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What does a Registered Representative do?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 01 November 2016
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A registered representative buys and sells securities on orders from clients and provides advice about prospective investments. Registered representatives are also known as account executives, brokers, or stockbrokers. They usually work for brokerage firms and when they apply for initial licensure, they must be sponsored by parent firms.

To become a registered representative, it is necessary to pass a series of exams. These exams test knowledge of the professional ethics of the trade, the laws related to acting as an agent for clients, and related issues. After passing exams, people can register with a regulatory agency to work as registered representatives. To maintain registration, it is necessary to take continuing education classes. People who fail to meet the continuing education requirement will not be able to remain registered representatives.

The registered representative acts as an agent on behalf of clients. People approach registered representatives to ask them to buy and sell securities for them. Clients issue orders and the representative works to fill the order in a timely fashion and at the best price for the client. This includes networking with other firms and acting quickly to execute time sensitive orders.

Another aspect of the work involves offering advice. Registered representatives are not financial advisors, but they do provide information when asked about specific investments. They can tell clients whether to buy, sell, or hold investments, basing their opinions on current market movements and experience. Clients rely on their agents to provide accurate and well informed information.

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In exchange for these services, a registered representative typically collects a commission. The commission is usually based on the sales price. Other arrangements such as being kept on retainer may also be worked out, depending on where the registered representative works and the needs of the client. All information about compensation must be agreed upon before the registered representative starts executing trades on behalf of the client.

People in these careers can work with individual investors, as well as institutions. They assist with the execution of deals of all sizes, from bulk sales and purchases to smaller transactions. People skills are critical, as is a knowledge of the market and the wide variety of investment options available to people. A registered representative can make varying amounts of money depending on compensation agreements and the current position of the market. Because representatives stand to gain and lose along with their clients, they have a powerful incentive for providing the best services possible.

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