What Is a Stockbroker?

What Is a Stockbroker?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

A stockbroker is a professional who executes buy and sell orders for stocks and other securities on behalf of clients. They work at a brokerage firm, and their job includes a variety of different tasks. These tasks include researching investment opportunities, advising clients on investment strategies, managing client portfolios and handling the actual buying and selling of securities. They earn their income from commissions on the trades they execute, fees for managing portfolios, or a combination of both.

Related Questions

1. What qualifications do you need to become a stockbroker?

To become a stockbroker, you typically need a bachelor’s degree in a related field such as finance or business. You also need to pass the General Securities Representative Exam, also known as the Series 7 Exam, which is administered by the Financial Industry Regulatory Authority (FINRA).

2. What’s the difference between a stockbroker and a financial advisor?

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A stockbroker’s primary role is to buy and sell securities on behalf of clients, while a financial advisor provides a wider range of services. These include financial planning, retirement advice, tax guidance, estate planning, and more. Financial advisors have a fiduciary duty to act in their clients’ best interests, while stockbrokers must only ensure the investments are suitable for the client.

3. Is being a stockbroker a stressful job?

Being a stockbroker can be stressful as the financial markets can be unpredictable and volatile. Stockbrokers often work long hours and their income can vary significantly based on the state of the markets and their success in managing clients’ portfolios.

4. Can a stockbroker make millions?

Yes, it is possible for a stockbroker to make millions. However, this is not the norm and often requires many years of experience, a large client base, and a strong track record of successful investments. Much of a stockbroker’s income comes from commissions, so earning high amounts typically means processing high-value transactions.

5. Do stockbrokers work in other areas besides stocks?

Yes, stockbrokers can also deal in bonds, commodities, futures, and other types of securities. They can also provide advice on these securities, although their primary role is in the transaction process.