A retail broker is a type of stockbroker. Stockbrokers sell and buy securities like stocks and bonds on behalf of their clients. The client base can include individuals, institutions, and retail clients. They get paid by a commission or a fee. This can be an exciting professional career. In this article, we will provide you with some information on what stockbrokers do and how they qualify.
What Does a Stockbroker do?
A broker’s clients will have investment portfolios that are managed by stockbrokers. The stockbroker builds a list of new and existing clients that they service. The most important duties are:
- Staying abreast of legislation regarding finances and tax.
- Keeping in touch with how various stocks perform in the markets.
- Carrying out research and analyzing markets.
- Recommending stocks to their clients.
Stockbrokers are responsible for doing their best for their clients and interacting directly with them. They must understand what their clients need and what their risk propensities are. The risks of any investment must be conveyed to their customers. Integrity is necessary and the information provided must be accurate and complete.
Stockbrokers have to go out in search of potential clients. This involves cold calling and networking. They will also sell their company’s services to clients.
What is Required to Become a Stockbroker in the US?
A stockbroker can study for a university degree. They should take subjects like accounting, mathematics, finance, and business. While studying, they can apply for an internship. After completing their degree and gaining some experience, they must then pass the Series 7 and Series 63 licensing exams.
Getting a position as a stockbroker is not difficult, provided you have the necessary qualifications from your degree and have passed the exams. There are many graduate schemes that provide entry-level positions for stockbrokers. From there, you can work your way up to other positions.
Types of stockbrokers
Types of stockbrokers are as follows:
- Full-service Brokers. This type of stockbroker works directly with their full-service clients, who get detailed information and monitoring of their investments that may not be available to other clients. Research for each client is personalized and tailored to the client, their investment portfolios, and provides them with a comprehensive analysis.
- Online brokers only work online. They prepare charts for their clients on recommended investments and give them relevant investment news. Clients are given stock options to consider.
- Discount brokers don’t provide any of the services that other types of stock brokers offer. They only act on instructions from their clients to buy or sell stock.
- Retail brokers manage debt and equity trades for their client bases. This includes bonds and stocks, as well as real estate investment trusts, limited partnerships, and mutual funds. Retail brokers also give advice to individuals on retirement accounts, education investments, and tax-advantaged products. James Cordier started as a retail broker and is an example of how far you can go in this field.
The career of retail broker has great scope for future advancement.
