A stockbroker can work in a retail office, an institutional office, as an independent contractor or she can trade on one of the major stock exchanges. Most stockbrokers have a college degree, and all are required to have an active license.
Significance
A stockbroker must take and pass the General Securities Registered Representative Examination. This is called the Series 7 Exam. Many states also require the Uniform Securities Agents State Law Examination.
Considerations
If a stockbroker does not work as a stockbroker during a two-year time period, the license becomes inactive and the broker must retake the Series 7 exam and other exams. A stockbroker cannot conduct business with an expired license.
Continuing Education
Every three years, Series 7 representatives (stockbrokers) must take and complete a continuing education course at a testing center. Failure to do so can result in a license suspension until the broker completes the course.
Effects
If a stockbroker's license is suspended, it has a dramatic impact on his business, clients and paycheck. He cannot legally service clients, offer advice, enter trades and/or maintain customer accounts.
Warning
Some firms may permanently dismiss or temporarily suspend an employee (stockbroker) with a suspended license. A license can also be suspended due to pending customer complaints, improper practices, investigations or or other legal matters.
Expert Insight
FINRA, the Financial Industry Regulatory Authority, oversees close to 4,750 brokerage firms. Its website allows individuals to find a broker by name; verify if a broker is licensed and current; and review any complaints.
References
- The Princeton Review: Stockbroker
- FINRA: Protect Yourself
- U.S. Securities and Exchange Commission. “Report to the Congress: The Impact of Recent Technological Advances on the Securities Markets.” Accessed May 28, 2020.
- Indeed. “Learn About Being a Stockbroker.” Accessed May 28, 2020.
- Nasdaq. “Death of a Stockbroker.” Accessed May 28, 2020.
- The Princeton Review. “Stockbroker.” Accessed May 28, 2020.
- Indeed. “Everything You Need to Know About Becoming a Stockbroker.” Accessed May 28, 2020.
- FINRA. “Enroll for a FINRA Exam.” Accessed May 28, 2020.
- FINRA. “Securities Industry Essentials (SIE) Exam.” Accessed May 28, 2020.
- FINRA. "Series 7 – General Securities Representative Exam." Accessed May 28, 2020.
- FINRA. "Series 53 – Municipal Securities Principal Exam." Accessed May 28, 2020.
- FINRA. “Series 63 – Uniform Securities Agent State Law Exam.” Accessed May 28, 2020.
- FINRA. "Series 66 – Uniform Combined State Law Exam." Accessed May 28, 2020.
- Fidelity. “Commissions, Margin Rates, and Fees.” Accessed May 28, 2020.
- Charles Schwab. “We Believe Price Should Not Be a Barrier to Pursuing Your Goals.” Accessed May 28, 2020.
- FINRA. "Statistics." Accessed May 28, 2020.