Investor's wiki



What is a stockbroker?

A stockbroker is a licensed professional with the authority to buy and sell stocks for different investors. Stockbrokers are directed by the Securities and Exchange Commission (SEC) and are typically employed by a brokerage or a broker-dealer. Stockbrokers work on commission and generally receive a percentage of the exchange's value as their fee.

More profound definition

Stockbrokers fall into one of two categories: full-service brokers or discount brokers. The former offer many services, selling bonds, annuities, and insurance notwithstanding stocks. Merrill Lynch and Morgan Stanley are the leading full-service brokerages. Discount brokers offer less services and take part in higher volumes of trades. Charles Schwab and Fidelity are viewed as discount brokerages.
The Financial Industry Regulator Authority (FINRA) licenses and manages the industry. FINRA's official assignment for a licensed stockbroker is "registered representative."
Stockbrokers must finish FINRA's General Securities Representative Exam, commonly known as the Series 7 exam, to become registered representatives. The Series 7 gives them the authority to sell common and preferred stocks, bonds, call and put options, and different securities, excluding commodities, futures, life insurance or real estate. Subsequent to breezing through the exam, they must be associated with a registered broker-dealer, likewise called a brokerage firm or a wirehouse.
Many states expect stockbrokers to finish a Uniform Securities Agent exam, for which they will be conceded a Series 63 license. The exam measures the's comprehension applicants might interpret state securities acts, regulations, ethical practices and fiduciary obligations. Numerous stockbrokers decide to earn different licenses that empower them to offer more services to their clients, including:

  • Series 3 license to sell commodity futures contracts.
  • Series 6 license to sell mutual funds, variable annuities and unit investment trusts
  • Series 65 license to offer financial or investment counsel or work with oversaw money accounts.
  • Series 66 license, which joins the Series 63 and Series 65 licenses.

Stockbroker example

Both full-service and discount brokers are employees of their firms. The most skilled full-service brokers work on commission and can receive 40 percent of the fees paid by clients, with the leftover 60 percent going to the firm; lower-performing brokers receive more like 35 percent to 25 percent of the split. The amount of money clients possess in their brokerage accounts can likewise direct how much consideration they get from stockbrokers. With full-service firms, the accounts with additional money receive considerably more consideration from brokers. Discount brokerages typically leave a large part of the investing choices to their clients and only execute the trades the client needs to make.


  • A stockbroker is a financial professional who buys and sells stocks at the course of clients.
  • Affluent people and institutions keep on utilizing full-service brokers, who offer guidance and portfolio management services as well as finishing transactions.
  • Most buy and sell orders are presently made through online discount brokers. This automated cycle diminishes fees.


What amount does a stockbroker make?

The median salary for a stockbroker in 2020 was $60,644, with an average scope of $40,000 up to $123,000.

What do stockbrokers do?

Stockbrokers act as mediators between markets (for example exchanges) and the investing public. Brokers take order from customers and try to fill them at the best price conceivable. In return, they earn a fee known as a commission. Today, numerous stockbrokers have changed to financial advisors or planners as online brokerage platforms permit users to enter their own orders by means of the web or mobile app.

What's the difference between a discount and full-service broker?

Generally, a discount broker would just participate in buying and selling for the benefit of customers, while a full-service broker would give a more extensive breadth of financial services like research, guidance, portfolio management, etc. Today, as online brokerages have forced commissions down to zero, discount brokers have separated themselves by likewise giving research and different services notwithstanding pure execution.