So You Want to become a Stock Broker, Next What?

A Broker, according to Wikipedia, “is an individual person who arranges transactions between a buyer and a seller for a commission when the deal is executed”.

As a stock broker you would facilitate the transaction of buying and selling stocks on behalf of clients (individual or institutions) based on their financial goals. You will be paid fee or commission (apart from salary package) based on what type of broker you choose to become. A broker is also known as a securities sales agent or securities and commodities sales agent.

Educational Qualification

Any Graduation, preferably in Finance and its Associate courses.

If you a non-finance student, wish to pursue this profession, you are in tough ride compared to core students. To become qualified, it is necessary to complete a professional certificate in stock broking in India.

Types of Brokers

Traditional or Full Service Brokers

Traditional Broker offer trading (stocks, commodities and currency), research and advisory, investment banking, sales and asset management under one umbrella. They also allow investing in Forex, Mutual Funds, IPOs, FDs, Bonds and Insurance (you can google to understand more about these terms). In some cases full-service brokers also have in-house banking and demat account services. They are ‘advisors’ for the client and at the same time salesmen for the financial products.

Examples – Angel Broking, ICICI Direct, Motilal Oswal etc.,

Note -If you choose to join traditional Brokers, they will provide comprehensive training package that includes sales and product training as well as education in administrative procedures and compliance regulations.

Discount or Online service brokers

Online brokers focused mainly on trading, they don’t offer research, funding and other add-on services. Discount brokers offer low brokerage, high speed and the state-of-the-art execution platform for trading in stocks, commodities and currency derivatives. They offer ‘no-frills’ brokerage service for ‘do-it-yourself’ traders who understand the market well. Most of them charge flat rate brokerage and some offer fixed monthly brokerage for unlimited trading.

Examples -Zerodha, RKSV, Fyers, Pro stocks, SAS online etc.,

Note – If you think you are not good at sales or from non-finance background, it’s best to give a try being discount broker, learn the business and get acquainted with the profile. Eventually you could join full-service brokerage firms or could become an independent broker-dealers.

Responsibilities Of stock broker
Primary Responsibilities

  • Interact with clients to update them on research calls and advising them on asset allocation within their portfolio and guide them on Buy, Sell or Hold strategy.
  • Keep abreast of micro & macroeconomic indicators, global & domestic financial markets and impact on stock movements.
  • Help customers to Execute trade online and place orders on behalf of customers.
  • Ready to sell Financial products (in-house and third-party) to clients.

Secondary Responsibilities

  • Acquire new clients for Demat and Trading accounts through networking, database and references.
  • Engage with inactive customers and activate their accounts.
  • Ensure that customers trade actively after opening the trading account.

How to Register as stock broker

It is mandatory to register yourself as stock broker and become “member” of Stock Exchange to carry out clientele transactions. So to become a “Registered stock broker”, you need to pass the following examinations.

NISM Series XI: Equity Sales Certification Examination
NISM Series VIII: Equity Derivatives Certification Examination (Mandatory)

These exams cover a broad range of subjects on the markets, and the securities industry and its regulatory structure. They ensure that securities professionals acquire a minimum level of understanding and expertise.

Visit nism.ac.in for more information.

How to start your career?

Employers prefer to hire stock brokers with 1-3 years of brokerage experience. Employers that offer online brokerage services may require one or more years of online brokerage experience. Internships are an ideal way for beginning brokers to gain experience and build their knowledge of the industry. While you are around, make sure you learn until you are comfortable using trading applications, MS office etc., Show the employer that you are confident in communication – both verbal and written.

Career as a stock broker

A broker must stay on top of the market at all times by analyzing, monitoring and researching the performance of stocks, trade markets and acquisitions. Lets see how first few years of Career looks like -1. You will be working long odd hours, making enormous cold calls to build large customer base within the limited probationary period. Success of a broker fundamentally depends on the quality of the customer portfolio. 2.Meet revenue target (in turn brokerage for you) from the existing portfolio, and also from third party products. 3. Always work hard for the best possible outcome for the clients..

As a beginner, it is going to take more than willpower to stay competitive.