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How to become a Financial Broker

by Charles Nwabueze
Reading Time: 5 minutes

In the UK, newly qualified brokers in large banks get offered a salary of around £30,000 excluding commission. This becomes bigger if you work for boutique investment firms, a junior broker may get a base salary of £40,000. If you then add more experience to your career, in no time you may be earning as much as £150,000 as a base salary. With all these and more, it is little wonder that a career as a broker is an appealing one for some graduates. But what is a broker, stockbroker or stockbroker? These terms can be used interchangeably.

Who is a Broker?

A Broker is a person or a group of people (firm) that works as an intermediary between buyers and sellers, between investors and a securities exchange. A stock broker is an individual who manages a client’s investments in stocks, shares and other financial assets. Brokers earn their money by making commissions or fees when the transaction has been completed. They can also be compensated by the exchange itself. 

There are three main types of Brokers and they work in a diverse range of industries to help sell a variety of different services and commodities, including mortgages, insurance, and stocks and shares.

Types of Brokers 

Full-service Broker: This broker provides his/her client with a fully personalised service, which includes relaying important information that’s only available to clients who’ve opted for this type of broker. Full-service brokers usually receive a commission and personalise their work and advice for the individual client. 

Discount Broker: This broker just carries out their client’s instructions without offering advice, analysis or any other such services.

Online Broker:  This broker only offers his/her support remotely by conducting research and providing clients with investment news, charts and recommendations of stocks to consider. He or she will barely have personal contact with the client. 

What does a Broker do?

Considering that there are different types of brokers, it’s natural that the responsibilities of a broker will vary depending on the type of broker he/she is. However, there are typical duties a broker will be expected to perform

  • research financial markets and the latest trading figures
  • work closely with investment analysts
  • generate new business and develop close relationships with clients
  • manage and review client portfolios
  • advise on risks
  • instruct and work closely with stock market traders, to achieve the best market prices
  • meet profit, new business and retention targets
  • keep up to date with tax and financial legislation
  • buy and sell securities for clients
  • monitor and analyze the market
  • make investment recommendations
  • keep clients updated about the state of their investments
  • give presentations to their clients at events and during conferences
  • write newsletters and reports

How to become One

Becoming a broker in the UK does not necessarily require a university degree as there are various routes to this role:

  • Applying with a university degree
  • Take part in an apprenticeship
  • Applying directly
  1. University Degree

This route is probably the most popular one and you can start by doing a degree in a relevant subject like management, accounting, business, economics, finance and mathematics. To qualify to be accepted into a degree at a university you’ll need to follow the necessary criteria for getting one which includes 2 to 3 A levels, or equivalent. 

When you have gotten your degree or while taking your degree you will improve your chances of becoming a broker by taking part in a placement year or summer internships, as these programmes will give you valuable experience and an advantage when applying for work. 

Once you’ve completed your degree, you should participate in gaining further relevant experience that employers look for. You can either work in a related field or a graduate scheme. In the broking industry, graduate schemes are the best. Apply to graduate schemes where you will be trained to become a stock broker. If you don’t get a scheme, working in related fields, such as banking, investment, insurance and accounting can equip you with the skills, experience and exposure to work as a stockbroker.

After you’ve acquired all of the necessary experience and qualifications, you must register with the Financial Conduct Authority (FCA) before you can work as a stock broker. Registering with the FCA means that you are an ‘approved person’ who’s approved to carry out activities that the FCA calls ‘controlled functions. 

Apprenticeship

The other route through which you may be able to get into this job is through an investment specialist higher apprenticeship or financial services professional degree apprenticeship.

You will take professional exams as part of these apprenticeships and at the end, you will be able to apply for membership in the relevant professional body. The entry requirements are usually 4 or 5 GCSEs at grades 9 to 4 (A* to C) and A levels, or equivalent, for a higher or degree apprenticeship.

Direct Application

There is also the method of direct application. Through this mode, you could move into stockbroking if you have an experience in accountancy, banking or insurance and take further training on the job.

Further Qualifications 

Many graduates also have a postgraduate qualification like a master’s in business administration. Some also choose to become a Chartered Financial Analyst (CFA) by completing the CFA programme and the necessary work experience. Some also choose to gain professional qualifications from and Chartered Institute for Securities & Investment.

Skills need to become a Broker

  • Excellent negotiation and selling skills. As your income will often be dependent on commission, the more deals you close, the more you’ll be able to earn.
  • Having an in-depth knowledge of the financial market will also be essential
  • Excellent communication skills will allow you to talk to clients with confidence about any potential investment opportunities and how they could impact them.
  • Skills in a second language can also be useful.
  • Knowledge of mathematics, economics and accounting
  • Natural business acumen
  • The ability to use your initiative
  • The ability to work well under pressure
  • Confidence
  • Computer literacy
  • Persistence and determination
  • Decisiveness
  • Excellent multi-tasking skills

Is there a good Career Progression

Being a broker offers you the opportunity to enjoy great progression. Once you have qualified as a broker and garnered experience with a good track record you could progress to become a trader, relationship manager or fund manager. You could also become a partner or set up your own business. You might want to consider Jesse Livermore one of the greatest and most famous stock brokers. He started his career as a stockbroker with Allen Younger where he worked successfully for many years eventually becoming a partner. As a partner, he produced some of the finest deals in the history of the stock market and made so much money that he decided to open his firm.

Alternatively, you may choose to leave the broking profession and go into investment banking or other areas of finance.

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Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)
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