4 How To Become A Stock Broker

(doylc.com) How To Become A Stock Broker - Did you just finish watching Wall Street? Well, being a stockbroker doesn't involve that much glitz and glamor, but it's pretty awesome. A stockbroker is a financial advisor who advises clients (businesses or individuals) on appropriate investments that suit their skills and goals. To become a stockbroker, one must work for a brokerage house - buying and selling stocks on the stock exchange is restricted to members of the stock exchange. A broker is also known as a securities sales agent or securities and commodities sales agent. Here's everything you need to know!

• Started

Go to a good college. In the past, anyone with a knack for numbers and a lot of friends could become a successful stockbroker. No more! If you want to stay competitive, you need to get your degree. Economics, finance, math, accounting or business administration are all good areas to pursue your bachelor's degree in. And the better the college, the more chances you have later in the game!

Especially if you're going to grad school, keep your grades high. The better your grades, the more—and better—schools will open up to you. Not to mention that once you enter the stock market, you know what you are doing!

Check out internships. Some brokerage firms hire interns during their senior year. Visit your campus' "Investment Club" - or start one if it doesn't already exist! Getting that dream internship could make your path to becoming a billionaire a lot easier.

This is your best choice if you don't want to do an MBA and want to get started as soon as possible. But know that relaxation is absolutely a viable option. A lot of people take a few years off, go back to do their MBA and get into the game a little later. Also, people are more likely to trust a 28-year-old with their money than a 22-year-old, so feel free to hold that Solo red mug and packet of ramen in your hand for a second or two longer.

Consider getting your MBA. Okay, an MBA is n't necessary per se , but if you want to climb to the top of the leaderboard, an MBA will put you at the top of the potential hire list, which is bound to be where you end up. More and more people are getting them and taking them for granted. This move could contribute to career advancement, greater signing bonuses, and higher compensation.

Here, too, you can take a few years off between your studies and your MBA. Gaining some useful work experience (even if it's simple work at a bank or company) will also increase your opportunities tenfold. If you show that you already know what you are doing or want to do, programs will take you more seriously.

educate yourself Read. Consider. Expose yourself. To learn. This is an area where you can improve a lot in your free time. So read books! Watch financial news programs. Track different stocks and see what's up and what's down. While Joe breeds ferrets and Jim plays soccer, make sure you leave school with a six-figure income to get started.

Try William Bernstein's The Four Pillars of Investing: Lessons for Building a Winning Portfolio or Mark Hebner's Index Funds: The 12-Step Program for Active Investors. The Wall Street Journal or The Financial Section of the NY Times won't hurt either!

You probably know half a dozen people who are at least into investing. Ask them what they know! The only reason you need an education now is because it is the current academic trend. In the past, it was only people who were actively interested in it. So use all your resources as soon as you can, as often as you can.

Start your own investment portfolio. If you're old enough, look after some of your own money (if you're under 18, it must be in your parents' name). Work with a family member who does this and find out how to start building evidence of your expertise. If you wouldn't trust you with your own money, why would anyone else trust you with theirs?!

• Plan your future

Consider your options. There are three paths your career could take:

Be a full service broker . That would be working at a company like Merrill Lynch or Morgan Stanley. To be successful here you need to be very sales oriented. They will provide you with a place, train you and give you a starting salary until you pass the probationary period.

Be a discount broker . Charles Schwab or Fidelity are two examples of discount brokers. If you are more service oriented this is for you. They generally always get a salary, earn less commissions, but mostly help those who come to you buy and sell, but don't give advice.

be a bank broker. It's pretty simple - you work in a bank. The bank's customers come to you to buy fixed annuities and make other, often more conservative, decisions.

Discount brokers generally need to know a little bit about everything (rollovers, stock options, margin calculations, derivatives, bond ladders, etc.), while full-service brokers usually specialize in one area, like IRA rollovers or employee stock options.

Full service brokers are responsible for finding their own clients. However, you also get a job and a salary to start with. With discount brokers, you pay your overhead costs and make less commission. It's really give and take.

research company. Once you've narrowed down what type of broker you want to be, you still need to decide which firms you want to apply to. Just like a pair of pants (one that you will wear for decades), they have to fit you exactly. The most important thing to note? Size.

A large company can often offer you a competitive training package to make you feel more secure and ease your initial financial woes. However, you can feel like a tiny fish drowning in a large pond.

A small company can give you the attention you want and make you feel more likeable (in addition to a higher commission rate), but they may not be able to offer you the clientele or training of a larger program.

Get an apprenticeship in a company. You must complete a few months of practical training before you can earn your license and become a full-fledged stockbroker, but you can still work. It all depends on where you are employed. Some may call it an internship, others consider it just pre-training, some offer more money than others. Whatever form yours takes, it is a necessary step of the pre-screening.

• Become fully qualified

Pass your compulsory exams. There are two basic tests that you must pass :

The Series 7 . Formally known as the General Securities Registered Representative Examination . Administered by the Financial Industry Regulatory Authority (FINRA), this test is the most difficult test you will take (takes 6 hours). After you pass them, you are a "registered agent" or stockbroker. You are authorized to sell all securities and investments with the exception of real estate, life insurance and commodity futures. It currently costs $290.00.

The Series 63 . This is all about the conduct of business and the various laws that govern transactions. It's much shorter (75 minutes) and much easier. This costs $96.00

Consider taking other exams to specialize. They're not strictly necessary, but they ensure that nothing is off-limits to you. Those exceptions mentioned in Series 7? These disappear once these tests are passed.

The Series 65 . Your firm may require you to become a "registered investment adviser". They must complete 65 in order to use professional management platforms.

The Series 66 . Just a combination of 63 and 65.

The Series 3 . This test is required to sell commodity futures contracts.

The series 31 . In order to sell managed futures funds, you must pass this test. It is usually obtained in place of the 3.

If you're in the UK, you know the testing process is completely different. The serial tests are just not a thing. Across the pond, you could either have a CFA Society UK Level 4 Certificate in Investment Management, a CISI Level 4 Diploma in Investment Advice, a CISI Level 7 Masters in Wealth Management, a Fellow or Associate of the Faculty or the Institute of Actuaries or a BA (Hons) from Manchester Metropolitan University in Financial Services, Planning and Management.

Deal with the piles of paperwork. After your exams are in the bag, you must complete your FINRA/NFA registration and register with the Securities Commission of each state in which you wish to work. Here are the basics:

Pass a background check (anything beyond a minor traffic violation may disqualify you)

Get a fingerprint card

Complete paperwork for state and federal level

Meet quotas and get through your first year. If only the hard part was over. Now that you are a legit broker, you must live up to expectations. Depending on your company, you'll likely get six months to a year of base pay to give you time to build your client base. This will be the hardest part. In fact, many need several years before they really feel comfortable. It's stressful, but worth it.

The majority of dropouts now drop out. The money isn't coming in the way they want it, they're not good salesmen, they can't stand the long hours of prospecting, they get dumped for not making enough for the company, whatever. If you can get over that hump, you're spot on.

Take part in continuing education courses. To retain your license, you must attend seminars and attend continuing education courses. Your employer will make this easier for you. Just go on! The market is constantly changing.

• Successful in your career

Build your customer base. Again, there are three traditional ways you can do this:

Cold calling or door knocking. You literally grab the phone book (which surprisingly still exists ) and start making calls with a smile on your face. You could also get a list of names from the district clerk for a neighborhood and knock on the door. Yes, dogs are allowed to chase you.

A list of possible customers. You can either buy these from a marketing company or your employer can give them to you. Way better than being accused of trespassing.

Go through your own network. Hit friends, friends of friends, long lost uncles of friends of friends, join exchange clubs and various organizations to hit their members, etc.

Beat the learning curve. Clearly, the stock market is not a 2 + 2 = 4 place. There are a billion factors at once that you need to consider. You will give people advice and risk their hard-earned money. There's a lot to get used to. Quite a lot is, of course, a huge understatement.

The amount of money you bring home will increase every year. Surprisingly, the easier your job becomes, the more money you will make. Getting the ball rolling is really the hardest part.

At first you work all the time. Whenever you can reach customers, you will work. That means nights, weekends and holidays. But if you have a steady client base, work 6 hours a day and take time off whenever you need it. It may only be years before that happens.

Get used to the constant selling pressure. You will meet the quotas from day one. If you don't get people to give in to your sales skills, your job is at stake. Until you have a bank of people you can rely on to invest with you, the pressure will be around the clock. For some people, that can be quite a lot.

If you're not a super seller, a discount store or bank broker might be more your thing. Selling is not for everyone. You could also start at a bank or discount store, build your network, and then go to a full-service broker.

Be persuasive. All of your work revolves around getting people to trust you. Trusting them with their hard-earned money. That's asking a lot! Not to mention that you will probably be a total stranger. How are you even gonna get your foot in the door?

This is where finding a mentor comes in handy. There are psychological tricks of the trade that all pros use to keep people from literally hanging up or slamming the door in their face. Needless to say, you will develop quite a thick skin.

Communicate effectively. Let's just put it this way: you will be familiar with many terms and concepts that the average person does not. That's how you get a job. Instead of rolling around all those acronyms and concepts that people don't understand, you need to get down to their level. Can you make everything you know available to everyone? I hope!

Work for an independent broker. Raymond James or LPL Financial are two examples of independent brokers. They offer virtually any project and their staff see payouts in the 80-95% range (full service can start at around 40% early in your career and slowly but surely work your way up).

To do this, you need an established customer base. A very, very large customer base. For this reason, accountants and tax consultants often have a head start in this department. It is certainly something to strive for. After a while in the game, this is a definite possibility.