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Role of a Broker Dealer

Stock brokers are licensed agents who purchase various securities for individual investors or companies. In addition to purchasing securities, stock brokers can provide insight into the stock market for customers. Stock brokers work under a brokerage firm, usually with other stock brokers and trainees. Stock brokers are also generally required by their brokerage firms to contact potential investors. Education There are no educational requirements to become a stock broker although many stock brokers have college degrees in finance or years of experience in the stock market. However, no experience is required to be trained as a stock broker. Stock brokers are licensed through passing the General Securities Registered Representative Examination after training in a brokerage firm for four months. In addition, some states require stock brokers to pass the Uniform Securities Agents State Law Examination. Function Stock brokers buy and sell securities for individuals or companies. Some stock brokers also offer financial research to investors to guide them in their choice of securities to purchase. This research may be done through technical or fundamental analysis. Technical analysis assesses the chart of a company whereas fundamental analysis evaluates the company’s intrinsic worth through the firm’s reports. Features Stock brokers contact potential investors to present their investing strategy. This may entail a dinner meeting or a discussion on the golf course. However, these meetings are typically done on the weekends or during the evening when the stock market is closed. In addition, stock brokers must deal with complaints and counsel current clients on their portfolios. Complaints usually pertain to the performance of the stocks the firm recommended. In addition, brokers often deal with complaints regarding the commission and fees charged by the brokerage firm. Benefits Stock brokers are able to work their way up in the ranks of their brokerage firms. Experienced stock brokers may be given the opportunity to teach trainees. At the beginning, most stock brokers handle small accounts. However, with years of experience, a stock broker may be given a large corporate account, which can offer a large commission and a significantly higher salary. In addition, stock brokers can become independent brokers with industry experience. Warning Becoming a stock broker is a long process. Typically, a prospective stock broker will start off as a trainee for two years before moving into his permanent role. Trainees are paid between $14,400 and $24,000 annually, and are not guaranteed future employment. Be aware that stock brokers work long hours and must field clients’ complaints.

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