Average Stock Broker Salary
“An investment in knowledge pays the best interest.”
– Benjamin Franklin
The Stock Broker job outlook is expected to climb 11%, or about as fast as average, according to the Bureau of Labor Statistics. In May of 2014 the stock broker salary median was $72,070 a year or $34.65 an hour.
Stock brokers are paid a base salary but also earn commission and bonuses. Commissions are directly connected to how well they’re able to solicit clients to trade securities.
This also provides great motivation to building a client base as the more clients you have, the more money you’ll make.
How Can Stock Brokers Earn More Money?
They can be financial advisers to their clients performing other financial services while also working in person with a client to establish investment goals. These types of stock brokers, or full-service brokers, require higher fees and, therefore, earn a higher stock broker salary.
Responsibilities of a Full-Service Broker
A full-service broker, also known as a financial advisor, stays on top of the latest investment strategies by performing market research and detailing that info to their client making them more valuable. This is especially true if their projections on where the stock market will go turn out to be correct.
This is why it’s important for a full-service stock broker to be on top of his or her game to earn more referrals from a happy client thereby increasing business and a higher stock broker salary. Other responsibilities include:
- Estate Planning: Assist a client in determining how their assets will be handled after death.
- Offer Tax Advice: Help in identifying the best strategy for a client to save money when it comes to filing taxes.
- Retirement Planning: Guide their clients in establishing a plan for retirement savings and distribution of funds once retired.
Average Salary for Full-Service Brokers in Selected Firms:
|Wells Fargo Advisors||$60,530|
|J.P. Morgan Chase||$33,297|
Values according to Payscale.
What Education is Required?
To be an effective stock broker and receive a greater stock broker salary there are special on-the-job training programs which give a hands-on experience on how it’s like to execute trades on a daily basis.
And even though no degree is required, you’ll need to be licensed and that comes by taking the Series 7 exam which is administered by the Financial Industry Regulatory Authority (FINRA). This test qualifies you by FINRA’s standards and ensures that you have sufficient knowledge to execute trades on the trading floor and give financial advice. This is a multiple question test and you’ll need a passing score of 72%. It’s a 6 hour test that you take in two 3 hour segments.
FINRA is a self-regulatory organization that manages all the exams that lead individuals to becoming financial professionals. There’s a series 6 exam which allows those who take it and pass to sell bulk investment products that include mutual funds or unit investment trusts. Passing the series 7 exam, however, will qualify individuals to sell a wider range of securities which include stocks, bonds and options.
Average Stock Broker Salary by Company
According to Glassdoor.com, here are the average stock broker salary from investment companies that have been updated for the year of 2014. Glassdoor stock broker salary reports are submitted by actual stock brokers from each company so this will give you a pretty good idea at how each company pays their employees:
(1) – Scottrade: The average stock broker salary from this company is $43,800 which was submitted by 30 employees. In addition to salary, stock brokers here receive bonuses that average to $3,518 per employee.
(2) – Charles Schwab: This investment company pays their stock broker’s an average salary of $43,976 and awards bonuses worth up to $4,872 and stock bonuses worth $392.
(3) – E*TRADE Financial: A stock broker salary working at this online investment company can be about $41,500 and bonuses worth $2,333.
Two Different Career Paths – Trader Vs. Broker
There are two paths you can take when deciding to buy and sell securities on the stock market. There are stock brokers and stock traders. Even though they mostly do the same thing there is a distinction between the two jobs.
For instance, a stock broker is the middle-man between you and the stock you want to purchase just like a trader, however, they must have a strong sales quality. Stock brokers often meet with clients face-to-face working to build their client base whereas stock traders mainly work for large investment companies like Charles Schwab or Merrill Lynch on the floor of a stock exchange.
To be a stock broker you must have these skill-sets:
- Strong communication skills
- Able to make sells and build a client Base
- Stay up-to-date With the latest financial trends
- Be self-motivated as brokers can work for themselves as opposed to working for large investment companies
To be a stock trader try honing these skill-sets:
- Know when to pull out (or sell a stock) in order to cut your loses
- Able to stay consistent with a given trading strategy
- Always willing to learn no matter how long you’ve been on the trading floor
In any case, becoming a stock broker can be a fun and exciting career but also can be very competitive. One other obvious benefit to being a stock broker is that you’ll know the ins and outs of the market and will be able to invest your own money with a better return because of the knowledge you’ve obtained. Just remember that the harder you work at this profession the higher your stock broker salary can be.