If you have a knack for numbers and an interest in financial services, you might be wondering, “how much do stockbrokers make?”
The answer might surprise you!
It’s no secret that the average stockbroker salary is one that’s among the highest in the world, compared to other professions. These financial services sales agents are responsible for analyzing trends in the stock market and helping investors put their money in the right places.
While the average salary of stockbrokers can vary depending on where they are trading stocks, which brokerage firm they work with, and even the current state of the stock exchange market, the typical stockbroker will earn quite a high salary.
We’ll break it all down for you in this complete guide. Let’s get started!
Is being a Stockbroker a Good Career?
Before we can delve deep into the stockbroker salary, it’s important to understand exactly what a stockbroker does.
A stockbroker, also known as an investment broker or a trader, is a professional who sells and buys stock shares on behalf of a client on major exchanges like the London Stock Exchange, the New York Stock Exchange, and more. This is different than a financial advisor or hedge fund manager.
In short, you’ll be a middleman!
You can be a discount broker or a full-service broker. Discount brokers only provide transaction assistance. They won’t give financial advice – they will simply execute the trade. Full-service stockbrokers are people who offer more extensive services beyond just trading. They can also provide clients with input on where to best put their money.
Benefits of Working as a Stockbroker
There are a few advantages to consider if you want to work as a stockbroker.
For one, there’s the potential to make a lot of money. Your earnings will be driven largely by your work ethic – the more you work at it, the better your salary will be, especially if you can earn bonuses and commissions.
There’s also decent job security. Although the job outlook isn’t projected to grow very much within the next decade, there will always be a demand for stockbrokers as long as there are financial markets.
There’s the potential for career advancement, too, enabling you to move into a management position as long as you meet some educational requirements.
Downsides of Working as a Stockbroker
While there are plenty of advantages to becoming a stockbroker or financial advisor – the higher-than-average salary being one of them – there are also some significant disadvantages.
The stockbroker works long hours, often more than the traditional 40-hour workweek. You may find yourself working long into the weekend or evening hours. Since you might work with clients overseas, you’ll often find yourself working overnight or long before the sun comes up in the morning.
It can be a challenging, demanding job. Not all traders know how to beat the market – it’s not always easy to tell if the stock is going to move down or up. This can be frustrating and stressful.
Plus, the markets impact your finances. If the economy goes into a recession or a downturn, you’re going to be one of the first people to take a direct hit.
How to Become a Stockbroker
One of the biggest myths about becoming a stockbroker is that you need to have an Ivy League education or be from a rich family in order to be successful.
While having connections with other sales agents can help you make a lot of money in that they’ll be able to offer you insider knowledge of the career and provide investment advice, the reality is that you don’t need to have these sorts of lofty connections in order to be successful.
In fact, getting a college degree is the most important thing you can do to be successful as a stockbroker and make a lot of money.
An MBA can give you an edge over other candidates, especially if you take the time to intern in a brokerage firm to gain experience.
Something else to keep in mind as you are pondering a career as a stockbroker is the job outlook – or how good your odds are of finding a job.
The employment of workers in this sector, according to the Bureau of Labor Statistics, is projected to grow by about 4% before 2030.
This is lower than the national average, perhaps because services in the financial services industry are being consolidated. More and more people are turning online to make simple stock purchases rather than relying on a discount stockbroker to make the trade.
How Much do Stockbrokers Make?
Stockbroker salaries vary widely depending on a myriad of factors. Since your salary will be dependent on your job performance, there is a wide range of what you might earn.
According to ZipRecruiter, the average stockbroker salary in the United States is $136,000 per year. There are also stockbrokers who only earn $14,000 per year, and those who earn nearly half a million dollars (or more) per year.
The Bureau of Labor Statistics, on the other hand, only reports an average salary of $64,770 per year, or $31.14 per hour. This discrepancy could be due in part to the variability in the reporting of commissions and interest income.
There are a few other factors that will influence your median pay as a stockbroker, too.
Where You Live
There is a misconception that all stockbrokers like in New York City, and while it’s true that Wall Street is a hub for stock exchanges, the New York trading floor is definitely not the only place where you can practice your work as a stockbroker.
In fact, experienced stockbrokers can be found all over the world. You can work anywhere in which there is a trading office – in fact, most major cities have these. Some professional stockbrokers even work from home!
However, you’ll be able to bring in a higher median pay depending on where you live.
New York, specifically Wall Street is the best major metro market if you want to make the most money possible. Keep in mind, though, that the cost of living in New York is also much higher than it is in other parts of the country.
Other places that report high annual earnings, according to the Bureau of Labor Statistics and other reporting agencies, are Rhode Island, Connecticut, Massachusetts, and Vermont.
How Much Experience You Have
Most companies pay their stockbrokers a base salary plus commission. As an investment broker, it is in your best interest to build a large and reliable client base. However, this takes time and does not happen overnight.
It’s also worth noting that having more experience and a larger client base can actually work in the opposite way, too. Many brokerage firms pay their financial advisors less money as they book more clients. The theory here is that they don’t have to pay them as much because they are earning more in commissions.
Can Stockbrokers Make Millions?
There is a misconception out there that all stockbrokers make millions.
While it’s true that there is a small percentage of stockbrokers and financial advisors who do make these hefty salaries, most do not.
In fact, some even lose money through their trading activities.
Most companies or investment firms pay their employees a base salary plus commission. The average salary is, again, only slightly above the national average for all other careers.
It takes some time to build up a portfolio of clients, and remember – you will be directly impacted whenever the economy is in a recession or a downturn.
Should You Become a Stockbroker?
Becoming a stockbroker is not for everyone. But if you have the right personality and work ethic, it can be an exciting career choice.
Not only that, but it can also offer a decent salary. If you’re thinking about becoming a stockbroker or working in other financial services, you’ve made a smart choice.
Now get started!
You need a college degree and some experience in order to sell stocks (and be successful at doing it) so put your nose to the grindstone and get to work!