How to Become a Stockbroker

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Just as in every other job category, a professional stockbroker must have strong strategic thinking and communication skills in finance, business, and sales…

These professionals advise their clients on which stocks to trade, sell stocks for their clients, and answer their questions.

Stockbrokers don’t work for free. They get paid based on commission from the number of sales made and the higher their sales, the higher their chances of getting more commission.

You may find joy in becoming a stockbroker if you read this article to the end.

Table of Contents

What are the Duties of a Stockbroker?

Stockbrokers’ daily activities vary on the type of stockbroker they are. It could be a freelance stockbroker or an employee working in an office setting.

Today, stockbrokers are known as “advisors” because aside from selling they also advise their clients on how to trade their money without risk and the rewards attached.

Trade value changes daily and a successful stockbroker must be updated. Stockbrokers help their clients manage their portfolios and make a profit from their investments.

They work with companies and individuals. They must know how to differentiate between selling and trading strategies to help clients and companies goals.

Freelance stockbrokers often have more job responsibilities to complete. For example, they must learn how to get new clients through advertisements and one on one marketing. They must also keep track records of their client’s financial data for tax purposes.

While studying to have a degree in stockbroking, students can choose to practice in a subject like security trading, financial analysis, financial management, or personal financial advising.

Some stockbrokers may go further to get more certifications to expand their services.

For example, they may become a registered financial advisor (RIA). These professionals manage money for a business or individual. RIA understands more of the financial advising role and must legally place their clients’ demands first.

Steps on How to Become a Stockbroker

Below are the outlined steps on how to become a stockbroker.

Get a Bachelor’s Degree

Earning a bachelor’s degree is one of the most important steps to becoming a stockbroker. To get this degree, you must study as a student for four years. Although this varies based on the credit requirements and personal course loads. Some colleges offer accelerated programs for full-time students and they might end up spending 3years.

Most colleges do not offer stockbroking as a major course that’s why students rather go for a businesses degree. From there, you will learn how to successfully run a business and communicate with business owners. The degree covers major topics like marketing, ethics, human resources, business law, and financial accounting.

A degree in finance is the best for students who wish to a career as a stockbroker or a related position because it is not an extensive, multi-subject major. Those who major in finance can also earn jobs as financial advisers, accountants, auditors, and loan officers.

Complete an Internship

An completing an internship program helps the students get hands-on experience in a business setting with a supervisor to assist.

Some internships give salary, while others only count for school credit. These learning opportunities help students to build their portfolios and improve their resumes.

Take the Necessary Licensing Exams

To become a professional stockbroker that will assist businesses with buying, selling, and trading stocks, you must pass the FINRA exams.

These exams are what will give you a license to operate as a stockbroker. You can apply for sponsorship by completing FINRA’s Form U4.

Take and Pass the Licensing Exams

You must take various exams before you can start practicing as a stockbroker. Practically all stockbrokers are required to pass the FINRA Series 7 and Series 63 exams.

The Series 7 exam tests candidates on financial topics that are related to trading securities. Series 63 focuses its tests on state rules and laws in addition to security trading.

The stockbrokers must at least pass the Series 7 and Series 63 exams as a license to practice.

These exams require sponsorship through a FINRA member firm. Candidates must also pass the SIE before taking the Series 7 and Series 63 exams.

The Series 7 license exam is also known as General Securities Representative Qualification Examination.

The exam covers topics like taxation, retirement plans, investment risk, equity and answers questions that relate to client interaction. The exam has 125 questions with a maximum time of 225 minutes and candidates must answer at least 90questions.

While the Series 63 license exam, which is also known as the Uniform Securities State Law Examination, has 60 questions with a maximum of 75 minutes to complete and the candidate must pass 43 out of 60 questions correctly.

Once an aspiring stockbrokers pass the Series 63 exam, he can go further to start investments and sales of mutual funds, contracts, and stocks in a state.

Stockbrokers can earn additional certifications as they make more progress in their careers. These additional certifications help stockbrokers to offer more professional services to clients.

In Conclusion

Finding your path as a stockbroker requires full education to be successful.

You need a Bachelor’s Degree, a Master’s in finance, and other certifications to accompany your growth.

Comment below if this has helped you.