Securities Broker

Stock brokers invest in the financial markets on behalf of individuals or corporations. A stock broker must obtain a license through the Securities and Exchange Commission before they can legally buy and sell stock. In order to become eligible for this securities exam, the potential financial advisor must work with an investment brokerage for 4 months. In addition to the work requirement, they must have the sponsorship of an investment brokerage before making application for the exam. A college degree is not required to sit for the securities exam; however, it may be required for further certifications or for advancement into management positions. Those interested in pursuing a career in the securities exchange industry must enjoy the challenges, risks, and competitiveness that is an integral part of the profession. Without a genuine interest in the stock market, a broker will not be successful. The demands and pressures in this career field are high, and only a true interest in the industry will motivate the financial counselor to excel.

A stock broker's job is to explain the market to his client while gathering information about his financial history, goals, and future expectations. Financial advisors undergo a rigorous training period that typically lasts 2 years before they are adequately qualified to give advice on stock market happenings. When searching for a financial expert, experience and referrals are the distinguishing choice. There are over 327,000 stock brokers in the United States, so sifting through the masses to locate a professional, intelligent, and market savvy broker may take some time. He can work as an independent agent with a brokerage firm or as an employee for a corporation. Most stock brokers work independently, gathering their own clients while using the umbrella of a larger brokerage firm for making transactions. They are typically paid on a fee-basis or commission basis, in addition to receiving a portion for the transaction fees.

Most investors will have to use a stockbroker at one time or another. There are certain company's that sell shares to private citizens, but there are usually minimum purchases, for example: 10,000 shares. Those who want to diversify their investments (not putting all their eggs in one basket) will need to utilize the services of a brokerage firm. It will have outside financial planners as well as in house professionals in order to develop a portfolio that suits the needs and income of the investor, whether he is an individual or a corporation. The exams that a stock broker must pass are very comprehensive and difficult. The securities exam itself is a six hour exam consisting of 250 questions divided into 4 parts. In the morning, 125 questions are answered, and in the afternoon, the last 125 questions are answered. In addition to that, he must answer 10 extra questions woven into the exam. This allows for the test committee to ensure that new questions meet acceptable standards. These extra 10 questions are not scored. The potential stock broker must receive a 70 percent or higher on the exam to pass. The pass rate is only 33 percent on the first try, so those interested in investing others' money should study hard and become very knowledgeable before taking risks.

Passing the securities exam will require special effort on time and patience, but the rewards will be great in the nation's most fascinating industry. It is not uncommon for a stock broker to net over $100,000 within the first few years. A successful broker may net an annual income of $400,000. The securities industry, as a professional career, is a make or break industry. Professionals are either successful and enjoy the fruits or their labor, or quit because the hours are too grueling. People face investment decisions during their lifetime. They can choose to place all of their money in a bank certificate of deposit (CD) or savings account where the money will grow at a fixed interest rate, albeit lower, considering the average rate of inflation the past decade has been around 4 percent. For example, if an individual deposits $20,000 into a CD with a 5 percent interest rate, over a 10 year period, if inflation percentages remain, that individual would have only realistically gained 1 percent. Even though they earned the 5 percent rate and $12,578, that money is now really only worth $2515.

While this amount certainly is better than nothing, an investor can earn more with professional investing advice. Stock brokers can take that same $20,000 and invest it in relatively safe diversified mutual fund accounts where the average rate is 11 percent. This means that the investor ends up with $31,875 over the 10 year period. Deduct for 4 percent inflation, and the investor has made a realistic net amount of $20,284 for ten years compared with the $2615 from the bank CD. Whenever investing in stocks or mutual funds, there are risks not associated with the low rate CDs or Bonds, but if the investments are properly diversified by the stock broker, the risk is minimal. God tells us to "be wise now therefore" (Psalm 2:10). This means being good stewards of our wealth. Wise investments are part of our stewardship.