The lifeblood of the stock broker is not in making the right decision on a business every time; it is in the commission that he receives every time a trade is made on behalf of an individual.
Any major study of top stockbrokers will show that an overwhelming majority of the “Masters of the Universe” are actually just salesmen with an expertise in making their commissions go up.
Below are a few ways that a stock broker can legally increase his or her commissions.
1 – Compare Salaries from Different Companies
This is by far the most effective way for a stock broker to increase a commissions and salary. Companies in different areas of the country can pay stockbrokers different rates. It can depend on the demand of stockbrokers in that city, the type of company and the cost of living in the area. It’s a good idea to compare salaries from brokerage firms that can be found at glassdoor.com or payscale.com.
2 – Sell more than just Stocks and Bonds
Depending on the company they work for, stock brokers can earn a higher commission selling other products beyond stocks and bonds. For instance, insurance and annuities offer higher commissions for stockbrokers at many large brokerage firms. They can receive a higher percentage of the sale of an annuity or insurance than any other type of security. This, however, has led to a bit of controversy because it can make a broker more hungry for profit than for the needs and wishes of their client.
3 – Raise the overall production level
When a broker generates fees and commissions for brokerage firm, not all of that money goes to the broker. Some of it goes to the brokerage firm for administrative costs and other expenses. However, the higher productivity that an individual broker has, the greater of a percentage that broker will receive of the fees and commissions that he or she generates.
4 – Raise the number of transactions
It’s simple math, the more transactions, the more you get paid. Volume has to do with the total number of shares that trade because of the actions of a broker. The number of transactions is simply the number of transactions that are performed.
If a broker creates transactions in large blocks rather than in small ones, that broker will receive less of a commission than the same volume of shares traded in smaller lots. Individuals who trade often receive a discount for trading in large lots of shares. This means that the lower amounts of shares traded actually receive a higher percentage of commission fees.
5 – Raise the total number of clients
The more clients that a stock broker has, the more that he has an opportunity to increase productivity and spread volume over a larger amount of transactions. The stock broker also has opportunities for combining and splitting shares and transactions to his benefit to and from the different accounts that are controlled by him. All of these are legal maneuvers that are regulated by the federal government. As long as you’re able to satisfy your clients needs and are not overwhelmed, this is definitely a great way to increase revenue.