There was a time when an interest in stock markets, strong sales skills, and a high school diploma were adequate to secure you a job on Wall Street. Not any longer. The field has become more competitive now.
Today finance companies expect their brokers to have a graduate degree, preferably with majors in finance, economics, or mathematics. There are two tough tests – Series 7 Exam and Series 63 Exam – that aspirants need to pass to become registered representatives (stockbrokers). And a legal offense other than a minor traffic violation can throw you out of the list of eligible candidates for leading Wall Street firms.
An effect of these changes is that the entry bar has been raised. You cannot while away the hours now if you have decided to make a career in stockbroking.
This article suggests five things you can do if you aspire to work on Wall Street:
1. Education counts
Long gone are the days when a high school diploma will find you a job with a leading finance company. Today many employers look for candidates with a bachelor’s degree.
Although FINRA (Financial Industry Regulatory Authority) does not mandate minimum educational requirements – so in theory, a high school graduate has a chance – it is tough to land a job without a college education. FINRA is an authority that encourages the use of standards and maintains financial discipline among stockbrokers and member firms.
If you want to see yourself working on Wall Street, focus on your college education and the standard tests FINRA requires you to pass before you can trade.
2. Manage your own money well
Stockbrokers manage other people’s money. If you have a passion for money management, why not start with your own.
A bankruptcy and low credit scores are signs of financial mismanagement. Many employers screen job candidates to look for traits for financial carelessness. Even one bankruptcy can make you ineligible stockbroking. Low credit scores hurt your chances of finding a job.
If you want to be a stockbroker, start with managing your own money carefully. Do not take loans you cannot repay in time, or at all. It will hurt your credit scores. Avoid bankruptcies at any cost.
3. Build a portfolio
If Warren Buffett were to tell you to invest in a stock, you would not think twice. But if you were to advice your client to invest in a stock, the client will likely take your words with a grain of salt. Why is there a difference?
For one, Buffett has made millions stockbroking. For two, he showcases a well-performing portfolio that speaks volumes for him. Although you cannot count on making millions at the start of your career, you can at least have a well-performing portfolio that demonstrates your skills.
It is hard to find investors when you are new. Most of the time you rely on family, friends, and acquaintances for business. Even they may ask for a proof of your competence.
One way to convince them that you are capable is to build your portfolio with your own money. Invest in shares. Track the returns over a period of a few months or a year and then share those results with clients.
4. Avoid legal troubles
An impressive education, excellent money management skills, and a portfolio with proven returns can help you get a job, as long as you do not have many major legal troubles.
Many companies run background checks on stockbrokers. Legal troubles other than a small traffic offense can render you ineligible for work at top firms.
5. Create a network
Your success as a stockbroker depends on how many clients you have. One way to get clients is through the people you know.
The more people you know, more clients you are likely to have. There are a few ways you can expand your network.
You can join professional organizations by passing the standard tests. You can use social media – Facebook, LinkedIn. You can advertise in newspapers and on the internet.
Stockbrokers work hard. They work in a high-paced environment. They work put in long hours. And they get rewarded handsomely for their work. High salaries and the glamour associated with this work has attracted a lot of young men and women into the profession. Therefore there is much competition for stockbroking jobs.
You can stay a step ahead of competition if you focus on your education, manage your money well, build a working portfolio, do not get into trouble with the law, and concentrate on building a strong network.