How to become a Stockbroker
Becoming a stock broker, while full of its challenges, can provide both financial and personal fulfillment. A stock broker acts as an intermediary between small investors and Wall Street and the stock exchanges. They buy and sell stocks for their clients, and in return are paid a commission based on how much business they bring in. Today, many brokers also work as financial advisors and guide their clients' monetary future. Some of the places of employment include major financial banks, like Smith Barney or Bank of America, or smaller institutions like Scott Trade. Although there are only two legal requirements in the United States to become a broker, it helps to posses some other skills, too.
Exams
The first requirement is the "General Securities Representative Exam." This is also called the Series 7 exam. This test allows a broker to work as a broker and to give financial advice to his or her clients. The exam is a six hour test run by the Financial Industry Regulatory Authority (FINRA). A passing grade is a 70% of the 250 questions right, or 175 right answers. The content of the test ranges from different types of investments to mutual funds to financial advice and stock recommendations. After the test, people who passed receive a Series 7 license and only need to pass one additional exam.
The other exam required is the "Uniform Securities Agent State Law Exam." This is the Series 63 test and it is also administered by FINRA. This test exists only because the separate states want the brokers working in their states to have a Series 63 license. You are allotted 75 minutes for the test and 42 right answers are required to pass the test. However, this exam focuses more on state regulation issued by the Uniform Securities Act and should be taken for the specific state a broker wants to work in.
Education
While it isn't a requirement to have a degree in finance or economics to work as a broker, those degrees make a potential job candidate look more attractive to a bank. If an incoming college freshman aspires to be a stock broker, both those degrees are recommended. They both give students a well-rounded education in financial matters, allowing brokers to better educate their clients. Those degrees also make passing the required tests easier.
Additional Skills
The biggest tool a broker-to-be should have is great people skills. The ability to be a great salesman is what separates the rich brokers from the not-so-rich brokers. A broker must be an excellent communicator because they make their living convincing potential clients to trust them managing their money.
It also helps new brokers with they have connections to people with significant wealth. While this only applies to people coming from money, it allows these brokers to have a head start on their competition. It also allows a new broker to avoid the laborious task of cold-calling people and bugging them to trust their money with the broker's bank.
All that's left for aspiring brokers to do is send out their application. A tip for interviews: be professional. Any business that controls the amounts of money banks posses demands their workers to have a professional outlook because their clients do. That being said, the hardest thing with becoming a broker isn't actually qualifying to become a broker. The toughest part is getting the clients while having the job. However, with hard work, this occupation can allow brokers to gain financial and personal wealth, not just by making money through commissions, but by giving people the right financial advice.
