The job of a stockbroker calls for a lot of awareness, research, and market study. The success level of this professional is linked with the success of his or her clients, for the more the investors earn, the more will be the earning potential of their broker. This Buzzle article discusses the job description, requirements, and salary of a stockbroker.
The Bureau of Labor Statistics states that there is an additional growth rate in the employment of brokers and traders. This is because of the substantial increase of trading in commodity markets.
Stockbroking is the process of dealing with securities, commodities, and financial services on stock exchange. Stockbrokers provide sound financial advice to existing clients, attract new clients with high-return investment options, and buy and sell stock options for their clients in order for them to gain great financial profits. There are many kinds of stockbrokers. These are mainly classified into two categories: (i) Full-service Broker and (ii) Discount Broker. The difference between the two is explained as under.
(i) Full-service brokers provide investment advice on various market opportunities as well as act on their client’s behalf, i.e., perform buying and selling of stocks according to their expert observation. They usually charge a hefty amount of fees, however, they take full responsibility of the client’s investment and ensure that they get high returns.
(ii) Discount brokers, also known as online brokers, only help carry out the buying and selling of orders as directed by the client, without giving any investment advice to them. These professionals do not help you choose any stock, neither do they tell you of the right time to buy or sell. They charge a significantly lower amount as fees compared to a full-service broker, hence the lack of services. Some work independently while others are mostly hired employees of a brokerage firm.
The salary range of a stockbroker depends upon varied factors including the work profile, industry, type of employer, experience, location, education, and so on. Bonuses and commissions should also be taken into consideration when looking at the salary aspect of this job. To survive in this industry, a stockbroker must also possess excellent communication, interpersonal, and convincing skills.
AVERAGE SALARY OF A STOCKBROKER
The Bureau of Labor Statistics has included this profession under the category of ‘Securities, Commodities, and Financial Services Sales Agents’. There is a projected growth rate of 11 percent from the year 2012 to 2022. The 2012 annual median salary of this category was USD 71,720, according to BLS. The following sections will give you the current figures of the average salary that can be expected in this field.
Average Salary by Experience
| 0 to 5 years | USD 45,000 |
| 5 to 10 years | USD 55,000 |
| 10 to 20 years | USD 81,000 |
| > 20 years | USD 132,000 |
Source: PayScale
Average Salary by State
| Alabama | $46,000 |
| Alaska | $34,000 |
| Arizona | $38,000 |
| Arkansas | $47,000 |
| California | $49,000 |
| Colorado | $41,000 |
| Connecticut | $53,000 |
| Delaware | $40,000 |
| Florida | $43,000 |
| Georgia | $52,000 |
| Hawaii | $28,000 |
| Idaho | $30,000 |
| Illinois | $52,000 |
| Indiana | $44,000 |
| Iowa | $45,000 |
| Kansas | $42,000 |
| Kentucky | $40,000 |
| Louisiana | $41,000 |
| Maine | $41,000 |
| Maryland | $47,000 |
| Massachusetts | $55,000 |
| Michigan | $46,000 |
| Minnesota | $40,000 |
| Mississippi | $48,000 |
| Missouri | $45,000 |
| Montana | $38,000 |
| Nebraska | $33,000 |
| Nevada | $35,000 |
| New Hampshire | $45,000 |
| New Jersey | $50,000 |
| New Mexico | $40,000 |
| New York | $55,000 |
| North Carolina | $44,000 |
| North Dakota | $41,000 |
| Ohio | $44,000 |
| Oklahoma | $42,000 |
| Oregon | $44,000 |
| Pennsylvania | $44,000 |
| Rhode Island | $42,000 |
| South Carolina | $45,000 |
| South Dakota | $35,000 |
| Tennessee | $43,000 |
| Texas | $44,000 |
| Utah | $36,000 |
| Vermont | $40,000 |
| Virginia | $46,000 |
| Washington | $47,000 |
| West Virginia | $43,000 |
| Wisconsin | $41,000 |
| Wyoming | $38,000 |
Source: Indeed
» Note:
- All figures are as of July 2014 and are in US Dollars.
- All figures are average annual salaries and may vary based on education, experience, location, type of employer plus commissions.
According to the website of Stock Broker Career Headquarters, “the lowest earning 10% of stockbrokers earned less than $31,330 while the highest earning 10% of stockbrokers earned in excess of $166,400.” Alternately, the website PayScale states the median annual income of a stockbroker to be within the range of USD 35,046 to USD 136,391, including bonus, commission, and profit sharing. As you can notice, the amounts vary differently based on the varied factors.
EDUCATIONAL QUALIFICATIONS
- The minimum educational requirements at entry-level is a bachelor’s degree in business, finance, accounting, or economics.
- For those looking for high-end positions, better compensation, and bonuses, a master’s degree in business administration (MBA) is mandatory.
- Many firms hire interns with a keen analytical mind, numerical ability, logical thinking, excellent communication and interpersonal skills, and the most successful ones are often offered full-time jobs after they graduate.
- All aspirants must clear the General Securities Registered Representative Examination, also known as Series 7 exam, to acquire a license.
- Some states also require you to clear the Uniform Securities Agents State Law Examination and the Uniform Investment Adviser Law Exam to become a licensed stockbroker.
JOB DESCRIPTION
- Suggest clients the right time to buy or sell the stock options with an aim to increase the client’s wealth.
- Interact with prospective investors and provide information about various profitable services available.
- Monitor the international and local stock markets and inform the clients about any risks, or sudden changes and fluctuations in the market.
- Meet the clients face to face and devise retirement plans, or provide investment and tax-related advice.
- Prepare financial reports, either quarterly or monthly pertaining to the status of the investments made, and present it to the client or management.
- Work for long hours, preferably in the evenings and weekends, as most of the clients work during the day and are available only in the evening and weekends.
This industry definitely provides ample growth opportunities for a deserving and hardworking candidate. So, if you think you have good mathematical and analytical skills, decision-making abilities, and good presence of mind, then who knows … this could be your dream job after all! However, you need to understand the fact that the entry in this field requires you to be highly smart, ambitious, and talented. The competition is extreme and you need to prove your worth to fit into the world of stock markets. All the best.