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How do I Become a Securities Broker?

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  • Written By: Simone Lawson
  • Edited By: Jenn Walker
  • Last Modified Date: 11 November 2016
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Securities brokers play a key role in the financial investment world. Brokers work to advise people on securities investments, such as stocks, bonds and mutual funds. Once the client agrees to the investment, the broker sends the order to the floor of the securities exchange and procures a commission from the investment. To become a securities broker, it is advisable to have a strong understanding of business and finance principals, a bachelor’s degree in a related field and the proper licensure.

Building business and finance skills is generally the first step to become a securities broker. This may be done by closely studying current investment and market trends. To be a successful broker it is ideal to have knowledge of the markets and upcoming investments.

Gaining work experience in sales is also a helpful way to build skills and attract future employers. Many firms hire securities brokers with a background in insurance or real estate sales. Working on a commission gives one looking to become a securities broker an understanding of how to deal with clients and manage a commission-based salary.

Many securities brokers hold bachelor’s degrees in accounting, economics, finance or business. Obtaining an internship during undergraduate study is also considered an excellent way to secure employment after graduation. Some students find employment as summer interns to establish relationships with firms early on. Firms often hire a large percentage of their summer interns as full-time securities brokers once they have completed their undergraduate studies.

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Some securities brokers go on to earn a master’s degree in business administration (MBA). Typically an MBA is obtained after several years of working in order to secure a higher level position in the industry. Some may go on to obtain an MBA directly after graduation, but it is uncommon to attend graduate school without some type of work experience.

In the United States, it is typically required that securities brokers register as representatives of their firm with the Financial Industry Regulatory Authority (FINRA). Registration requires four months of employment at a firm and successful completion of the Series 7 examination. The Series 7 examination is administered by FINRA and should be completed in order to obtain the proper licensing.

The Series 7 exam is six hours long and requires a passing score above 70%. Some states in the US require brokers to complete the Uniform Securities Agents State Law Examination as well. This exam is designed to test specific knowledge on the requirements and procedures of the securities business.

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starrynight
Post 2

@indemnifyme - Exams of all kinds are just not fun. I'm glad licensing exams aren't easy though. If you need special skills to do a job, then the exam should ensure that you have those skills.

I think this is especially true of brokers. Since they give financial advice to consumers, they need to be on top of their game. If they don't know what they're doing, they could give bad advice and customers could lose money.

indemnifyme
Post 1

I work in insurance, so I've had to take a licensing exam. Let me tell you, it's not a joke. And I imagine the Series 7 exam is probably even more difficult than an exam for an insurance license.

But let me tell you, it took me about two months to prepare for my property and casualty licensing exam. I studied every single day. And I still didn't pass on the first try!

My exam was only an hour and a half long. I can't imagine having to take a seven hour long exam of the same magnitude! I definitely have respect for securities brokers.

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