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How to become a broker?

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M

maffu

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29 August 2006
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Hi guys,
Ive been searching around the ASX website, the ASIC site and also tribeca.com.au trying to find out how one becomes a stock broker, ive found a few things, but nothing certain so thought some people here would be certain to know everything.

So is anyone here a Broker? Or do you know how to become a broker or how to get some work experience with a broker?

Thanks for any help.
Matt
 
Hi Matt,

Just call some and ask, they will tell you what they require.
Good luck.

Bob.
 
During high school, I was lucky enough to do separate work experience placements at Goldman Sachs JBWere and EL&C Baillieu Stockbroking - during which I sat next to Scott Pape, author of 'The Barefoot Investor'. If you are a high school student, and provided they have availability, you shouldn't find it too hard to get a week's work experience with a stockbroker. Although it is definately hard to get such a placement whilst at uni.

But I remember many of the stockbrokers/dealers telling me that they came out of uni with single or double commerce (or business) degrees and gained training on the job. Having said that, there was a SEATS operator who was literally picked off the streets - he had no tertiary education whatsoever. To become an official stockbroker, you have to pass an exam. There was one guy who was about to sit the exam whilst I was there, and I would see him studying these large Securities & Derivatives Industry Association (SDIA) and ASX manuals.

Cheers,
scsl
 
I worked in a stock broking firm for many years and saw trainee advisors all the time. The trainees did have to pass a course (can't remember the name of it) and the company would pay for all costs if they passed. Anyone can do this course. Being a trainee advisor (broker) working under a more experienced broker is a good way to learn.

Unfortunately I do not know how they got the trainees in, or how the trainees came to the place.

I would suggest ringing a stock broking firm and see if they take on trainees.

Alternatively you could contact the ASX and see what they can direct to you. As scsl said, anyone off the street can do these courses so you don't need any tertiary background.
 
I am also interested in becoming a broker.

Also, my another question is can I start up a company with ABN to trade as a company on the ASX?

I know when you go for the ABN, ATO will call you and ask what industry are you in but how to do explain to them the industry you are going into.
 
Companies that trade on the ASX iniatially raised funds from the public and so they are public companies reporting to the many shareholders. Listing and then trading on the ASX is an expensive process and so the number of companies trading on the ASX compared to the overall number of companies in Australia is miniscule. But as with anything, there are benefits as well e.g. growth potential with large funds, publicity/marketing opportunities etc.
 

Yes you can trade the stockmarket under the name of a company. Just tell them your business is "investment activities" or something similar. But you are best talking to an accountant to work out if that structure is best for your situation.

You should make sure that it is viable with the cost to setup a company and having to do tax returns each year etc... But ofcourse you have the benefit of limiting tax at 30%.
 

You cannot TRADE as a TRADER if you tell the ATO that your business is "investment activities" - you are telling them you are an investor.

The distinction is very important for Tax reasons.

Get someone qualified to give you advice and search the ATO website for publications to help.
 
As i said, talk to an accountant... I don't trade as a company myself, I use a discressionary trust (everything was setup by my accountant), but my understanding you tell the ATO basically the same thing.

Also when we were filling out that ABN paperwork i remember ticking the box for "investment" (or something similar) when classing the business activities, there wasn't one for trader. But then again i use the structure for a mixure of trading and investment activites.

At the end of the day, you need to talk to an accountant!
 

Matt,

Have you considered whether you have the personality type to become a broker?
I'd like to suggest that two of the necessary qualifications would be that (1) you have the capacity to happily pass on the company's recommendations to your potential clients regardless of whether you believe such suggestions will actually make money for your clients, and (2) you can be trained to be a supadupa salesperson!

Julia
 

Nope, i have definatly not thought about the fact i may have to give recommendations that i dont believe in, im still young and naive

I guess ill give a few broking firms a call and see if they have any work placement/experience deals for uni students.

All the accounting bodies such as CPA/CA and the Investment Banks are all quite visible when it comes to trying to hire uni grads, but id never seen anything from Financial Planners or Brokers so thought id ask about that as thats more where my interest lays.
Im doing Finance/Accounting at uni so hopefully that would help somewhat if i was to try and get a Broking job.

Thanks for all the info so far.
 
Hi,
I have a Commerce degree (majoring in marketing/HR), and a grad dip of Law, and a grad dip ed.

I'm an economics teacher at the moment.

Do I have a chance of being a trainee advisor (stockbroking) in CBD Sydney? I'm looking to enroll in a dip financial markets through Finsia next year.
 
Since you've got the B Comm, you probably would be better of doing the Grad Diploma in Applied Investments and Finance, I've seen broker jobs asking for degree and Post Grad SIA qualifications

SIA = FINSIA now
 
Thanks for your help I think you are right! I just need to decide which electives and path to take.
 
get your ps146 and find a stock broker who can be your mentor... thats all i did i'm 21 no degree and on my way to financial freedom

don't waste your time/energy getting degrees in accounting, mathematics etc... get into a firm and work your way up
 
thx mlennox,

so i should not bother doing the 8 module Grad Diploma in Applied Investments and Finance? Instead i should just do the 4 module Dip Fin Services through Finsia which will grant me my PS 146 compliance?
 
So are you actually an assistant to a stockbroker or are you a home trader with a mentor?

I'm also interested in what a ps146 is and what that can allow you to do?

Thanks,
scsl
 
scsl said:
So are you actually an assistant to a stockbroker or are you a home trader with a mentor?

I'm also interested in what a ps146 is and what that can allow you to do?

Thanks,
scsl
Click to expand...
ps14 is the licence you have to complete to allow you to advise "non sophisticated" investors, anyone with less than 500k. Over 500k it is assumed the investor can pretty much look after themselves so you dont need this licence....no insto salesman have this...it is a private client thing.

The first step to becoming a broker (and it depends on how old you are) is getting a job along the lines of a desk assistant where you are esentially a book keeper for a bunch of advisors...you get their lunches, take phone calls, pay bills, give out quotes, make sure stock gets paid for etc...if you are lucky enough, you may then get the chance to become and assistant advisor, if you have the right attitude and the willingness to be **** kicker for a while...from junior to someone an office will respect with a client base i would say at least 5 years, unless you come straight out of uni and get a trainee advisor role.....
 
PS146 is the Mickey Mouse half diploma required to deal in securities nowadays.

The hard part is getting into the firm.

Having solid degree quals and post grad certainly helps, but connections are far better.

Some (21yr/olds) are kissed on the d!ck and congrats to them - but many have to work in the industry for a number of years to get connected and score a decent seat.

Building a book at a lesser known house is a good way to shimmy into a good seat before turning 30.
 
and at the end of the day, the amount of money in private client brokings is slim pickings compared to doing pretty much any front office job on the insto side of things, it just depends on what you want out of life.
 
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