8 min read

How To Become A Stockbroker: A Guide

Nikki Dale
Nikki Dale April 21, 2023
how to become a stockbroker

What is a Stockbroker?

A stockbroker is a financial professional that is responsible for managing the investment of clients, particularly in stocks, shares, and other financial instruments.

Stockbrokers use their specialist knowledge of the stock market and other economic factors to get the best return on investment for their clients, buying and selling commodities, stocks, and shares at the right time to make a profit.

Stockbrokers can work for institutions, like pension funds or insurance companies, or they can work for private individuals on a retail basis - usually high-net-worth individuals.

Stockbrokers offer three different levels of service to their clients.

  • Discretionary: at this level, stockbrokers are given complete control of the client portfolio, making all the decisions about buying and selling with little or no input from the client.
  • Advisory: at this level, the stockbroker gives advice and makes recommendations about the best investment choices, but the client has the final say in what happens with individual trades and the overall portfolio.
  • Execution-only: At this level, the stockbroker acts only on the direct orders of the client, making only the requested buy or sell orders, and does not provide any advice.

Why do people work as Stockbrokers?

For financial professionals who enjoy giving advice and helping clients make money, the role of a stockbroker is very attractive.

Being a stockbroker usually means working in a busy, open-plan office, using negotiating and sales techniques, and helping institutions and individuals make the most of their investments. Stockbrokers need to have fast reactions and be able to work well under pressure, which is why they are a popular subject for movies - it is an exciting and fast-paced role.

Being a successful stockbroker means hitting targets and earning commissions and bonuses - so it is a career that can be as lucrative as it is exciting.

Key Roles and Responsibilities of a Stockbroker

The specific roles and responsibilities of a stockbroker will depend on the type of service they provide; an execution-only broker will not have as much to do for their clients as someone who is working as a discretionary broker would.

Alongside nurturing and growing the portfolios of existing clients, a stockbroker is responsible for generating new business and selling services to get more clients.

They need to research and analyze market movements and economic news to decide on the best way to invest that will make money for the clients, and this means keeping up to date with what is happening on a global market scale.

With this information, they need to be prepared to give advice and make recommendations to clients, including giving realistic risk advice too. They need to understand what the client wants to achieve with their portfolios and create a clear plan to make that happen.

Of course, the stockbroker is required to make the trades and to buy and sell the different financial instruments that make up the client's portfolio.

A stockbroker will need to regularly create reports and presentations about the performance of the portfolios that they are looking after, both for the client and for the management of the firm that they are working for. Stockbrokers will have particular targets that they need to achieve, both individually and as a company, to be able to get the bonuses that they are hoping to be paid.

Essential Skills and Qualifications for a Stockbroker

stockbroker guide

With so many different facets to the role of a stockbroker, successful employees need to be able to demonstrate a wide range of different skills, aptitudes, and competencies.

These include:

  • Communication skills, both verbally and in writing, including active listening.
  • Persistence and determination as well as the ability to remain calm under pressure
  • Self-motivation and initiative, with a good team working mentality
  • Excellent sales technique and negotiation skills
  • Numeracy
  • Analytical and logical thinking
  • Problem-solving
  • Good judgment and critical thinking skills
  • Knowledge of economics and accounting
  • Understanding of the financial markets
  • Excellent ability to judge risk
  • Knowledge of a second language is a bonus, especially if dealing with clients in other countries.

In terms of qualifications, most stockbroker firms are looking for employees who have completed a relevant degree, so something like:

  • Economics
  • Business Studies
  • Finance
  • Accountancy
  • Mathematics

More prestigious or boutique firms may need more specific knowledge, so completing an MBA might be the best way to get in, while others will only need you to be registered as an 'approved person' and have completed a professional qualification from an organization like Chartered Financial Analysts or the Chartered Institute for Securities and Investment.

Pathways to Becoming a Stockbroker

If you have completed a degree, this may lead to a graduate program, where you will receive full, specific training relating to becoming a stockbroker. You will usually get the additional certifications to be registered with the Financial Conduct Authority (FCA) as an 'approved person' - which every stock broker must be.

There are other pathways to becoming a stockbroker; some firms offer apprenticeships for example. Being a stockbroker and 'on the floor' dealing with the buying and selling on behalf of clients is a tough role, with long hours and a lot of pressure, which is why it needs a candidate who has proven that they can deal well with pressure as well as having the right level of knowledge and skills.

Entry to graduate schemes and apprenticeships is usually competitive; you'll have to go through several stages in the application process to be considered for a role.

What does the career ladder for a stockbroker look like?

After the successful completion of your training, you will move from being a trainee stockbroker to a fully-fledged stockbroker.

Many people spend a few years in this position, and the career progression can be quite simple - moving into a more senior position and getting bigger client portfolios to manage, or moving into a supervisory position and taking charge of other stockbrokers and their performance.

Some stockbrokers might move into specializing in fund management or looking after institution accounts, while others might want to focus on retail (high net worth) clients.

Higher up the career ladder is the potential to become a partner or even a director in the firm, or perhaps branch out and start your own firm.

Many stockbrokers move on to positions in investment banks and financial advisory roles, pivoting their careers slightly to focus on other types of investments as well as the stock market.

What are the average stockbroker's working hours?

Stockbrokers work long hours; they need to be available for the opening of stock markets across the world and in different time zones.

This means that a normal working day can be from 7 am through to 6 pm - and a lot of that time is spent on the floor, dealing with stressful situations, and trying to stay calm under pressure to hit targets.

Stockbrokers might also be expected to travel abroad for meetings with foreign clients, and they may be required to work on the weekend, too.

What is the average salary for a stockbroker?

The reason that many stockbrokers want to do the job is for the commission. In general, stockbrokers earn extra money (above their base salary) as bonuses and commissions when they make sales or hit targets, and this makes being a stockbroker a lucrative job opportunity for those who can deal with the stress and the long hours.

Trainee stockbrokers can make £25,000 plus commission and bonuses, and newly qualified stockbrokers in boutique firms might be offered a base salary of £40,000 with bonuses on top.

More experienced stockbrokers could earn between £100,000 to £150,000 plus bonuses, and there is almost unlimited earning potential once a stockbroker chooses to specialize in either institutions or high-net-worth clients.

What are the best companies to apply for as a Stockbroker?

There are several approved firms in the UK that are registered to make trades on the London Stock Exchange and other markets, and some of these have developed a reputation as being excellent places for a stockbroker to start and make their career.

Some of these firms include:

If you are applying for an entry-level role at one of these firms, you need to be prepared to go through a rigorous selection process.

The more you know about what the stockbroker firm is looking for, the easier you will find it to prepare for the application process. Check out our employer hiring guides with practice assessments.

Nikki Dale April 21, 2023

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