A Stock Broker's Life Part 1

At the request of Eddie Wu I'm going to elaborate on the job of being a stock broker. Mainly, what we do, how we do, the job requirements, etc etc. All of this will be taken from the perspective I have at my investment banking firm. So it might not be the same perspective some of you may get at a specific firm. If you're looking for the assignment, it is below this entry.

Ok to start, there are two ways to get into a firm as a broker:

1. They hire you and train you themselves to be a broker.
2. You came from another firm as a stock broker after applying or them seeking you out and recruiting you.

If you came through option 1, like myself, you need to pass a few exams. The primary one you MUST pass is the Series 7. Second, you will have to take either the Series 63, 65, or 66. The Series 66 exam is a combination of both the 63 and 65 tests so you get both licenses at once. Most firms will require you to get the 66 but some may opt for only the 63.

After you complete your licensing exams you will most likely work under a broker. This is the HARDEST time of any broker's life. Normally you will be required to open anywhere from 10-40 accounts for the broker you're working under. Basically this means you're opening all these accounts and making no money from it. However, if you have a nice broker, the accounts you open will be joint accounts where you and the broker split commissions. I have this setup at my firm so it works out ok for me.

Now the entire opening account thing works like this: You make a cold call utilizing a prospect card or some other type of information. Normally these are bought from a marketing company or something. Then you can either make a pitch to immediately open an account (which is the hardest) or just get their interest and contact information so you can send them a packet of info regarding your firm so they might open an account at a later date.

Opening accounts is a pretty rough time because most new brokers aren't used to making cold calls and take a few weeks to open a single account unless you get lucky. Our workday starts at 8am and lasts at least until 4pm. However, most brokers will work from 7-8am till 6-10pm or later.

Brokers do a lot more too. Generally speaking, most of us will do our own research and not always use the firm's analyst as our guide. Sometimes the brokers influence the analyst's ideas since brokers are just as capable of picking good stocks as an analyst. Usually this is true at least. Some brokers don't have the capabilities to pick quality stocks.

Welp, brokers do a lot more beyond this. But I'll stop here.

I hope you all get some information out of this and if you want me to post more about how stock brokers work at my firm and a few others, leave me a comment. Just a reminder, this view right here is of one firm only. Some other firms have different methods. IE: Merrill Lynch's brokers work in a different capacity. New broker's there who worked under a specific broker automatically get a piece of the action from the client's already established. So in essence, you already have hundreds of accounts at your disposal.

Questions? Comments? Criticism? Leave me a comment.