Loading the player...

What is a 'Stockbroker'

A stockbroker, also called a Registered Representative, investment advisor or simply, broker, is a professional individual who executes buy and sell orders for stocks and other securities through a stock market, or over the counter, for a fee or commission. Stockbrokers are usually associated with a brokerage firm and handle transactions for retail and institutional customers. Brokerage firms and broker-dealers are also often referred to as stockbrokers.

BREAKING DOWN 'Stockbroker'

It used to be that only the wealthy could afford hiring a broker to have access to the stock market. However, advances in technology, such as the Internet, gave rise to discount brokers that allowed small investors to trade the stock markets at a small fee. Because of discount brokers, nearly anybody can afford to invest in the stock market, even individuals who are based overseas. One downside to this is the lack of personalized service only a dedicated stockbroker can offer.

Educational Requirements

A bachelor's degree in finance or business administration is typically required for stockbrokers. A deep understanding of financial laws and regulations, accounting methods, principles of economics and currency, financial planning and financial forecasting are necessary to ensure success in the field.

Various Country Licensing Requirements

Different countries have different requirements for stockbrokers. In Canada, would-be stockbrokers should be currently employed by a brokerage firm and are required to complete the Canadian Securities Course (CSC), Conduct and Practices Handbook (CPH) and the 90-day Investment Advisor Training Program (IATP). In Hong Kong, applicants have to be working for a licensed brokerage firm and pass three exams with the Hong Kong Securities Institute (HKSI). However, passing all three exams does not guarantee a license as it still has to be approved by the financial regulatory body.

In Singapore, becoming a trading representative requires passing four exams, Modules 1A, 5, 6 and 6A, administered by the Institute of Banking and Finance. A license is applied through the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX). In the United Kingdom, stockbroking is heavily regulated and brokers must achieve qualifications from the Financial Conduct Authority (FCA). The qualifications required depend on the duties required of the broker as well as his employer. In the United States, the designation "Registered Representative" is obtained by passing the General Securities Representative Exam, also known as the "Series 7 exam," offered by the Financial Industry Regulatory Authority (FINRA). Applicants must also be employed with a registered brokerage firm.

  1. Nominee

    A person or firm into whose name securities or other properties ...
  2. Commission Broker

    A commission broker is an employee of a brokerage company who ...
  3. Series 63

    A securities license entitling the holder to solicit orders for ...
  4. Series 14

    An exam administered by the Financial Industry Regulatory Authority ...
  5. Brokerage Fee

    A brokerage fee is fee charged by a broker to execute transactions ...
  6. Series 6

    The Series 6 is a securities license entitling the holder to ...
Related Articles
  1. Financial Advisor

    Is A Stockbroker Career For You?

    Discover what you need to become a stockbroker and the variety of opportunities that are now available to you.
  2. Personal Finance

    Banker or Broker: Which Career Is Right for You?

    Bankers and stock brokers may share similar traits, but there are many differences.
  3. Trading

    Broker or Trader: Which Career is Right For You?

    A day in the life of a broker or Wall Street trader is an exciting and varied one. Learn more about these two financial professions.
  4. Insurance

    Brokers: Do You Want To Sell Stocks Or Insurance?

    Know the difference between working as a broker or an insurance rep.
  5. Financial Advisor

    Investment Advisor Versus Broker: How They Compare

    What is the difference between an investment advisor and a broker?
  6. Investing

    Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice.
  7. Financial Advisor

    Should You Add A Securities License To Your Qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.
  8. Financial Advisor

    Introduction To The Series 65 Exam

    The Series 65 is required in many states in order to be a fee-based advisor. Find out what it is and whether you need it.
  9. Financial Advisor

    Sell-Side Analysts Need Series 86/87 Exams

    Though these tests are not particularly difficult or comprehensive, passing them is mandatory to work as a sell-side analyst.
  10. Personal Finance

    The Series 79 Exam: What It Is And When You Need It

    If you're getting into the field of investment banking, you'll need to know all about the Series 79.
  1. What certification series does one need to be a bond broker?

    One major requirement before one can become a bond broker is to pass the General Securities Representative Exam, commonly ... Read Answer >>
  2. How do I apply to work in the securities industry?

    Learn about the career path of becoming a securities industry professional, which involves an apprenticeship period and registration ... Read Answer >>
  3. What is the quickest, easiest and cheapest way to buy a bond?

    Bonds usually can be purchased from a bond broker through full service or discount brokerage channels, similar to the way ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center