Show Me The Money!

Show Me The Money!

When the stock market rises, you make bank. When the market falls, guess what, you also make bank.

Is it not odd that the only generous person I ever knew, who had money to be generous with, should be a stockbroker. --- Percy Bysshe Shelley

You run the money. You know the money. You buy the money and you sell the money. It’s not even money to you, it’s numbers, global numbers.

But you make a truckload of the stuff when you score, and you’ve scored big enough to be stared at when you walk into another office.

Each day, you handle so much money. You and other brokers move hundreds of billions of dollars that change hands on the major securities exchanges. This money is used to invest in securities, such as stocks, bonds, or mutual funds— bought and sold by large institutional investors, mutual funds, pension plans, and the general public.

You are one of a small but powerful group of brokers, working directly on the floor of a stock or commodities exchange. When a firm or investor buys or sells a security or commodity, your computer zaps the order straight to the floor of the exchange.

Power? You negotiate the price with other floor brokers, make the sale, and forward the purchase price to the sales agents.

And you’re totally making bank, doing this. It’s like printing money, when you make it work.

How did you get your career rolling to begin with? When you began, you relied on Cold Calling to start your day, rolling a list of leads. You called it Collie Cold Calling— even a dog can sell, if he rolls enough telephone numbers.

stockbroker on the phone

(A hundred calls a day and maybe one-tenth hooked up and maybe 2 or 3 were a sell. The more you called the more you sold. Brutal numbers. But now you’re past that. Now you have built up your own big client accounts.)

You are a securities sales agent— a broker, or stock broker.

You advise your clients to invest, or not invest. You know their tendencies and their financial clout.

You electronically sends the order to the floor of the securities exchange, to complete the transaction. After the transaction is finalized, you charge your commission. Sweet!

You’ve had offers and you’ve toyed with becoming an Investment bankers— a sales agents who connect businesses (that need money to finance their operations or expansion plans) with investors interested in providing that funding, in exchange for debt (in the form of bonds) or equity (in the form of stock).

This broker process is called underwriting, and it is the main function of the investment bank. Investment bankers have to sell twice: first, they sell their advisory services to help companies issue new stock or bonds, and second, they sell the securities issued to investors. You’re still thinking it over.

Then there are the big fat IPO’s. Initial Public Offerings. Maybe the most important advisory service, provided by investment bankers, is to help companies new to the public investment arena issue stock for the first time.

Then there’s mergers and acquisitions. Investment bankers advise companies, find buyers and sellers, and broker enormous deals.

What do you need to know to broker all these big money deals?

At minimum, most broker positions require at least a bachelor’s degree in business, finance, accounting, or economics.

Try to get your foot in the door ASAP. Brokerage firms hire summer interns before their last year of college. Many successful interns are offered full-time jobs after graduation.

Brokers often go ahead and earn their Master’s degree in business administration (MBA), which is often a requirement for high-level positions in the securities industry.

Wall Street

Because the MBA is a professional degree designed to expose students to real-world business practices, it is considered to be a major asset for jobseekers. Employers often reward MBA holders with higher-level positions, better compensation, and even large signing bonuses.

Brokers and investment advisors must register as representatives of their firm, with the Financial Industry Regulatory Authority (FINRA).

Before beginners can qualify as registered representatives, they must be an employee of a registered firm for at least 4 months and pass the General Securities Registered Representative Examination—known as the Series 7 Exam—administered by FINRA. (The exam takes 6 hours and contains 250 multiple-choice questions; a passing score is above 70 percent.)

Securities, commodities, and financial services sales agents held about 317,200 jobs in 2008. About 49 percent of jobs were in the securities, commodity contracts, and other financial investments and related activities industry. About 15 percent of all workers were self-employed.

Employment of securities, commodities, and financial services sales agents is expected to grow 9 percent during the 2008-18 decade, about as fast as the average for all occupations. Consolidation of the financial industry, mainly stemming from recent global financial problems, will be the largest inhibitor of employment growth. Increased levels of industry consolidation often result in duplicated tasks among workers, a scenario that is expected to result in layoffs of many broker, sales, and investment banking positions.

The median annual wage-and-salary wages of securities, commodities, and financial services sales agents were $68,680 in May 2008. The middle half earned between $40,480 and $122,270.

Median annual wages in the industries employing the largest numbers of securities, commodities, and financial services sales agents

Benefits in the securities industry are excellent. Healthcare, retirement, and life insurance, paid lunches with clients, paid dinners, extensive travel opportunities.

You will live in a big city somewhere in the world. That’s where the money markets thrive.

London, Shanghai, Hong Kong, Zurich… exciting, huh?

In the USA, the stock exchanges and large banking operations— and most of the major investment banks, are based in the New York metropolitan area. (Smaller investment banks can be found in many major American cities and some major investment banks have operations in other cities, although most of their business remains in New York.)

If the big-city fast-track life appeals to you, go for it.

And job security? It depends on your competitiveness. The financial world isn’t going away. The world revolves on money.

And the adrenal rush for many brokers is highly addictive. Global securities trades are arranged through brokers of securities, commodities, and financial services— whether the trades are between individuals with a few hundred dollars, or huge institutions with hundreds of millions of dollars!)

So how do you get there? The broker lifestyle demands that you work hard, that you build toward an advanced degree. Remember, an MBA (or professional certification) accelerates advancement.

It’s THE BIGS, a total money game. And you need to educate yourself— to compete on the world stage.

(And as Shelley said, its much easier to be generous, when you have earned a ton of money to play with!)

For information on securities industry employment, contact:

For information on licensing, contact:

  • Financial Industry Regulatory Authority (FINRA), 1735 K St. NW., Washington, DC 20006. http://www.finra.org

For information on CFA certification, contact:

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