Building a career as a stockbroker requires an analytical mindset and a knack for making decisions.
In this guide we explore:
- What does a stockbroker do?
- What skills do I need to pursue a career as a stockbroker?
- What does a trainee stockbroker earn?
- How long does it take to become a stockbroker?
- How to become a stockbroker.
What is a stockbroker?
A stockbroker is someone who buys and sells financial products like stocks and shares, in order to get the best financial returns. They do this on behalf of different ‘clients’ (ie customers), which tend to be either “institutional” (ie big financial services companies) or “retail” (wealthy individuals who want to invest their money in different financial products).
Stockbrokers make their money by charging a fee or commission from their clients. Stockbroker jobs usually work in one of three different ways. Discretionary means that stockbrokers make decisions for their clients, and manage all their investments by buying and selling shares on the stock market.
The second, advisory, means the stockbroker gives advice to clients without making decisions for them, and they’re not directly involved in actually buying and selling. This is the main way stockbrokers operate for institutional clients (explained above).
The final way is known as executive, which means the stockbroker buys and sells financial products, and makes investments, only when the client asks them to.
Stockbrokers have to be completely honest in the advice they give. They often work on commission, which means they get paid for carrying out specific tasks, usually on top of their regular salary.
What does a stockbroker do?
Here is an overview of the tasks and responsibilities of a stockbroker…
- Using figures and data to make decisions about where and when to invest money.
- Researching markets, and analysing data.
- Draft reports and newsletters that summarise this research.
- Working alongside investment analysts.
- Developing relationships with colleagues and potential clients.
- Coming up with new business (ie clients) through networking.
- Communicating with clients regularly to manage and review their portfolios (the investments they have made). Giving them advice on different risks and opportunities.
- Meeting targets to do with profit and new business.
- Staying up to date with laws about finance and tax, as well as news about the financial industry.
- Give presentations to clients.
What do they earn?
Stockbrokers’ salaries vary quite a lot depending on their experience, qualifications, employer and the length of time they’ve been working. As a junior or trainee stockbroker in a large bank you might earn around £25,000 plus commission. Experienced stockbrokers can earn anywhere between £100,000 and £150,000.
What skills do stockbrokers need?
People working in stockbroking need a combination of the following traits and characteristics:
- Good head for numbers and skills in maths.
- Great communication skills and ability to explain complicated information.
- Excellent decision making skills and ability to reason.
- Analytical thinking abilities.
- Customer service skills.
- Research and presentation abilities.
- Confident, works well under pressure and able to take the initiative.
- Honest and trustworthy.
- Attention to detail.
How to become a stockbroker
If this is sounding like a good career path for you, let’s take a look at how to become a stockbroker, as well as answer the question: how long does it take to become a stockbroker?
Well the answer depends on which route you take, as there are several:
- Applying directly.
You don’t need a degree to become a stockbroker, but it can significantly help your chances of getting a job. Relevant degree subjects include maths, management, business, economics, and finance. You could then apply for a job as a graduate or trainee stockbroker on a company’s graduate training scheme.
You could choose to do an apprenticeship instead. These are programmes where you work and study at the same time, earning a salary while working towards a qualification, and sometimes even a degree. Apprenticeships related to stockbroking include the financial services professional degree apprenticeship. There are also a number of banking and finance apprenticeships.
Work experience will set you apart from the other applicants, as this is a competitive field.
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