How Much Do Stockbrokers Make?
You can make a decent living as a stockbroker. And while movies like The Wolf of Wall Street and Boiler Room are entertaining, you don’t have to break the rules to make it as a stockbroker. So how much do stockbrokers make?
The median pay for securities, commodities, and financial services sales agents was $64,120 in 2018, according to the U.S. Bureau of Labor Statistics.
This puts stockbrokers slightly above the median household income in the U.S of $61,372 in 2017.
The median salary is the wage at which half of the workers in the occupation earned more than that amount ($64,120) and half earned less.
The median salary gives you a good idea of what a typical stockbroker makes per year.
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.
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.
How Much Do Stockbrokers Make: The Top & Bottom 10%
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.
The bottom 10 percent of stockbrokers earned less than $34,360, while the top 10 percent earned more than $208,000 in 2018.
But which state offers the highest stockbroker salaries?
Job Outlook for Stockbrokers
Market fluctuations and the economic environment affect the demand for stockbrokers.
There were 375,700 securities, commodities, and financial services sales agents employed in 2016.
The Bureau of Labor Statistics project this number will grow by 6% to 398,242 by 2026. Or about as fast as the average for all occupations in the U.S (7%).
Many people who became wealthy started out as stockbrokers, including Warren Buffett, Chris Gardner, and Jordan Belfort.
If you’d like to learn more about being a stockbroker visit How to Become a Stockbroker.