|Names||Stockbroker, Investment Advisor|
A stockbroker is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients through a stock exchange or over the counter in return for a fee or commission. Stockbrokers are known by numerous professional designations, depending on the license they hold, the type of securities they sell, or the services they provide. In the United States, a stockbroker must pass both the Series 7 and either the Series 63 or the Series 66 exams in order to be properly licensed.
Stock brokers typically earn a bachelor's degree in finance or business administration. A finance degree prepares students to work as stock brokers by focusing a student's studies on financial laws and regulations, accounting methods and investment management. Students study the principles of economics and currency, financial planning and financial forecasting. On-the-job training programs are often available to aspiring stock brokers, which allow them to gain practical experience and work towards earning the needed professional licenses.
Licensing and training requirements
In Canada, a stockbroker is called a "Registered Representative" or an "Investment Advisor". To be licensed as a Registered Representative and thus qualified to offer investment advice and trade all instruments with the exception of derivatives, an individual employed by an investment firm must have completed the Canadian Securities Course (CSC), the Conduct & Practices Handbook (CPH), and the 90 day Investment Advisor Training Program (IATP). Within 30 months of obtaining their designation as a "Registered Representative", the registrant is further required to meet the post-licensing proficiency requirement to complete the Wealth Management Essentials course (WME). A Registered Representative is also required to complete 30 hours of professional development (product knowledge) and 12 hours of compliance training every three year continuing education cycle as set out by the Investment Industry Regulatory Organization of Canada (IIROC). To trade options and/or futures, a Registered Representative must pass the Derivatives Fundamentals Course (DFC) in addition to the Options Licensing Course (OLC) and/or the Futures Licensing Course (FLC), or alternatively, the Derivatives Fundamentals Options Licensing Course (DFOL) for options.
To become a representative one has to work for a licensed firm and pass 3 exams to prove one's competency. Passing a fourth exam results in obtaining a 'specialist' license. All tests can be taken with the HKSI. However, passing all tests doesn't result in automatically obtaining the license. It still needs to be approved by the financial regulatory body.
In Singapore, becoming a trading representative requires passing 4 exams, Modules 1A, 5, 6 and 6A, from the Institute of Banking and Finance and applying for the license through MAS and SGX.
Stockbroking is a regulated profession in the UK and brokers must achieve a recognised qualification from the Financial Conduct Authority (FCA)'s Appropriate Qualifications list.
A number of qualifications are available and the one a trainee does will depend on their duties and their employer.
- CISI Level 4 Diploma in Investment Advice
- CISI Level 7 Diploma in Wealth Management
- The Chartered Institute for Securities and Investment (CISI) is the largest UK professional body for those who work in the securities and investment industry. It evolved from the London Stock Exchange, has around 40,000 members in over 100 countries and delivers more than 37,000 exams each year.
While the term "stockbroker" is still in use, more common terms are "broker", "financial advisor", "registered rep." or simply "rep." — the latter being abbreviations of the official  (FINRA) designation "Registered Representative," obtained by passing the FINRA General Securities Representative Exam (also known as the "Series 7 exam") and being employed ("associated with") a registered broker-dealer, also called a brokerage firm or (in the case of some larger money center broker/dealers) a "wirehouse", typically a FINRA member firm. Other FINRA licenses or series exams exist. Individuals holding some of those licenses, such as the "Series 6", cannot be called stockbrokers since they are prohibited from selling stock and are not trained or licensed in the full array of capabilities of a Series 7 stockbroker (see list of securities examinations). Selling variable products (such as a variable annuity contract or variable universal life insurance policy) typically requires the broker to also have one or another state insurance department licenses.
Professional titles similar to that of stockbroker include investment advisor, and financial advisor. A "financial advisor" may or may not be a stockbroker, since some Series 6 licensed individuals—who are prohibited from selling stock—have that as their professional title. An "investment advisor", registered investment advisor, or investment advisor representative has training and capabilities similar to that of a stockbroker, but different licensing and different regulatory oversight. Many individuals hold both licenses, and might typically manage commission-based accounts as a stockbroker and fee-based accounts as an RIA investment advisor, or investment advisor representative (IAR).
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- Boiler room (business)
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- Online trading portal
- Prime brokerage
- Securities market
- Stock market
- Stock market data systems
- Stock selection criterion
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- "Continuing Education & Member Resources". Iiroc.ca. Retrieved 2012-10-16.
- "List of Members - #". FINRA. Retrieved 2012-10-16.
- "Investor Information - Understanding Professional Designations – FINRA". Apps.finra.org. Retrieved 2012-10-16.