TL;DR
- A stockbroker buys and sells stocks, shares and other securities on behalf of clients, through a stock exchange or over the counter, for a fee or commission. Depending on the service, the broker executes orders only, advises and then acts on instructions, or manages the portfolio with full discretion.
- The job has six duties: follow the markets and the rules, research and analyse, manage and review client portfolios, advise and recommend, deal and report, and find and keep clients. In the UK, advising on and dealing in securities is a regulated activity that requires authorisation by the Financial Conduct Authority.
- Employers look for numeracy, analysis, judgement under pressure, honesty about risk, and the ability to win and keep clients. The hours follow the markets, and pay is usually a base salary plus commission or bonus.
The stockbroker of the films shouts into two phones at once. The stockbroker of the job description reads company results at seven in the morning, calls a client about a portfolio that has drifted from its plan, executes an order within the rules, and writes it all down. The second is the job.
This article explains what a stockbroker does, sets out six duties, describes the three levels of service and the two kinds of client, summarises the UK authorisation requirement, lists the skills and qualifications employers ask for and gives a job description template.
Brokers work to targets on revenue, clients and compliance, and the targets should be visible and fair. See how New Dynamics Goals & OKRs keep targets and progress in one place.
What is a stockbroker?
The Cambridge Dictionary defines a stockbroker as “a person or company that buys and sells stocks and shares for other people”. Prospects, the UK graduate careers service, gives the fuller version in its stockbroker job profile: stockbrokers “buy and sell stocks, shares and other securities on behalf of private and commercial clients, through a stock exchange or over the counter, in return for a fee or a commission”, and act “as an intermediary between them and the stock exchange”.
The job is defined by two things: whose money it is, and how much of the decision the client has handed over.
Two kinds of client
Prospects divides broking by client base. Institutional broking serves accounts managed for groups or institutions such as insurance companies and pension funds; institutional clients are, in Prospects' words, “generally quite knowledgeable and independent from the broker” and may use different brokers for different markets. Retail broking serves individual investors, generally wealthy individuals, with whom the broker works directly.
Three levels of service
Prospects describes three levels, set by how much control the client keeps.
| Service | What the broker does |
|---|---|
| Execution-only | Buys and sells on the client's explicit request, without advice on risk or suitability |
| Advisory | Advises on appropriate securities, but acts only on the client's orders |
| Discretionary | Has full authority to buy and sell on the client's behalf, having established the client's investment aims |
A job description should say which level, or levels, the post covers, because the duties, the qualifications and the regulatory permissions differ.
What a stockbroker does: six duties
Prospects' list of responsibilities, regrouped:
- Follow the markets and the rules. Monitor stock market performance, stay informed about financial news and the drivers of change, and keep up to date with the latest financial and tax legislation.
- Research and analyse. Carry out market research and analysis, and write reports and newsletters that summarise it for clients.
- Manage and review portfolios. Manage and review clients' portfolios against their aims, and update clients regularly on the state of their holdings and new opportunities.
- Advise and recommend. Understand each client's needs so that suggestions are appropriate, provide advice on investments and make recommendations, within the level of service the client has chosen.
- Deal and report. Execute the buying and selling, on the client's instruction or under discretion, and record and report it as the rules require.
- Find and keep clients. Prospects is direct about the commercial side: brokers must “proactively look for clients, sell your services and manage those relationships”, through networking and cold calling, and give presentations at conferences and events.
Running through all six is a duty Prospects states separately: “be honest and provide all information, including risks. As a broker you cannot exaggerate or provide misleading information.”
Authorisation: the UK requirement
Stockbroking is a regulated activity. Prospects states it plainly: “Stockbroking is a regulated financial service activity, and you must be authorised by the Financial Conduct Authority to advise on and deal in securities (e.g. stocks and shares).” Firms and the individuals who perform certain functions within them appear on the FCA's register, and the FCA's guide to checking whether a firm or individual is authorised explains how anyone can verify a broker before dealing with them.
For an employer, that means the job description must state the permissions and the certification the role requires, and the checks and training that come with them. For a candidate, it means the qualification and the regulatory status are not optional extras. This is general information about the UK, not legal or financial advice; other countries have their own regulators and licensing rules.
Skills employers ask for
- Numeracy and analysis. Reading accounts, valuing securities and understanding what moves a price.
- Judgement under pressure. Markets move while the client is on the phone.
- Honesty about risk. The duty Prospects names: all the information, including the risks, without exaggeration.
- Communication. Explaining a recommendation to a client who is not a specialist, and writing research that people read.
- Commercial drive. Winning clients and keeping them, which Prospects lists as a core responsibility rather than a bonus.
- Discipline and record-keeping. Every recommendation and every deal documented as the rules require.
- Stamina. Prospects describes typical days from around 7am to 6pm to cover the markets, with unsociable hours for clients in other time zones.
Qualifications and routes
Prospects says you will usually need a good degree to train as a stockbroker, and lists accountancy, business studies, economics, finance, management and mathematics or statistics as subjects that may help. It notes that employers often expect a relevant professional qualification from a recognised securities or investment body, or a willingness to study for one once in work, that trainee roles can be reached from banking, accountancy, insurance or investment administration, and that a level 4 investment operations apprenticeship or a level 6 financial services professional degree apprenticeship offers a work-based route. Pay is typically a base salary with commission or bonus on top, and varies widely by firm and by results.
Stockbroker job description template
Adapt the client base, the level of service and the permissions to your firm.
Job title: Stockbroker (investment adviser / dealer)
Reports to: Head of desk or head of private clients
Hours: Full time, from market open to close, with some early starts, late finishes and travel
Purpose of the role: To manage and grow a book of [retail or institutional] clients, providing [execution-only, advisory or discretionary] services within the firm's permissions, the regulator's rules and the client's best interests.
Main duties:
- Monitor the markets, the news and the relevant legislation, and carry out research and analysis
- Manage and review client portfolios against their agreed aims and update clients regularly
- Provide suitable advice and recommendations within the agreed level of service, presenting all material information including risks
- Execute deals accurately and within the rules, and keep complete records
- Win new clients through networking, referrals and presentations, and retain existing ones
- Meet the firm's compliance, training and conduct requirements
Skills and experience:
- The regulatory qualifications required for the role's permissions [state them], or the ability to obtain them within [period]
- A record of building client relationships and generating revenue [for experienced hires]
- Strong numeracy, analysis and written communication
- Honest, disciplined and calm under pressure
- Clean regulatory and background checks
Measures: Revenue and new clients against target, client retention, suitability and compliance outcomes.
We provide: Study support for regulatory qualifications, a documented commission or bonus scheme, and a route to senior broker and head of desk roles.
For the layout of the whole document, use our job description template. For the branch role that often refers clients to investment services, see our bank teller job description.
Common mistakes in stockbroker adverts
Level of service unstated. Execution-only, advisory and discretionary are different jobs with different permissions. Say which.
Permissions and qualifications vague. Name the regulatory qualifications and the functions the role will perform.
Commission unexplained. If pay depends on results, set out how, in writing.
Selling without honesty. An advert that asks only for closers, and never for care with risk and suitability, will attract the wrong people and the regulator's attention.
Frequently asked questions
What does a stockbroker do?
A stockbroker buys and sells stocks, shares and other securities for clients, through a stock exchange or over the counter, for a fee or commission. Day to day they follow the markets and the rules, research and analyse, manage and review client portfolios, advise and recommend, deal and report, and win and keep clients.
What is the job of a stockbroker at each level of service?
At execution-only, the broker buys and sells on the client's explicit request without advice. At advisory, the broker recommends securities but acts only on the client's orders. At discretionary, the broker has full authority to buy and sell on the client's behalf, having agreed the client's investment aims.
Do stockbrokers need a licence in the UK?
Yes. Advising on and dealing in securities is a regulated activity, and Prospects states that brokers must be authorised by the Financial Conduct Authority. Firms and individuals performing certain functions appear on the FCA's register. This is general information, not legal or financial advice.
What skills does a stockbroker need?
Numeracy and analysis, judgement under pressure, honesty about risk, clear communication with non-specialist clients, commercial drive to win and keep clients, disciplined record-keeping and the stamina for market hours.
What is the difference between a stockbroker and a financial adviser?
A stockbroker deals in securities for clients and, at the advisory and discretionary levels, advises on which to hold. A financial adviser advises on a person's finances more broadly, including pensions, protection, tax and savings, and may not deal in securities at all. Both are regulated activities in the UK.
How do you become a stockbroker?
Usually with a good degree, often in accountancy, business, economics, finance, management or mathematics, then a trainee or graduate role at a bank or broking firm and the professional and regulatory qualifications the firm requires. Apprenticeship routes at levels 4 and 6 also exist in England. Winning and keeping clients is the part of the job that decides progression.
Your next step: write the permissions into the advert
- State the client base and the level of service the post covers.
- Name the regulatory qualifications and permissions required, and the support you give to obtain them.
- Set out the commission or bonus scheme in writing.
- Ask for evidence of honesty with clients as well as revenue.
To set revenue, client and compliance targets that pull in the same direction, read and download our OKR guide. The guide is free to read, and the PDF uses our short download form.
Want revenue targets, compliance training and client goals visible for every broker and head of desk? Book a New Dynamics demo and bring your current targets. You can also email contact@new-dynamics.com.
