Make the Most of a Career as Stock Broker

Stockbroking helps the buyers meet sellers and vice versa and bringing equilibrium to the supply and demand in the financial market. The ticker is their heartbeat of the stockbroker as they capitalize on the uncertainties in the market. 

What is the Stock Exchange?

The stock exchange can be defined as “an exchange or stock market where stock brokers and traders can buy and/or sell stocks (also called shares), bonds, and other securities.” Now, the next question would be “What is the difference between a broker and a trader?” The difference lies in the organization that they work for. While a broker works on his own, or for brokerage houses, traders work for asset management companies. Brokers interact directly with the client, while traders usually work for a portfolio manager.

Ignite the animal spirit in you and bring out the punter in you, if you want to be stock broker. Stockbroking isn’t for the faint-hearted, one has to ride on the wave of volatility to be a successful stock broker. On the flip side, there is little room for monotonicity in stock broking as change is the only constant out there.

There are opportunities galore for the opportunist. There are millions to be made, and, who knows it could be anyone of you!!!

Educational Requirement

One needs to be a graduate, preferably in commerce, to be stock broker. Any work experience in similar fields is always handy. The minimum eligibility to be a sub-broker (the previous stage of being a broker) is high school education. In India, the minimum age to be a stock broker is 21 years.

In India, the stock brokers need to get themselves registered with the Securities Exchange Board of India (SEBI), the controlling body of securities in India. The broker has to appear in various exams where one is judged on subjects like securities and portfolio management, economics, capital markets, etc.

Further, larger broking firms prefer MBA (Fin), or, Chartered Accountants, or, Chartered Financial Analysts (CFAs). One needs to have a strong interest in financial markets, accounting and economics, along with strong analytical and quantitative skills.

Career Path

Course Details

As detailed above, graduation in commerce gives an edge if you want to opt for a career as a stock broker. However, the bigger brokerage firms like Kotak Securities, ICICI Securities, Karvy, Motilal Oswal(in India) and Morgan Stanley, Bank of America, Meryll Lynch (Global) favor MBAs and CAs. Hence, a list of top colleges in relevant fields is listed below for a quick reference.

Top Indian Institutes

Institute	Locations	Course	Eligibility	Website/Information
Indian Institute of Management	AhmedabadBangaloreKolkataLucknowIndoreKozhikode	PGDBM	At least 10+2+3 in any discipline CAT/GMAT	https://en.wikipedia.org/wiki/Indian_Institutes_of_Management
Institute of Chartered Accountants of India	Any	Chartered Accountant	Class XII (Any discipline)	www.icai.org.in/
Chartered Financial Analyst Institute, U.S.A	Any	Chartered Financial Analyst	Undergraduate (or appearing in final year of UG exam)	https://www.cfainstitute.org/

Top International Institutes

Following are the top B-schools in the world:

Institute	Courses	Average Score in GMAT	Country	Website
University of Chicago – Booth School of Business	MBA	720	USA	https://www.chicagobooth.edu/
Stanford Graduate School of Business	MBA	720	USA	https://www.gsb.stanford.edu/
Harvard Business School	MBA	730	USA	http://www.hbs.edu/Pages/default.aspx
University of Pennsylvania-Wharton	MBA	728	USA	https://www.wharton.upenn.edu/
London business school	MBA	700	UK	https://www.london.edu/
INSEAD	MBA	703	France	http://www.insead.edu/home/
University of Oxford-Saïd Business School	MBA	690	UK	http://www.sbs.ox.ac.uk/
HEC Paris MBA	MBA	690	France	http://www.mba.hec.edu/
NUS Business School	MBA	672	Singapore	http://bschool.nus.edu/
HKUST Business School	MBA	600	Hong Kong	http://www.bm.ust.hk/

     Source: Financial Times, QS

There are few other institutes that offer certain courses that might help one willing to pursue a career in stock broking. The list of such institutes is given below

College	Place	Course name	Website
Institute of Company Secretaries of India	Any major city in India	PG membership course in the capital market and financial services	http://www.icsi.edu/
National Institute of Securities Market	New Delhi	1 year PG program in fundamentals of capital market development	http://www.nism.ac.in/
Mumbai Stock Exchange Training Institute	Mumbai	Various certification courses	http://www.bsebti.com/

Fee Structure

The cost of an MBA from a top college in India would range between INR 8.0 lacs to INR 25.0 lacs including allied costs. An MBA from abroad would range between INR 35.0 lacs to INR 90.0 lacs including allied costs.

The fees for various diploma courses and certification courses that are available in India start from INR 4,000.0 to INR 1.0 lac.

Job Opportunities

All in all, one can work in any of these broad categories:

• Work for institutions like brokerage houses, catering to retail clients
  • Advisors
  • Security traders
• Work for self, i.e., own practice

The job roles usually offered are:

• Security sales representative
• Securities trader
• Securities broker
• Securities analyst

The responsibilities of an equity analyst would typically include:

• Buying and selling securities for their client
• Acting as a securities sales advisor, suggesting clients what to buy or sell
• Elucidating stock market jargons and trading strategies to client
• Offering financial counselling and devising financial portfolios

The growth and outlook of the brokerage houses is in sync with the economy. The last two years were very good for the industry. In the present year, even though the Indian economy and the financial market has been subdued to quite an extent, the inherent numbers of IPOs or Initial Public Offerings have increased considerably. Moreover, the inherent position of the Indian market is quite better than those in other markets, such as China which had suffered a huge market crash recently, as well as markets in Europe

India is in a brighter spot in the global equity market helped by the favorable macro-economic environment. However, the global scenario might take a while to turn around. Moreover, with so many listed companies in India and so many IPOs coming every year, there is a huge scope for the stockbroking industry in India.

Industries to Explore

A stock broker would be working in the following industries:

• Banking and Financial Services Industry (BFSI):
  • Brokerage firms, like, Karvy, Sharekhan
  • Investment Banks like, JP Morgan, Goldman Sachs
  • Banks, like, SBI, Deutsche Bank
  • Mutual Funds like, Franklin Templeton, Mirae Asset
• Business houses, like, Tata Group, AB Group – Recruits for in-house trading

Skills Required

The key skills that the recruiters look for in a stock broker at entry level are:

• Excellent communication and interpersonal skills – The job profile requires regular interaction with clients
• Ability to work under pressure – A stock broker has to take decisions in a fraction of a second and time would always be on the other side of the field.
• The individual should be self-motivated, proactive and possess a passion for investing and financial markets.

Salary Structure

The compensation for the equity researchers is average at the initial stage of the career. Typically, their packages include a substantial bonus component. In India, the typical salary for an entry-level analyst would range from INR 2.0 lacs per annum in small brokerage firms to INR 10.0 lacs per annum in the bigger brokerage houses, recruiting for proprietary trading profiles. The US counterparts earn more than $ 40,000 per annum plus bonuses.

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