How to Become a Stock Broker
The recent success of the movie Wall Street 2 (sequel to the seminal movie of the “me generation”) has sparked people’s interest in working as a stock broker. As with most things, movies and television make the life of a stock broker look far more outrageous than it truly is — most stock brokers don’t own billion dollar art collections or smoke cigars worth more than a month’s rent. Still, a job in a financial market is considered secure (the financial markets have been with us a while and are here to stay) and potentially lucrative. So how do you become a stock broker?
Steps to Becoming a Stock Broker
If you are still in high school and you’re planning to become a stock broker, start now by taking as many courses in math, economics, and business as you can. If your high school doesn’t offer enough options, sign up for finance courses at a local community college or community center. Even better — save a little money and invest it in the stock market. With even the smallest sum of money (say, $1,000 of savings) you can start to manage your own portfolio (in an adult’s name if you’re under the age of 18) and get a feel for the market. If you have a knack for it, you may even make a little money in the interim. Starting your own portfolio is critical to understanding markets.
Your next step would be to join some sort of investment club. These are groups where people analyze investment
opportunities as a committee, analyze possible outcomes, discusses these investment, and then pools its fund to make money for all involved. Success in an investment club may not look great on a job application, but any experience learning the ins and outs of financial markets is worth it.
Do Stock Brokers Need to Go to College?
Though you don’t have to have a degree to be a stock broker, you should definitely go to college. Almost all stock brokers are college graduates with degrees in finance, business, or economics. This is important not only to show your future first employer that you are worth hiring, but to make you familiar with good business practice.
What About Tests?
Exam time — at some point you’ll have to pass the Series 7 exam, also known as the General Securities Registered Representative Examination. This test is administered by the National Association of Securities Dealers, and is a requirement to become a stock broker. In many states, you must also pass the Uniform Securities Agents State Law Examination (known as the Series 63) as well as the Uniform Investment Advisor Law Exam, the Series 65.
Preparing for the Series 7
The only way to prepare for these exams is on the job training. Brokerage firms, your future employers, are always looking to hire young people interested in becoming stock brokers, and they’re fully aware that you’re using this position as on the job training. Work at a brokerage firm for a few months and take your exams. As soon as you pass the required exams for your state, you are officially a stock broker, and you represent the brokerage firms that sponsored you.
The Life of a Stock Broker
Like many high reward jobs, most people who start out working as a stock broker don’t last very long. As a rookie broker, your job is pretty much always on the line. If you’re young and have just passed your exams to become a stock broker, you haven’t earned a bank roll for yourself yet, and your first year or so of trading stocks could be pretty lean.
Being a stock broker also means being a salesman, and all the ups and downs that come with a life in sales. You’ll have lean times, times of great success, and stress and frustration everywhere in between. This is why many people think of stock brokers as harried, ulcer-having, balding men headed for bypass surgery. Of course, not every stock broker lives life this way, and many people make a ton of money dealing in stock.
Work as a stock broker means working with the most competitive people in the world. Brokerage firms can take their pick of the best of the best recent college graduates. Count on your ability to stick through the hard times to separate you from the rest — many people burn out during the grueling and exhausting training and testing process.
Stock Broker Salary
You may be surprised to learn how small a stock broker’s salary is — according to the Bureau of Labor and Statistics, the average stock broker earns between $30 and $50,000 in salary. So why do people think stock brokers are loaded? Commission.
Stock brokers earn the bulk of their money on commission. The same study that found the average salary somewhere between $30 and $50,000 suggested an average commission rate five zeros after it. You can easily make $100,000+ if you’re an excellent stock broker, and the only limit to how much money you can make is how good of a salesman you are, and how dedicated you are to work.
For the stock market-obsessed, there are few more appealing jobs than working as a stock broker. If you have the skills and the proper attitude, you can have an incredibly successful career, both personally and financially, with very little in the way of investment. No fancy post-graduate degrees or long unpaid internships necessary here. Start young, learn how to invest, and build a portfolio of your own along the way, and your career as a stock broker is as close to a sure thing as you can get.