What are the Risks and Rewards of Being a Stock Broker?
L Z asked:
And what does it take to succeed as a stock broker? Do people excel as stock brokers long term or is there a high degree of “burn-out?” What is the average annual take home for a stockbroker and how exactly do stock brokers differ from traders? Answers from stockbrokers would be especially appreciated.
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And what does it take to succeed as a stock broker? Do people excel as stock brokers long term or is there a high degree of “burn-out?” What is the average annual take home for a stockbroker and how exactly do stock brokers differ from traders? Answers from stockbrokers would be especially appreciated.
January 13th, 2010 at 2:10 pm
The most important thing you need to become a successful stock broker is people who have millions of dollars to invest with you as their broker.
I worked as a broker for a while. We had a group of 40 people start at the same time. We were give a few weeks to study for the Series 7. If you didn’t pass, you were fired. Only 3 failed so 37 of us carried on. Within 6 months, all the rest were fired but 3 of us.
The reason we weren’t fired…we knew a few wealthy people willing to put big bucks with us.
If you don’t know people like this with about 5 million to get started, you won’t make it past 6 months.
And really, why would someone want to give a new broker with no experience that kind of money.
It’s really just a sales job, and a tough one at that.
Good luck. wooper
January 14th, 2010 at 1:14 am
Risks: stressful, volatile job; just like any sales-commission job would happen to be.
Rewards: potential for high income, again just like with any successful sales job.
To succeed, you need to have a business degree, a good sense of buying and selling products, and good “people skills.” There’s potential for long-term success if you put in the time, work smart and manage it right. Because it’s usually a commission-sales job, you’re basically in business for yourself, even if you work for a brokerage firm.
Annual take-home is probably about $40K starting out, and it can go straight up from there - again, depends on how much time you put in and how much you do with it.
Different from traders in that brokers usually manage funds and other investment vehicles, whereas traders handle individual stocks on the SE.
Good luck. blackbimmer1972
January 15th, 2010 at 10:09 am
There are two types of stockbroker. Well educated type, and the quick thinker market trader type. It is a long term profession, there are people in their 70s still working.There’s no average. You have to earn enough for it to be worthwhile your company to house you . I would say minimum £150k gross. You will never know the top rate because those sort of brokers are very tight-lipped. Also if you can get the business, it is just as easy to do a trade worth £1m as it is for £100. Some brokers are salaries + bonus others are 1/2 commission. Commission is roughly 1%
Stockbrokers are usually dealing for their own clients and use dealers (or traders) to execute the trades in the market. Burn out usually occurs in the money market or option markets. Risks are in compliance and usually the broker has 100% liability to his clients losses or non-payment. Although in law this would probably be 50% raysor