Everything you need to know about becoming a stockbroker

The word “stockbroker” might bring to mind images of a powerful figure like Gordon Gekko or Jordan Belfort living the high life in The Wolf Of Wall Street. But there’s actually more to a career as a stockbroker than meets the eye. While the career can be lucrative, it’s more complex than it seems.

What does a stockbroker do?

Stockbrokers are financial professionals who buy, sell, and trade securities on the stock market on behalf of their clients. They know how markets like the New York Stock Exchange and NASDAQ work inside and out. A stockbroker’s job is to study the market enough to know when to buy and sell specific stocks in order to get the best price for their clients and get them the biggest return on their investment into that stock.

Stockbrokers can work for investment firms or independently — with everyday individuals as well as companies large and small. They usually earn a flat fee or percentage of the trades they make on their client’s behalf.

Thanks to individual investors becoming more independent and in control of their investments through electronic trading, the role of a stockbroker in personal finance has evolved in recent years. Today, stockbrokers often dole out advice for their clients and work hard to maintain relationships with the people who come to them for help buying, trading, and selling stocks, even if they aren’t the ones doing the actual trading.

This change is partly due to the popularity of personal finance apps like Robinhood and online discount brokerages like Fidelity and Ameritrade, which allow everyday people more control of their stock trades and commodities. However, stockbrokers still play an important role in the grand scheme of things in the financial world. This is especially true for investments from larger corporations and big investors, who often still rely on brokers to execute their trades.

How do you become a stockbroker?

There’s no specific training required to become a stockbroker, but a Bachelor’s degree is usually needed to land an entry-level position. Undergraduate studies in finance, economics, mathematics, business, or similar can be helpful for a stockbroker. Many stockbrokers go on to earn an MBA in graduate school to bolster their knowledge and training and increase their chances of advancing in their career. 

Stockbrokers must take the Financial Industry Regulatory Authority’s (FINRA) Series 7 exam prior to becoming licensed. Also known as the General Securities Representative exam, the 225 minute-long test consists of 125 questions. Stockbrokers must also pass the 105 minute-long Securities Industry Essentials Exam that consists of 75 questions.

Passing these exams qualifies a person in the U.S. to purchase or sell securities products, though some states may have additional requirements for stockbroker licensing. Additionally, to sell and trade certain assets or stocks like municipal bonds, stockbrokers may be required to pass additional exams.

What skills do you need to become a stockbroker?

In-depth knowledge of the stock market, finance, and the related laws, rules and regulations is crucial for stockbrokers. Many of the hard skills of a stockbroker’s day-to-day technical work in trading are learned through experience. Staying up-to-date with market trends through research is also a big part of a stockbroker’s job.

Most stockbrokers are ambitious and willing to work hard to make the most money they can for their clients, and in turn, themselves. They’re often driven to succeed and competitive by nature and adept to work in a fast-paced, stressful environment. 

Building a repertoire of clients for stockbrokers can take marketing, negotiation, and customer service skills. They should be able to make connections and network effectively in order to land clients.

What is the average salary for a stockbroker?

The U.S. Bureau of Labor Statistics (BLS) includes stockbrokers in its salary data for securities, commodities, and financial sales service agents, whose average salary in 2020 was $98,770. However, stockbrokers can and do make much more than this depending on their area of expertise and where they work. 

For example, those stockbrokers who choose to focus on investments for oil and pipeline transportation companies were reported to have made an average salary of $156,030 in 2020, according to the BLS. Salary reporting from the BLS also reported that stockbrokers working in the state of New York in 2020 made an average of $161,580. 

What is the typical career path for a stockbroker?

Many stockbrokers won’t actually start their work as a broker right out of college, but often hold other positions like a clerk within a firm or bank prior to becoming a broker. Some even complete internships to help learn the skills necessary to become a stockbroker prior to landing an entry-level role. 

On-the-job training is a big part of learning how to become a stockbroker and rising through the ranks of career advancement. They often work in roles as part of a larger team and are supported in their career path by others around them, achieving new certifications while learning about professional development in the industry.

Stockbrokers tend to work long hours and sometimes outside of regular business hours to study the market and work trades. 

Where to find stockbroker jobs

Despite the rise of independent trading through online discount brokerages, there are still plenty of opportunities out there for stockbrokers. The BLS expects the job market for stockbrokers to grow on pace with the average across all industries — about 4% — over the next decade.

See current openings for stockbroker jobs on Ladders now.