A stockbroker manages investments for clients through the trading of financial products such as stocks and shares. Stockbrokers usually work on commission, taking a percentage of the value of the assets traded, although some may charge a fixed, flat rate fee. Stockbrokers support either individual investors or institutions in making informed decisions about the right stocks and markets to invest in at the right time. Stockbrokers can operate in discretionary, advisory or executive ways. Shard Capital has an award-winning stockbroking service which was established in 2013, serving a range of clients across a variety of global instruments and investments. This includes a whole suite of discretionary, advisory and execution only services.
Discretionary, Advisory, Execution-only
Discretionary stockbroking is where the stockbroker manages all a client’s investments and makes decisions on their behalf as to what shares and investments should be bought and sold. With an advisory service, the stockbroker does not make any direct decisions and is not involved in the actual buying and selling of assets, but instead offers expert advice to the client. With an execution-only service, the stockbroker only engages when explicitly requested to do so by the client.
Entry to Stockbroking
The most usual entry point to a job as a stockbroker is through a graduate programme with an employer. Most employers will look for a minimum of a 2:1 degree in a relevant field, such as business, finance, maths, economics or management. The job market is competitive, so those who already have some experience of working within financial services will be at an advantage. Some of the larger firms offer summer internships, with the opportunity to start work once a degree has been completed.
There are three basic types of stockbrokers: full service, discount or online. A full service stockbroker will provide a service that is personalised to the client, passing on information and recommendations based on careful research. Full service stockbrokers will typically earn a commission if the client chooses to invest in the recommended products. Discount stockbrokers send clients a list of stocks that they recommend, but this is not backed up by the research. Online stockbrokers offer a non-personalised service by providing clients with relevant investment news, charts and a selection of stocks for consideration. In all cases, stockbrokers are not only expected to manage the assets of existing clients but also to develop new business.