Stockbroker

The Job and What's Involved

Stockbrokers bring together people within the investment marketplace who want to either buy and/or sell stocks, bonds and other assets (collectively known as securities). Clients may be institutions or individual investors. Stockbrokers act upon instructions given by clients, offering one or a combination of these three services:

Discretionary - managing investments and authorised by clients to buy and sell stocks and shares without seeking further permission.

Advisory - giving advice about investments and which shares they recommend buying and selling, but not necessarily executing the trade.

Execution only - acting purely on instructions each client provides to sell or buy stocks and share, but not providing advice.

Stockbrokers in large companies may specialise in security dealings or advisory work. In smaller organisations they perform both functions.

A stockbroker's responsibilities include:

• Managing and reviewing clients' investment portfolios to check results and recommend appropriate changes.
• Researching financial markets, working closely with investment analysts who report on how companies and markets are performing.
• Analysing and interpreting individual or corporate client investment objectives.
• Answering clients' questions.
• Keeping clients informed about the performance of investments.
• Preparing investment recommendations for restructuring portfolios and advising on investment selections.
• Executing trades or instructing stock market traders to achieve the best market prices.
• Marketing their services to new clients.

In larger companies, stockbrokers usually specialise in certain markets such as technology, energy or finance, or in specific geographic regions such as South East Asia or the Middle East. Those working for private clients may be known as wealth managers. Other similar job titles include equity trader, broker or dealer.

Stockbrokers normally work Monday to Friday. They must be ready to start work when markets open, usually between 7am and 8am for European markets. Those dealing in commodities or markets operating in different time zones may work more irregular hours.

They generally work in a large open plan office. The work can be pressurised. Stockbrokers use computers to access market information and spend a considerable amount of time also on the phone and e-mail taking orders and advising clients.

Salaries for trainee/junior stockbrokers may be £24,000 to £35,000 a year. More experienced stockbrokers with a restricted client base may earn between £40,000 and £70,000 and senior stockbrokers with a more extensive client base and higher trade limits may earn over £80,000, potentially reaching £150,000 or more.

Stockbrokers often receive substantial performance-related bonuses on top of these salaries.

Getting Started with this Career Choice

Stockbrokers work for the 400-plus members of the London Stock Exchange, which include financial investment houses, global banks and specialist stockbroking firms.

Most jobs are in London, but there are opportunities, mainly for stockbrokers dealing with private client investment, in major cities and towns throughout the UK, including Birmingham, Leeds, Manchester, Glasgow, Edinburgh and Cardiff.

There are more applicants than vacancies.

Large employers generally recruit graduates each year, often through university job fairs. Application deadlines for trainee posts are usually between October and December of the year before the graduate programme starts. Applicants may need to attend an assessment centre, deliver a panel presentation and take psychometric and aptitude tests.

Graduate trainees often complete a summer internship in their last year of degree studies, with a large percentage of interns receiving offers of full-time employment.

Vacancies are also advertised in the national and financial press or through specialist financial recruitment agencies. Other sources include specialist financial recruitment web sites, such as www.efinancialcareers.co.uk and www.totallyfinancial.com.

Education and Training

Most stockbrokers are graduates with at least a 2.1 degree classification. This could be in any discipline, but subjects such as economics, business studies, maths and accountancy may be particularly useful.

The minimum qualifications for a degree course are normally two A levels and five GCSE's (A*-C), or equivalent qualifications. Candidates should check with colleges and universities for specific entry requirements.

Increasingly, entrants have a postgraduate qualification, such as a Masters in Business Administration (MBA) or MSc in subjects such as business or economics. A second language may also be useful.

It may be possible to enter a junior investment operational support role via the Level 3 Advanced Apprenticeship in providing financial services, which offers a pathway in investment administration.

Apprenticeships and Advanced Apprenticeships provide structured training with an employer. As an apprentice you must be paid at least £95 per week; you may well be paid more. A recent survey found that the average wage for apprentices was £170 a week. Your pay will depend on the sector in which you work, your age, the area where you live and the stage at which you have arrived in the Apprenticeship.

Entry to Employment (e2e) can help to prepare those who are not yet ready for an Apprenticeship. In addition, Young Apprenticeships may be available for 14- to 16-year-olds. More information is available from a Connexions personal adviser or at www.apprenticeships.org.uk.

There are different arrangements for Apprenticeships in Scotland, Wales and Northern Ireland. For further information contact Careers Scotland www.careers-scotland.org.uk, Careers Wales www.careerswales.com or Careers Service Northern Ireland www.careersserviceni.com.

With an appropriate examination for stockbroking, a junior operational staff member may be able to move into a training/junior stockbroking position. For this route, the Diploma in business, administration and finance, A levels or a foundation degree in financial services may be relevant.

A Few More Exams You Might Need

Stockbrokers giving financial advice must pass an Appropriate Exam as listed by the Financial Services Skills Council (FSSC). To give any investment advice, they must also be registered as an 'authorised person' with the Financial Services Authority (FSA).

Appropriate examinations include:

• CFA Society of the UK Investment Management Certificate (IMC).
• Chartered Institute for Securities & Investment (CISI) Level 3 Certificate in Investments, comprising a regulatory unit, an investment and risk unit (which must be completed if providing retail advice or dealing in securities or derivatives) and completion of one of six technical units.

Compulsory in many investment jobs, these qualifications are designed to give a good understanding of the industry financial regulation and code of ethics. While qualifying, entrants generally train and work alongside market analysts and qualified stockbrokers.

Within several years, stockbrokers may progress towards more advanced professional qualifications, including:

• Chartered Financial Analyst (CFA) qualification (available by independent study from the CFA Institute).
• CISI Diploma, including appropriate modules in fund management and investment analysis.
• CISI Level 6 Diploma in Wealth Management (with Applied Wealth Management accredited at a Level 7 Masters degree).

Stockbrokers are expected to maintain an up-to-date knowledge of the investment sector and changes in regulations. The CISI and the CFA Society of the UK both provide short courses and training events to support continuing professional development (CPD).

With the CISI Diploma or Masters and three years' experience, stockbrokers can achieve CISI Chartered status and the designation FCSI.