How to become a stock broker in India?

Have you ever come across the tiny bull and bear icons along with a set of tables and graphs, while skimming through the seemingly-mundane business sections of a newspaper? Or are you that kind of a person who spends hours mulling over the equations and speculations of these graphs and tables? Yes, we are indeed referring to the stock exchange rates here. What if I tell you that one of the most promising professions your country can provide you lies hidden in this tiny portion of the newspaper you read every day? The share market, even in its ups and downs, is a haven not only for investors and corporate giants – it provides a plethora of career opportunities. Stock broker is considered to be the most decisive one among these. 

You don’t have to be a share market geek to build a steady career with it. Are you good with numbers and an enthusiast of finance and markets? If yes, you stand high chances of becoming a successful stock broker. However, the term would bring in a lot of questions – Is stock broking a steady and stable job? Can a person become a stock broker one fine morning? Does it involve mere speculation and luck? What does a stock broker actually do? What happens inside the share market? Let us try to solve these first.

What is stock broking?

Before we look into the career of a stock broker, we ought to be aware of the ways in which a stock market work. A stock market is analogous with any other market, provided that the commodity that gets exchanged here is the share value of any business enterprise. In other words, business firms can sell out portions of their ownership value – equity, as we call it – to investors who are interested. Investors buy these shares, hoping to sell them to other bidders for a higher value. This continuous process of buying and selling makes the dynamics of a share market.

When we buy a share of certain company, we are in fact buying a part of its ownership. This is in other terms called stock, and is listed in stock exchange to be traded. Buyers and sellers of shares meet in a stock market. In very simple terms, a stock broker mediates this exchange. That is, stock brokers are the links between shareholders and potential buyers. They analyse the market, identify the values, and advice their clients regarding the purchase and sales of stocks.  

Stock brokers, in fact, engage with the trade of even more potential securities apart from stocks. They need not necessarily be an individual person. Given that market analysis and decision making are intricate processes that demand expertise, stock broker can also be a group of people or an organisation. Well, when we say that stock brokers mediate between stock buyers and sellers, what do we actually mean? The job of a stock broker, to put it in simple words, is to buy or sell stock on behalf of their clients. They are licensed to take part in this trade, and hence can act as agents who work for investors and shareholders. But, do you think a stock broker’s job is as simple as we see it? Let us find out.

What do stock brokers do?

There are many functions of a stock market that can be considered as a stock broker’s job. First and foremost, as we already discussed, is the buying and selling of stocks for clients. You and I, as individuals, cannot independently trade stocks in a stock market. We need to approach a stock broker who would identify our priorities, consider our financial capabilities, and the extent of risk we would like to take. Then, it is the stock broker’s job to locate the stocks that, when bought, would bring us greater profit. They analyse the market trends frequently, and intimate us continuously regarding which stock to buy, and what rate to sell. Proper and transparent communication between the investor and the broker can benefit both, by turning in huge profit shares.

Some brokers would offer service only in terms of buying and selling the stocks in which the investors are interested, and some others provide further aid by directing the clients with frequent briefing and investment advices. Apart from stocks, brokers also trade other financial products such as bonds, derivatives and insurance. However, brokers charge a fixed share of profit or commission as their fee. 

Apart from being a licensed stockbroker with a registration ID from any stock exchange, one can also start their career as a sub-broker. Sub-broker is someone who practices trade under the membership ID of any registered stockbroker. The process of stock broking is not complete without the work of dealers, who are hired by sub-brokers to handle stock exchange portals. They deal with the technical side of feeding in trade-related data to computers. Thus, these various phases of activities together formulate a stock broking team or organisation. Often, market analysts and financial analysts also become a part of this nexus.

Courses and Qualifications of Stock broking: Who can become a stock broker? 

Now that we know what a stock broker does, the next question is obvious – how to become a stock broker? Well, not anyone can become a successful share broker, to say the least. Share broking is not an undergraduate or post graduate degree that can be acquired from any university. Instead, the process of trading is mastered through market observation and on-field training. Ideally, a stock broker should be a graduate, with a minimum work experience of two years. You can start practicing as a sub-broker, if you have passed 12th standard. Even though stock broking course cannot be taken up for graduation, a stock broker shall preferably have a degree in the field of commerce, economics or business administration. A postgraduate candidate, especially someone with an MBA in finance, would stand higher chances of moulding a grounded career. 

However, before registering and getting licenced, each and every candidate shall undergo a brief course in stock broking from any of the leading institutions. Most of the time, the registering stock exchange would provide a certificate or diploma course in stock broking. Otherwise, you can always approach these institutes independently to get your foundation course done. Many such institutes offer courses in stock broking, capital market and investment, investment planning etc. Anyone who wishes to become a stock broker, thus, should take either a certificate programme in financial markets or capital markets, or a post graduate diploma in capital market and financial services/ fundamentals of capital market development from any of the following institutions:

  • All India Centre for Capital Market Studies, Nasik
  • Institute of Financial and Investment Planning, Mumbai
  • Institute of Company Secretaries of India, New Delhi
  • Institute of Capital Market Development, New Delhi
  • Mumbai Stock Exchange Training Institute, Mumbai
  • Institute of Chartered Financial Analysts of India, Hyderabad
  • The Orion Institute of Capital Market, New Delhi
  • The UTI Institute of Capital Market, Mumbai

There are some big players and MNC’s who would hire only Chartered Accountants and Chartered Financial Analysts as stock brokers. In any case, you have to cross 21 years of age in order to qualify as a stock broker.

How to become a stock broker in India?

Even if you qualify in all the above mentioned eligibilities, you still have to undergo yet another registration process to start practicing as a stock broker. Once you have completed the certificate course from any of the institutes we discussed above, you will have to be trained at any stock broking firm. Within this period, you would’ve realised and identified the kind of security you wish to engage with – it could be equity, equity derivatives or currency derivatives. As the next step, you shall pile up essential office space, equipment and monetary funds, following which you can go for registration. 

Every stock broker in India shall register with SEBI (Securities Exchange Board of India), as per the SEBI act of 1992. The board will evaluate your application and provide a Certificate of Registration according to your eligibility. Then, needless to say, you shall take an official membership in any stock exchange like NSE or BSE. Membership can be acquired in more than one exchange. This, however, involves a considerable expense, since the membership fee and security deposit can sometimes cross lakhs. 

Stock broking career in India: Scope, Job Opportunities and Salary

Setting aside all the requirements we have discussed so far, a stock broker is expected to have another set of skills – decision making and risk management is the most significant among those. In-depth knowledge of markets and stock values is also necessary. Considering these skillsets and multifaceted training acquired from the field, a stock broker need not necessarily stick on to being a stock broker. That is, there is a wide range of careers that can be opted by a stock broker, in the same field. Since a successful stock broker is someone who us good at observing market trends and providing investment advice, they can easily qualify for a financial advisor, investment advisor or a capital market specialist. They can also choose to work as independent agents, accountants, securities analysts, security traders, or financial managers along with stock broking.

The greatest scope of stock broking is that its possibilities are not limited at all. Stock brokers can work with brokerage firms, insurance firms, investment banks, mutual funds, financial institutions, magazines and newspapers (if you haven’t forgotten the bull and bear column) or even with researchers. Their on-field experience and analytical skills can take them to heights we can never imagine. Even if they choose to work as a sub-broker, they can easily earn a sum of 3-4 lakhs per annum, and this can further go as high as 10 lakh per annum. The salary will shoot up exponentially abroad. Private firms such as Reliance Capital Ltd, HDFC, JP Morgan, ICICI Direct, Sharekhan Limited and Kotak Securities Ltd are some of the big names that hire stock brokers to different job profiles.

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For stock brokers, skill and expertise work as an advertisement. If you wish to build up a dynamic career in the field, you shall identify your strengths and cater to it. Most interestingly, the list of career option never ends for a skilled stock broker. This, however, makes the career most desirable for anyone who has a keen interest in the market economy and share investment. India, an economy which is projected to achieve the highest growth rate in the coming years, can make considerable promises to stock broking and allied professions. Thus, for anyone who is good with economics and business management, and extremely confident in their skillsets, stock broking becomes the future’s best gift.

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We hope this article helped you become familiar with career opportunities of Stock broking in India. You can reach out and have a free chat with our experts at Hikewise for personalised support and advice on how to build a successful career ahead.

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