what is a stockbroker 
a stockbroker is a financial professional who executes orders in the market on behalf of clients a stockbroker may also be known as a registered representative rr or an investment advisor most stockbrokers work for a brokerage firm and handle transactions for several individual and institutional customers stockbrokers are often paid on commission although compensation methods vary by employer understanding the role of a stockbrokerbuying or selling stocks requires access to one of the major exchanges such as the new york stock exchange nyse or the nasdaq to trade on these exchanges you must be a member of the exchange or belong to a member firm member firms and many individuals who work for them are licensed as brokers or broker dealers by the financial industry regulatory authority finra 1until recent years getting access to the stock markets was prohibitively expensive it was cost effective only for high net worth investors or large institutional investors such as the managers of pension funds they used full service brokers and could pay hundreds of dollars for executing a trade while an individual investor can buy stock shares directly from the company that issues them it is much simpler to work with a stockbroker however the rise of the internet and related technological advances paved the way for discount brokers to provide online services with cheap fast and automated access to the markets more recently apps like robinhood and sofi have catered to micro investors allowing even fractional share purchases most accounts in the markets today are managed by the account owners and held by discount brokers brokerage firms and broker dealer companies are also sometimes referred to generically as stockbrokers these include full service and discount brokers who execute trades but do not offer individualized investing advice most online brokers are discount brokers at least at their basic service levels in which trades are executed for free or for a small set price commission many online brokers offer robo advisors that automate the buying and selling process stockbrokers in the 21st centurybrokers who are employed by discount broker firms may work as over the phone agents known as voice brokers available to answer brief questions or as branch officers in a physical location they also may consult with clients subscribing to premium tiers of the online broker a comparatively smaller number of stockbrokers work for investment banks or specialized brokerage firms these companies handle large and specialized orders for institutional clients and high net worth individuals hnwi another recent development in broker services is the introduction of roboadvisers programs that use algorithmic investing techniques carried out via web or mobile app interfaces there is minimal individual interaction keeping fees low mobile phone apps like robinhood and sofi cater to micro investors allowing even fractional share purchases educational requirements for stockbrokersa bachelor s degree in finance or business administration is typically required for stockbrokers a strong understanding of financial laws and regulations accounting methods principles of economics and currency financial planning and financial forecasting are all useful for working in the field 2global credentials are also becoming increasingly sought after as signals of legitimacy and financial acumen examples include the certified financial planner cfp and chartered financial analyst cfa designations most successful stockbrokers have exceptional interpersonal skills and can maintain strong sales relationships market knowledge and investing skills licensing requirements for stockbrokersin the u s registered brokers must hold the finra series 7 and series 63 or 66 licenses and be sponsored by a registered investment firm 345 floor brokers in the u s must also be members of the stock exchange where they work in canada would be stockbrokers should be currently employed by a brokerage firm and are required to complete the canadian securities course csc conduct and practices handbook cph and the 90 day investment advisor training program iatp 67in hong kong applicants must work for a licensed brokerage firm and pass three exams from the hong kong securities institute hksi those who pass the exam must still be approved by the financial regulatory body to receive a license 8in singapore the institute of banking and finance administers nine different modules while the singapore college of insurance administers five modules the monetary authority of singapore mas and the singapore exchange sgx have licensing authority 9in the united kingdom stockbroking is heavily regulated and brokers must achieve qualifications from the financial conduct authority fca precise qualifications depend on the specific duties required of the broker and the employer 10stockbroker salariesbefore we touch on actual numbers let s talk about the types of pay a stockbroker may receive one of the primary ways stockbrokers earn money is through commissions whenever a broker buys or sells securities on behalf of their clients they receive a commission which is usually a percentage of the transaction value in addition to commissions stockbrokers may charge various fees for their services these can include account maintenance fees advisory fees and fees for specific services such as financial planning or investment research stockbrokers employed by larger financial institutions or brokerage firms often receive a base salary along with performance based bonuses the salary provides a steady income while bonuses are typically tied to the broker s success in meeting sales targets acquiring new clients or achieving certain performance metrics according to salary com the average stockbroker salary in the united states as of june 2024 was 161 090 the average salary range is between about 122k year to 188k year the top 10 of stockbrokers made over 213 000 annually 11stockbroker vs financial advisora stockbroker is primarily focused on the buying and selling of securities such as stocks and bonds on behalf of their clients on the other hand a financial advisor offers a much broader range of financial planning services financial advisors assist clients with comprehensive financial planning which includes retirement planning tax advice estate planning insurance needs and budgeting financial advisors take a more holistic approach to managing a client s financial well being a financial advisor is generally more likely to help clients achieve long term financial goals while a stockbroker is more useful in executing short term investment strategies financial advisors typically charge fees based on the assets they manage or hourly rates for their advice while the compensation structure of a stockbroker discussed above is slightly different the key difference between a stockbroker and a financial advisor lies in the scope and nature of the services they provide while stockbrokers focus on specific transactions within the market financial advisors engage in overall financial strategy and planning note that a stockbroker can be a financial advisor with the qualifications and a financial advisor can also be a stockbroker again with the right qualifications 