Learn How To Become a Stockbroker

When researching how to become a stockbroker, you’ll find that having a college degree isn’t required, only recommended.

However, it’ll be harder to get established without one.

Many brokerage houses won’t accept individuals without a degree in either finance, business, accounting or economics.

With some extra education in your background, you’ll look more attractive to potential firms and will have sufficient knowledge of the financial industry.

But when you get down to it, in order to have the ability to sell and buy securities, you need to have a broker’s license. And the Financial Industry Regulatory Authority (FINRA), not a college institution, is the head of all security licensing procedures and provides many of the exams required in this industry. The main exams that you’ll need to focus on in learning how to become a stock broker are the series 7 and 63 exams.

Read More: Find Out How to Market Yourself as a Stock Broker Here!

How To Become a Stockbroker

How to Become a Stock Broker

The Series 7 Exam:

This exam is necessary to receive the Series 7 License also known as the general securities representative (GS) license. Once passed, you’ll be able to buy and sell individual securities like stocks, bonds and call and put options.

The Series 7 exam itself has 260 questions (10 of them being pre-test questions that are not counted against your score) which are broken down into two 3-hour sessions. Sponsorship from a FINRA member firm, an exchange or a self-regulatory organization (SRO) is required. So they’ll pay the $305 fee required to take the exam.

The Series 63 Exam:

This exam does not require a sponsor, all you need to do is fill out form U10 and pay the $115 fee associated with this exam. However, you can be sponsored by a member firm if desired. The Uniform Securities Agent Law Examination will, once passed, award you the Series 63 License which allows you to sell securities in a particular state.

This means that you thoroughly understand the Uniform Securities Act and are aware of state laws regarding buying and selling securities. This exam comes from the North American Securities Administrators Association (NASAA) and is administered by FINRA. You have 75 minutes to complete all 60 multiple choice questions.

 Keep in mind that some states do not require the Series 63 License. They are as follows:

  • District of Columbia
  • Florida
  • Louisiana
  • Maryland

  • Ohio
  • Puerto Rico
  • Vermont
  • Colorado

One Important Note:
For FINRA licensing exams, you cannot take these test anywhere. You have to choose an approved testing area which can be found in either of these two websites: PearsonVue.com or Prometric.com.

When Finding A Job, Your Personal Finances Will be Checked

how to become a licensed stock broker

Another important fact to keep in mind in regards to learning how to become a stockbroker is that when you’re applying for a position at a brokerage firm, a credit check will be done to ensure you have adequate financial management skills.

It’s pretty obvious why this is an important detail, in virtually all financial careers, how you manage your money can reflect how you might manage your client’s money.

Furthermore, It’s actually against FINRA regulations not to disclose bankruptcy filings, among other things, on Form U4. They’re so serious about brokers being upfront that If you file for bankruptcy protection, you’ll have 30 days to report that event before being charged a late fee of $100. And every day after that there’s a $25 fee if you continue not to disclose with a max fee of $1,575.

Other more serious offenses like felony criminal convictions and illegal investment activities that fall under the Statutory Disqualification category must be reported within 10 days of an event before a late fee is charged.

You can check for information like bankruptcy filings with FINRA’s BrokerCheck. Bankruptcy filings over 10 years old are removed from the system.

How to Become a Stockbroker – Building Clientele

How to Become a Stockbroker

Another aspect to knowing how to become a stockbroker is generating and maintaining clientele. This is absolutely crucial for a stock broker to be successful. Some would say it is the “bread and butter” of the business. Some very important ways stock brokers build their clientele is initially through networking.

Turning to your family, friends, neighbors and others is a start. Also, building websites/blogs, hosting seminars and cold-calling are other ways stock broker build a client base. Social media can help too.

Once you’ve been established as a stock broker, your success will depend on your ethics, market research ability and professionalism when interacting with clients. Also, always strive to learn more about your profession as this will make your more valuable to your clients and the firm you are working under.

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