Financial Services Brokers

Financial services brokers, sometimes called registered representatives, account executives, securities sales representatives, or stockbrokers, work to represent both individuals and organizations who wish to invest in and sell stocks, bonds, or other financial products. Financial services brokers analyze companies offering stocks to see if investing is worth the risk. They also advise clients on proper investment strategies for their own investment goals. Securities, commodities, and financial services brokers hold approximately 281,000 jobs in the United States.

Financial Services Brokers Job Description

The most important part of a broker’s job is finding customers and building a client base. Beginning brokers spend much of their time searching for customers, relying heavily on telephone solicitation such as “cold calls”—calling people with whom they have never had any contact. Brokers also find customers through business and social contacts or they might be given a list of likely prospects from their brokerage firm.

When financial services brokers open accounts for new customers, they first record all the personal information that is required to allow the customer to trade securities through the brokerage firm. Depending on a customer’s knowledge of the market, the broker may explain the meaning of stock market terms and trading practices and offer financial counseling. Then the broker helps the customer to devise an individual financial portfolio, including securities, life insurance, corporate and municipal bonds, mutual funds, certificates of deposit, annuities, and other investments. The broker must determine the customer’s investment goals—such as whether the customer wants long-term, steady growth or a quick turnaround of stocks for short-term gains—and then offers advice on investments accordingly. Once an investment strategy has been developed, brokers execute buy and sell orders for their customers by relaying the information to the floor of the stock exchange, where the order is put into effect by the broker’s floor representative. Securities traders also buy and sell securities, but usually as a representative of a private firm.

From the research department of the brokerage firm, brokers obtain information on the activities and projected growth of any company that is currently offering stock or plans to offer stock in the near future. The actual or perceived strength of a company is a major factor in a stock-purchase decision. Brokers must be prepared to answer questions on the technical aspects of stock market operations and also be informed on current economic conditions. They are expected to have the market knowledge to anticipate certain trends and to counsel customers accordingly in terms of their particular stock holdings.

Some financial services brokers specialize in areas such as institutional accounts, bond issues, or mutual funds. Whatever their area of specialization, financial services brokers must keep abreast of all significant political and economic conditions that might effect financial markets, maintain very accurate records for all transactions, and continually solicit new customers.

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