broker salaries typically range between $37,000 and $93,000 yearly. The average hourly rate for stock brokers is $28.41 per hour. Stock broker salary is impacted by location, education, and experience.
What type of broker makes the most money? ›
High Paying Brokerage Professional Jobs
- Broker. Salary range: $45,000-$131,500 per year. ...
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- Stock Broker. ...
- Broker Assistant. ...
- Brokerage Clerk.
