CandleFocus Glossary Editor
A stockbroker is a financial professional who intermediates between buyers and sellers of stock (equities). Working in the securities and capital markets, stockbrokers can transact in a variety of financial instruments, including stocks, bonds, options, mutual funds, commodities, and other financial products on behalf of their clients.
In the digital age, stockbrokers now largely leverage online tools to complete stock transactions. These online discount brokers automate the buying and selling process and allow clients to place orders without a face-to-face interaction with a stockbroker. As such, the process is more efficient, reducing fees for both the broker and the client.
Although online discount brokers are a popular choice for many individual investors, some wealthier individuals, institutions, and fin-tech firms still employ full-service brokers. Unlike online discount brokers, modern full-service brokers offer advice and portfolio management services, as well as completing transactions. They use analytics and degrees of automation to assess risk, set up portfolios to meet individual objectives, and manage portfolios to maximize returns. This allows full-service brokers to strategically manage portfolios and advise clients on stocks and investments with the goal of achieving long-term success.
To become a stockbroker, you typically need to have a college degree in finance or a related field, as well as specific certifications, including the Series 7 certification. Also known as the General Securities Representative Exam, the Series 7 is administered by the Financial Industry Regulatory Authority (FINRA) in the United States. Importantly, each state has its own regulations and requirements for becoming a stockbroker, so it’s important to check with the appropriate authorities before beginning a career as a stockbroker.
In the financial services industry, stockbrokers play a critically important role. They must be knowledgeable and experienced in investments, as well as having an acute understanding of the markets and how best to achieve their clients’ objectives. As such, stockbrokers must be able to keep up with latest trends and developments in the industry and look for innovative ways to assist their clients in managing their financial portfolios.
In the digital age, stockbrokers now largely leverage online tools to complete stock transactions. These online discount brokers automate the buying and selling process and allow clients to place orders without a face-to-face interaction with a stockbroker. As such, the process is more efficient, reducing fees for both the broker and the client.
Although online discount brokers are a popular choice for many individual investors, some wealthier individuals, institutions, and fin-tech firms still employ full-service brokers. Unlike online discount brokers, modern full-service brokers offer advice and portfolio management services, as well as completing transactions. They use analytics and degrees of automation to assess risk, set up portfolios to meet individual objectives, and manage portfolios to maximize returns. This allows full-service brokers to strategically manage portfolios and advise clients on stocks and investments with the goal of achieving long-term success.
To become a stockbroker, you typically need to have a college degree in finance or a related field, as well as specific certifications, including the Series 7 certification. Also known as the General Securities Representative Exam, the Series 7 is administered by the Financial Industry Regulatory Authority (FINRA) in the United States. Importantly, each state has its own regulations and requirements for becoming a stockbroker, so it’s important to check with the appropriate authorities before beginning a career as a stockbroker.
In the financial services industry, stockbrokers play a critically important role. They must be knowledgeable and experienced in investments, as well as having an acute understanding of the markets and how best to achieve their clients’ objectives. As such, stockbrokers must be able to keep up with latest trends and developments in the industry and look for innovative ways to assist their clients in managing their financial portfolios.