Stockbroker — Roles, Types, Requirements & Pay

Key takeaways
* A stockbroker executes buy and sell orders for clients and typically works for a brokerage firm.
* Two main types: full-service brokers (advice and portfolio management) and discount brokers (trade execution at lower cost).
* Licensing and exams (e.g., FINRA Series exams in the U.S.) are required in most jurisdictions.
* Compensation varies: commissions, fees, salaries and bonuses; averages vary widely by region and employer.
* Many brokers now perform advisory roles as technology and robo-advisors handle routine trading.

What is a stockbroker?

A stockbroker is a licensed financial professional who executes securities transactions on behalf of clients and provides market access. Brokers may serve individual retail investors, high-net-worth clients, or institutional customers. While some focus primarily on executing trades, others offer broader investment advice, portfolio management and financial planning.

Core responsibilities

• Place and manage buy and sell orders for stocks, bonds and other securities.
• Advise clients on investment options and provide market research (depending on service level).
• Seek the best execution price and comply with regulatory and fiduciary rules.
• Maintain client relationships, monitor portfolios and follow up on account administration.
• Stay informed on regulations, market developments and product offerings.

Types of brokers

• Full-service brokers: Provide research, personalized advice, portfolio management and additional services. Typically charge higher fees or commissions.
• Discount brokers: Focus on trade execution at lower fees; many are online platforms offering self-directed accounts.
• Robo-advisors: Automated platforms that build and manage portfolios using algorithms; minimal human interaction.
• Institutional and specialist brokers: Handle large or complex orders for institutions and high-net-worth clients.

How brokers operate today

Technology has shifted many routine trading tasks to online platforms and algorithms. Retail investors can execute many orders themselves through discount brokers and apps that offer low or zero commissions and fractional-share trading. Brokers increasingly differentiate by offering advisory services, premium features, research and personalized planning for clients who want guidance beyond execution.

Education and professional credentials

Typical background and credentials:
* Bachelor’s degree in finance, economics, business or a related field is common.
* Additional professional credentials that enhance credibility: CFP (Certified Financial Planner), CFA (Chartered Financial Analyst) or equivalent designations.
* Strong interpersonal, sales and analytical skills are important for client acquisition and retention.

Licensing and regulatory requirements (examples by jurisdiction)

Requirements vary by country but generally include employer sponsorship and passing license exams.

United States
* Common exams: FINRA Series 7 (General Securities Representative) plus Series 63 or 66 for state law requirements.
* Brokers must be sponsored by a registered brokerage firm and comply with FINRA rules.

Canada
* Typical requirements: Canadian Securities Course (CSC), Conduct and Practices Handbook (CPH) and firm-specific training such as the Investment Advisor Training Program (IATP).

United Kingdom
* Brokers must meet standards set by the Financial Conduct Authority (FCA); exact qualifications depend on role and employer.

Singapore and Hong Kong
* Local regulatory bodies administer required module exams and licensing (e.g., MAS/SGX in Singapore, HKSI and regulators in Hong Kong).

How trades are executed

Brokers place client orders on exchanges or electronic trading platforms using order types such as:
* Market orders — executed immediately at current market prices.
* Limit orders — executed only at a specified price or better.
Clients can choose to specify order parameters or delegate execution decisions to their broker.

Compensation and typical pay structure

Stockbroker pay can include:
* Commissions on trades or transaction values.
* Advisory or asset management fees.
* Base salary plus performance bonuses (common at larger firms).
* Account maintenance or service fees in some arrangements.

Earnings vary widely by experience, client base and employer. Some brokers earn modest incomes early in their careers, while experienced brokers serving institutional or high-net-worth clients can earn substantially more.

Stockbroker vs. financial advisor

• Stockbroker: Primarily executes securities trades and may provide product recommendations. Compensation often tied to transactions.
• Financial advisor/planner: Offers comprehensive financial planning (retirement, tax, estate, insurance) and ongoing strategy. Typically charges fees based on assets under management, hourly rates, or fixed fees.
  Note: One professional can hold both roles if appropriately licensed and qualified.

Legal and ethical considerations

• Brokers must not trade on material nonpublic information (insider trading is illegal).
• They must follow suitability and regulatory requirements for recommendations and account handling.
• Conflicts of interest should be disclosed and managed according to regulatory standards.

Conclusion

Stockbrokers provide market access and facilitate transactions for a wide range of clients. The industry has evolved with technology: many routine trades are now automated, while human brokers increasingly focus on advisory services and relationship management. Licensing, ongoing education and adherence to regulatory and ethical standards remain essential to practice.