Stockbroker 1

Term Research Paper - Stockbroker

Carl Tuitavuki

Salt Lake Community College

BUS-1010-413-F17

Dr. Cindy Briggs

November 14, 2017

Term Research Paper - Stockbroker

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A job that I have always been interested in is a stockbroker. Growing up I have always

wanted to work right where the moneys at and it seems like being a stockbroker is the perfect

way to do it. It seems like the the perfect job to get big gains if you know what youre doing, and

essentially making your own money work for you by investing. In order to become a stockbroker

however, like most career paths, takes a lot of time, as well as educational requirements. This

essay will explain in detail the career path of a stockbroker and how you can become one.

Everyone has heard of the term stockbroker, what what exactly do stockbrokers do?

Stockbrokers buy and sell stocks on the behalf of clients. They make their money by receiving

commission for the transactions that they make for each client. Stockbrokers are usually

associated with brokerage firms, in which they trade stocks or securities, through retail as well as

institutional clients. The average stockbroker generates approximately 1% revenue on their assets

under management, which are the total value of assets they manage for their clients.

Stockbrokers get to keep 30-40% of that revenue. In day to day life, being a stockbroker is

compared to being a small business owner, as a stockbroker must spend their day marketing

themselves to clients in order to make commission. It is especially hard for a new broker to come

up in this business because they usually have to work twice as hard in order to find clients with

assets to invest. Stockbrokers tend to make their own daily schedules, but they usually spend

their time studying the stock markets, as well as conversing with existing clients with investment

recommendations for their portfolio. Stockbrokers are always networking, making connections in

order to expand their clientele as well as holding seminars and webinars, teaching prospective

clients and potential investors. Often stockbrokers must answer questions from clients regarding

their securities being traded on behalf of them. Stockbrokers know what the market is doing so it

is their job to inform their clients on whether or not to buy or sell their securities. Stockbrokers
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must have the analytical skills in order to analyze securities and commodities, and also be able to

pass on this information to clientele. Stockbrokers must use their knowledge of the market to

their advantage in order to persuade and to help their clientele invest in the right securities.

Before becoming a stockbroker, you must go through an internship process to gain the

som experience needed to actually become a stockbroker. Most brokerage firms and investment

banks have internship programs where aspiring stockbrokers can be hired at to make connections

and build relationships to secure a better chance at landing a job there after graduation. It is ideal

to treat an internship as an extended job interview, as well as a great opportunity to get hands on

training with other stockbrokers. You will get to see the work before your own eyes and it will

most test your limits to really see if you got it in you to become a stockbroker. It is an excellent

way to gain experience and get the upper hand on the competition.

You can become a stockbroker as long as the proper licenses are obtained. In order to

obtain those licenses however, you must pass both exams Series 7, and either the Series 63 or

Series 66 exams. The Series 7 exam, also known as the General Securities Representative Exam,

is a six-hour exam with 260 questions. In order to pass the exam you must get a score of at least

72%. The Series 63 exam, otherly known as the Uniform Securities Agent State Law Exam, is

much shorter than the Series 7 exam, having 65 multiple choice questions. You must also have a

72% or higher on the exam in order to pass. The Series 66 exam, or the Uniform Combined State

Law exam, is a 100 question multiple choice exam with 10 pretest questions. You score at least

73% on the exam to pass. In order to get these licenses it is required to be sponsored by a

Financial Industry Regulatory Authority registered firm or investment bank.

Besides having a high school diploma and obtaining the required licenses, in order to

advance in your career as a stockbroker and take it to the next level, you must have a college
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education. It just isnt realistic if you dont have one. In most cases, in order to work in a

brokerage firm or an investment bank, a Bachelors degree is required for entry level

commodities, securities, and financial service sales positions. Any bachelors or masters degree in

finance, economics, accounting, or business, could go a long way in the stockbroker world, and

could up your chances for a better future in this market. Taking classes in mathematics and

statistics would also be handy skills to have while working as a stockbroker. A finance degree

would be ideal because you will learn helpful skills such as financial computing, global

investments, and risk management while a business degree will give you knowledge of business

operations, strategic accounting, business analytics, microeconomics, as well as a broad

spectrum of other skills that could potentially come in handy while working as a stockbroker.

Although you dont need any specific degree to become a stockbroker, these are some of the

degrees that could potentially help jump start your career as a stockbroker.

Not everyone is cut out to be a stockbroker, but I believe that the key to success in this

field is to approach every situation with optimism. Even when the market is doing bad and going

down, you can still approach clientele with positivity, making the best out of bad situations.

However, if you go in there with a pessimistic negative attitude, you wont get any clients

wanting to invest their valuable assets with you. The opportunities that this career offers is high,

but it doesnt come easily. If it was easy, everybody would do it. The process to become a

stockbroker can be very intense and quite stressful at times, but nothing good comes to those that

dont work. After a couple years of marketing yourself, networking, and making connections,

dividends will pay, and all the hard work you put in will pay off.

One of the more popular stockbrokers brought to light by the movie Wolf on Wallstreet

is former stockbroker Jordan Ross Belfort, who made millions marketing penny stocks by
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defrauding investors with a pump and dump scheme which is when a stockbroker inflates the

price on a cheap stock through false positive statements, essentially lying and prompting clients

to buy cheap stocks at a high price in order to get a high percentage of their clients money.

Jordan Belfort built his empire on lies and greed, and his brokerage firm Stratton Oakmont had

over a thousand employees, having stock issues totalling more than one billion dollars. He was

eventually convicted for securities fraud and money laundering. He lived a lavish lifestyle,

notorious for glorifying narcotics and prostitutes, always partying with his employees. His

restitution agreement is that he has to pay 50 percent of his company to approximately 1,513

clients he defrauded. He is still paying that money back. According to www.time.com in 2014,

Belfort made $30,000 dollars per speech. He now works as a motivational speaker. I guess that's

not a bad job for someone who is good with words and persuasion. In 2017 however, it was

noted on www.tmz.com that Belfort still owes over 97 million dollars to the feds. Jordan Belfort

aka The Wolf of Wall Street is definitely a good example of the route you should not take

when becoming a stockbroker. You dont want to spend the rest of your life in debt, owing

hundreds of millions of dollars to investors and the federal government. The only way you can

ever be successful in this business is if you are legitimate. You must build a good reputation for

yourself and not scam people for their hard earned money.

As you can see from the paragraph above, there are many pros and cons of being a

stockbroker. In Jordan Belforts case, his pro was getting rich and drowning in money and his

con was getting convicted of money laundering and securities fraud. Things didnt work out for

him so well. For stockbrokers in general however, there are many pros and cons for choosing this

career path. Some of the pros to being a stockbroker is that you could earn a really good high

paying salary if you work hard enough for it. You just have to stick with it over time and your
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clientele will increase. There is always a demand for a stockbroker as well. We live in a time

where more and more people are willing to invest their money into the stock market, and their

needs to be stockbrokers out there to assist them. There are many opportunities as a stockbroker

to move up in brokerage firms as well, a lot of stockbrokers start off as interns but as they keep

progressing in their path as stockbrokers they can work their way up to higher positions in

companies. Aside from making a lot of money, these are just some of the other pros of being a

stockbroker. Some cons to being a stockbroker is that the markets pretty much determine your

income. If the markets are doing bad, then the less likely you will be able to get clients to invest

money with you. There is also a stress factor that comes from being a stockbroker. It is a career

that demands patience and you must be able to perform under pressure. You also have to deal

with angry clients and investors from time to time and you need to be able to deal with them

professionally. Every career choice comes with pros and cons, but you got to look at the bright

side and stay positive through it all.

In conclusion, the reason why I chose to research this particular career is because I think

that I would make a good fit for it. Although math is not my strong point, I feel like I have the

determination and dedication it takes in order to be a good stockbroker. I know that it takes a lot

of sacrifice and hard work but even now I am learning more and more about stocks, securities,

commodities, and currencies every day, and also about how charts move in the market. I think

that I could be a good financial advisor to those who need it and I would be honest and genuine

in helping out the needs of a client. I am willing to work hard in order to be successful in this

field, and through education and dedication I will be able to achieve my goal. I believe that you

can do anything you put your mind to, and that at the end of the day, the sky's the limit.
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Bibliography

Cussen, M. (2016, January 19). Is a Stockbroker Career For You. Investopedia.com. Retrieved

from

https://www.investopedia.com/articles/professionals/040813/stockbroker-career-you.asp

Clark, K. (2017, June 5). What is a typical day in the life of a stockbroker for start to finish?

Investopedia.com. Retrieved from

https://www.investopedia.com/ask/answers/09/life-of-stock-broker.asp

(2017, October 17). Jordan Belfort. Wikipedia.com. Retrieved from

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https://en.wikipedia.org/wiki/Jordan_Belfort

(2017). Stock Broker Degrees & Careers. Learnhowtobecome.org. Retrieved from

https://www.learnhowtobecome.org/stock-broker/

(2017, October 17). Stockbroker. Wikipedia.com. Retrieved from

https://en.wikipedia.org/wiki/Stockbroker

Eichler, Alexander (2011, September 26). Stockbrokers More Competitive. Huffingtonpost.com.

Retrieved from

https://www.huffingtonpost.com/2011/09/26/stockbroker-psychopath_n_981950.html

(2017, September 2). Series 7 exam. Wikipedia.com. Retrieved from

https://en.wikipedia.org/wiki/Series_7_exam

(2015, January 25). Uniform Securities Agent State Law Exam. Wikipedia.com. Retrieved from

https://en.wikipedia.org/wiki/Uniform_Securities_Agent_State_Law_Exam

Luckerson, Victor (2014, May 19). The Wolf of Wall Street Says he is making 100 million this

year. Time.com. Retrieved from

http://time.com/104734/jordan-belfort-real-wolf-of-wall-street/

(2017, October 10) Jordan Belfort Still $97 Mil in the hole to Feds, and theyre coming for it!

TMZ.com. Retrieved from

http://www.tmz.com/2017/10/10/wolf-of-wall-street-jordan-belfort-owes-federal-government/
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