Broker or Trader: Which Career Is Right for You?
A broker often spends a great deal of time keeping clients informed of variations in stock prices. Additionally, brokers spend a fair portion of their days looking to expand their client bases. They do this by cold calling potential customers and showcasing their background and abilities, or holding public seminars on various investment topics. Are you having trouble deciding between a career as a Wall Street trader or stockbroker? Both involve buying and selling securities, but the nature of each varies greatly. And these variations could make all the difference in determining which career will suit you best.
However, you can enter stockbroker jobs at a junior level after completing an undergraduate degree. There are opportunities for high salaries plus substantial bonuses and commission for successful stockbrokers with the right combination of skills and experience. Nowadays, a four-year college degree is a basic requirement—at least, if you want to work for a reputable financial institution or company.
Stockbrokers are often paid on commission, although compensation methods vary by employer. A stockbroker’s average salary varies between companies along with bonuses and percentage of commission. Also, a stockbroker salary in London may be different from those in other areas in the UK.
Until recent years, getting access to the stock markets was prohibitively expensive. It was cost-effective only for high net-worth investors or large institutional investors, such as the managers of pension funds. They used full-service brokers and could pay hundreds of dollars for executing a trade.
Apprenticeships combine work with part-time study for professional qualifications. Traders tend to buy or sell securities based on the wishes of a portfolio manager at an investment firm. A trader may be assigned certain accounts and charged with creating an investment strategy that best suits that client. Traders work in different markets — stocks, debt, derivatives, commodities, and forex among others — and may specialize in one type of investment or asset class.
Most successful stockbrokers have exceptional interpersonal skills and can maintain strong sales relationships, market knowledge, and investing skills. However, the rise of the internet and related technological advances paved the way for discount brokers to provide online services with cheap, fast, and automated access to the markets. More recently, apps like Robinhood and SoFi have catered to micro-investors, allowing even fractional share purchases. Most accounts in the markets today are managed by the account owners and held by discount brokers.
Stock brokers are the intermediaries that conduct transactions between investors and exchanges. They are required to be licensed by the Financial Industry Regulatory Authority and usually have a college degree in finance or business administration. The average salary for stock brokers in 2022 was $63,290, with an average range of $40,900 up to $189,620. They also may consult with clients subscribing to premium tiers of the online broker. A stockbroker is a financial professional who executes orders in the market on behalf of clients.
Stockbrokers will also proactively look for potential clients, sell their services and manage relationships through cold calling and networking. They may be required to give presentations at conferences and events as well. Stockbrokers should be honest and provide all information – including any risks involved – as you can mislead or exaggerate information. As a stockbroker, you’ll manage and look after your clients’ investments, acting as an intermediary between them and the stock exchange. Businesses raise capital by selling securities, while investors buy securities to make a profit. Investment bankers provide advisory services to businesses and help them raise the capital they need.
They will need to be IT competent and be able to give presentations and talks at events and conferences. They’ll have excellent problem-solving abilities, assertiveness and have natural sales skills to secure those investments. If you’re imaging Leonardo DiCaprio in The Wolf of Wall Street, it may not be as cinematic as you’re hoping, but it is still just as challenging and rewarding. Stockbrokers in the UK work within fast-paced financial environments where they buy and sell stocks for clients. They may work with other securities than stocks for their customers, who are either retail or institutional.
They analyze and study trends and data as they provide advisory services to others — mainly organizations. Another recent development in broker services is the introduction of roboadvisers, programs that use algorithmic investing techniques carried out via web or mobile app interfaces. The Find a job service can help you with your search for jobs and send alerts when new jobs become available. You can find out more about careers and training in stockbroking from the Chartered Institute for Securities & Investment and the Chartered Financial Analysts Society UK. You may find it useful to gain professional qualifications from organisations like CFA Institute and Chartered Institute for Securities & Investment.
Begin with an entry-level position like an assistant to a stock analyst or trader and learn everything you can. Many financial firms offer internships—some paid, some not—and year-long training programs for straight-out-of-college types, especially for those on a track to get their trading license. They deal with equities and bonds, as well as mutual funds, ETFs and other retail products as well as options for more sophisticated clients.
Some companies will require you to travel abroad and you might be absent from home for a couple of nights a week on a regular basis. Access over 55,000 free job description templates and use our job alert service to access over 650,000 jobs at any time. You have two years after passing an exam to register with FINRA to get your license. Before granting it, you will need a background check—both criminal and financial—a fingerprint card and you will need to register with the SEC. To be a trader, you must pass the Securities Trader Representative Examination with a score of at least 70. As of July, 2021, the exam lasts 105 minutes and consists of 50 questions.
- Not that liberal arts types can’t have successful careers as traders—any field that encourages research and analytic thinking develops useful skills.
- In the U.S., registered brokers must hold the FINRA Series 7 and Series 63 or 66 licenses and be sponsored by a registered investment firm.
- Access over 55,000 free job description templates and use our job alert service to access over 650,000 jobs at any time.
- Some aspirants even move on to obtain an MBA where they learn about business, analysis, microeconomics and business planning.
- Regarding boutique investment companies, the stockbroker salary in London for juniors starts at £40,000, but includes 20% – or even up to 25% on top of the basic wage.
If you have a high grade or a first, then you’ll be at an advantage to other potential candidates. Typical employers include both large and small specialist brokerage firms, financial houses and banks. In addition to the Series 7 and 57, many states require a candidate to pass the Uniform Securities Agent State Law Examination, commonly referred to as the Series 63 exam. When an individual has a license from FINRA, they have the ability to buy or sell stocks and other securities.