NATURE OF THE WORK

The U.S. securities industry manages the accounts of approximately 50 million investors directly and tens of millions of investors indirectly through corporate, thrift, and pension plans. The industry generates in excess of $300 billion of revenues yearly in the U.S. economy and employs approximately 700,000 individuals. Most investors, whether they are individuals with a small amount to invest or large institutions with billions of dollars, choose securities, commodities, and financial services sales representatives when buying or selling stocks, bonds, mutual funds, annuities, or other investment products. More importantly, clients use them for advice on investments and strategies for investing.

Securities sales representatives, also known as stockbrokers, registered representatives, account executives, or financial consultants, perform a vast array of functions depending upon their specific niche. For example, when an investor wishes to buy or sell securities, a sales representative may relay the order through their firm's computers to a particular exchange, such as the New York and American Stock Exchanges, or the NASDAQ.

Securities sales representatives also provide many related services for their customers. They may explain stock market terms and trading practices, offer financial consulting or advice on the purchase or sale of particular securities, or devise an individual client portfolio. A portfolio can include individual stocks, shares of mutual funds, bonds, annuities, life insurance, CD's, and other alternative investments.

Not all customers have the same investment goals. Some individuals prefer long-term strategies with income spread over a number of years. Others might want to invest in speculative securities with the hopes of a quick return. Securities representatives furnish information about the advantages and disadvantages of an investment based on each person's objectives. Providing the latest price quotes, as well as information on the financial standing of corporations, are other common services that are provided.

WORKING CONDITIONS

Most securities sales representatives work in offices under fairly stressful conditions. They have access to computer terminals that continually provide information on the prices of securities. When sales activity increases due to any unanticipated changes in the economy, the pace can become very hectic.

Beginners who are seeking customers may work longer hours. New brokers spend a great deal of time learning about the firm's products and services and studying for exams to qualify them to sell other products.

EMPLOYMENT

A college degree may be helpful, but many employers consider personal qualities and skills more important than academic training. Today's employers seek applicants who have considerable sales ability, good interpersonal and communication skills, and a strong desire to succeed. Self confidence and an ability to handle frequent rejections are also important ingredients for success.

Because maturity and the ability to work independently are important, many employers prefer to hire those who have achieved success in other areas. Some firms would rather hire candidates with sales experience, particularly those who have worked on commission in areas such as real estate, auto sales or insurance.

Securities sales representatives must meet State licensing requirements, which usually include passing an examination. In addition, sales reps must register as representatives of their firm with the National Association of Securities Dealers, Inc. (NASD). Beginners must pass the General Securities Registered Representative Examination (Series 7 exam), before they can qualify as registered representatives. This exam is administered by the NASD only to those who have been an employee of a registered firm for at least 4 months. These tests measure the prospective representative's knowledge of the securities business, customer protection requirements, and record keeping procedures. There could be additional examinations depending on professional specialty. Additionally, a continuing educational process will continue throughout a registered rep's career.

Most employers provide on-the-job training to help employees with all testing requirements. This is necessary because a sales representative must understand the basic characteristics of a wide variety of ever-changing financial products offered by the firm.

Financial service sales representatives learn their jobs primarily through on-the-job training under the supervision of senior officers. In this type of industry the principal form of advancement is an increase in the number and size of accounts handled.

JOB OUTLOOK

Barring a significant decline in the stock market, the number of financial service sales representatives should grow much faster than average for all occupations throughout the decade. As people's income continues to increase and they seek better returns on their investments, they will increasingly need the advice and services of securities representatives to realize their financial goals.

Baby boomers in their peak savings years will fuel much of the investment boom. Savings for retirement is being made much easier by the government, which continues to offer a number of tax-favorable pension plans, such as the 401K and the Roth IRA. More women in the workforce also means higher incomes and more women qualifying for pensions. Many of these pensions are self~directed, meaning that the recipient has the responsibility for investing the money. With such large amounts of money to invest, brokers and financial planners will be in demand to provide continued investment advice and services.

Employment of brokers, however, could be adversely affected if the market or the economy suddenly declines. Even in good times, turnover is relatively high for beginning brokers who are unable to establish a sizable clientele. However, once established, securities sales representatives have a very strong attachment to their occupation because of high earnings and the considerable investment in time and training.

EARNINGS

Stockbrokers, who provide personalized service and more guidance over a client's investments, usually are paid a commission based on the amount of stocks, bonds, and other products they sell. Sales representatives who can provide their clients with the most complete financial services should enjoy the greatest income stability. Trainee brokers are usually paid a salary until they develop a client base. This salary will eventually decrease in favor of commissions as the broker gains the knowledge necessary to properly handle customer accounts.

Case in point, the Wall Street Journal published an article on July 14th, 1999 showing that the average income for a stockbroker in 1998 was in excess of $177,000.

We hope our brief synopsis of the brokerage industry is informative enough so that it can help you properly make a serious career decision.