Basically, Stock Brokers should have an analytical mind. This will come in handy when reading business news articles, so he can readily correlate the facts in the news to potential impact on probable company stocks or industries to be affected. A strong will is the secret of those Stock Brokers who have managed to stay in the industry for so long. Sometimes it is really hard to sell at a lose hoping for the price to come back up but sometimes cutting losses is necessary to prevent further losses. There are no Brokers who had a 100% profit batting average.
Normally Stock Brokers are paid by commission on a per-transaction basis. Although, at first it may sound like a typical sales job but when a Broker gets really good, there’ll come a point when the Brokers can choose clients they would just like to take on. Veteran Brokers prefer a commission-based income because they can have greater income potential. Imagine this scenario, if a certain Mr. John Doe asks his broker to buy a million shares of Microsoft shares and then a few hours later asks the Broker to sell them, this means that the Broker transacted roughly about $50 million because the price of Microsoft shares are hovering around the $23 price. Imagine the commission the Broker made in just a matter of hours.
Established stock brokerage houses like JP Morgan and Morgan Stanley give top-of-the-line remuneration packages because their in-house brokers doesn’t need to do marketing efforts as these broker houses are established and already have an established clientele.
There are two types of accounts a Stock Broker handles, one is an order-taker type and the other is a discretionary one where the Broker has full liberty to buy and sell in behalf of his clients. When Brokers make the wrong call, like, selling his clients holdings then the stock surged right after selling them or bought stocks and then the price goes lower, clients can’t help but doubt their Broker’s decision making and calls their immediate supervisor. To avoid Client-Broker disputes, even though the account is a discretionary type, it is always prudent to let the client know what the battle plan is. Like, “Mr. Client, word is abuzz that a merger is in the offing between IBM and Oracle making the new company the second largest IT-company, if activity picks up, I will buy both stocks and sell them when the news comes out” or something like that. This way, clients are informed fully what’s happening since, after all, it’s their money.
Those who want to live a fast-paced, roller-coaster life like those of Stock Brokers, a license is a requirement. No particular degree is really needed however, there are now courses specializing in Financial Markets which would equip prospecting to become Stock Brokers the necessary knowledge on the ins and outs of high-finance.