Career Occupational Profile for :
Securities, Commodities, and Financial Services Sales Agents

Buy and sell securities in investment and trading firms, or call upon businesses and individuals to sell financial services. Provide financial services, such as loan, tax, and securities counseling. May advise securities customers about such things as stocks, bonds, and market conditions.

Signficant Points

• A college degree, sales ability, good interpersonal and communication skills, and a strong desire to succeed are important qualifications.
• Competition for entry-level jobs usually is keen, especially in investment banks; opportunities should be better in smaller firms.
• Many people leave the occupation because of underperformance, but those who are successful have a very strong attachment to their occupation because of high earnings and considerable investment in training.

Overview

Sample Job Titles

Training

Most positions require a bachelor’s degree, although few require a specific major. An MBA or professional certification can also be very helpful. Advancement is often very difficult, but those who are successful can have extremely lucrative careers.

Education and training. A college education is important for securities and commodities sales agents, especially in larger firms, because they must be knowledgeable about economic conditions and trends. Most workers have a bachelor’s degree in business, finance, accounting, or economics, although this is not necessarily a requirement. Many firms hire summer interns before their last year of college and those who are most successful are offered full-time jobs after they graduate.

After working for a few years, many agents get Master’s degrees in Business Administration (MBA). This degree is a requirement for many of the high-level positions in the securities industry. Because the MBA is a professional degree designed to expose students to real-world business practices, it is considered to be a major asset for jobseekers. Employers often reward MBA-holders with higher-level positions, better compensation, and even large signing bonuses.

Most employers provide intensive on-the-job training, especially for entry-level employees. While college coursework is helpful, most firms have a specialized business model which employees must learn. New employees must also come to know the large number of products and services offered by most firms. Trainees in large firms may receive classroom instruction in securities analysis, effective speaking, and the finer points of selling. Firms often rotate their trainees among various departments, to give them a broad perspective of the securities business. In small firms, sales agents often receive training in outside institutions and on the job.

Securities and commodities sales agents must keep up with new products and services and other developments. Because of this, brokers regularly attend conferences and training seminars.

Licensure. Brokers and investment advisors must register as representatives of their firm with the Financial Industry Regulatory Authority (FINRA). Before beginners can qualify as registered representatives, they must be an employee of a registered firm for at least 4 months and pass the General Securities Registered Representative Examination—known as the Series 7 Exam—administered by FINRA. The exam takes 6 hours and contains 250 multiple-choice questions; a passing score is above 70 percent.

Most States require a second examination—the Uniform Securities Agents State Law Examination (Series 63 or 66). This test measures the prospective representative’s knowledge of the securities business in general, customer protection requirements, and recordkeeping procedures. Most firms offer training to help their employees pass these exams.

There are many other licenses available, each of which gives the holder the right to sell different products and services. Most experienced representatives have several. Traders and some other workers also need licenses, although these vary greatly by firm and specialization. Financial services sales agents may also need to be licensed, especially if they sell securities or insurance.

Registered representatives must attend periodic continuing education classes to maintain their licenses. Courses consist of computer-based training in regulatory matters and company training on new products and services.

Other qualifications. Many employers consider personal qualities and skills more important than academic training. Employers seek applicants who have excellent interpersonal and communication skills, a strong work ethic, the ability to work in a team, and a desire to succeed. The ability to understand and analyze numbers is also especially important. Because securities, commodities, and financial services sales agents are entrusted with large sums of money and personal information, employers also make sure that applicants have a good credit history and a clean record. Self-confidence and an ability to handle frequent rejection are important ingredients for success.

Maturity and the ability to work independently are important so many employers prefer to hire those who have achieved success in other jobs. Most firms prefer candidates with sales experience, particularly those who have worked on commission in areas such as real estate or insurance. Other firms prefer to hire workers right out of college, with the intention of molding them to their corporate image.

Advancement. The principal form of advancement for brokers, investment advisors, and financial services sales agents is an increase in the number and size of the accounts they handle. Although beginners usually service the accounts of individual investors, they may eventually handle very large institutional accounts, such as those of banks and pension funds. After taking a series of tests, some brokers become portfolio managers and have greater authority to make investment decisions regarding an account. Some experienced sales agents become branch office managers and supervise other sales agents while continuing to provide services for their own customers. A few agents advance to top management positions or become partners in their firms.

Investment bankers who enter the occupation directly after college generally start as analysts. At this level, employees have some contact with clients but spend most of their time producing pitchbooks, information booklets used to sell products. They also receive intensive training. After 2 to 3 years, top analysts may be promoted to an associate position or asked to leave. Recent graduates from MBA programs can start as associates, which is similar to the analyst position, but with more responsibilities. Associate may lead a group of analysts and tend to have more contact with clients. After 2 to 3 years, associates are promoted or terminated. Successful associates can become vice presidents, who manage the work of analysts and associates and have a great deal of contact with clients. Vice presidents may advance to become directors, sometimes called executive directors.

Nature of Work

Each day, hundreds of billions of dollars change hands on the major United States securities exchanges. This money is used to purchase stocks, bonds, mutual funds, and other financial instruments, called securities. Securities are bought and sold by large institutional investors, wealthy individuals, mutual funds and pension plans, and the general public. In fact, about half of American households own stock. Most securities trades are arranged through securities, commodities, and financial services sales agents, whether they are between individuals with a few hundred dollars to invest or between large institutions having millions of dollars. The duties of sales agents vary greatly depending on occupational specialty.

The most common type of securities sales agent is called a broker or stock broker. These are the people who sell securities to everyday people, also known as retail investors. Although only about 2 out of every 10 equities are held by small investors, most investors fall into this category. Because there are so many retail investors, they must work through a broker rather than trading directly on an exchange. First, the investor speaks with the broker, discussing the terms of the trade. Then, the broker relays this information to a trader at the company’s headquarters. Because most securities companies are very large, they can often find other company clients who are willing to buy or sell the same security. Otherwise, the stock trader places an order with a floor broker at an exchange, or trades the stock on an electronic network. The broker charges a fee for this service, and may also make money by finding a lower price for the security than was arranged with the investor.

The most important part of a broker’s job is finding clients and building a customer base. Thus, beginning securities and commodities sales agents spend much of their time searching for customers, often relying heavily on telephone solicitation. They also may meet clients through business and social contacts. Agents also join civic organizations and other social groups to expand their networks of possible clients. Many find it useful to contact potential clients by teaching adult education investment courses or by giving lectures at libraries or social clubs. Brokerage firms may give sales agents lists of people with whom the firm has done business in the past. Some agents inherit the clients of agents who have retired. After an agent is established, referrals from satisfied clients are an important source of new business.

Investment bankers are sales agents who connect businesses that need money to finance their operations or expansion plans with investors who are interested in providing that funding in exchange for debt (in the form of bonds) or equity (in the form of stock). This process is called underwriting, and it is the main function of the investment bank. Investment bankers have to sell twice: first, they sell their advisory services to help companies set up issuing new stock or bonds, and second, they then sell the securities they issue to investors.

Perhaps the most important advisory service provided by investment banks is to help companies new to the public investment arena issue stock for the first time. This process, known as an initial public offering, or IPO, can take a great deal of effort because private companies must meet stringent requirements to become public or be allowed to issue stocks and bonds. Corporate finance departments also help private companies sell stock to institutional investors or wealthy individuals. They also advise companies that are interested in funding their operations by taking on debt. This debt can be issued in the form of bonds. Unlike a stock, which entitles its holder to partial ownership of a company, a bond entitles its holder to be repaid with a pre-determined rate of interest.

Another important advisory service is provided by the mergers and acquisitions department. Bankers in this area advise companies that are interested in merging with or purchasing other companies. They also help companies that would like to be acquired. Once a potential seller or buyer is found, bankers advise their client on how to execute the agreement. Generally both buyers and sellers have investment banks working for them to make sure that the transaction goes smoothly.

Investment banking sales agents and traders sell stocks and bonds to investors. Instead of selling their services to companies for fees, salespeople and traders sell securities to customers for commissions. These sales agents generally work by telephone, calling customers and their agents to discuss new stock and bond issues. When an investor decides to make a purchase, the order goes to the trading floor. Traders execute buy and sell orders from clients and make trades on behalf of the bank itself. Because markets fluctuate so much, trading is a split-second decision making process. If a trader cannot secure the promised price on an exchange, millions of dollars could potentially be lost. On the other hand, if a trader finds a better deal, the bank could make millions more.

A small but powerful group of sales agents work directly on the floor of a stock or commodities exchange. When a firm or investor wishes to buy or sell a security or commodity, sales agents relay the order through their firm’s computers to the floor of the exchange. There, floor brokers negotiate the price with other floor brokers, make the sale, and forward the purchase price to the sales agents. In addition to floor brokers, who work for individual securities dealers, there are also independent brokers. These are similar to floor brokers, except that they are not buyers for specific firms. Instead, they can buy and sell stocks for their own accounts, or corporate accounts that they manage,, or they can sell their services to floor brokers who are too busy to execute all of the trades they are responsible for making. Specialists or market makers also work directly on the exchange floor, and there is generally one for each security or commodity being traded. They facilitate the trading process by quoting prices and by buying or selling shares when there are too many or too few available.

Financial services sales agents sell a wide variety of banking, accounting, securities, insurance, tax preparation, and other related services. They contact potential customers to explain their services and to ascertain customers’ banking and other financial needs. They also may solicit businesses to participate in consumer credit card programs.

Work environment. Most securities and commodities sales agents work in offices under fairly stressful conditions. The pace of work is very fast, and managers tend to be very demanding of their workers since both commissions and advancement are tied to sales.

Stock brokers and investment advisors generally work somewhat more than 40 hours a week, but they may not work at traditional times. Evening and weekend work is often necessary, as many of their clients work during the day. A growing number of securities sales agents, employed mostly by discount or online brokerage firms, work in call-center environments. In these centers, hundreds of agents spend much of the day on the telephone taking orders from clients or offering advice and information on different securities. Often, such call centers operate 24 hours a day, requiring agents to work in shifts.

Investment bankers in corporate finance or mergers and acquisitions typically work long hours and endure extreme stress, especially at the junior levels. Evening and weekend work is common. Because banks work with companies all over the world, extensive travel is often part of the job. With some experience, the workload becomes more manageable, but since higher-level workers generally have more contact with clients, they also tend to travel more.

Sales and trading departments typically work somewhat more than 40 hours a week, but not nearly as much as their counterparts in investment banking. They also travel less, and many only travel a few times a year for conferences or training. On the other hand, their jobs are incredibly stressful. For sales agents, every minute of the day that is wasted means they might have made another sale. Since both commissions and advancement are tied to sales, this can be very stressful. Traders have perhaps the most stressful jobs of all, as split second decisions can lead to millions of dollars being won or lost. Trading floors are very busy and often very loud. Exchange workers, much like traders, have highly stressful jobs because the bulk of their work takes place on the floor of the exchanges. However, exchange traders and workers typically work shorter hours than many other agents since most of their work is done while the market is open.

Exchange workers, much like traders, have highly stressful jobs, but the bulk of their work takes place on the floor of the exchanges, so hours are not very long. Trading floors of exchanges are even busier and louder than those inside of investment banks. Stress is very high, as millions of dollars are on the line for almost every trade, but workers who have made it to this level are generally up to the task.

Financial services sales agents normally work 40 hours a week in a comfortable, less stressful office environment. They may spend considerable time outside the office, meeting with current and prospective clients, attending civic functions, and participating in trade association meetings. Some financial services sales agents work exclusively inside banks, providing service to walk-in customers.

Related Academic Programs

• Financial Planning and Services.
• Investments and Securities.