Stockbrokers we visit often tell us their frustrations on recruitment, saying a typical dialogue might be as follows:
“I have always wanted to be a broker”
Ok, so you know what a CFD is, the difference between a forward and future contract, the difference between a stock and a share, an option, derivative, candlestick, swap?
“Uhh, not sure really.”
“Ok, so tell me what you know about broking, the market or how it works?”
“Uhh, not sure really.”
“Ok, what do you think for example would happen to the investment market with a rise in interest rates?”
“Uhh, not sure really.”
So what made you come to interview if you know so little about it?
They do not mind the not knowing, it is the clear untruth about always wanting to be a stockbroker. Reputable firms want people who tell the truth. It would break regulatory rules as well as being unethical and all calls are recorded.
We notice on their CV they have not set up even a free online ‘pretend money’ trading account, read any books on trading, or frankly done anything at all apart from apply for this job that would back this claim up. If you have wanted to be something since school you would have nurtured and followed up that interest and have something to say about to back up the truth of this statement. We would sooner see people who had never thought of it but have solid reasons with a strong motivation of why they believe it is for them.
So we wonder what they think the role of a broker is. On probing we often find that the real goal is that the title broker with a city address has a very high status to it coupled with very high potential income and this is the true goal.
What is a Broker? A person who buys and sells goods or assets for others.
There are regulated and unregulated brokers. The former are decreed by Act of Parliament and the Financial Conduct Authority regulate their behaviour, products, and companies. The FCA cannot choose who it regulates nor can a company choose to be regulated it or not. It is listed in the Act or not.
Historically, this led to the creation in regulated brokers of the “Opener” role because you could not make deals yourself unless a regulated broker. The unregulated broker has also taken on this structure.
So let us clarify what this specialist sales role is and if it may be for you. Yes I said sales. There are back room broker positions for more analytical positions, we do not recruit for those. If you want to analyse figures, calculate and comment on P/E ratios, work out yields, internal rates of return then we cannot help. Our positions in this sector are front room Stock/Commodity/Wine brokers that are selling. Predominantly selling over the telephone, although a recent development has been more seminar presentation and one to one meetings with clients.
Any form of investment is highly competitive and you have to get out there and make a pitch against competition. Over a number of months and years stockbrokers develop their own portfolio of clients, even then the client will expect to be called with any new offers available. This is when the very high incomes are earnt.
Do I have to cold call? Everyone you ring will not know you, nor you them. No brokerage firm will give trainees their oldest clients or expensive leads coming in through marketing when you start. You have to earn this right by proving yourself. You will start as Junior Broker by developing clients from fresh. Would you give yours away to someone else 2 years later? So yes you are going to be calling people you do not know, developing rapport, qualifying, nurturing interest and getting information out. It is really hard work, call after call, much rejection.
I am always telling people that before they even look for jobs they should have a clear set of goals. This I do appreciate is far easier said than done with so many career directions to pursue. Unfortunately, most people drift through a few jobs to find out where they fit in. They start with a ‘try it and see attitude’. This is a recipe for several short job moves that can ruin a CV. As a Junior Broker you will not make it through the first week with that attitude.
A typical day will start quite late and with training in products, investments, finance, markets or selling skills. Then you will be on the telephone and have a sophisticated system dial up calls for you, one after the other. Expect massive rejection of investors with many offers to consider. Each call is recorded and evidence is kept of exactly what is said. Yes, selling an investment for £100,000 is a world apart from tele-selling a hotel promotion. You have to be very persuasive and that means far more than sales skills. It means you really do know what you are talking about.
How do I know that the company is reputable? The investment and financial services industry generally attracts bad press/blogs like a magnet. If you are going to be broker you are going to have to learn how to analyse and separate truth from opinion, slander and lies. You should never tell lies as a broker, never take an investment that has been financed or involving any sort of loan, take money from someone that is needed for their living costs. Everything you say is recorded. To check out a company the best and only source I take any credibility from is the FCA. They will list all regulated brokers. If they are not listed they are not regulated. They will also list any companies that have reason to believe are not genuine or where any legal proceedings, investigations are in process. That is what I do when someone rings me with an investment.
How do I know it is for me?
This who success as stockbrokers or similar have certain traits in common.
A real interest in investment and finance.
Motivated by high income AND prepared to work until they achieve it.
They never give up.
They are keen to continue learning.
They are sharp, intelligent and think in their feet rather than having academic qualifications.
They are strong and independent. This means if those around you including me tried to put you off you would still be determined no matter what.
They are extremely good listeners. This is a tough one and probably the biggest cause of failure. It really is more about listening than talking. So many people blot out what they do not what to hear.
Still want to be a broker?