How To Choose Between Being A Broker and A Trader

How To Choose Between Being A
Broker And A Trader
A career in Wall Street is one of the most lucrative and attractive ones for
people in the finance industry. Now you can either choose to be a Wall
Street Broker or a Trader. Although both of these jobs may look similar as
they involve buying and selling securities, they are very different.
You need to be aware of these variations so that you can choose the career
that best suits you. So read on below to distinguish the differences between
these two roles. Also, you can check out publications from Wendy Kirkland to
learn tips on how you can become a good broker or trader.
Main Responsibilities of a Broker Or Trader

Both brokers and traders deal with securities. However, a broker also
doubles as sales agents, acting on behalf of a brokerage or securities firm,
or representing themselves. They mainly obtain and maintain a list of
individual customers who are regulars for the company. These are also
known as institutional or retail customers.
Alternatively, traders sell securities on behalf of large investment firms such

as a bank or an exchange that manages the assets. Below is a more detailed
description of the difference between their work.
Buying and Selling
Brokers directly communicate with clients. The clients give them their
requirements based on what the brokers are dealing with. Brokers also plan
financial policy for the clients, such as how to diversify their portfolio,
provide a structure to their retirement plan, give advice on insurance, and
investments on real estate. Brokers deal with ETFs, mutual funds, bonds,
equities, and other options for more sophisticated clients.
Traders usually buy or sell securities based on the requirements that come
from an investment companies portfolio manager. A trader might be
assigned with the account of a particular client and will be responsible for
creating a strategy that best suits the investment needs of the client.
Traders work in many diverse markets, such as derivatives, debts, stocks,
commodities, and forex, but they mainly specialize in any one type of asset
class or investment.
Brokers keep their clients informed on the price variations of the stocks.
Brokers also are responsible to increase client base by holding public
seminars on topics related to investment, or by cold calling potential
customers to showcase the abilities and services of the firm.
Research
Traders and brokers both use analyst research reports to recommend their
client or portfolio managers on buying or selling securities. Traders also do
their analysis and research. Traders now use the internet over phones and
computers to analyze performance charts. They do this to polish their
trading strategies.
High energy levels are a must for both brokers and traders. They need to be
very proficient and be able to multitask at the opening hours of the market.
The environment of the market is very high-pressured and fast-paced, so
they need to be energy-oriented to make it through a trading day.
Education
The path or education that a broker or trader needs is the same. If you want
to get a job at a reputable financial company, you are required to have a 4-
year college degree. The degree can mostly be in finance, math, economics,
business, accounting, or banking. You need to be well versed in the numbers
game to be in this profession.
You can also consider obtaining an MBA to learn more about analysis,
business, and microeconomics. You can also take courses that teach you
about global investment, risk management, financial computing, and
advanced financial concepts.
Starting Off
The best way to get access to the selling floor is to join a brokerage or an
investment bank. You can learn a lot by starting as an assistant to a stock
analyst. You can get paid or unpaid internships at many financial institutions
that offer year-long training programs for fresh college graduates that are
helpful to get them on the right track.
Licensing and Exams Requirements

If you want to execute orders, you need to have a license from FINRA. The
Financial Industry Regulatory Authority has some tests that you need to take
to get this license. If your goal is to be a trader, you must pass the
Securities Trader Representative Examination, and obtain a score above
70%. This exam is also known as Series 57. Maintaining books and records,
trade reporting and clearance, trading activity, and settlement is covered in
this exam.
If you intend to be a broker, you must secure 72% or higher scores on the
General Securities Registered Representative Examination, or the Series 7
exam. This exam covers the rules and regulations of the SEC and also
provides basic knowledge of investing and investment products.
After passing your exam you need to register with FINRA within 2 years. At
this point, you will need to go through a background check such as financial,
criminal record and fingerprinting, and also required to register with the
SEC. After the license is obtained you can request to be moved to an open
trading desk where you can learn how to carry out trades on behalf of the
clients of the company or investment bank.
Remuneration
The U.S. Bureau of Labor Statistics states the annual salary for securities
and financial sales agents is $63,780 as of May 2017. This is a generalized
salary quotation for both the brokers and traders. Job growth between 2016
and 2026 is expected to be roughly at 6% so the outlook for the industry is
positive. Demand for investment banking, retirement planning, and financial
services are growing so the prospect for this job in the market is very high.
Finally
Many factors encourage people to become traders. Money is high on the list,
but also the passion and fascination an individual has for finance and the
movement of investment funds also play as key factors. Those of you who
like to communicate and deal with other people, being a broker is a perfect
fit for you. This is a fast-paced workplace that never sleeps, so you must be
prepared for a thriving and energetic career. Happy trading!

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How To Choose Between Being A

Broker And A Trader

Main Responsibilities of a Broker Or Trader

Alternatively, traders sell securities on behalf of large investment firms such

Buying and Selling

Licensing and Exams Requirements

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