The Average Salary of Stockbrokers (Illustrated Guide)
Do you want to get ahead as a stockbroker? Well, Wall Street is a great place to start. Top stockbrokers earned more than $204,000 in 2019, and you can too!
You can make a decent living as a stockbroker, in fact, they are one of the highest-paid financial services workers in the United States.
And while movies like The Wolf of Wall Street and Boiler Room are entertaining, you can make a decent income as a stockbroker without breaking the rules.
How Much Do Stockbrokers Make?
According to the U.S. Bureau of Labor Statistics, the median pay for securities, commodities, and financial services sales agents was $62,270 in 2019. The top 10 percent earned over $204,130 while the bottom 10 percent earned less than $35,320.
This puts stockbrokers slightly below the median household income in the U.S of $63,179 in 2018 (data for 2019 not available yet).
The median salary is the wage at which half of the workers in the occupation earned more than that amount and half earned less.
The median salary gives you a good idea of what a typical stockbroker makes per year.
Becoming a Stockbroker Can Change Your Life
There are stories of people completely changing their lives after getting a job as a stockbroker. One of those examples is that of Chris Gardner, the “The homeless man who became a multi-millionaire investor“.
During the early 1980s, Gardner struggled with homelessness while raising a toddler son. He eventually became a stockbroker and ended up founding his own brokerage firm Gardner Rich & Co in 1987.
He is worth over $60 million today.
Gardner's story is explored in the 2006 hit, “The Pursuit of Happiness”.
How Do Stockbrokers Make Money?
Many stockbrokers earn a commission based on the value of the products (equities) they sell. Many firms pay stockbrokers a minimum salary in addition to commissions.
Trainee stockbrokers' salaries typically make up a large portion of their overall compensation in the beginning. Their commissions will gradually make a larger portion of their overall compensation as they grow their client base.
Stockbroker Commission Rates
Stockbrokers typically make similar-sized commissions, no matter where they work. Their commissions typically make up 1-2% of a client's managed assets.
For example, John wants to purchase 100 shares of a company at $60/share. John's broker earns a commission of $120 for facilitating the transaction ($60/share x 100 shares = $6,000 x 0.02 commission = $120. When the commission is added, the total cost of the trade would be $6,000 + $120 = $6,120).
Some stockbrokers don't actually get a salary at all. Their income is 100% dependant on how many trades they facilitate.
So, you can begin to see why stockbrokers want to facilitate as many trades as they can during the hours when the market is open.
How Much Do the Best Stockbrokers Make?
Your stockbroker salary will depend on many factors.
As a new stockbroker, you will have to build up your client base and reputation to get a bigger paycheck.
Experienced stockbrokers typically make a lot more than the median salary. I'll reiterate so the numbers sink in.
The top 10 percent of securities, commodities, and financial services sales agents earned over $204,130 in 2019, while the bottom 10 percent earned less than $35,320.
This shows that you can make plenty of money as a stockbroker if you are hard-working and determined, but there are also some people that aren't making a whole lot.
Table last updated 09/12/2020
How Much Do Wall Street Stockbrokers Make?
Although the BLS doesn't say exactly how much Wall Street stockbrokers make, we know how much a typical stockbroker makes in NYC.
According to the US Bureau of Labor Statistics, New York stockbrokers earn a median salary of $161,580 annually, making New York stockbrokers the highest-paid in the world.
You can why stockbroker movies like the Wolf of Wall Street and Wall Street focus on this famous street. It's where the New York Stock Exchange is based and where you can find the highest-earning stockbrokers in the world!
Metropolitan Areas with the Most Stockbrokers
You don't have to work on Wall Street to make a lot of money as a stockbroker. In fact, there are stockbrokers earning a high salary from all over the United States.
Here are the metropolitan areas with the highest concentration of stockbrokers, and their average annual wages.
Table last updated 09/12/2020
You can see that is doesn't matter where in America you are from, there are plenty of high-paying stockbroker jobs available.
As you can see, the areas with the highest concentrations include New York City, Los Angeles, Chicago, and Dallas.
You'll probably want to move to a large city to earn a high salary as a stockbroker.
Your role as a stockbroker is to manage the portfolio of your clients. This could be an individual or a company.
You will recommend shares for your client to buy and sell, on the advice of an investment analyst.
Experience in sales will somewhat prepare you for the role. But there are other skills you will need to develop to become a successful stockbroker, including:
- Knowing how to deal with rejection
- Having the motivation to work long hours
- Great interpersonal skills
Okay, so you know what makes a good stockbroker, but what will your duties be?
Here are some things you'll be expected to do as a stockbroker:
- Monitor your clients’ investments
- Liaise with investment analysts
- Research the financial markets
- Report to your clients
- Pitch/cold call new clients
There are a few education requirements that you must meet to become a stockbroker.
To become a stockbroker you should consider completing an undergraduate degree in either business or commerce.
Majoring in economics, finance or accounting will prepare you for a stockbroker job.
It's true that you can land an entry-level job with a bachelor's degree. But top positions will usually require you to hold either an MBA or a master's degree in a related discipline (economics, finance or accounting).
Virtually every state in the U.S requires you to pass the Series 7 and Series 63 exams to become a licensed stockbroker.
The Series 7 exam will test your ability to:
- Provide customers with information about investments
- Make suitable recommendations
- Transfer assets
- Maintain appropriate records for your clients
Your primary areas of knowledge will include investment risk, taxation, equity, and debt instruments, options, packaged securities, and retirement plans.
While the Series 63 license will measure your knowledge and understanding of state law and regulations.
Job Outlook for Stockbrokers
Market fluctuations and the economic environment affect the demand for stockbrokers.
There were 464,200 securities, commodities, and financial services sales agents employed in 2019.
The Bureau of Labor Statistics project this number will grow by 4% to 481,600 by 2029. Or about as fast as the average for all occupations in the U.S (5%).
Now that I've answered your question “how much do stockbrokers make,” maybe you'd like to learn about some successful stockbrokers.
Many people who became wealthy started out as stockbrokers, including Warren Buffett and Chris Gardner (as I mentioned earlier).