How to Become a Stock Broker (2020 Guide)

When we think of stockbrokers or investors, we think of beautiful suits and fancy cars, but is it all that?

Table of Contents

Table of Contents

There are a few classic careers that have been romanticized in the modern world, none more so than the stockbroker. When we think of stockbrokers or investors, we think of beautiful suits and fancy cars, but is it all that?

Unfortunately, seldom does reality reflect fiction, and while that rings true for the perceived images of stockbrokers, it doesn't mean that the career isn't worth considering in the financial services industry. Although be warned, it isn't a friendly career for the faint of heart.

Those that go down the road of becoming full-time stockbrokers or financial services sales agents have a difficult time ahead of them. You're going to have to get qualified, and that is going to take a lot of school time. You're also going to have to prove your skills practically, not just flash a fancy degree.

Results speak louder than qualifications, so you're going to have to take risks. If those risks are calculated, though, then you're going to find yourself in a job with a lot of money long term. This is the first step to understanding how brokerage firms run.

Do Stockbrokers Make a Lot of Money?

More often than not, this is the first question that comes to mind for a lot of careers that fall into the realm of stocks and trading. It's not exactly passionate and inspiring work, although it can be for those with a love of business, numbers, and statistics.

Regardless, the ceiling for earnings is high on trading work, especially with trading stocks as a broker. On top of any trades you're executing, you also have commission from clients as a business administration.

The income you see from the trade is going to scale exponentially over time and grow with your skill and investment fund. All it takes is some good timing for you to make some good money as a stockbroker. However, you can just as easily, if not more so, lose a lot of money.

How Much Does a Stockbroker Make?

It's hard to put a definitive figure on a profession like trading stocks. It's like asking how much does a professional poker player make. It could be thousands, it could be hundreds of thousands, or it could be millions. The length of time can change too, from a day to years, to even a couple of minutes. An investment firm offers trading in the stock market, mutual funds and other asset classes also.

How much a stockbroker makes is, however, going to be directly proportional to their skill level and how much funding they have to start trading with. Then there's the matter of variance to consider. As much as we might try to deny it, of luck to it. There's a reason that 70 odd percent of people lose money on trading sites.

The role of financial advisors is to suggest some investment strategies and financial planning along with risk management.

Sure, it's possible to mitigate this luck with skill, but it's still there in some capacity. This leads to the possibility of significant periods of losses, and long periods of earnings, all out of control of the trader.

The Final Salary Number

Having said all of that, though, given the make consistent earnings of a stockbroker, there is a more definite number that can be placed on salary. That number is $63,780. That's a far cry from the millions upon millions of dollars that The Wolf of Wall Street might have you believe, but it does sit above the American median salary. Remember, you can set your own financial goals based on your willingness to find clients.

According to the bureau of labor statistics, the average income of a licensed stockbroker can increase exponentially in the next ten years.

How Hard is it to Become a Stockbroker?

It's hard. Sorry. 

You're not going to find a snap-decision alternative career as a stockbroker when you get inspired to leave your safe nine to five. At the bare minimum, you're going to need a bachelor's degree in the relevant areas of the financial and securities industry. You must have knowledge of the financial markets and portfolio management to retain clients who are interested in buying and selling securities.

Deciding to buy and sell stocks for a living is a big enough commitment for yourself. It's even more prominent when you decide to do it for a client base. Even if you don't choose to open your own business and join a pre-existing brokerage firm, you're going to need to be qualified to handle securities on behalf of a client. That qualification is typically in the form of a degree.

This leaves us with the educational side of becoming a stockbroker, and the professional side of it. So we're going to discuss the two separately.

The Steps to Becoming a Stockbroker - Education

Becoming a stockbroker starts at a high school diploma. You might think that's self-explanatory, but a lot of people overlook it, especially when it comes to the self-made professions that revolve around trading.

You need a diploma to get a bachelor's degree, so start at that square. Make sure you've given some serious thought to the subject and that becoming a stockbroker is what you want to do. A bachelor's degree is a big time and money investment, so you don't want to waste it – especially if there's a chance that you don't end up finishing the degree.

There is no particular major needed to become a stockbroker, which gives us a couple of different options. We're trying to enter into the financial services and securities industry, so we're looking for a degree that revolves around finance. An actual finance degree, business, and economics are all good options.

So, you get through college, pay a bomb for your degree, study hard, and walk out the other side. Done, right? Far from it, unfortunately.

As a Post Graduate

Once you have your degree to your name, now you have the task of securing an internship. Internships can be an iffy subject. It requires you to try and make use of that new and expensive knowledge, and a lot of the time, you're going to be getting paid peanuts, if at all.

However and experience is everything. So do your best to persevere. Any respectable brokerage firm or securities bank is going to hire interns for the summer. Your college might offer a connection program to get you set up with one of these straight away, but it might not. If you do need to make your own opportunities in this scenario, do so through a couple of emails, and pop into the premises in-person to drop in your credentials.

Just make sure that you let them know that you're looking for an internship position, not a job. Work through this internship position for the summer, and suck up as much knowledge and experience as you possibly can.

Even after this, though, you're not done.

The Series 7 Exam

After you go through all of that toil and work, you have one last hurdle to overcome. That hurdle is the series 7 exam. You might be thinking, “another exam? What about all of the exams I did in college?” complaint, but unfortunately, yes, you're going to need to take another exam to finish becoming a stockbroker. This exam, in particular, is to get your license. This is also known as the general securities representative exam.

Importance of financial industry regulatory authority

It's not as simple as just sending an application email and sitting the exam, though. In order to sit the series 7 exam, you have to be sponsored by a financial industry regulatory authority. What this means, in other words, is that you have to get hired by a financial and securities business before you can be fully qualified.

Hopefully, you can go on to a full-time position from your internship, but if not, you're going to have to put a bit of legwork in.

If you want to buy and sell stocks for a living as a stockbroker, you're going to have to diversify your skillset. In particular, marketing. As a stockbroker, it's going to be your job to provide reliable advice and convince your clients to let you trade securities on behalf of them. That's going to require a bit of marketing flair. This doesn't mean that you need to be a copywriting machine, just that you can talk the talk when you have to.

Keep that in mind when you're applying to a position while you're looking to 

No Room for Failure

There is no room for failure. All of your exams as a stockbroker are must pass. This is to be expected, given that you're being sponsored to take the test, meaning that you have certain responsibilities with your results, but the pressure is noticeable all the same.

Failing the test the first time around runs you the risk of forfeiting your ability to trade securities. Fail it twice, and there is no financial regulatory authority that is going to keep you in the payroll. In other words, just don't fail the series 7 exam.

Even More Exams

Following the series 7, you're going to have to take the series 63. The series 63 exam is similar to the series 7 exam and is one of the mandatory base tests a stockbroker is going to take. It centers around a more specific focus on security trading but also covers law and regulations.

Overall, the series 63 exam has in and around the same pass rate as the series 7 exam. The pressure that you're going to be under to pass the two is roughly equal, too. On top of that, there are a few other exam types besides the series 7 that you might be required to take. This is stock brokerage specific, so there is no way to really plan for it until you're there in the moment.

Study, Study, Study

You're definitely going to want to be studying, and studying hard, though. Given that you don't get a retry on the series 7 exam and series 63 exam, you need to be on your A-game. You don't get to have an off-day, so don't cram. Dedicate yourself to your studies and save yourself from the possibility of wasting three years and tens of thousands of dollars on a degree.

Once you've completed your series 7 and series 63 exam, as well as however many other series exams your brokerage requires you to complete, only then are you going to find yourself as a fully-fledged stock broker.

It's important to keep in mind that you're likely going to have to climb the salary ladder, so don't get dismayed if you start out on less money then you were expecting. As a stocks broker, your income is going to be directly tied to your performance. So learn your stuff, trade smart, pass your series 7 and series 63, and your bank account should grow in no time.

Becoming a Stock Broker - The Profession

As a stock broker, your job is to help people make money. You need to apply your financial knowledge carefully, trading in general securities, as well as buying and selling different stocks all on a day to day basis. You can find yourself responsible for some seriously large investment numbers, which is why you take the series exam, you need to be qualified to move that money around.

You can't just wing it when people's financial livelihood is at stake, and you don't want to give your business a bad name.

You need to Most of your money is going to be coming from commissions. Naturally, you want your clients to buy and sell more general securities so that you make more money. Following that logic, you need to be giving out profitable advice on the regular. This is going to keep clients coming back to your business, instead of the competition.

You Need to Talk the Talk

This is where having good people skills comes in. We've all seen that “sell me a pen” scene from The Wolf of Wall Street, and the message of that scene reflects in reality. While you're not going to be putting those sales skills to shady uses like in the movie, you still need to be able to convince the client to pull the trigger on the trades that you are suggesting, and that takes skill.

You need to keep your finger on the market pulse constantly. This is the only way that you're going to be giving up to date advice. It's an intensive job, and you're going to be seeing charts and numbers in your sleep for the first few weeks into it. However, once you settle into your role, everything should feel like second nature to you.

Is Stockbroker a Dying Career?

Given how coveted and classic the role of a is, many people assume that it is a dying breed that isn't fit for continuation. This sentiment is only amplified by the prevalence of online trading, allowing potential clients to buy and sell securities from the comfort of their home without any help from a broker.

Nowadays, people have access to charts, theorems, news, and information that was exclusive to stock-brokers back in the day. Essentially, anyone can become a from if they want. No series exam, no financial education on finance and securities, and no business. All people need is a laptop and a bankroll.

On top of all this, there are new kids on the block called financial consultants. These guys have no series exams to take, and manage the entireity of a client's assets. It's a business that offers more financial value to clients than just the ability to buy and sell securities, and doesn't even require you to sit a series exam.

Put this all together, then yes, the stock broker business is a dying breed. 

Should I Become a Stockbroker?

That's not to say you shouldn't become a stock broker, though. Just be aware of how much work is going to go into getting a stock broker license. As well as how much time you can waste before you even see a stock. By following through with a financial bachelor's degree, you're going to have a whole host of career choices available to you, not just the option of stock and securities trading.

You could become one of those aforementioned financial consultants. Or you could become an accountant, or an economist, a marketer, a banker, or anything in between. You could even do a bit of independent stock trading of your own. No exam required.

A lot of people who would have followed through on a tock broker profession back in the day have chosen to set up different financial business ventures. This isn't just in the realm of securities, though.

Take to Social Media

Everybody loves being told how to make easy money from home. You can take advantage of this as someone that knows all about money. You can also take advantage of this. Many different investing, marketing, financial, and securities geniuses run successful social media accounts on top of their stock trading business.

This is primarily to generate leads, which is where they draw you into paying for a learning program. Not always, though. Often times, investors just like to have a platform to put their thoughts out there and interact with some like-minded individuals.

It would be foolish not to take advantage of this. Regardless if you want to trade stocks, securities, or you want to flip houses. There is nothing wrong with learning from those with more knowledge and experience than you.

To help along with that, we've got five must-follow accounts for anybody in the financial sector. This isn't a list of gurus, as what you need is going to depend on your specialization. Instead, these are five broad accounts that everyone should be following, regardless As a side note, Twitter is where the stock and financial industry lives. thrives on it, so that's where you want to be.

Accounts to Follow

The first account you should follow is CNBC. You're likely already familiar with CNBC, with it being one of the bigger American news providers out there. Its business, financial, and stock reporting is second to none and worth the follow of anybody in the business of money.

Sitting modestly at 50k followers, Breakout Stocks is a simple, but handy tool for any stock investor out there. All it does it tweet out stocks with breakout highs and lows. It's basic, but can be an effective way for your attention to be drawn to a profitable trade that you would have otherwise missed.

You shouldn't need to be told why the Wall Street Journal Markets account should be followed. Its in-depth analysis and features from the world of finance tend to be a goldmine of information. It covers everything in the global market, not just the stock market, so it would be questionable to not give it a follow.

Stephanie Link is a professional portfolio manager and a CNBC contributor. She often tweets out some feature articles that she writes, and these are always worth a read.

If you're looking for more strict stock analysis, The Street should be one of your go-to sources. Its content includes every aspect of stock market data, not just black and white advice on favorable trades, so it can be a great source of learning for those willing to dive into it.

Share on twitter
Share on telegram
Share on facebook
Share on reddit
Share on whatsapp
Share on vk