Going for Broke
Popular films based on the lives of prominent traders and stock brokers have given an edge of glamour and excitement to this particularly competitive career path. But you have to be prepared to put in a substantial amount of hard work and time in further studies before being in the position to buy and sell on the stock market. Madhvi Pankhania explores the sector.
There are around 13,000 stockbrokers in the UK whose job, primarily, is to manage and provide the best return for investments by trading stocks, bonds, shares and other financial products. There are typically three areas of service in the industry:
Discretionary – managing client portfolios and trading on their behalf
Advisory – providing clients with advice about investment options
Execution only – buying and selling on instruction.
Stockbrokers can provide one or more of these services and in large companies there are roles for specialists who work in industries such as technology or finance.
Vibrant and highly-pressurised, the environment provides a unique atmosphere, rarely found in other finance jobs. The fluctuating market and the performance of companies that trade on it require brokers to communicate and analyse while making quick decisions to keep up with ongoing changes. This includes communicating with clients through the day, and updating them on market news and performance, instructing market traders, and speaking to investment analysts. Computers, along with telephones, provide the main avenues of research. The fast-paced nature of the job appeals to individuals who enjoy thinking on their feet.
Kevin Barlow FSI, a trainee at Redmayne Bentley, one of the UK’s leading independent stockbrokers, says: ‘The main challenges are remaining calm and thinking clearly. Doing so enables you to remain focused and spot a potential investment opportunity. Another challenge is the amount of knowledge needed to be competent in your job.’ Most of those who end up in this industry and thrive enjoy the risks and challenges that stockbroking offers, and the satisfaction that earning money for a client can bring.
Academic qualifications have become important markers for employers, which they use to filter students. Most prefer a 2:1 or above at degree level, and preferably one which is finance related. Increasingly, postgraduate qualifications such as an MSc or MBA are asked for along with related work experience. Larger companies opt for a selection process which entails a series of tests and interviews. For those who go on to provide financial advice they must pass an exam offered by the Financial Services Skills Council (FSSC) and should be registered with the Financial Services Authority (FSA). Once through the rigorous selection process further training is usually given by experienced stockbrokers to improve and consolidate analytical and numerical skills learnt at degree/post graduate level. These help trainees to work towards qualifications given by the Securities and Investments Institute (SII) or the Chartered Financial Analyst (CFA) society. Supplementing a numerical proficiency, good, clear communication skills essential and will be further developed once qualified.
So where does this training lead? Besides the varied work, which is often an important factor for graduates who end up in this career, there are also many bonuses; starting salaries are between £24,000 and £35,000, going all the way up to £80,000 with a few years of experience. Due to the results-driven nature of the work, performance related bonuses can match those of banking sector professionals. If targets are surpassed, sales professionals can earn another 100 per cent of their salary and up to 200 per cent for trading bonuses. Working hours are generally between 7am and 6pm to fit in with the opening times of the London Stock Exchange, and allow an earlier finish when compared to that of many other city and finance jobs.
Career opportunities in this field are fairly promising. Good results and performances can lead to a more responsible position in larger client accounts, and further success can see brokers move to a managerial role in accounts and funds or into a consultant role. International opportunities can also open up. ‘The stock market is a vast place with many products and services on offer, and which operates on a global scale. There is the potential to work anywhere in the world meeting many people on the way’ says Kevin. This career can reap serious financial rewards for some and open some interesting doors for others, but make sure you are ready to deal with economy fluctuations, and pressurised trading as job security in some areas is not guaranteed.
- For more information about post graduate training and exams visit the Financial Services Skills Council www.fssc.org.uk/
- To look at the qualification criteria to register as a stockbroker visit ww.fsa.gov.uk/