What Are the Different Types of Stock Broker Qualifications?

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  • Written By: K. Kinsella
  • Edited By: Shereen Skola
  • Last Modified Date: 23 April 2018
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Stock brokers trade marketable securities such as stocks and bonds on behalf of entities and individual investors. Typically, stock broker qualifications include securities licenses and prior work experience. Accounting experience and training is also important in many cases. Some employers also prefer to hire brokers that have completed college degrees.

Securities laws in most countries mean that only licensed or certified individuals can conduct transactions involving stocks and other types of securities. Investment firms sometimes hire non-licensed individuals and provide these new-hires with several weeks or months of on-the-job training. During this time, the new recruits attend classroom based training sessions and have the opportunity to shadow licensed brokers. At the culmination of the training program, these individuals must complete a securities licensing exam. In some countries, brokers must pass several exams in order to sell different types of securities in which case job postings normally list a number of licenses among the stock broker qualifications that qualified applicants must possess.

While a securities license may enable a broker to sell stocks or bonds, in some nations brokers must obtain separate licenses in order to conduct transactions involving annuities and other types of life insurance contracts. As with the securities licensing process, brokers can obtain an insurance license after attending a training class and successfully passing an insurance exam. Brokers must attend continuing education classes for their insurance and securities licenses to remain active. Therefore, evidence of attendance at such classes is normally among the stock broker qualifications that a job applicant must be able to present to a prospective employer.

Financial transactions involving stocks, annuities and other securities are often complex and efficient brokers must have good accounting skills. Many brokers have undergraduate degrees in finance, economics, accounting or related topics. While securities regulators do not typically require brokers to have undergraduate degrees, many employers list college degrees among the stock broker qualifications that job applicants must possess. Some companies even require brokers to have completed postgraduate finance related degree courses.

Aside from licensing exams and academic credentials, stock broker qualifications typically include some industry experience. Some brokers work as non-licensed assistants before transitioning into a licensed role. These individuals accept trade orders from clients but non-licensed assistants are unable to provide investment advice or to conduct trades. Other brokers work as real estate agents, sales people or bankers before obtaining securities licenses and becoming stock brokers. Additionally, some investment firms prefer to hire college graduates who worked as investment company interns prior to graduation since these individuals had the opportunity to gain some insight into the broker's role.



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