How To Become an Investment Broker

Investment brokers arrange matters between buyers and sellers. They look for both buyers and sellers of stock and charge a commission from whatever sales agreement follows based on instructions from either the buyer or the seller. Investment brokers need a license to be able to sell stocks, mutual funds and bonds. Although some people prefer dealing with a large brokerage firm like Merrill Lynch, there are still a lot of people who deal with individual licensed investment brokers.

Most investment brokers take care of trading for investors. But there are investment brokers who give additional services to clients like portfolio management and giving their "expert" investment advice. Brokers charge commissions from their sales and also from charging fees from investors. Usually, brokers insist on a minimum deposit in a brokerage account. Every time the broker needs money for a trade, he gets money from this brokerage account to make a purchase. On average, the minimum deposit for a brokerage account is about $200-$500 although it may go higher than that.

Brokers at workThere are full-service investment brokers and discount investment brokers. The investment broker that you usually find online who charges a rate of $5-$15 per transaction is a discount investment broker. A discount investment broker does his work by doing small "buy and sell" transactions. The full-service investment broker acts as a financial planner for your account, drafting an investment strategy for you and maintains a portfolio that adheres to your financial plan. This means he regularly studies your preferred market and is on the lookout for deals and steals which will benefit your portfolio and is ready to unburden it when a good time for unloading comes. An investment broker can charge from $100-$200 per transaction. But he can also charge an additional fee for the service of maintaining your portfolio and for the operating fee.

Because of the sensitive nature of the job, investment bankers who are hired by banks are usually required to have finished a management course in college, or a degree in accountancy, banking and finance or economics. If you want to get better clients and want to charge higher rates, getting a doctorate degree in economics would also be a good choice. If you want to become an individual investment banker and not necessarily with a bank, there are institutions that offer special subjects on banking that give post-graduate certificates or diploma courses in banking.

In most states, an investment broker needs a license to operate on his own. There are various exams but you just need to take the licensing exam for a particular option that will suit your needs. You need to get a Series 3 license if you want to specialize in commodities.

If your line of work is more on getting options principal, you will need the Series 4 to have a license. But if you want to become a licensed general securities representative, you need to take the Series 7 exam.

When an individual invests, he believes that the money he is placing in an investment will possibly generate more returns after some years. This expectation is hinged on an investment broker and much is expected of the investments that he will suggest to individuals seeking a good return on their money.


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