You can make decent money as a stockbroker. And as entertaining as the movies "Wall Street" and "Boiler Room" are, you don't have to engage in all sorts of nefarious activities to be successful.
The median pay for stockbrokers and other sales agents who sell securities, commodities and other financial services was $63,780 in 2017, according to the U.S. Bureau of Labor Statistics.
That's a good cut above the median pay for all workers in the U.S., which stands at $50,620.
And if you are ambitious and driven, you have the chance to make far more than that. The top 10% of the field pulls down a median pay of $208,000, which, to state the obvious, means the top 5% makes more than this.
In a story that spans both Hollywood and real life, Chris Gardner is an example of the success some brokers can achieve. Worth tens of millions of dollars today, Gardner rose from homelessness on the streets of San Francisco to running his own Chicago brokerage after winning a trainee position at Dean Witter Reynolds. Until he was able to earn a decent living, Gardner lived in a homeless shelter with his toddler son, something he was careful to make sure his colleagues didn't know about.
Gardner's life story can be seen in the 2006 hit movie starring Will Smith, "The Pursuit of Happyness."
How to Become a Stockbroker
Here's what it takes to get started as a stockbroker and the best places and companies in which to practice your profession.
Get your credentials
First off, you'll need a bachelor's degree, and a major in finance probably doesn't hurt. A summer internship is a good place to try and get a foot in the door - eventually you will need to get hired by a brokerage or other firm registered with FINRA (Financial Industry Regulator Authority) which, in turn, will agree to sponsor you for the state licensing exams you'll need to pass to become a broker.
You'll need to at least get your Series 63 license, which deals with basic ethics and related issues, as well as your Series 7, which allows you to sell stocks and other securities except for futures and commodities.
Work really, really hard
Not everybody is cut out to be a stockbroker. No, you don't have to be recklessly ambitious like Bud Fox, the junior stockbroker in "Wall Street," who crosses all sorts of legal and ethical boundaries as the protégé of Gekko, a ruthless corporate raider modeled after Carl Icahn, Ivan Boesky and J. Tomilson Hill. But you do have to have a gift for gab, a knack for sales and relentless determination to court and recruit customers and build a book of business. That can mean lots of work in the evenings and on the weekends, either meeting with clients or cold calling and organizing events to recruit new ones.
One in three people in commodities, securities and financial services sales work more than 40 hours a week, according to the U.S. Bureau of Labor Statistics. The first five or ten years can be the toughest for new stockbrokers as they build up a portfolio of customers with assets to invest. That can mean coming to the office hours before the market opens and staying three to four hours each night cold calling prospective customers or putting on seminars and other marketing events. Summing up, the life of a stockbroker is far from a 9-5 gig where you take home the same paycheck, week after week, with the occasional raise. How much you make hinges on your hustle and the commissions you generate.
Pick the right sector
Brokers who work directly for firms that focus on the sale of securities, commodities contracts and "other financial investments and related activities" earn a median salary of $96,550, according to BLS. About 43% of stockbrokers work for these firms. Working as a stockbroker for a bank or other lender, where another 43% of brokers work, is a bit less remunerative, with a median pay of $47,260.
Metro Markets with Top Stockbroker Salaries
New York, and specifically Wall Street, is the best major metro market for stockbrokers looking to make the most money possible. While specific numbers for New York City aren't reported to BLS, New York tops the list of states with the best median pay for brokers, at $162,550. The New York metro market, which includes chunks of Connecticut and New Jersey, also has the highest concentration of brokers and other financial services sales agents, at 59,110, or 8.83 per thousand, according to BLS.
You'd never guess whose No. 2 on the pay list, though: Muscle Shoals, Alabama, which has two music studios that have produced a series of hit records since the 1960s. Thirty brokers and other financial sales people work in Muscle Shoals and other small towns in the area, making median pay of $141,210. The wealthy New York suburbs around Stamford, Conn., are No. 3 on the pay list, at $141,070, and fairly high up in terms of the number of brokers and other financial sales people (4,180).
Other surprises: Oklahoma City's 740 brokers and financial sales folks pull down median pay of $121,400, while in Jacksonville's 2,740-member contingent makes $118,520.
Top states for broker, financial services sales:
New York ($162,550)
Rhode Island ($130,040)
Connecticut ($126,080)
Massachusetts ($116,030)
Vermont ($113,520)
Outlook for Stockbroker Jobs
There were 375,700 brokers and other financial services sales people gainfully employed in the U.S. in 2016. That number is slated to grow by 6%, to 398,000, by 2026, a bit slower than the 7% BLS has projected for all occupations. Automation is expected to be drag on job growth in the sector.
That said, stockbrokers can still earn decent money in a job that, for the very ambitious, can be a springboard to even great things. Among those who got their start on Wall Street as a stockbroker is TheStreet's very own Jim Cramer. Cramer worked for three years at Goldman Sachs in the mid-1980s before leaving to start his own hedge fund, later launching TheStreet in 1996.
Happy stock picking!
FAQs
Myth #1: All Stockbrokers Make Millions
The average stockbroker doesn't make anything near the millions that we tend to imagine. In fact, some lose a lot of money through their trading activities. The majority of companies pay their employees a base salary plus commission on the trades they make.
What is the highest salary of a stock broker? ›
Stock Broker salary in India ranges between ₹ 0.2 Lakhs to ₹ 5.0 Lakhs with an average annual salary of ₹ 2.1 Lakhs. Salary estimates are based on 333 latest salaries received from Stock Brokers.
How much does the average stock broker make on Wall Street? ›
The average Wall Street trader earns $134,571 a year, but there's a vast range of salaries ranging from $17,415 to $458,570 a year. Where you fall along this very large pay scale as a Wall Street trader largely depends on the number of years of experience you have.
What is the income of stockbrokers? ›
Stockbroker Pay Basics
For 2021, BLS says the median pay for securities, commodities, and financial services sales agents came to $62,910 per year. The median value separates the highest-earning half of brokers from the lowest-earning half.
Is stockbroker a stressful job? ›
Stockbroker work environment
A stressful work environment at times. Regular communication with clients. A fast-paced work environment that is constantly changing. Local and international travel often required.
Is broker a stressful job? ›
Working as a stockbroker sounds like a glamorous career, but the fact is that many first-year brokers drop out of the business because the job usually requires long hours, can be overly stressful, and the business requires a substantial amount of dedication.
Can you become a millionaire as a stockbroker? ›
It's not always easy to become a stock market millionaire, but it is possible. While you don't need to be wealthy to make a lot of money by investing, you do need the right strategy. Strategy is key to building wealth in the stock market, and it's simpler than you might think to generate wealth.
Which finance job pays the most? ›
Highest paying finance jobs in India
- Investment Banker.
- Hedge Fund Manager.
- Private Equity Associate.
- Chief Financial Officer.
- Chief Compliance Officer.
- Chief Risk Officer.
- Management Analyst.
- Personal Finance Advisor.
Is a stockbroker job considered an in-demand career? The United States Bureau of Labor Statistics (BLS) projects an employment growth rate of 10% from 2021 to 2031 for commodities, securities and financial services sales agents.
How long does it take to be a stockbroker? ›
It takes at least four years to earn a bachelor's degree to become a stockbroker. Some stockbrokers may choose to earn their master's in business administration to enhance their credentials.
It is estimated that more than 80% of traders fail and quit. One key to success is to identify strategies that win more money than they lose. Many traders fail because strategies fail to adapt to changing market conditions.
Are stock brokers still needed? ›
Do you need a broker? The short answer is no—you don't need a living, advice-giving, fee-charging broker (although you shouldn't rule them out). You do, however, need a brokerage—the online storefront where you purchase stocks, bonds, exchange-traded funds (ETFs), and other investments.
How hard is it to become a stock broker? ›
"To become a stockbroker is not as difficult as someone might imagine," says Josh Simpson, financial advisor with Lake Advisory Group in Lady Lake, Florida. All you need is a bachelor's degree and to pass the licensing exams required by the Financial Industry Regulatory Authority (FINRA), your state and your employer.
How do stock brokers make millions? ›
Interest Income
Discount brokers often offer interest-bearing accounts to their clients. The broker can put the money in a low-risk market fund or government securities to generate income. From this investment, the broker earns interest. Stock brokers also generate income from investors who buy shares on margins.
Can you make a living out of stock trading? ›
Trading is often viewed as a high barrier-to-entry profession, but as long as you have both ambition and patience, you can trade for a living (even with little to no money). Trading can become a full-time career opportunity, a part-time opportunity, or just a way to generate supplemental income.
What do stockbrokers do all day? ›
A stock broker's day is all about trading. They start off the day researching and contacting their network of clients to discuss their portfolios before making any moves. They make plans for what to buy and sell.
What are the disadvantages of being a stockbroker? ›
Stockbroker Pros and Cons
Must be able to handle rejection and stress. Competitive work environment. May require excessively long work hours. May have a hard time building a client base due to the rise of online trading.
What skills do stock brokers need? ›
Requirements and skills
- Proven work experience as a Stockbroker or similar role.
- Sound knowledge of how financial markets operate.
- Proficient in IT and mathematics.
- The ability to evaluate complex information.
- Strong analytical skills.
- Excellent negotiation skills.
If you have an account with a brokerage firm, you may wonder if your money is truly safe. After all, a brokerage firm can go bankrupt like any other business.
Can a broker go broke? ›
Overview. Typically, when a brokerage firm fails, the Securities Investor Protection Corporation (SIPC) arranges the transfer of the failed brokerage's accounts to a different securities brokerage firm. If the SIPC is unable to arrange the accounts' transfer, the failed firm is liquidated.
1. Earn a Bachelor's Degree. Stockbrokers need to have an extensive understanding of finance, and most brokerage firms require candidates to have at least a bachelor's degree.
Where to invest $1,000,000 today? ›
Best Ways To Invest 1 Million Dollars.
- Stock Market. Stocks are a good investment choice as they usually generate returns through dividends and growth in share prices. ...
- Bonds. ...
- Rental Properties. ...
- ETFs (Exchange-Traded Funds) ...
- Start or buy into a business. ...
- Peer-to-Peer Lending. ...
- CDs and Money Market Accounts. ...
- Fixed Rate Annuities.
Wall Street is both an actual street and a symbol. It's home to a variety of financial and investment firms, along with institutions like the NYSE and the Federal Reserve Bank of New York.
Do billionaires have brokers? ›
Answer and Explanation: Multi-millionaires and billionaires do use brokerage firms like TD Ameritrade smart mining and vanguard, but they still have other unique ways of trading.
What is highest paying job in USA? ›
The highest paying jobs in the U.S. are all in medicine, according to the Bureau of Labor Statistics. Chief executives and airline pilots are also among the highest paid professions.
What is the highest degree in finance? ›
A PhD is the highest finance degree you can get. To work in the financial industry, you don't need a PhD (which is the highest degree). A bachelor's degree can get you different financial sector jobs in: Corporate finance.
Is it better to get a finance or accounting degree? ›
The field of finance offers more career choices but also less predictability. In some cases, careers in finance might offer higher pay. Careers in accounting can offer more predictable and stable work but less pay in many cases.
How many hours do stockbrokers work? ›
Securities, commodities, and financial services sales agents usually work full time and some work more than 40 hours per week. In addition, they may work evenings and weekends because many of their clients work during the day.
Do you need a college degree to be a stockbroker? ›
It is generally recommended that you acquire at least a bachelor's degree prior to becoming a stock broker. You may consider pursuing a degree in accounting, economics, business, or finance. A master's degree is not necessary, but many employers prefer it if you pursue advanced positions within the company.
Which degree is best for stock trading? ›
7 best degrees for professional traders
- Business administration and finance. Business administration with a focus on finance is an excellent choice for entering a career as a stock trader. ...
- Investment management. ...
- Economics. ...
- Statistics. ...
- Computer science. ...
- Data analytics. ...
- Applied mathematics. ...
- Critical thinking.
If you can commit 100% to a good stock trading course, you should be able to get up and running within a few weeks of starting the course. If you're learning in your spare time, you should expect to commit at least 40 hours to structured learning, which you might have to spread over a couple of months.
How many stock brokers are there in the US? ›
Key FINRA Statistics for 2021
| Registered Representatives | 612,457 |
|---|
| Securities Firms | 3,394 |
| Branch Offices | 149,887 |
| Market Events Processed | 342.6 billion |
| Fines Imposed | 103M |
2 more rowsIf you have a trading account of $10,000, a good day might bring in a five percent gain, or $500.
Why do brokers make so much money? ›
How Does a Brokerage Firm Make Money? Generally, brokerages make fees for every transaction. The online broker who offers free stock trades receives fees for other services, plus fees from the exchanges.
Are stock brokers good at math? ›
Required Skills for Stockbrokers
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.
What replaced stockbrokers? ›
Stockbrokers no longer exist. They are either retired or dead. Today's version of stockbrokers are known as Investment Advisors, Financial Advisors, Wealth Advisors or any other dozen (or so) monikers.
What replaced stock brokers? ›
Today, stockbrokers have been replaced with “financial consultants” (or whatever they choose to call themselves) who do nothing more than gather clients' assets, outsource the actual investment management to third parties, and collect fees.
How do stock brokers make money now? ›
How does a broker make money? Brokers are typically compensated through a commission on each trade. Investors have historically paid a broker a commission to buy or sell a stock.
Can you be a millionaire as a stock broker? ›
It's not always easy to become a stock market millionaire, but it is possible. While you don't need to be wealthy to make a lot of money by investing, you do need the right strategy.
Can you be rich as a stock trader? ›
Can a Person Become Rich by Investing in the Stock Market? Yes, you can become rich by investing in the stock market. Investing in the stock market is one of the most reliable ways to grow your wealth over time.
Because of the above-average compensation, the finance industry has little trouble attracting talented professionals who want to become analysts, traders or managers. Like any industry, there are no set rules for getting a foot in the door. That said, there are a few tried and true paths to a career on the Street.
How do stock brokers get so rich? ›
Brokers would collect margin interest when customers purchased shares of stocks on margin. Additionally, they would also collect borrowing fees and interest for stocks they lent out for short sales. Some brokers would offer banking services like loans, interest bearing savings accounts and credit cards.
