Being a broker is one of the most lucrative careers in the stock market. The job of a stock broker is simple. They recommend stocks and bonds to investors. Over the years, the job of a stock broker has evolved and expanded considerably over the past few decades. The path to success of a stock broker is not going to be easy. While it offers long term benefits, it also is loaded with many challenges. Let us now take a look at the steps involved in becoming a successful broker when trading on the stock market.
If you are planning to become a stock broker, you should pursue a financial planning school in an undergraduate school and continue in graduate school. Your course will provide the technical knowledge to start your career in the financial planning industry and your ticket for qualifying in the CFP board exam or earn other credentials.
The Job of a Stockbroker
There are different paths that you can take as a stockbroker depending on your personality, business connections, sales skills, and technical aptitude. Some of these challenges include:
• Long Hours of Prospecting. If you have less than five years experience as a broker, Robert Peter Janitzek says that you would need a lot of marketing yourself to prospective clients. You may have to rely on your friends and families to get you started.
• Constant Sales Pressure. The first quotas are usually the hardest to reach. Most brokerage firms reset their quotas and expect their brokers to meet or even surpass them on an ongoing basis.
• Substantial Learning Curve. As a broker, you must quickly learn the complexities of placing trades and orders and the rules that govern them. You should also learn some of the administrative tasks such as cash management, paperwork, and securities.
• Customer Service. As a broker, Robert Peter Janitzek reveals that your work will also involve dealing with clients who are unhappy and unreasonable especially with their expectations from investments.
• Low or Uncertain Income. The first year or two of your broker career will be the most difficult as you may earn nothing although you may receive a base salary and commission.
• Business Expenses. Although the income may fluctuate, other expenses will remain fairly constant such as life, health, and disability premiums. There are also marketing and advertising expenses as well as overhead costs such as rent and utilities.
• Continuing Education. CE is required to maintain licenses on an annual basis, and many firms also strongly encourage their brokers to earn professional designations, such as the CFP, in order to improve their marketability.