How to Become a Stockbroker

Stockbrokers are finance experts who buy and sell stocks, funds and other securities for their clients. Brokers make money by charging commissions in exchange for their services, which clients pay when they place an order to buy or sell a security. Stockbrokers regularly analyze the stock market and they may also provide their clients with trading tips or recommendations on when to buy and sell securities. A stockbroker must pass a series of exams in order to buy and sell securities and must also complete ongoing education.

According to data from the Bureau of Labor Statistics, the job outlook for stockbrokers is growing at a rate of about 6% per year, which means that it’s a great time to learn more about this exciting career.

If you enjoy working in a challenging and fast-paced environment and you’re fascinated by market movements, a career as a stockbroker might be right for you. Read on to learn more about what it takes to become a stockbroker.

Technically, there’s no legal requirement that a licensed stockbroker must hold any kind of degree. Realistically, however, you’ll probably need at least two degrees before you can get started with a brokerage firm: a high school diploma and a bachelor’s degree.

High School Diploma

If you’re currently a high school student, you may want to consider taking advanced math and economics courses. Consult with your guidance counselor and tell him or her that you’re considering a career as a stockbroker — your counselor will be able to recommend specific courses your school offers to expose you to some of the basic finance principles you’ll need to know as a broker.

If you dropped out of high school or you never received a diploma, don’t give up hope — you can still qualify for most collegiate programs by passing the General Education Development test (GED). Though a GED is not the exact same thing as a high school diploma, most employers, colleges and post-secondary institutions consider it functionally equivalent to a diploma.

Check your state’s requirements for GED testing, consider signing up for a GED prep course online and pass the test before you start applying to colleges and universities.

Bachelor’s Degree

In most cases, you won’t be able to secure an entry-level job at a financial institution without a bachelor’s degree. A bachelor’s degree is an undergraduate academic degree awarded to a student by a college or university after three to seven years of study in a particular area.

When you start college, you’ll be asked to choose an area of study called a major. Your major determines which classes you’ll take, so choosing a course heavy in mathematics, finance and economics is important if you want to become a stockbroker.

Though there is no particular major required to become a stockbroker, some majors you might want to consider include:

Business and Business Management

Many stockbrokers choose to pursue a degree in business or business management while in college.

To earn a business degree, you take core courses in marketing, finance and management, as well as elective courses on the stock market and stock prices, corporate structures and securities.

Finance

A finance degree is another excellent choice for aspiring stockbrokers. To earn a degree in finance, you study subjects like risk management, company and stock valuation and accounting.

You also learn about how saving for retirement works, the ins and outs of investing and how a company can effectively manage its cash flow to maximize returns during strong economies and survive bear economies.

Economics

Economics is the study of the domestic and global economy as a whole. An economics degree can be invaluable to a stockbroker, especially if you want to work with international corporations or clients. If you choose a major in economics, you’ll study things like consumer decision-making, historical and geopolitical factors that influence trade and how the markets of the United States and other countries work.

Are you a high school senior who isn’t sure which major is right for you? That’s okay. Many undergraduate colleges and universities allow and even encourage first-year students to enter school with an “undecided” major. When you enter college undecided, you take a series of general courses that every student regardless of major must take to graduate. These classes are often colloquially referred to as “gen eds,” and can expose you to a wide range of studies and areas of interest.

Additional Training

Graduating from college isn’t the only type of education and training you’ll need to become a stockbroker. Some other types of training you might need include:

Internships

An internship is a learning experience and period of temporary employment that can help you learn more about the finance industry. An internship with a brokerage firm can teach you more about the many ways to invest in the stock market and can help you make connections that can secure you a job after college.

Many employers offer paid and unpaid internships to scout out new talent and to give students a more intimate look at what stockbrokers do on a day-to-day basis.

In recent years, a growing number of employers have offered unpaid internships which do not meet the standards laid out in the Fair Labor Standards Act. Legal unpaid internships need to meet all of the following criteria:

• The internship is for the benefit of you, the intern. It’s not free labor for the employer.
• The internship doesn’t displace an employee, and the intern doesn’t do the same work as paid employees.
• The employer doesn’t promise the employee a job at the end of the internship as a condition of taking on the internship.
• The employer-intern relationship is more similar to that of a teacher and a student than to a boss and employee.
• The place of employment activities are not impeded if the intern isn’t on site.

If you believe that you’ve been offered an illegal unpaid internship, you can report the employer to the U.S. Department of Labor. If an investigation by the Department of Labor reveals that you were actually doing the work of an employee, you may file a wage complaint. Visit the U.S. Department of Labor online to learn more about fighting back against illegal and immoral unpaid labor practices.

On-the-Job Training

Most financial institutions provide extensive on-the-job training for their new hires. Employers often hire new college graduates in administrative or customer service roles until they pass their FINRA-required licensure exams (more on those later). They may also hire a broker in a supervised position under the condition that he or she becomes licensed within a certain number of months after hiring.

Other Certifications and Licenses

Contrary to popular belief, you cannot start working as a stockbroker immediately after you graduate college. Licensed stockbrokers must pass between one and three licensure exams, depending on their state.

Many brokers begin their careers as administrative assistants and customer service representatives in-house with a firm, and their firm sponsors them to take the exam. Some of the most common licensure exams that brokers must pass before they can begin buying and selling securities include:

National Association of Securities Dealers' General Securities Registered Representative Exam (Series 7)

Every stockbroker, no matter where they are located, must first pass the Series 7 exam in order to buy and sell securities on behalf of a client. The exam covers topics like the evaluation of customer security holdings, opening and closing accounts and providing investment advice.

Uniform Securities Agents State Law Examinations (Series 63 and Series 65)

Most states also require brokers to pass the Series 63 and Series 65 exams, though many brokers take the Series 66, a combination exam containing content from both the Series 63 and 65 exams. Both the Series 63 and Series 65 exams cover topics like bookkeeping, legal limitations and requirements stockbrokers must adhere to, as well as client services.

Many financial institutions offer their new hires education reimbursement or in-house training to help them pass their exams. Check with your state’s requirements to learn which specific exams you’ll have to take before you can become a licensed broker.

Getting Ahead: Continuing Education

Smart stockbrokers know that keeping their knowledge up-to-date and sharp through continuing education programs is beneficial to both themselves and their clients. Some of the ways in which stockbrokers get ahead in their field include:

Employment-Sponsored Seminars and Workshops

Many employers regularly host sponsored continuing education programs for their stockbrokers. These programs range from seminars to workshops to retreats hosted by experienced stockbrokers.

Online Courses and Seminars

Many brokers continue their education outside of work hours with the wealth of finance-related books, courses and workshops available online.

Advanced Degrees

Stockbrokers may continue their education beyond the undergraduate level by attending graduate school and earning an advanced degree. Some common choices for brokers include the Master of Business Administration (MBA), Master of Finance (MFin) or the Master of Science in Applied Statistics. Some employers encourage their employees to pursue higher education by reimbursing a percentage of tuition costs upon completion.

Other Certifications and Specializations

Some stockbrokers become certified financial planners, financial analysts and financial consultants. Some of these designations require additional licenses, and many financial institutions sponsor their top brokers through their education.

Final Thoughts on Becoming a Stock Broker

A career as a stockbroker can be rewarding both personally and financially. It’s also a tough career that requires a ton of tenacity, ambition, customer service skills and numerical prowess.

The best way to learn more about life as a stockbroker is to speak with brokers in your area. Ask them what they like about their job, what they dislike, and what advice they would give to you. Get an unbiased look at what it means to be a stockbroker — and whether or not the job is right for you.

Frequently Asked Questions