Stock Broker Career Information
What a Stock Broker does
Of course not everyone can become a registered stockbroker. Why? Simply because it's quite expensive. If you can cough up an exchange fee of Rs 2.41 crore you can procure a broking card. That's not all. You have to shell out another Rs 20-25 lakhs to get registered with SEBI. But, that shouldn't deter you from becoming a stockbroker. You can always work as a dealer or an agent with a stock broking firm.
The stock exchange is exposed to a high degree of volatility. Prices fluctuate within minutes and are determined by demand and supply of stocks at a given time. A stockbroker buys and sells securities on behalf of individuals and institutions for some commission.
As a stockbroker, you could get into private practice or work for institutions. Those who work with institutional investors are also called Securities Traders. As a stockbroker, you could work as a dealer, advisor or securities analyst. Security analysts use their sound knowledge of capital markets to advice companies on floating shares. You could even research, analyse market conditions and draw profit margins on behalf of your client.
As a stockbroker, you have to simplify stock market terms and trading practices for your client, offer financial counselling and also devise financial portfolios. This portfolio also includes securities, life insurance, corporate and municipal bonds, mutual funds, certificates of deposit and other investments. As a stockbroker, you will also offer advice on the purchase or sale of securities.
Back office (administration) forms the backbone of the business. Work is not as fast-paced and exciting as a dealer's. It involves keeping track of the procedural aspects after a deal is executed. The nitty-gritty of the business, like handling pay-in and payout forms a part of the job.
As a stockbroker, your job as a dealer involves contacting clients and executing the deal that has been closed. You should be good at sourcing information. Buying and selling involves convincing clients to buy or sell shares to a client, a big organisation or retail investor.
As a stockbroker, you need to be constantly updated about market conditions. Computer literacy is an added advantage with most of the dealings being computerised.
A stockbroker also does research and analyzes various sectors, industries including the price of a share - whether it is under-priced or overpriced.A stockbroker should be open to criticism and willing to accept failures when you are an analyst. Late hours, stress and tension go hand in hand with the job.
As a stockbroker, you should know that there is very little room for boredom or stagnation in the field of stockbroking. No matter which department you are in, a thorough knowledge of the various sectors and industries, gives you an edge in the business.
Since the industry is performance driven you, as a stockbroker, should be on your toes all the time to keep pace with the market movements. Stress levels are very high and since money attracts all sorts of people, one has to develop a certain amount of insensitivity.
Employment options for stockbrokers are mainly with:
• Business houses
• Broking firms
• Investments banks as well as traditional banks, which have business with broking firms
• You could also prepare market report and analysis for magazines and newspapers
Capital markets all over the world are witnessing major changes. With escalating interests of domestic and international players in India there is an increasing demand for a more systematic approach. SEBI is also trying to bring transparency in the dealings.
Economic growth and liberalisation has opened number of opportunities for Stockbrokers in various organisations like mutual funds, investment consultancy, broker firms, insurance companies, merchant banks, pension funds and other financial institutions.
Foreign institutional investors, mutual funds and even individuals have once again started posing confidence in the capital markets. This has enhanced prospects for brokers, investment and equity analysts. Stockbrokers can also start their own consultancies. Stock exchanges to some extent play an important role as indicators, reflecting the performance of the country's economic state of health.
Abilities & Traits Required
• Strong desire to succeed
• Good sales ability
• Good communication skills
• Knack to convince people
• Knowledge of market and investment products
• Ability to listen to clients
• Understanding clients needs
• Build customer base
• Sharp memory
• Analytical mind
• Foresight and logical approach to make projections
• Ability to withstand mental stress and handle complex situations
• Head for numbers
• Interest in market proceedings
Minimum requirement is graduation in any discipline preferably Commerce. It is essential for you to have thorough knowledge of economic conditions and market trends.
Some big broking firms prefer MBA with specialisation in Finance or CA. To be a member of the stock exchange you have to undergo training with a broking firm for a minimum period of six months. The training aims to impart knowledge of accountancy, law related subjects, capital markets, securities, portfolio analysis, etc.
• Most brokering firms pay performance-based commissions along with the salary
• Beginners get Rs 10000-25000 plus commission
• With experience you could earn around Rs 2000000 -3000000 p.a