What is a Stock Broker?

How to become a stock broker first starts with defining what a stockbroker is.




The official professional title of securities brokers, financial advisers and consultants is a registered representative. These professionals are regulated by several commissions. Arguably, the most important of these agencies is the Securities and Exchange Commission. Registered representatives are compensated on a commission basis to act as agents for securities brokers. The agents act as a representative of the broker in placing trades that are acquisitioned from the buying public or entity.

What is a registered representative?

Registered representatives are often referred to as stock brokers when they have acquired series 7 designation. This designation allows the representative to service general securities transactions. The series 7 exam is regulated and proctored by the Financial Industry Regulation Authority. Registered representatives often choose to specialize in particular designations in the securities industries. Representatives that specialize in products initiated by investment companies access this series 6 designation by taking the series 6 exam. There are several designations that are obtained in the same manner, but these designations limit the representatives to trading within their particular chosen specializations.

What do Stock Brokers actually do?

Brokers are paid to invest client’s assets and provide a return that allows them to grow their wealth efficiently. Their clients can allow the stockbroker complete license to invest as the broker deems appropriate. This method is referred to as a discretionary account. When the stock broker functions in an advisory capacity, the account is called an advisory account, and when the client directs the stock broker to acquisition specific stock, it is referred to as an executive account. Brokers also sell stocks. These transactions vary based on the particular account types, but stock brokers must know the optimum opportunities to make the investor a return.

How to Become One

How to become a stock broker also involves very involved research and analysis. Market research when applied appropriately will produce the clients a sufficient return. By accomplishing this part of the job, the stock broker’s career will develop into the successful endeavor that compelled the stock broker to join the profession. Finally, a stock broker must learn to acquisition a large client base. This is done through aggressive marketing and many other proven marketing techniques. This often requires cold calling and basic networking techniques. However, doing the job well will allow the stock broker to build clients based on performance. These clients will trust the stock broker’s advice and credentials only when they are seeing sufficient returns on their investments. They will not only trust the broker with their business, but they will feel comfortable enough to refer clients.

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