What does a stockbroker do?
Stockbrokers look after investments on behalf of their clients – growing them by trading stocks, shares and other financial products in order to get the highest return. These clients can range from high net worth individuals to major corporations. Stockbrokers have a good head for numbers, and they develop a keen understanding of the stock markets, enabling them to make sound judgements and decisions quickly based on what the market is doing.
Day-to-day responsibilities of a stockbroker can include:
- Staying up to date with the latest developments in financial markets
- Researching potential strategies on behalf of clients
- Reviewing strategies to ensure the biggest possible returns
- Instructing stock market traders based on market prices
- Finding out more about potential markets from investment analysts
- Generating new business and developing business relationships
- Offering regular updates to clients on their portfolios, as well as advising them
- Keeping on top of changes in tax and financial legislation
Are there different types of stockbroker?
Stockbrokers provide three different types of service, depending on their speciality and type of client:
- Discretionary stockbrokers manage investments and make decisions on behalf of their clients
- Advisory stockbrokers provide tips and advice to their clients but do not execute decisions on their behalf
- Execution only stockbrokers do not provide advice but carry out client requests to buy and sell
What skills do I need to be a stockbroker?
Stockbrokers become successful and secure the biggest clients and financial returns, by not only working very hard but developing an excellent reputation. You will need to be honest, trustworthy and very adaptable in high pressure situations.
You’ll also need to have the following attributes:
- Great verbal communication and customer service skills
- A high level of mathematical knowledge backed up by qualifications
- Understanding of accounting and economics principles
- Independent judgement and confidence in decision-making
- An ability to take criticism and work effectively in stressful situations
- Strong instinct and initiative
What qualifications do I need to be a stockbroker?
Most people get into stockbroker jobs through a relevant degree course, but industry-specific qualifications like Forex Trading can also give you the foundations for a successful career if you have the right background.
The traditional route into working as a stockbroker is studying a degree (for which you will need three A Levels) in one of the following areas:
In many cases a graduate training scheme will top up the broad knowledge acquired at university with the industry-specific understanding and skills that you need. However, you can also apply directly for a role as a stockbroker if you are confident that you already have the relevant qualifications and experience.
What can I earn as a stockbroker?
Annual base salaries for stockbrokers range from around £24,000 for beginners to £150,000 at the most experienced level. This can rise quickly and there is scope to earn large bonuses – meaning that many stockbrokers earn huge amounts of money overall, often in the hundreds of thousands.
This is one of the biggest motivators for many people to enter the profession. However, the working hours are demanding – often between 50 and 60 hours per week.
Is the role of a stockbroker right for me?
If you’re not a people person, then working in another area of finance may be a better option for you – stockbrokers are highly confident and outgoing, and excellent at dealing with different kinds of people from all types of organisations.
You need to be able not only to make swift decisions that could have significant financial implications, but to spot which risks are worth taking and worth avoiding – all under what can often be extreme pressure.
If you’ve got the mathematical mind and the financial know-how but you’re not sure that frontline work as a stockbroker is for you, there are plenty of alternative roles in similar fields: