There are a number of very different and varied opportunities within broking. Firstly, there are those broking firms which are purely private client who tend to offer execution-only and / or an advisory service.
If you want to work as an execution-only broker for a private client broker, this is the bottom of the ladder. You will need to pass your registered representative exam before you can actually take an instruction from a client to buy and sell stock and then execute it, The exam is relativeley straight forward...The first part of the exam is multiple choice and concentrates solely on the regulatary aspects of the financial markets i.e you must learn and understand things like money laundering, capital adequacy requirements, the penalties for breaking any of the rules and regulations, insider dealing etc. The second part is also multiple choice , but refers specifically to the markets you are trading in.
Remember also, that as a broker you may want to specialise in particular markets, e.g Equities (UK /European / Asia / US/Emerging markets), Bonds, Futures & Options (Derivatives).
Further up the career ladder, you should really be looking to work for an institutional broker (such as Morgan Stanley, Goldman Sachs, Merrill Lynch, Deutsche Bank, Citigroup etc), i.e one that transacts business on behalf of pension funds, mutual funds, banks, hedge funds etc. This is where the real money is.The exam requirements are still the same in that you must pass your registered representative exam first. (The exam can be taken even if you are not employed - look at the Securities Institute website for details). The exam is easy to pass if you are prepared to learn a lot of boring information, and are able to regurgitate it later for the exam. If you don't put in the work, you won't pass!...if you do, you will. I know a number of highly qualified graduates with good degrees who were offered jobs in the City only to fail their reg. reps exam because they did not put in the work because they wrongly assumed that because it was multiple choice it would be a doddle. (They did however pass on the second attempt...you can take it as often as you like until you pass.
Once you pass the exam,however, you are still not entitled to operate as a broker. In order to do this you must first obviously be employed by an FSA registered firm, and the FSA will investigate your background (Criminal record, county court judgements, bankruptcy etc). Once they are satisfied that you are a "fit and proper" person, your name will be placed on the FSA register (see
www.fsa.gov.co.uk).
The real areas you should aim to get involved in include Institutional sales.This involves bringing new institutional clients to your employer, and selling in-house research to them in order to encourage them to trade. Your bonus, which will typically be 100-200% of your basic salary will reflect the business you bring in.
If you are serious about a career as an institutional broker in the City, and you are aged 18-25 with a good degree from a good University (degree doesn't have to be finance related), then now is a good time as brokerages are beginning to recruit again following 3 dismal years.
A small private client brokerage would probably pay you about£20k a year to start. The bigger names, like those I have listed above, I suspect may offer c£35k to start, but competition will be firece to join them, and don't expect to get in if you didn't go to a top University and get a first class degree.2 years on, you could expect to be earning £80k-£100k with the same again including bonuses in a good year. Further down the line, sat 5-10 years, million pound packages are the norm if you have talent. Equally, if you can't take the pressure, long hours, internal politics, stress and everything else, City firms are notorious for showing you the door with little mercy!
That, in a nutshell is what is required to be a broker.
To become a trader is a different matter altogether, which I will go into more detail in a later post when I have more time!
Good luck with your job-hunt.
