Those who broker individual stock to the investing public are called "stock brokers." These professionals are the official intermediaries that enable anyone to acquire stock for their own individual accounts. As no one can walk into a stock exchange and buy stock directly, someone must broker the stock for them. There are both pros and cons to the work of brokering individual stock.
Qualifications
Extensive testing and licensing are required to receive the legal authority to broker stock to the public. This could be a con for those unable to withstand the learning curve and studying necessary to pass all exams. The "Series 7" exam is a common test that prospective brokers take on their way to licensing. Even after passing this test, brokers much be registered with the Securities and Exchange commission before engaging in any work. Additionally, some prospective brokers do not get access to the test or the license without first gaining official sponsorship from a professional brokerage firm. These hurdles could deter some people from eventually working at a stock broker.
Stress
Brokers interact daily with investors who put large amounts of capital to work in the stock market. When these investors panic or have difficulties with their trading platforms, the brokers must assist these traders with their transactions. The amount of money at stake could place considerable pressure on the broker, who must act quickly to resolve problems or calm the client. During periods of market turmoil, a broker may have to endure many calls from clients who are agitated and concerned about their portfolios. This is a considerable con to the profession of brokering individual stock.
Weekly Hours
Many careers involve no more than 40 hours of work each week. Stock brokers, however, tend to log many more hours than this. Individual clients may require extra paperwork that results in long hours. According to State University, working on a weekend or even a holiday is not uncommon to ensure that all tasks are completed.
Compensation
Brokers may be rewarded for the demands of the job by attractive compensation packages that mix a base salary with commission from client trading. Bonuses and profit sharing may also enter the mix. According to national salary data provided by PayScale, commissions alone can be six figures in some cases. This could justify the challenges of brokering individual stock.
Exposure to Markets without Trading
The profession of stock market trading, particularly for active traders, is a specialized field requiring years of experience to generate consistent profits. For those with a passion for the financial markets, brokering individual stock is an opportunity to be involved with the stock market on a daily basis without the skills and temperament necessary to succeed as an individual trader. Many brokers help traders facilitate their trading decisions rather than making the decisions themselves. The commission fees generate profits for the broker regardless of the success or failure of the actual trades. Thus brokers get exposure to the stock market without the stress of making profitable trades. This is a pro for those who wish to interact with the high-energy field of actively buying and selling shares without the pressures that usually come with it.
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