Guide: How To Become a Stockbroker

By Indeed Editorial Team

Updated September 5, 2022 | Published June 21, 2021

Updated September 5, 2022

Published June 21, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Stockbrokers work within the financial world, buying and selling stocks and other securities for their clientele. A proficient stockbroker can have a thriving career and long-term financial success. With the right skill set, you can follow this exciting career path. In this article, we discuss what a stockbroker is, their duties, skills, educational requirements, and a step-by-step guide for excelling in this career.

What is a stockbroker?

A stockbroker is a licenced investment professional who the Canadian Securities Administrators register to buy and sell stocks, bonds, and other types of securities. Stock brokers are also known as share brokers, investment brokers, registered representatives, or trading representatives. They work on behalf of their clients within the financial investment industry to complete investment transactions. Stockbrokers also evaluate the performance of securities and provide sound financial advice.

Related: How To Get Into Investment Banking In Canada: A Guide

What are the types of stockbrokers?

Stockbrokers work for full-service investment firms, discount brokerage firms, or bank and credit unions. We break down the differences below:

Full-service investment firm

A stockbroker that works for a full-service investment firm, also called a wirehouse, is the most traditional work environment. A full-service investment firm offers a wide range of financial products and services, tax and retirement planning, and access to foreign markets. These are often large organizations that have extensive teams and typically offer training and support with educational requirements and licensing support. The drawback to full-service investment firms is that new brokers often have high sales quotas that they need to meet quickly upon starting. Many stockbrokers will begin at a full-service firm and, once they have created a clientele following, will move to a smaller boutique or independent firm.

Discount brokerage firms

Discount brokerage firms typically offer affordable services to walk-in customers and often pay their stockbrokers a flat salary with minimal commissions. Discount brokers are excellent for stockbrokers who are not highly proficient in sales and cannot meet the sales quotas of larger, full-service firms. Employees in a discount brokerage firm also gain a vast range of experience, as the products and services offered are typically more varied. In addition, a stockbroker earns experience with administrative duties of the position, such as opening new accounts and issuing stock certificates.

Bank and credit unions

Most banks and credit unions offer investment banking, including buying and selling of stocks and other securities. A stockbroker working within a bank or credit union setting has the benefit of accessing the customer base of the organization, reducing high-pressure cold calling and clientele building. They offer a wide range of products and services for investment portfolios, but often with a lower commission and bonus structure than a full-service investment firm.

What are the responsibilities of a stockbroker?

A stockbroker buys and selling of stocks, bonds, and other securities for their clients. However, they have many other responsibilities, including:

Finding new clients

Although a brokerage firm or bank may start a new stockbroker with a portfolio of clients, ultimately, a successful stockbroker must constantly work to expand their clientele. They find new clients through networking, business events, customer referrals, and cold calling.

Working with existing clients

A stockbroker works closely with their existing clientele and focuses on several things. First, a stockbroker must provide regular updates to their clients on the status of their investment portfolios. Based on the performance of their customer's portfolio, a stockbroker must then provide accurate investment advice, including informing clients of new investment opportunities. They manage the purchasing and disposal of stocks, bonds, shares, and other investments based on their client's financial goals or instructions.

Related: The Ultimate Guide to Building Rapport with Clients

Financial report evaluation

A stockbroker must be proficient at understanding market conditions and evaluating financial reports. Analyzing market trends helps a stockbroker provide sound investment advice to their clients.

Continuous learning and staying current

A successful stockbroker knows they must stay current and up-to-date with the latest financial news, economic developments, and investment trends. This also includes taking part in professional development opportunities. Continuing training is a requirement to maintain specific licensing regulations in Canada.

Skills needed to be a stockbroker

A successful stockbroker has a combination of essential skills and knowledge that contributes to a lucrative career, such as:

Communication skills

A stockbroker spends a considerable amount of their day on the phone with prospective and current clients. As such, they need proficient communication skills. Explaining complex ideas in easy-to-understand ways is part of the verbal communication skills that a successful stockbroker must have. A stockbroker must organize their thoughts and present ideas clearly to pitch stock ideas and provide concise financial advice to their clientele.

Sales technique

A successful stockbroker has excellent sales techniques and skills. They can effectively evaluate the needs of their clients and provide the most appropriate product recommendations for them. They use persuasion and negotiation skills to sell their stockbroker services to potential and current customers. They make stock recommendations with the aim of selling particular stocks and securities. Because a base salary with a commission is the standard for many stockbroker positions, being an effective salesperson is essential to long-term success.

Related: What Is a Sales Technique? (With 17 Techniques to Use)

Computer literacy and IT skills

Because most of the financial industry is heavily reliant on information technology and computer programs, a successful stockbroker needs to have a solid foundation in computer literacy and IT. Understanding economic and investment software and programs will be critical to gaining insights into viable stocks and providing sound investment advice.

Mathematics

Because stockbrokers are dealing with numbers and money daily, they need strong mathematical skills. Basic math skills of addition, subtraction, multiplication, and division are essential, along with percentages, fractions, and amortization equations.

Average annual salary

According to Indeed Salaries, the average annual salary of a stockbroker, or stock trader, is $65,719 per year. The wage for a stockbroker will vary on factors such as experience, education, location, and company. Many brokerages pay stockbrokers a base annual salary with additional commissions and bonuses based on performance, dramatically increasing the earning potential.

How to become a stockbroker

There are several steps involved in becoming a stockbroker, including:

1. Complete a bachelor's degree

The first step to becoming a stockbroker is to complete a post-secondary bachelor's degree program in economics, finance, accounting, global business, or business administration. Universities across the country offer various bachelor's degree programs that provide a solid foundation to becoming a stockbroker. A bachelor's degree is also typically a prerequisite for finding a job within the finance industry, so this step sets you up for long-term success. If you want to open more possibilities, consider completing a Master of Business Administration (MBA). Many financial companies provide better positions to MBA graduates and offer more significant compensation packages and advancement opportunities.

2. Complete the CSI Global Education's Canadian Securities Course (CSC)

After obtaining a bachelor's degree, you need to complete the Canadian Securities Institute's (CSI) Global Education's Canadian Securities Course. You can achieve this before entering the workforce, or your employer can sponsor you through the program. While you likely learned about these topics during your university schooling, the CSC provides in-depth and specific knowledge for those looking to become a stockbroker. The topics covered in the course include:

  • Mutual funds

  • Fixed-income securities

  • Segregated and hedge funds

  • Equity transactions

  • Common and preferred shares

  • Derivatives

  • Corporations and financial statements

  • Managed and structured products

  • The Canadian investment marketplace

3. Gain work experience

Within three years of planning to complete your securities registration, you must have a minimum of twelve months of hands-on experience. The experience can come in many forms within the investment industry, such as working within a legal, accounting, or consulting field related to securities. You might also work with a registered dealer, advisor, or investment fund manager, or work within investments, such as securities trading or research, portfolio management, investment banking, or investment advisement.

Related: What Does a Stock Trader Do? (With Requirements and Skills)

4. Pass your Canadian Securities Course exam

Once you have a minimum of twelve months of work experience and have completed your Canadian Securities Course, you can take your examination. As a stockbroker, you must pass this exam with a minimum of 60%. The exam itself comprises 100 multiple-choice questions and takes four hours to complete. Upon completing the Canadian Securities Course exam, they mail a certificate to display on the wall.

If you wish to work in both Canada and the United States, you need to take the Financial Industry Regulatory Authority, Inc. (FINRA) Series 37 exam or Series 38 exam. These exams focus on both Canadian and US securities processes, protocol, and best practices.

5. Register as a stockbroker

Upon passing your CSC exam, you must register as a stockbroker with the National Registration Database (NRD). This registration database also works with the provincial and territorial regulatory bodies to ensure you have the necessary qualifications to be a stockbroker across the country or your home province. Additional registration with the Investment Industry Regulation Organization of Canada (IIROC) is recommended but not mandatory.

6. Maintain your continuous education

If you have registered with IIROC, they require you to complete mandatory continuing education to maintain your status with the organization. If you have only registered with the National Registration Database, taking part in ongoing professional development is always an essential pursuit of growth and career success.

Please note that none of the companies, institutions or organizations mentioned in this article are affiliated with Indeed. This article is based on information available at the time of writing, which may change at any time. Indeed does not guarantee that this information is always up-to-date. Please seek out a local resource for the latest on this topic. Salary figures reflect data listed on the quoted websites at time of writing. Salaries may vary depending on the hiring organization and a candidate’s experience, academic background and location.

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