How to Become a Successful Stockbroker

The prospect of becoming a successful stockbroker holds a lot of allure for many people. Two factors determine who gets the best piece of the pie: career length and location. The longer you’ve been working, the larger the client base and large cities are home to the biggest, highest-paying firms.  

The average salary for a stockbroker paid by a firm excluding commissions was $71,882 a year as of August 2024. Salaries ranged from around $33,450 up to $154,470 at that time. The average commission added another $43,500. 

Here’s how to do it if becoming an accomplished stockbroker sounds appealing to you.

Key Takeaways

• Hone your personal skills with a focus on determination and patience.
• Consider obtaining an MBA and ace the process with excellent grades.
• Begin networking and cold calling to build a client base.
• Get started by taking your FINRA exams as soon as possible even if it means paying for them yourself.

Build a Toolbox for Success

You’ll need these skills to succeed in this profession: 

• Be a self-starter.
• Know how to deal with rejection.
• Possess the determination to work long hours, nights and weekends included.
• Have the patience to build up a business, which takes years.
• Hone good sales, communication and time management skills
• Practice perseverance 

You’re ahead of the game if you can check off these factors but strongly consider these additional steps as part of your career legwork if you want to increase your advantage over the competition:

• Attain an MBA.
• Accumulate certificates you might need down the road, which saves firms money and shows that you’re motivated.
• Earn excellent grades in college.
• Procure an internship for experience.
• Trade your own money. Nothing matches real-world experience but the value of simulated trading can’t be overlooked.
• Join a business-related club or fraternity in college for networking opportunities.

Build a Client Base

These tactics are imperative to build a client base:

• Cold calling
• Contacting pre-qualified leads
• Tapping into relatives, friends, and referrals
• Networking in your community

You can also get creative and market via social media, blogging to show off your knowledge and tweeting to garner more attention. But keep it simple.

The turnover rate for stockbrokers in their early years is extraordinarily high. Finding a mentor is highly recommended. You want to follow the path that successful brokers have taken.

Note

It will get easier if you can make it through the early and difficult years.

The Cost of Getting Started

Firms will want to know if you can generate commissions, new leads, and accounts. A firm will likely sponsor your FINRA exams if it sees potential in you but it shows determination if you can pay for the exams yourself. Here are the costs as of December 2024:

• Series 7 General Securities Registered Representative: $300
• Series 3 National Commodity Futures Exam: $140
• Series 63 Uniform Registered Investment Advisor Examination: $147
• Series 65 Uniform Combined Registered Advisor-State Laws: $187

You have two years after passing an exam to register with FINRA. You’ll need a criminal and financial background check and a fingerprint card to complete registration with FINRA and you must register with the Securities Commission unless you’re conducting all your business intrastate. 

Which Broker Type Are You?

Look into working for full-service brokers such as Merrill Lynch or Morgan Stanley (MS) if you want prestige. Payouts are around 41% and brokers will have to have earned $650,000 if you want to work at Merrill Lynch. Training will be extremely comprehensive. You’ll have to meet a high sales quota to retain your position and you’ll be faced with a lot of high-pressure situations and looked at as a number.

Important

This might sound discouraging but you’ll eventually go from a number to a name and the potential for success is high if you pass the test.

Another alternative is to work with an independent broker-dealer such as LPL Financial. You’ll see higher payouts, often 80% to 95%-plus, but you’re responsible for your own expenses and there’s no office space provided.

Consider a discount broker like Charles Schwab Corp (SCHW) if you don’t enjoy sales and/or giving investment advice. You’ll earn a flat salary and get much more experience because your investment knowledge must be spread across the board rather than specialized in one area. There aren’t any quotas to meet and you’ll be situated in a friendlier, less competitive work environment.

What Is Simulated Trading?

Simulated trading is essentially a practice platform. Most provide all the features and tools you’d access to trade for real but you don’t have to risk your money while you’re learning. Some provide training sessions, too, like Charles Schwab’s paperMoney. Simulated trading can provide a way for you to start learning the ropes.

What Is a Discount Broker?

A discount broker handles buy and sell orders for clients but doesn’t provide investment advice or analysis. They virtually work for free, charging very minimal commissions if any at all. They’re platforms where you can set up an account and effectively do your own trading.

What’s the Biggest Downside to Cold Calling?

Perhaps the greatest downside to cold calling is that you’re tapping someone on the shoulder who probably really doesn’t want to talk to you at the time you call. They’re almost certainly occupied with doing something else or they’re relaxing and don’t want to be bothered. You might want to talk about stocks but odds are that they don’t, at least not at that precise moment.

They might be willing to schedule a later time to talk with you, however, if you’re personable and polite.

The Bottom Line

These tactics can help if you want to become a successful stockbroker but the job also requires a great deal of patience and thick skin. Remember when doubt creeps in that your willingness to persevere is what separates you from your competition.