How To Become A Stockbroker In Australia: A Complete Guide

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Students want to know how they can become stockbrokers in Australia.


 

If you're seeking a fulfilling and financially rewarding career, look no further than becoming a stockbroker in Australia. Stockbrokers possess specialised expertise in trading financial products, particularly shares and stocks.

 

The good news is that a well-defined path exists to enter this exciting profession. To embark on this career trajectory, developing a deep understanding of the stock market, investments, and the intricate realm of finance is crucial.

 

While a degree is not obligatory, obtaining one can significantly boost your job prospects and open doors to greater opportunities.

 

This blog will teach you about the stockbroker's roles, responsibilities, qualifications, courses, and more. Keep reading to discover everything you need to know about pursuing a career as a stockbroker.

 

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1. What Does A Stockbroker Do?

 

A stockbroker is also called a broker-dealer. This professional sells and buys stocks for institutional and retail clients through over-the-counter and stock exchange. And for providing this service, they are either paid a commission or a fee.

 

A stockbroker is well-versed in the stock exchange market and can advise people when to buy and sell their stocks to earn maximum profit.

 

Apart from selling and buying stocks, shares, etc., they can also work as a financial adviser. As a financial adviser, you will advise corporations and individuals about investment practices and assist them in making informed investment decisions.

 

 

2. Responsibilities of A Stockbroker

 

By now, you briefly know what a stockbroker does. This section will help you understand their responsibilities thoroughly.

 

A stock broker will usually make trades for someone, particularly on behalf of their clients. A stock broker's client can be an institution, a company, and even an individual.

 

When it comes to the responsibilities and duties of a stockbroker, there are many things that the specialist will have to take care of. Take a look at some of the essential duties of a stockbroker below:

 

  • A stockbroker must have in-depth knowledge of shares, stocks, and investment services. They must also know how to trade them.

  • A stockbroker should always stay up-to-date regarding legislation on taxation and finance.

  • The specialist should monitor the stock market's performance and understand the changes.

  • If there are any risks, the stockbroker will have to analyse the risks and guide the client accordingly.

  • The stock trader should be a good listener, listen to the client's requirements in detail, and provide tailored services.

  • Must follow world news and events that can contribute to the prices.

  • Alert clients and advise them about the right time to sell and buy stocks to increase the client's chances of making maximum profits.

  • The stockbroker conducts financial trades on behalf of their clients.

  • The specialist must manage the client's financial portfolio and analyse it properly to see growth opportunities.

  • The professional will have to prepare reports and analyses of the investment portfolios. They may have to explain the information as well.

  • A stockbroker must know the market and find new clients.

 

 

3. What Personality Do You Need To Become A Stockbroker?

 

Not everyone is suitable for all types of professions. The same goes with stock-broking. People with specific personalities are suited for this profession.

 

If you have or can build the following skillset, you have a higher chance of succeeding as a Stockbroker in Australia.

 

 

Technical Skills

 

  • Good knowledge of various financial, analytical, and mathematical skills to identify the best trades.

  • Thorough knowledge of the stock market, including ASX Limited, and overseas stock markets, like the FTSE 100.

  • Knowledge of accounting software, specialised trading software, and trading platforms such as Trade Station, Microsoft Excel, QuickBooks, etc.

  • Computer skills to work with programmes like Microsoft Office.

  • Knowledge of mathematics to apply investment formulas to analyse different situations.

  • Impressive sales skills in selling shares, stocks, and funds to clients.

 

 

Soft Skills

 

In addition to technical skills, you also need a range of soft skills to maximise your chances of success in stock broking:

 

  • Hardworking

  • Ambitious

  • Emotional control

  • Able to stay composed under pressure

  • Analytical mindset

  • Good risk management skills

  • Patience

  • Confident

  • Persuasive

  • Honest and trustworthy

  • Self-motivated

  • Solid sales and social skills to build a client base and maintain lasting relationships with them.

  • Practical communication skills to clearly explain complex financial data to clients.

  • Able to handle work pressure while dealing with large sums of money.

  • A certain level of personal fitness to work long hours, within tight deadlines, and in stressful conditions

  • Willingness to continually stay updated on financial news, changing financial markets and regulations, and keeping up-to-date on their skills, qualifications, and licenses.

  • Able to make investment decisions, they can defend their clients.

  • A learning attitude

 

 

4. Education Requirement To Become a Stockbroker In Australia

 

If you want to become a skilled stockbroker, you must be good at analytical and mathematical skills. You must also have a thorough understanding of the financial market and tools. A bachelor's degree is the minimum requirement to start working as a stockbroker. 

 

A degree is optional to become a stockbroker. However, if you want to work with stockbroker firms, they will mostly ask for a degree.

 

If you want to know how to become a stockbroker without a degree, the answer is to find a firm that will let you work as a stockbroker even without a degree. But aim for a degree to avoid trouble becoming a stockbroker in Australia.

 

Do an under-graduation course in economics, mathematics, finance, accounting, or a similar subject. These are the subjects that stockbrokers usually study. Moreover, these subjects will help you understand the financial industry better.

 

If you want to enhance your stock market knowledge, you can take stockbroker courses TAFE offers. TAFE is an excellent destination for finding relevant courses.

 

Apart from courses offered by TAFE, you can also apply for stockbroking certification courses. Diploma courses are usually short and can help you understand the role of a stockbroker properly.

 

If you are a graduate and want to make a career shift, try some stockbroker courses. The crux is to prepare yourself to become a stockbroker without any hurdles.

 

After graduation, you can also do a master's degree in finance. This will help you showcase your expertise and skills better. Moreover, the more degrees you have related to finance, the more your clients will trust you.

 

Do visit the website of the stockbrokers association of Australia to find an accredited course that will skyrocket your stockbroker career.

 

Once you have done this, the next thing that you need to do is apply for a stockbroker license. Ensure that you meet ASIC (Australian Securities and InvestmentsCommission) stockbroker training requirements.

 

 

5. What Are The Three Different Types of Stockbrokers?

 

Stockbrokers are classified into three different types:

 

 

Full-Service Brokers

 

Known for their financial expertise, full-stock brokers offer a premium-level investment service to their customers. It includes:

 

  • Evaluate your current financial state and investment goals

  • Perform detailed investment research

  • Guide on what shares to buy and sell

  • Provide a comprehensive portfolio analysis

  • Perform all the legwork required to trade in stock and other financial assets for you.

 

So, besides assisting you in buying and selling securities, they also help you with portfolio analysis, financial planning, and wealth management services.

 

Some of the well-known full-service brokers in Australia are:

 

  • Commonwealth Securities Limited

  • Morgan Stanley Wealth Management Australia

  • Bell Potter Securities Limited

  • Macquarie Equities Limited

  • Morgans Financial Limited

  • Shaw and Partners Limited

  • UBS

  • Phillip Capital Limited

 

 

Online Brokers

 

Online brokers are cheaper than full-service brokers as they only help clients by providing a platform to trade in securities. However, they don't offer any investment advice and perform investment research and financial planning on behalf of their clients.

 

It is a good option for clients with a decent knowledge of the stock market who do not require personalised advice to trade or invest in the market.

 

To use the services of an online stock broker, you must create an account on their web-based or app-based trading platform. Based on the broker, you can trade assets such as shares, ETFs, index funds, bonds, options, etc., on both ASX and international exchanges.

 

You can also use online tools such as copying high-profile trades of investors, doing in-depth stock research, getting easy data access to make informed trades and more.

 

Some of the top online brokers in Australia are CommSec, eToro, IG Share Trading, CMC Invest, Tiger Brokers, Self-Wealth, Syfe, and more.

 

If you don't have a trading account yet, consider eToro, used by many investors in Australia and worldwide. You can create an eToro trading account HERE.

 

eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. See PDS and TMD

 

eToro offers extensive trading features, social trading tools, and copy trading to imitate the trades of other famous traders. 

 

Buy Australian & international shares with unlimited commission-free trades. (No brokerage). Other fees may apply.

 

 

Robo Advisors

 

Robo-advisors are online financial advisers that use innovative technology to offer similar investment management services as a traditional financial adviser but at one-tenth of the cost of a traditional financial adviser.

 

It uses expert-designed analysis tools and algorithms to generate financial plans for customers and automatically balance and re-balance their investment portfolios based on their financial goals, investment time frame, and risk appetite.

 

However, Robo-advice doesn't offer personalised services and lacks the flexibility of buying individual shares that other services provide. Most of their services are limited, with no tax or estate planning assistance.

 

 

Discount Brokers

 

Those who don't make it to full-service brokerage firms go for discount brokers. Discount brokers aren't experts at sales but want to learn how to manage investments. The firms that hire discount brokers pay a flat salary. 

 

The best thing about discount brokers is that while working, they build up a portfolio with a good clientele base that helps them to move to a full-service.

 

 

Bank Brokers

 

Then you have bank brokers. Bank brokers are paid as discount brokers but are more like full-service brokers. Banks look for brokers with previous experience. 

 

Therefore, if you want to work as a bank broker, you must become a discount broker first. Bank brokers may have to work with a conservative clientele base, and the work culture is almost free of high sales pressure and sales quotas.

 

 

6. Your Career Path To Becoming A Stockbroker

 

You have minimal chances of becoming a stockbroker if you don't have adequate knowledge about the stock market. You must study as much as possible and stay abreast with everything related to stocks. 

 

You can read books on the stock market, keep yourself up to date by following daily stock-related news, etc. Find out what a stockbroker does in more depth, even though we have highlighted the significant responsibilities of a stockbroker.

 

 

Excellent Math Skills

 

A leading stock market will tell you how prudent mathematics skills are to become a stockbroker. Even if you are good at maths, hone your skills further. The better your math skills, the better your chances of becoming a broker. Maths is an inevitable requirement for a stockbroker.

 

 

Be Detailed

 

A stockbroker must be detail oriented on every piece of information. If you know a stockbroker, you will notice that they are incredibly detail-oriented. They will fail to provide their clients with the right advice if they miss crucial stock information.

 

 

Get A Degree

 

We have already shared what kind of education qualification you need to become a stockbroker. Still, we want to refresh this part again. Yes, it's not mandatory to have a degree but to work as a stockbroker in a leading firm, you need to have a degree in finance. 

 

Therefore, complete your graduation. Also, ensure that you get good grades.

 

 

Keep Working on Yourself

 

If you want to stay one step ahead of other stockbrokers, you must work on yourself and always be ready to improve your skills.

 

A degree will help you become a stockbroker. Still, when it comes to growing, additional certifications, higher degrees, experience, and enhanced skills will support you.

 

So, don't stop there. Attend seminars and conferences and visit the stockbrokers association of Australia because they conduct workshops and conferences for stock brokers. Conferences and seminars will allow you to network with like-minded people and learn more about stock broking.

 

If you want to grow in this domain, you need to keep working on your skills and prove that you are the best in the stockbroking domain.

 

 

Think About The Firm

 

There are big, medium, and small firms to work as stockbrokers to gain experience. So, you need to consider what kind of firm will suit you.

 

For example, do you want to join a big firm and get paid well along with a competitive training package? Or do you want to work in an environment where there won't be many people?

 

If you choose the latter, go to a small firm. A small firm's package will be less, but the company will provide you with better training.

 

While a big company will offer you a lucrative training package, you will have to work with many, which means you may miss out on a few critical things.

 

 

You Have To Be Sales Oriented

 

The key to becoming a successful sales broker is to be sales oriented.

 

You must know how to impress prospective visitors and convert them into clients. And once they become your clients, you should also know how to keep them with you so that they keep availing of your stock-broking services.

 

 

7. What Does A Stockbroker Earn in Australia?

 

According to Pay Scale, the average Stockbrokers's salary is AU$76,805 in 2023. 

 

Their salary also depends on the following:
 

  • Stock market knowledge

  • Relevant experience

  • Client base

 

A stockbroker with expert stock market knowledge, an established client base, and experience in making profitable trades tends to earn a higher-than-average salary.

 

The stockbroker's salary also depends on other factors, such as the professional's work experience, where they work as a stockbroker, the type of stockbroker they are, whether they are graduates or not, and so on.
 

Besides a base salary, stockbrokers also earn a commission from the number of sales they make on behalf of their clients.

 

 

Average Salary Based on Experience

 

Entry-level stockbrokers generally earn a salary while they learn the market and develop their client base. As they gain knowledge and expand their client base, commissions make up a larger portion of their income.

 

For example, full-service brokers may charge a commission between 1% and 2% of their clients' managed assets.

 

More successful trades and larger client bases result in higher earnings.

 

  • Entry-level (<1-year experience): AU$60,000 per year 

  • Early career (1-4 years of experience): AU$70,000 per year 

  • Mid-career (5-9 years of experience): AU$75,000 per year 

  • Experienced (10-19 years of experience): AU$93,000 per year

  • In their late career (20 years and above): AU$160,000 per year

 

 

8. How To Apply For Stockbroker Positions in Australia?

 

First, complete your education in finance. And if you have done graduation in another course, do some certification course related to finance or stocks. Some institutions provide short-term courses that will help you understand stocks.

 

Then, apply for licensure and start applying for stockbroker positions. Ensure to work on your resume and add education qualifications, certifications (if any), and years of experience.

 

Leverage the power of the internet and search for open positions related to stockbrokers in Australia and start applying. Alternatively, you can get in touch with recruitment agencies as well. They have good networks and can help you find relevant opportunities.

 

 

9. Frequently Asked Questions (FAQs)

 

 

What Is a Stockbroker in Australia?

 

Stockbrokers are qualified financial specialists ASIC-licensed to trade in stocks, bonds, mutual funds, and other financial securities.

 

They provide financial services to their clients on their existing and prospective stocks and securities investments.

 

Stockbrokers build an investment portfolio, process trading and investment transactions, and manage sales of securities on behalf of their clients, including individuals, companies, or institutions.

 

Besides these, they also offer advice on what investments have the potential for the best returns and suitable investment strategies.

 

 

How Stressful is Being A Stockbroker?

 

It takes work to become a stockbroker.

 

Some of the reasons that can make it stressful to work in this profession are:

 

  • The high volatility of the financial market makes you fret about losing your investments, threatening retirement accounts, etc., whether or not your investment selections are correct.

 

  • The constant load of managing and growing your client's hard-earned life savings despite the volatile market can bring a lot of stress.  

 

One way to overcome the stress is to do a thorough research analysis to understand the market's direction, adopt times-tested strategies in different scenarios, and regularly evaluate them based on the market's condition and your client's risk appetite and investment horizon.

 

 

Do You Need A Degree To Be A Stockbroker?

 

Most investment banks and brokerage firms offering entry-level stockbroker positions require candidates to have a bachelor's degree in business, commerce, finance, or a related field.

 

It is essential as the course provides basic knowledge in key areas such as accounting, finance, taxation, and business law. Those with a bachelor's degree in an unrelated field may consider completing a relevant master's degree to pursue this profession.

 

To become a stockbroker without a degree, you must have a lot of work experience in a finance-related role to enter the position. Another way to secure a stockbroker role is to find sponsorship from a brokerage house through a professional program.

 

 

Why Do So Many Day Traders Fail?

 

The attitude with which you start to trade determines your success rate in stock-broking.

 

Most who start day trading with an "I will give it a shot" attitude will likely lose whatever capital they have deposited in their brokerage account. Most such traders have inflated egos and may listen to experts' opinions but do not follow them, thinking they know the best.

 

The small percentage of day traders who succeed are the ones who are serious and committed to their profession as if they are starting their business, willing to accept and learn from their mistakes and follow experts' suggestions and advice.

 

Stockbroking is a serious business that requires discipline, focus, determination, and patience throughout the journey.

 

Putting in at least a year of hard work, practice, and self-reflection on your trading strategies can increase your success rate.

 

 

Can A Stockbroker Become a Millionaire?

 

A stockbroker may make good money and become a millionaire if he makes a lot of profit for his investors. Usually, most brokerage firms pay stock brokers a base salary and a commission for all the trade transactions they facilitate.

 

So, the more transactions they facilitate, the higher their commission will be. Where the average transaction fee of a full-service broker is $150, it is $10 in the case of a discount broker.

 

With time, a stockbroker may get high-value clients paying much higher commissions. The amount of money received depends on your work location and type of brokerage firm.

 

Besides earning commissions, brokers can also make money through interest income, offering other premium services (upgrades to free products and additional financial services) and compensation from market makers like "Payment of Order Flow" to boost their income.

 

Of course, becoming a millionaire in the initial years of your career is impossible. Still, it is achievable once you build a name for yourself and gain high-value clients.

 

 

What Are The Disadvantages of Being a Stockbroker?

 

Like any career, a profession of a stockbroker also has some drawbacks, such as:

 

  • High-stress and fast-paced environment

  • Long work hours, up to 14 hours or more in a day

  • Working both standard and non-standard business hours to suit the availability of their clients. It may include working in the evening and on public holidays and weekends.

  • The market movements impact Your economic well-being. When the economy goes into recession, or downturn or recession, you will have fewer clients, fewer profitable trades, and more losses.

  • Constant Cold-Calling/outbound telemarketing to sell your services or products over the phone to bring in new business. 

  • Dealing with upset or angry clients and setting expectations and priorities.

 

 

Is a Stockbroker a Good Career?

 

The job of a stockbroker is social, lucrative, and exciting. It offers you an opportunity to use your talent to manage and grow people's savings and the fulfilment of building your client base.

 

Furthermore, liberalisation and economic growth are leading to a high demand for stockbrokers across various organisations, agencies, and firms within Australia and abroad.

 

More than market analysis, many high-net-worth companies and individuals need them to make personalised decisions and pay a commission off the trade.

 

Considering ample job opportunities, job security, high income earning potential by commissions and bonuses, and career advancement opportunities into managerial roles makes a career as a stockbroker a perfect option.

 

If you are quick on your feet, have an interest in finance, and enjoy sales and working in a fast-paced work environment, then a career as a stockbroker may be an excellent fit for you.

 

 

10. Wrapping Up

 

Now that you possess comprehensive knowledge about the stockbroker career, you must continue pursuing relevant certifications to fuel your growth. Gain valuable work experience, refine your skills, and exude confidence.

 

Focus on expanding your client base and broadening your skills and knowledge.

 

This blog outlined the path to becoming a stockbroker in Australia. Now, it's your chance to transform your dream into reality.

 

 

The advice and information on OzStudies.com is in general nature and should not be seen as a replacement for independent financial advice. We strongly encourage readers to consult with financial experts regarding their own financial decisions and investments.


Please note that the information presented on OzStudies.com is solely for educational purposes. Every individual's financial situation is unique, and the products and services we mention may not suit everyone. We do not provide financial advice, advisory, or brokerage services nor endorse buying or selling specific stocks or securities. It's essential to know that information might have changed since publication and past performance does not guarantee future results.

 

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