How to Become a Stockbroker
Some of the most riveting and popular movies available take deep dives into the often glamourous and intense lifestyle of a stockbroker. In fact, one would be hard pressed to find an avid moviegoer who hadn’t seen Wall Street, The Wolf of Wall Street, The Boiler Room, Margin Call, Other People’s Money and Trading Places. Underlying the plot themes of each motion picture are the life and professional themes with which a stockbroker must contend, including– the work of sales and commissions, building and maintaining a client base, risk planning and management, knowledge and adherence to federal and state securities regulations, remaining current on market developments, as well as having the ability to execute the job’s demands under tremendous pressure.
In order to become a stockbroker, there are certain steps you may be able to take conjointly, but if not, then sequentially. To successfully enter the job market, you must take care to have your knowledge grounded in a formal education, have on the job experience in some form, either via an internship or having an entry-level job, become certified with respect to industry standards and government mandated standards, and most ideally, master a level of networking with others in the field.
Education to Become a Stockbroker
Historically speaking, stockbrokers were not required to have a bachelor’s degree in order to become successful. However, in 2024, most firms will require a bachelor’s degree from candidates seeking positions. According to Forbes magazine, “If you want to become a stockbroker, the first step is to earn a college degree. A bachelor’s degree is required for most entry-level positions, and it’s especially helpful to major in something business-related. These classes provide an overview of the industry and can help hone your skills in finance and economics.” When researching colleges be sure to ascertain whether or not the institution is accredited. It is imperative to earn a degree from a reputable and respected college or university. There are a plethora of options at esteemed institutions of higher learning, both on campus and online. If you cannot financially afford to attend a four-year program initially, consider attending a junior or community college to satisfy your general education requirements. One important thing to remember—make sure your credits from the junior or community college will transfer to the 4-year college you are interested in eventually attending.
Network for Entry Level Job or Internship
In the fast-paced, ever-changing world of finance, membership in professional organizations will be one of your most important steps toward establishing and maintaining your career as a stockbroker. Additionally, professional organizations are the granting bodies of the certifications you will need to establish yourself as a viable job candidate. They are also the source of continuing education units. These finance associations are also the key to networking and tapping into all of the resources within the associations, including internship opportunities. The following is an introduction to the regulatory body governing securities firms and professionals (FINRA) and one example of a professional .
1. Financial Industry Regulatory Authority (FINRA) https://www.finra.org/about/
According to the Financial Industry Regulatory Authority (FINRA), “We are a government-authorized not-for-profit organization that oversees U.S. broker-dealers. We work every day to ensure that everyone can participate in the market with confidence. We play a big role because FINRA is authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. We oversee more than 624,000 brokers across the country—and analyze billions of daily market events. We use innovative AI and machine learning technologies to keep a close eye on the market and provide essential support to investors, regulators, policymakers and other stakeholders.”
FINRA provides rules and guidance information and support, exams, continuing education, events and training, compliance tools and registration with the Central Registration Depository (CRD). The CRD “contains the registration records of broker-dealer firms and their associated individuals, including their qualification, employment and disclosure histories. It also facilitates the processing of form filings, fingerprint submissions, qualification exams and continuing education sessions.” In order to become a stockbroker, you will need to become proficient in your knowledge of what is required by FINRA.
2. The Securities Industry and Financial Markets Association (SIFMA) https://www.sifma.org/
In their own words, “SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development.” SIFMA provides members with, educational options, seminars, forums, mentorship opportunities, conferences and avenues for investigating and securing internships and career postings. Look into SIFMA as a starting point for your investigation into different trade and professional organizations.
Job Outlook for Stockbrokers
According to the U.S. Bureau of Labor Statistics (https://www.bls.gov/), Stockbrokers have promising opportunities for the time period spanning 2022-2032. The field is growing by 7% per year, which is slightly faster than the 6% average growth rate. Government experts predict that each year over 40,100 openings will become available (between 2022-2032), due to replacing workers who leave the profession, leave the work force and/or retire. Over the ten year time span (2022-2032) it is projected that a total of 35,600 new positions will be created. In 2022 there were 482,200 individuals working as stockbrokers. The median pay per year was $67,480, while the median hourly wage was $32.44. (As a reminder, the “median” amount is not an average, it is the middle value of a dataset. For the U.S. BLS definition go to: https://www.bls.gov/cps/definitions.htm#medianearnings) .
By pursuing your education, participating in an internship or having experience from an entry-level job, becoming certified in accordance with state and federal regulations, maintaining continuing education requirements, and networking with others in the field, you will be on your way to a lucrative, satisfying and rewarding career as a stockbroker.
