Everything You Need To Know About How To Become a Stockbroker

By Indeed Editorial Team

Published 23 August 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you enjoy sales and have an interest in the world of finance, a career as a stockbroker may be a great fit for you. With a high earning potential and the fulfilment of developing your own base of clients, being a stockbroker can be a good career choice for a hardworking and ambitious individual. Learning about the primary responsibilities of a stockbroker as well as the educational requirements can help you evaluate whether this career is right for you. In this article, we explore how to become a stockbroker, share their primary job duties and answer some of the most frequently asked questions about this career.

Related: How To Become a CA: Complete Guide To Chartered Accountants

How to become a stockbroker

Here are the basic steps you can for how to become a stockbroker:

1. Pursue a bachelor's degree

Most employers require a bachelor's degree to qualify for entry-level positions in securities, commodities or financial services. There is no specific degree required, although a degree in business, economics, finance or accounting can help you prepare for your career as a stockbroker. Some of the coursework that can be useful includes statistics, mathematics and quantitative analysis.

To gain a competitive advantage over other candidates, you may also want to pursue a Master of Business Administration. Employers often reward candidates who have obtained their MBA with more advanced positions, better compensation and larger signing bonuses.

2. Complete an internship

As you are pursuing your degree, look for internship opportunities. Many brokerage firms hire interns to work in their offices. In addition to providing the opportunity to apply your knowledge and gain work experience, internships can also help you create valuable connections with other professionals in the financial industry. This is also a great way to get access to additional job training that many brokerage firms provide to new stockbrokers, which can give you a competitive advantage over other candidates in the job market.

3. Register with a stock exchange

To become a stockbroker, you must register and become a member of a stock exchange first. There are several active stock exchanges you can explore, including the Bombay Stock Exchange (BSE), MCX Stock Exchange Ltd. (MCX-SX), Calcutta Stock Exchange, United Stock Exchange and National Stock Exchange (NSE). Stockbrokers who register with a stock exchange are able to act as agents on their behalf by purchasing and selling stocks. After you complete your registration, the stock exchange you belong to provides you with a registration ID that you can use when you begin trading for your clients.

4. Apply for your Certificate of Registration through SEBI

Before you can become a licensed stockbroker, you need to register with the Securities and Exchange Board of India (SEBI) to obtain your Certificate of Registration (CoR). SEBI oversees all stockbrokers to protect investors and regulate the market. You can visit SEBI's office in person or download a form from their website to apply. Some of the information the application asks for includes your name, address, permanent account number (PAN) and the name of the stock exchange of which you are a registered member. If SEBI accepts your application, you can pay a membership fee to join and begin trading.

5. Pursue additional certifications

While you can begin trading stocks on behalf of your clients as soon as you receive your CoR from SEBI, some broking firms may require you to complete additional certification through the National Institute of Securities Markets (NISM). This program educates investors, sub-brokers, stockbrokers and other financial professionals about the stock market. You can register to take this exam online and review practice tests on NISM's website to help you prepare.

What does a stockbroker do?

A stockbroker is a licensed professional who has the authority to buy and sell stocks and other securities on behalf of clients. The clients they work with may be individuals or institutions. Stockbrokers receive their payment through a commission in the form of a flat fee or percentage of the value of each transaction they make. Stockbrokers must be well-versed in the markets to offer their clients advice on when to buy and sell. They are responsible for finding their clients the best prices on stocks. Some of their primary duties include:

  • Providing accurate investment advice to clients

  • Managing client investment portfolios

  • Accurately evaluating financial reports

  • Staying up to date on the latest financial news

  • Updating clients regularly regarding the status of their investment portfolios

  • Making changes in investment strategies based on client goals and market conditions

  • Finding new clients through cold calling and networking

Related: What Is an Investment Banker? Definition and Career Advice

Average salary for a stockbroker

The average base salary for a stockbroker is ₹23,102 per month. The amount you earn as a stockbroker may vary based on your education level, work experience and skill set. Where your job is located and the cost of living in your area may also impact your salary.

Skills for stockbrokers

Here are some skills that can help you advance in your career as a stockbroker:

  • Research and critical thinking: Stockbrokers research market trends to provide their clients with the best investment opportunities. They also use their critical-thinking skills to assess their client's financial goals so they can develop investment strategies for them.

  • Interpersonal skills: It is important for stockbrokers to build trust with each of their clients so they feel comfortable allowing them to make financial decisions on their behalf. Practise active listening and use clear, concise language when speaking with clients to ensure a mutual understanding.

  • Wealth management: A successful stockbroker leverages their industry knowledge to help their clients maintain and accumulate financial wealth. Stay up to date on current investment opportunities so you can offer your clients the best advice.

  • Negotiation skills: As a stockbroker, you may negotiate trade costs, commissions and the number of portfolios you manage. Honing your persuasive skills can help you compromise with other financial professionals and institutions successfully.

  • Mathematical skills: Being able to calculate percentages, dividends and profits quickly can help you remain competitive in the stock market. Hone your mathematical skills and familiarise yourself with different software programs that can help you ensure your calculations are accurate.

  • Problem-solving skills: While research and strategic planning can help you mitigate risks, there are still some circumstances where you may need to rely on your problem-solving skills to adapt to unforeseen circumstances. Studying different problem-solving strategies and being aware of emerging market trends can help you provide advice to clients who need to recover from financial challenges.

Related: Interpersonal Skills: Definitions and Examples

Frequently asked questions about being a stockbroker

Here are answers to a few of the most frequently asked questions about being a stockbroker:

Is being a stockbroker a good career?

Stockbrokers can become very successful over the course of a career. One of the major pros of this job is that you earn a base salary in addition to commissions and bonuses. This means that the more clients you sign and the more trades you make, the more you can earn.

How do you build a client base as a stockbroker?

There are many ways to look for new clients. Some of the most common methods are:

  • Making cold calls to open new accounts

  • Contacting pre-qualified prospects who your firm or a marketing firm provides

  • Contacting relatives or friends asking for referrals

  • Leveraging organisation memberships, such as a local chamber of commerce

Related: What's the Difference Between Sales and Business Development?

What is the typical work environment for a stockbroker?

Stockbrokers usually work for a financial institution and spend the majority of their time in an office setting. They may also travel to meet with prospective and current clients. Their work tends to be fast-paced and may be challenging at times. Stockbrokers must communicate with their clients regularly to provide updates regarding their investments.

Stockbroker job description example

Here is an example of a stockbroker job description to help you prepare when you begin applying for jobs:

United Financial, Inc. is seeking an experienced stockbroker to add to our growing team. The ideal candidate will have extensive corporate client investment experience as well as a background in personal investment trading. To succeed in this role, the candidate will need to have excellent communication, critical thinking and negotiation skills. A minimum of a bachelor's degree in finance or a related field and registration with the Securities and Exchange Board of India is required. NISM certified candidates preferred.

Please note that none of the organisations mentioned in this article are affiliated with Indeed.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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