When someone wants to buy or sell stocks, bonds, mutual funds, insurance
annuities or other financial products, they may go to a stockbroker. Stockbrokers
may also be called securities sales representatives, registered representatives,
account executives or investment dealers.
Stockbrokers are the people who are licensed to buy and sell stocks. Stocks
are pieces of paper that give you part ownership in a company, and part of
the profits that company earns. Stocks themselves can make their owners a
profit, depending at what price they were bought and at what price they were
There are generally two types of stockbrokers: The first is the traditional
kind of stockbroker, also called the full stockbroker or investment advisor.
These stockbrokers analyze portfolios, suggest stocks, offer clients accounts
from which they can buy stocks, and provide a whole range of other services.
Stockbrokers charge commissions for their service, usually from one to three
percent of the money invested. Full-service stockbrokers charge at the high
end of the range.
Brian Field is a full stockbroker. When he is beginning to work with a
client, Field says he first determines how much risk they are willing to take,
how much money they wish to invest, and the financial goals they wish to reach.
Using that information, he puts together a portfolio -- a collection of items
such as stocks, bonds and cash -- for them.
The second type of stockbroker is the discount broker. This type of stockbroker
does not provide advice or suggestions to clients. All they do is carry out
the transactions, such as buying or selling stocks, desired by the client.
People who prefer to do their own research into their investments would most
likely go to a discount broker.
There are two important changes taking place in the world of the stockbroker.
First, clients are becoming much more sophisticated and knowledgeable about
their investments. Because more and more clients are choosing their own investments,
the demand for discount brokers has increased. As a result, some experts believe
the future looks bleak for traditional stockbrokers.
Computerization is also taking a toll on traditional stockbrokers, because
investors can get up-to-date information about stock prices on their own computers.
In the future, investors may even be able to carry out their own transactions
by computer. Some people feel this could spell the end for stockbrokers, since
their services would no longer be required. But some experts believe there
will always be some demand for stockbrokers -- especially those with a proven
Stockbrokers may work for brokerage firms and banks. They are also beginning
to be found in many other types of financial institutions.
New stockbrokers often spend their first couple of years developing a client
base. This takes a lot of hard work, determination in the face of rejection,
and persistence. It is often best to have experience in sales before you get
started as a stockbroker.
Buy and sell stocks for clients
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Securities, Commodities, and Financial Services Sales Agents
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