How to become a stockbroker
Synonymous with Wall Street and 1980’s power dressing, stockbrokers have been one of the most attractive jobs for a number of decades. With the promise of potential mammoth bonuses and excellent earning potential, stockbrokers work in a fast-paced, highly energetic environment. This is a role that suits those who work well under pressure, who have a keen eye for figures and who can predict market changes successfully.
£24,000 to £125,000+
50 to 60 hours
What does it take to become a stockbroker?
As a stockbroker, you will be responsible for managing other people’s investments through your trades in stocks, shares and other financial products. It will be your job to invest well and achieve the highest returns on behalf of your clients. When a trade is successful, you can expect rewards but be sure to be prepared for failed trades and be aware that you will need to manage ebbs and flows in your career.
What qualifications will I need to have in order to work as a stockbroker?
To work as a stockbroker, you will likely need to be a graduate and this means that you will have already completed a degree. Most new stockbrokers enter the profession through a graduate training scheme with an employer, and competition for these places is usually very high. To impress a prospective employer, you need to demonstrate eagerness and an impressive academic record.
Most employers will source potential candidates through university job fairs and this will sometimes lead to work experience placements or summer internships. Once the employer has had an opportunity to watch the candidate at work, they will be in a better position to offer graduates a place once their degrees are completed.
Most employers will only accept applications from those who have achieved at least a 2:1 in their degree. The higher the degree grade and the more relevant work experience you have, the more likely you will be to be successful in an application for a graduate training programme. Many stockbrokers also hold a postgraduate qualification such as a Masters of Business Administration which helps to further set them apart from the competition.
Some employers will be flexible about the degree course that an applicant has completed, but others are stricter and require the degree to be in a relevant subject such as:
- Financial Studies
It may also be possible to work as a stockbroker once you have experience of working in the financial industry. Some financial advisers or salespeople with a finance background can make successful applications for these roles.
To work as a stockbroker, it is necessary to be registered with the Financial Conduct Authority (FCA) as an ‘approved person’.
Essential Skills for Being a Stockbroker
Stockbrokers work in one of the fastest paced environments at times and this means that the role can be high pressured. However, when a trade is successful, the rewards are substantial and this makes stockbroking one of the most attractive roles for remuneration.
Stockbrokers need a number of essential skills in order to ensure that they can enjoy their work and provide the best service and returns for their clients. Some of the necessary skills needed for this career include:
- Exceptional attention to detail and the ability to process numbers quickly and correctly.
- Superb communication skills and the ability to explain investments to those who may know very little as well the ability to detail potential returns and risk.
- The ability to analyse complex pieces of information quickly and assess the impact that this may have on your trades.
- For those who want to work on an international level, foreign language skills are highly desired.
- The ability to work under pressure.
- The ability to make decisions quickly and calmly whilst under pressure.
- Excellent organisational skills.
- The ability to communicate verbally and in writing.
- The ability to keep records up to date.
Day to Day Work of a Stockbroker
Your work as a stockbroker will include high attention to detail, the need to communicate with others constantly and a host of tasks that must be completed to secure the best results for your clients. You will usually be employed by an investment bank or by a stockbroking firm and clients will usually be assigned to you based on your skills or previous working relationships. Working as a stockbroker may mean that you work for and alongside fund managers, retail investors and other associates.
As a stockbroker, you will be able to work in three areas. You may choose to work in all areas or specialise in one or two. They are:
- Discretionary where you will manage all of your client’s investments and will buy or sell shares on the stock market on behalf of your client.
- Advisory, where you will offer advice to your clients about different investment options and they will make the final decisions themselves.
- Execution only where you will buy and sell shares only when you are asked to by your client.
Working as a stockbroker, you will fall into one of three categories. They are:
- Full service. In this category, you will deliver bespoke advice based on individual research which will enable you to recommend investments to clients.
- Discount. In this category, you will send your clients recommended lists without there being any detailed research involved.
- Online. In an online capacity, you will provide the client with the tools and information they are likely to need to make their own investment choices.
No matter which capacity you work in, you will be required to complete the following tasks on a day-to-day basis:
- Research markets and analyse the most up to date trading figures.
- Liaise with investment analysts.
- Keep in touch with clients to help them understand their investments and to develop working relationships.
- Explain services to new clients.
- Generate new business from cold and warm leads.
- Giving private presentations to clients and potential clients.
- Maintaining an up to date knowledge of tax and financial matters.
- Understanding international markets.
- Meeting all targets and increasing margins where possible.
How much do stockbrokers earn?
Stockbrokers can earn very high wages, depending on how successful they are and the locality of their office. London stockbrokers are amongst the highest UK earners and those who specialise in niche or international investments are also usually paid more.
The usual starting salary for a new stockbroker is between £24,000 and £40,000. This sum will increase to between £50,000 and £70,000 with experience and years in the profession.
Those who have worked as a stockbroker for several years and who have demonstrated their skills to a high level can expect to earn in excess of £125,000 each year.
Working as a stockbroker usually brings a host of additional benefits such as private medical insurance, dental care, a large pension and generous annual leave.
Most employers will also give annual bonuses to their stockbrokers. The bonus amount will be based on how well the stockbroker has performed and the company’s performance overall.
Career Progression for a Stockbroker
Stockbrokers tend to further their career through demonstrating skill and success. Promotions are usually offered to the highest performers and will usually come with a pay rise.
Those who are successful in this career and who have experience could consider becoming a trader, a fund manager or a relationship manager. Those who want to progress further might consider setting up their own firm or becoming a partner.
Working Hours and Environment for a Stockbroker
Stockbrokers work exceptionally long hours in order for them to secure the best results on each trade. Most stockbrokers start their working day early, at around 7am. The working day ends at around 6:30pm and most stockbrokers take the weekend off.
If the stockbroker works on an international level, with commodities in other time zones, they will alter their working hours accordingly to suit the needs of their clients.
The majority of a stockbroker’s work is completed in a large office, where they will have their own station with a computer and telephone. However, some stockbrokers continue their work at home if they need to contact clients at unsociable times.