How to Become a Stockbroker Research Paper

Excerpt from Research Paper :


The basic qualification you need (to become a stockbroker) is an interest in the market. But if the reason for your interest is to simply gain more money, you may end up frustrated" (Morgan).

Before you actually get in the industry, you have to understand that normally, stockbrokers do not become stockbrokers right after graduation. To start in the industry, you need to prepare yourself to acquire a license. To acquire your license, you have to find a brokerage firm. "You need to be with this firm for at least four months to take the General Securities Registered Representative Examination. After passing that test, many states require you to also take the Uniform Securities Agents State Law Examination" (Morgan).


If you wish to pursue a career as a stockbroker, education is very important. There isn't really a limit on how early you can acquire stockbroker skills. In high school you can follow courses in mathematics and economics. Afterwards you can go to one of the many colleges that provide useful courses for a stockbroker wannabe such as statistics and advanced economics. Further still you can achieve a masters degree in a relevant field that will give an edge as a stockbroker (How to Become a Stockbroker).

Though it is not required that a potential stockbroker have a college degree, today, it is important that you graduate from college. "Ideally, the education you will undertake will be two-fold. On the one part you need to know something about math and how to invest money. On the other hand, you also need to know how to get access to information on short notice" (Learn how to become a stockbroker). Most current stockbrokers recommend college level courses and even a major in business or finance. Though these courses and majors are not required, they will certainly help prepare you for the career and the exams you need to become a stockbroker.

More specifically, The Keller University Graduate School of Management has many different classes and programs that one can take to fulfill his or her dreams of being a stock broker in New York. The Keller University is a part of the DeVry University system. Such classes and programs include Accounting and Financial Management, and Public Administration. These classes are programs that one can develop a Master's degree with. Classes for the bachelor's degree include Accounting and Financial Analysis. These are programs necessary for any potential stock brokers in New York (Stock Broker Jobs in New York - What Education Do You Really Need?).

An online college that can be extremely good at helping one become a stock broker in New York is the University of Phoenix (Stock Broker Jobs in New York...).

Rita Henry, contributing editor to leading web sites for the stock broker industry, cautions,

No matter what college or school one wishes to attend to get the bachelor's degree or higher needed to be a stock broker in New York, one must be sure that the school is accredited" (Stock Broker Jobs in New York...).

What's Next After College?

Similar to becoming a photographer or artist, if you want to know how to become a stock broker then it is important that you start your own investment portfolio that can track your investment successes. You can then use this portfolio as a showcase to try to make sure you have the trust and confidence of others when it comes to showing you know how to trade on your client's account. Again, not required, but it is a great idea in parallel with your college courses (Learn how to become a stockbroker).

Then, as soon as possible, apply for a position with a brokerage firm. You must do this before you actually take your tests (see Series 7 Exam below). If you can "intern" in parallel with college -- even better. This will allow you to get the training that you need to actually do well on the test. In fact, many brokerage houses will help you to prepare for it during the first four months that you work with them (Steps to Become a Stockbroker).

The Series 7 Exam..and Series 63...and 65

To be licensed to sell securities to individual investors, brokers must pass the Series 7 exam, also called the General Securities Registered Representative Examination. The six-hour test requires knowledge of specific securities, the concept of suitability, the securities markets, and various aspects of maintaining customer accounts, stocks, bonds, options, mutual funds, direct participation programs, and variable annuities, but not commodities or futures contracts.

Anyone taking the exam must be sponsored by an NASD member firm or an industry self-regulatory organization (SRO) (Series 7).

One of "Emily's" first comments after failing the Series 7 Exam was, "I studied the wrong way" (Series 7 - Exam Candidate Interviews). She said she had repetitively worked the CD ROM and was essentially memorizing questions. Emily had taken an exam prep course and used the CD she received with the materials for four days, for six or more hours a day.

The Uniform Securities Agent State Law Examination, commonly referred to as the Series 63, is developed by NASAA and is administered by FINRA. The examination is designed to qualify candidates as securities agents within a state; nearly all states require individuals to pass the Series 63 as a condition of state registration.

You will hear this again and again from many who have tried to study for the tests individually, "You are better off getting a job with a local broker and have them help you with the test"(Becoming a Stock Broker?).

There may also be another qualification test for those that are looking to become a stockbroker according to NASAA:

The Uniform Investment Adviser Law Examination and the available

Study outline were developed by NASAA. The examination, called the Series 65 exam, is designed to qualify candidates as investment adviser representatives. The exam covers topics that have been determined to be necessary to understand in order to provide investment advice to clients" (Series 65 Resources and Study Guide).

Ups and Downs

Since the Great Depression, we have not seen a stock market as down as it is today. Not only is the stock market down, so are the stock brokers. To get an idea of what life as a stockbroker can be, we'll look at Stephen Hopson, a Merrill Lynch stockbroker who, after four successful years in the business, left to become a motivational speaker. This is neither a uniquely negative perspective or positive one -- just one man's experience.

His interview experience was extensive and exhausting, "Over the next five months, I interviewed with twelve officers of the firm, each of whom invariably tried to discourage me by saying, "you are better off in a safe 9 to 5 bank job," "you won't make it," "80% of newcomers fail within their first year" and "you have no investment experience" (Hopson).

He finally got the job, but with exceptions. He had to quit his current job within two weeks so he couldn't fall back on it, and he had to pass the Series 7 exam on the first try. Hopson remembers that he was "shaking like a leaf," his throat was dry, and he desperately needed a glass of water, "I remember that I stood there thinking, 'I stand to lose everything if I fail that exam.'" He passed, got his license and "spent the next six months eating peanut butter, pasta and cereal while he burned the midnight oil and beyond studying and building up his client base.

It was a grueling time with no social life at all; I was totally exhausted and ready to quit."

One of most difficult and challenging aspects of being a stockbroker is making the largely dreaded 'cold calls,' Hopson says. "We were required to make phone calls to literally hundreds of prospects each day, many of whom have never heard of us, in an effort to solicit new business. Rejection was a way of life. In addition to cold calling, I also had to coddle very nervous clients during roller coaster stock market conditions. This was no easy feat" (Hopson)!

Eventually, for Hopson, the work paid off and in the four years he was there, he increased his sales 1700%, became one of the top salesmen, and handled multi-million dollar portfolios for wealthy clients. He was making a six-figure income, had earned recognition and sales awards. He quit when he decided something was missing and he was feeling spiritually empty and depressed. By the way, Hopson is disabled. He's deaf. Big ups...and big downs.

What Do People Think About Stockbrokers

In an October 28, 2008 Harris poll, Wall Street was blamed by 85% of the public for the economic and financial crisis, second only to banks and financial institutions. Not to beat a dead horse, but in an August, 2008 poll, stockbrokers were in the bottom five careers, the public named, with the least prestige. And, finally, dated March…

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