The world is changing faster that anyone can predict. As globalism creates new economic opportunities, the stockbroker profession must adapt. Blockchain is here to stay, which means stockbrokers must update their portfolios to reflect the changing demands of international commerce.
The faculty of the UAB Collat School of Business works tirelessly to ensure that the past, present, and future of business intersect to position you for the best possible career outcome.
Most stockbrokers have a bachelor’s degree in finance or business, while those in senior and executive leadership positions often hold a Master of Business Administration (MBA) degree. The University of Alabama at Birmingham’s online MBA program with a concentration in finance allows prospective stockbrokers to earn their MBA degree completely online. An MBA degree can provide the critical thinking, analytical, strategic, and financial reasoning skills needed to help advance a stockbroker career.
Duties and Responsibilities
Stockbrokers buy and sell stocks and securities for individuals, corporations, or organizations, and may also manage clients’ stock portfolios. To provide the best advice, stockbrokers should keep a close eye on the markets and stay current on tax laws and financial news.
Only registered members of a particular stock exchange have the power to execute stock transactions. Most work for brokerage firms or broker-dealers, though some are employed at banks with brokerage arms. Even online brokerage firms may have live brokers available to offer advice or help with trades.
According to the U.S. Bureau of Labor Statistics, a stockbroker is responsible for financial advice, management, strategy, and execution in the following ways:
- Identifying and contacting potential clients to provide information about available services.
- Buying and selling securities, such as stocks and bonds.
- Buying and selling commodities, such as gold and oil.
- Advising clients about investments and current market trends.
- Observing the performance of securities and financial markets.
- Monitoring company finances to provide advice on acquisitions, mergers, and public offerings.
- Analyzing the revenue and cost of business agreements.
Stockbrokers, even those who work for large firms, are responsible for developing their own client base, so sales ability, cold calling, and networking are essential skills. The Broker Protocol Agreement often protects the investment firm from releasing sensitive client information with a departing associate. However, when a stockbroker moves to another firm, their clientele is free to follow them without the need to rebuild a client base from scratch.
Through experience, a stockbroker can effectively assemble a client base through networking and professional associations. According to Investopedia, “the market … today has become more proactive and is no longer hampered by a rule set written nearly a century ago, and that makes [stockbrokers] more dynamic and active, helping to create a more robust market.”
Salary and Work Hours
Trading stocks is a career with high stress, high risk, long hours, and substantial earning potential. Income varies widely. The BLS reports the median annual salary for securities, commodities, and financial services sales agents (including stockbrokers) was $62,270 in 2019, with 5% growth expected between 2019 and 2029. In fact, the highest 10% earned more than $156,150 in 2019, which represents a tremendous earnings potential.
In some instances, many stockbrokers can earn substantial commissions on top of their base salary. However, in October 2019, both Charles Schwab and TD Ameritrade removed their commission fees, sparking a shift toward commission-free trading. Schwab views the maneuver as an attempt “to make investing easier and more affordable for everyone.”
However, the loss of commission could lead to an uptick in casual trading from those who viewed commission fees as a barrier to entry. This could result in higher salaries, based on the number and frequency of new traders.
Career Entrance and Advancement
Many stockbrokers get their start in the field with a bachelor’s degree. Brokers also must be licensed. According to Investopedia, registered brokers who work in the United States must hold the Series 7 license (also known as the General Securities Registered Representative Examination license), as well as the Series 63 or Series 66 licenses, and must be sponsored by a registered investment firm. Floor brokers in the U.S. must also be members of the stock exchange for which they work.
After passing the tests, brokers are considered trainees. New brokers can learn and take classes for up to two years.
Those who make it through the first few years usually stay in the business for a long time, enjoying the substantial client base they were able to develop, as well as higher salaries and better benefits.
Around five years into their careers, stockbrokers with management aspirations may consider earning their MBA degree, which frequently proves to be a direct route to career advancement.
About ten years into their careers, senior brokers are reaping rewards of their extensive training and education. High-level advancement for stockbrokers can include managing more and larger accounts or earning a partnership in their firm.
Job Outlook and Growth
Although the financial services industry has seen moderate consolidation in recent years, the BLS projects employment of financial managers to grow by 15% between 2019 and 2029, which is much faster than the national average.
Competition is intense, largely because of the high pay associated with the job. Applicants with previous job experience or MBA degrees typically have the greatest chance of landing a position at a respected firm.
According to information obtained by the Financial Industry Regulatory Authority (FINRA), the number of average daily transactions, as well as average daily volume (in billions), increased significantly between 2017 and 2019. This was consistent across the Exchange, Alternative Trading System, and Non-Alternative Trading System (OTC) models.
A shrinking international market can also impact a stockbroker career in the years to come. However, while increased globalism may appear to bring along increased competition from international markets, the opposite is true — at least, for a savvy financier. MBA holders are better positioned to engage international commerce to prepare for greater opportunities in emerging markets.
The Impact of Technology
The introduction of online brokerage firms such as E*Trade and TD Ameritrade 30 years ago thrust the career of a stockbroker from the days of ticker tape directly into the digital age. However, the complete paradigm shift is already here.
Blockchain, which is the foundational and technical underpinning of Bitcoin and other forms of cryptocurrency, can make stock exchanges much more efficient through interoperability and transparency. It provides a level of automation that offers huge potential for trading, securities lending, repo/margin financing, and monitoring systemic risk.
In fact, a 2018 survey at the Davos World Economic Forum suggested that by 2027, an estimated 10% of international GDP will be stored on blockchain. A stockbroker’s career will ultimately benefit from balancing a firm knowledge of traditional securities trading, along with understanding the mechanics of blockchain and how it relates to global markets.
Focus Your Future on Economic Independence and Creating Your Own Path Forward
The University of Alabama at Birmingham offers an online MBA program that provides the depth of knowledge you need to excel in multiple aspects of domestic, regional, and international business. Course curriculum includes an emphasis on investment and portfolio management, mergers and acquisitions, financial risk analysis, treasury management, and other aspects of a stockbroker career.
Classes combine traditional instruction with online technologies that offer a modern perspective of business combined with proven best practices that have shaped business and finance for generations. Online courses are completed collaboratively to provide real-world perspective reflecting a collaborative experience that can lead to career longevity and a high earnings potential.
Other program concentrations include marketing, management information systems, and health services. For more information, explore the University of Alabama at Birmingham’s online MBA website.
Bureau of Labor Statistics, “Financial Managers”
Financial Industry Regulatory Authority (FINRA), “Statistics”
Financial Industry Regulatory Authority (FINRA), “Market Data“
Investopedia, “Breaking Down Financial Securities Licenses”
Learn How to Become, “Stock Broker Careers & Degrees”
Medium.com, “Future of Stock Trading”
Princeton Review, “A Day in the Life of a Stockbroker”