Understanding How To Become A Broker In Stock Market: Hollywood and Bollywood have idolized the idea of working on Wall Street and Dalal Street for decades. From Charlie Sheen in Wall Street to Scam 1992’s Harshad Mehta, the idea of becoming a shark or bull of the stock market and becoming an overnight millionaire is a fantasy sold to all of us.

Now all those movies show us the highlights of living the life of an elite broker but none of them shows us exactly how to get there. Coming back from the reel world to the real world, you might be wondering – How To Become a Broker in the Stock market?

This blog will take you through the step-by-step process of how to become a broker in stock market and also help you decide if it is the right career for you.

Who Is A Stock Broker?

A stock broker is a licensed professional who buys and sells stocks on behalf of their clients. Their career revolves around the securities markets, and are responsible for maintaining a ledger for the orders and transactions of individual and institutional customers. 

While it seems simple from the outside, brokerage is a risky and competitive field, where a broker will have to constantly be in touch with clients and advise them on which stocks to buy and sell as well as market fluctuations on the regular. 

Broker Or Trader – Which suits you?

Both brokers and traders buy and sell securities in the capital market. Yet there is a difference between the two, especially from a career standpoint. Brokers act as agents for their clients and enact orders on behalf of their clients.

Based on the services provided by the firm, they may also offer other additional services such as retirement planning, wealth management, portfolio diversification, and real estate investment opportunities. 

A broker is not limited to stocks and bonds alone. They may also deal with mutual funds, ETFs, and even options for specific clients. 

A trader either works individually or on behalf of an investment firm and buys or sells securities based on the firm’s wishes. Similar to brokers, they too deal with different securities. 

Become A Stock Broker – Step By Step

  1. Submit A New Membership application on the NSE website to the Membership Services Department. 
  1. After the application is submitted, it has to be approved by the Membership Services Department. Once approved, it is sent to the Membership Recommendation Committee and Membership Selection Committee. 
  1. From the selection committee, the application is sent to the Member Compliance Department.
  1. Upon approval, an offer letter of Provisional Membership is sent to your place of residence. 
  1. You will have to submit documents to SEBI for registration. After approval, the SEBI Certificate is sent to you and then you’ll also receive a trading system.

Qualifications Of A Stock Broker

To become a broker in the stock market, the basic educational qualification is not as high as most jobs in finance. According to SEBI, these are the basic qualifications you need to become a broker –

  1. At Least 21 Years Of Age.
  1. An Indian Citizenship
  1. High School Certification or Equivalent
  1. An experience for not less than two years as a partner with, or an authorized assistant or authorized clerk or remisier or apprentice to, a member.

Besides these qualifications, there are other criteria to become a broker like cash in hand and net worth. You can read more about it here on the NSE Official Website.

What Is The Stock Broker Salary In India?

Now just like how the educational qualification is not fixed beyond the high school certificate, the salary range of a stock broker also isn’t certain. Brokers don’t earn through salaries but from the commission fees from their clients. Better trades mean higher commissions earned from clients.

Not only trades, but it also depends on the number of clients and their net worth as well. Some might be open to higher risk while others choose to stick to conservative forms of profiteering. 

Note that as a broker, success ratios have to come into the picture as commissions are earned only from profitable trades

Who Cannot Be A Stockbroker?

You cannot become a broker if

  1. You have declared bankruptcy or proven to be insolvent.
  1. Been convicted of an offense involving fraud and dishonesty.
  1. Engaged in businesses like merchant banking, financial services, underwriting, and investment advisory.
  1. Declared a defaulter by any stock exchange and/or barred from trading securities by SEBI, RBI, or any other regulatory body.

The Bottom Line 

People want to become a broker in the stock market for various reasons – Money being number one along with status and reputation. Add to that a knack for working with clients and the fast-paced action of markets, and you have the right skill set for becoming a broker. But one thing is for certain when you decide to become a broker – Money Never Sleeps. 

We’ve reached the end of this blog on “How To Become A Broker In Stock Market”. Hope this brought value to you and helped in making the right decision for your career. Happy Investing.