What is a Stockbroker?
Stockbrokers are individuals who buy and sell stocks and other securities for retail and institutional clients, through a stock exchange or over the counter, in return for a fee or a commission. Institutional stockbrokers work with fund managers and other financial institutions, but there are also retail investors.
What does a Stockbroker do?
Stockbrokers deal with their clients directly and manage their wealth portfolios. They work with existing clients and develop new businesses.
The role involves:
- Keeping up to date with the latest financial and tax legislation
- Monitoring stock market performances
- Conducting specific market research and analysis.
Most importantly, the role is to ensure to understand the client's needs and make the appropriate suggestions for their investments.
Brokers need to be honest and provide all correct information, including risk. Exaggerating and providing misleading information is not acceptable. They also need to proactively look for clients, sell their firm’s services and manage those relationships. This can be achieved by a combination of networking and cold calling.
Types of stockbrokers
- Full-service brokers - provide a personal service to clients and pass on important exclusive information available to only full-service clients. They deliver personalised research and information on investment
- Online brokers - carry out research and provide investment news, charts and a selection of stocks for clients to consider
- Discount brokers - only follow up orders from their clients. They don’t offer advice, research or analysis services.
How to become a Stockbroker in the UK?
You can become a Stockbroker by studying business, finance, mathematics or accounting related university degrees.
Please see below a few courses offered by the University of Law Business School.
Recommended courses to become a Stockbroker
You can seek a work placement or internship with a brokerage firm during your studies to gain relevant experience. Our Employability services offer various options for gaining work experience during your studies.
Once you acquire all the necessary qualifications and experience you need to become a stockbroker, you need to register with the Financial Conduct Authority (FCA) before you can work. By registering with the FCA you become an ‘approved person’, which means that you’re approved to carry out activities that the FCA calls ‘controlled functions'. All stockbrokers need to comply with the FCA rules.
Lots of graduate schemes offer starting positions for stockbrokers. After gaining the necessary qualifications, experience and registering with the FCA, you can begin applying for stockbroker positions.
What skills does a Stockbroker need?
- The ability to work in a fast-paced environment
- Excellent communication and interpersonal skills, including strong negotiating and presentation skills
- The ability to use your initiative
- Ambition and determination
- The ability to accept criticism and work well lots of under pressure
- A natural sales ability
- Customer service skills
- Strong numeracy skills
- Analytical and research skills, as well as the ability to process and retain information quickly
- Time management skills
- Knowledge of economics and accounting
- The ability to build lasting relationships
- A disposition for taking risks
- The ability to persuade people and strong negotiation skills
- Decisiveness and the ability to solve problems.
How much do stockbrokers make?
Stockbroker salaries in the UK are based on experience, qualification, success, the length of service within the brokerage company and the type of company they work for. Newly qualified brokers in a large bank can be offered a starting salary of around £25k plus commission.
Financial companies in London offer salaries for Junior Brokers from around £40k plus bonuses. With a combination of success, experience and length of the service, stockbrokers can earn up to £150k with significant commission and bonuses.
Other benefits working in this industry include private healthcare, health and travel insurance, gym membership, professional body membership fees, tuition and exam fees and study leave.
How to become a Stockbroker without qualification?
There are no formal educational requirements to become a Stockbroker; you might get into this role through apprenticeships schemes such as a financial services professional degree apprenticeship, or investment specialist higher apprenticeship.
If your degree is not in a business or finance-related subject, you must show employers that you understand how financial markets work. It might help find a work placement in an investment bank or similar company.
Above all, you still need to have continuous training throughout your career and keep yourself updated with the new procedures and regulations.
For more information on jobs and what to expect from this career, please visit some of the most widely used sites for careers support.