While there is no minimum experience or education qualification required to become a stock broker, anyone who has a keen interest in entering into this industry can consider doing a undergraduate degree in business or Masters in Business Administration (MBA) or a Masters in Finance or Masters in Accounting. Before we dive further into this profession let us understand who is a stock broker first.
Stock broker Definition:
A Stockbroker is a person who advices people about their investment plans.
When a person wants to invest his/her money where he might get better gain/ income and less risk, then that is where a stockbroker comes into picture because a stockbroker is the one who knows in and out of the stock market.
For a stockbroker, he should have an experience of working for a brokerage house which is buying and selling stocks on the stock market which is limited to its members. When an investor wants to invest the money he always looks for a stockbroker with a good adequate experience and yields better gains for the investor.
Above paragraph gave an introduction on who is a stockbroker, now let us learn some points on how to become a stock broker:
The First Step is By Getting into an Institute by Acquiring Knowledge First.
Stock Broker Qualification and Education Requirements:
1. A great college means Great Knowledge:
To become a stockbroker the person has to first know what a stock broking is, what is a stock market, etc. If the person doesn’t know any basics and just wants to enter the stock market, then he won’t be able to succeed in the stock market and may go bankrupt. Therefore one has to acquire all the adequate knowledge and ultimately that person will get great marks in exams and thus the credentials of that particular stockbroker may give him a chance to enter a good brokerage.
2. Go for an Internship:
Getting into an internship may help the individual to actually get a peak into reality and know what a stock market is, How a stock broker deals with its clients and how does a stockbroker invest the money according to the investor preferences and needs. To have an internship as an experience is a great way to get started into this business. Internship is a very better option to get started in this sector because it’s a win situation for the firm and also for the individual who applied for the internship.
3. Get a Masters Degree:
Masters degree helps the stockbroker to have knowledge about the finance background perfectly, therefore he/she will make accurate forecast of the market compared to a stockbroker who just started without any degree in finance. Therefore, getting a masters degree or doing an MBA will actually earn more opportunities and gain more trust from the investors. Because a investor may trust his money with a stockbroker who has a adequate experience and knowledge.
4. Show initiative in learning:
One should show its initiative and interest in learning techniques and tactics of learning and investing money according to the investor expectation. A stockbroker who has more knowledge will know how to forecast the current market situation and according to that it will invest money. But being able to forecast the market situation will need adequate knowledge and experience to do so. Not anyone can just forecast the market scenario out of the blue. Therefore the individual should try reading books about stock broking from various authors.
5. Start by investing your own money:
When an individual will invest his or money then that individual will be very careful about the rates, risk and etc. But if the same individual will invest someone else’s money he/she may not be so careful how much care he would take with his own money. The second thing is that he wont learn much when some else’s money would go in loss but if he/she invest their own money then they would be very vigilant. If the investment goes in loss also then he would learn his own lesson which would help him in future.
The Second Part Would Be When The Person Starts Planning For Their Future:
Tips to Become a Stock Broker:
1. Choose what kind of broker you want to be:
There are different types of broker available in the stock market. Think before taking any action because if you have another work also at hand then working full time broker won’t be an ideal choice for you. Therefore before becoming a stock broker one should see what kind of stock broker job will be the correct job for you. One can even be a part time stock broker so there are many options available. Thus stock broking is a flexible job where one can go anywhere and work with the use of internet.
a. Full Time Broker:
A full time broker is like a regular employee job with a sales target and salary. In such firms they give you training and observe your performance. If the performance is great they might give a higher post with highest salary package. This is a secure regular job for the individuals who are thinking setting up a career in stock market as a stock broker. This job is finding your own clients and setting up a sales target.
b. A Discount Broker:
A discount broker is mainly service oriented job where one will be on salary and making less commission and helping those who come to you for buying and selling of shares and etc. This is mainly for the people who are not so business minded and just wants a job where one can just sit in a place and do a regular job.
c. A Bank Broker:
A Bank broker is a person who works at a bank and then the bank customers will come for investment opportunities and to buy shares. This is more of trustworthy compare to the firms. People who wants a regular job and wants to work in a bank then this is a perfect job for them because the salary is sufficient and reasonable.
2. Do some Research:
Doing some research about the firms before entering is always a smart choice because according to the knowledge you can enter them. For example: If you have not so much information regarding the stock broking then it is suitable to enter a small established firm because it can give you attention and learn more. But it wont give the experience about the larger firm workforce and how do they get their things done.
3. Start with small and then end with big:
Going large will just end with disappointment because of lack of experience and in larger firms there are sharks that will not care in teaching someone and impart knowledge but instead get their work done with free of cost or with less commission. Therefore an individual who just started will be like a rabbit and will get very stressed out because of the situation. Start with a small firm and gradually start increasing the responsibility on your head
4. Complete the necessary exams for better credentials:
The necessary exams should be completed to enter the market of stock market and stock broking. The basics will be enough for an individual person who wants to enter the stock market such as Registered Representative Examination. There is one exam which is easy to get through which is ‘The series 63’ and its less hectic.
5. Start creating your own client:
If you want to create our own firm or client base area then one has to keep sales target to achieve that. By creating or generating your own clients the income generation will be more and thus more and more people will come into the firm to invest money because you have earned their trust. When there will be more clients, then the clients with more money and status will start pouring in the firm which is very good for the firm because that individual will start getting recognized as the most valuable and trustworthy stock broker.
6. Always be updated:
Stock broking is a continuous process because the stock market itself never sleeps. Even if there is one fluctuation in the economy it can make major difference and can either make profit or a loss, therefore the stock broker has to be always updated with the country economy etc. The laws of the country or any strike may also increase and decrease the rate of the market so the stock market should be always updated with the news and should learn different techniques to experiment the market.
7. Get used to with the pressure:
A stockbroker will have to be meeting certain quotas from their first day itself. If the person doesn’t get clients or people aren’t happy with the person’s salesmanship, then the person’s job would be at a major risk. Until the person doesn’t have a proper and handful amount of people who want to invest in the individual, then there will be pressure 24/7 on them. So such pressure can be a lot to handle for certain people.
8. Know what suits you the best:
The person needs to know which kind of stockbroker career would suit them the best. They should realize on their own that they aren’t a super salesman in any way. So for them either the career of a discount broker or a bank broker may suit them at their best. So they should know that sales aren’t entirely for them. These people may also begin working at banks or discount. With this they will start building their work network. After this, they can move over to working as a full time service broker.
9. Learn the techniques to earn people’s trust:
The entire job of a stockbroker is gaining trust of the other people. The person need to trust their stockbroker as they will be investing their hard earned money in it. For the person the individual at the moment would be a complete stranger and trusting them so much at this point would be very difficult. So the person needs to get their best foot forward for it before making any other move. Getting other people to trust the individual will only help in further building their reputation.
10. Having a mentor for advice:
So for gaining the trust of an individual, probably having a mentor is the best way in helping the individual. The mentor being experienced in their field know certain psychological tricks which can help in the trading process. These tricks can influence the person to literally invest their money in the person or leave empty handed. With these tricks, certainly the person can gain reputation and develop themselves in the field of a stockbroker.
11. Communication Skills:
Every stockbroker should have an effective communication with the other person. A stockbroker on a daily basis is going to learn a lot of terms and different concepts in their life. But the average person may not be familiar with such terms. They may not even answer the way the stockbroker is speaking to them. So the stockbroker should be smart enough and should come to a level as the individual in front. So their speech needs to be effective enough so that an average person is also able to understand it.
12. Work and Join as Independent Broker:
For a person it is beneficial at the beginning for them to start as an independent broker. Some examples of a few independent brokers are Raymond James or LPL Financial. These offer with virtually every possible project and the employees get a payout in the range of 80-95%. At the initial stages if the person is working full time, then they may get around 40% payouts. But as they progress forward slowly but steadily, they will find an increase in their payout.
The field and career of a stockbroker is a really successful one if the cards are played right by the person. It mainly depends on the skills that the person has in selling stock to others. But they should know that if they are working as an independent broker then they need to have a very large and well established client base. If the person is really passionate about their career then they can really make a lot of money while selling stocks and live a comfortable life. But it is all dependent on how the person wishes to carry their professional life out.