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I HAVE always been a great fan of your articles for many years. I am interested in becoming a stock broker.

And to hone my skills I went back to school and currently I am almost finishing certified securities and investment analysis on top of having a CPA (K) and a degree.

Guide me on how I can start a stock brokerage agency. I Will really appreciate. — Jacob

THANK YOU for your kind remarks. It is commendable that you have invested in gathering skills in readiness for opportunities in your chosen field.

However, there are a few steps that you need to take in order to increase your chances of success. To start off, identify a stock brokerage firm that will accept you as its agent.

Whether a stock broker decides to make you an agent or not mainly depends on your working relationship or track record with the selected company.

Your ability to deliver and act with integrity when dealing with customers will score you extra points.

Second, from a business point of view, you need to be able to generate sizeable orders to ensure that the commission you earn enables you to pay your bills and make a profit.

Income for an agent is derived from the commission earned from deals executed by the stock broker.

It is important to note that the commissions charged as a percentage of trades is a very big percentage, which means, in order to stay profitable, an agent would have to target customers who will give big orders.

Technically, agents are employees of the stock broker and hence the importance of having a good working relationship. It is the stock broker’s responsibility to ensure that any individual they hire as an agent adheres to a certain code of conduct when interacting with their potential or future customers.

This also applies to how the agent will be compensated for the business they bring in.

Many stock brokers require prospective individuals to have a minimum track record, usually more than a year, before applying to become their agent.

The requirements after approval to become an agent will normally differ from one firm to another and it is advisable that you start interacting with a target stock broker early enough.

While choosing a stock broker, consider how quickly and efficient they are in executing transactions and processing payments since this will impact on your relationship with your clients.

You will also need to negotiate your commission with the stock broker and define the extent of work you will be required to do.

There are a few skills you need to gain and continuous research on the market is inevitable. You must understand how the stock market works both from an investment perspective and from an operations angle to enable you offer good service and advice.

One also needs to have good people skills coupled with a thick skin in order to cope during tough economic times.

This exposure and experience can be gained by first establishing your own portfolio, which will give you first-hand experience and make it easier for you to provide good service to your customers.

A stock brokerage agency will require efficient management just like any other business, even if you are the only employee.

You therefore need to have a good business plan and focus on the best way to execute your strategy. Ensure you have an adequate budget and tap your accounting expertise to ensure maximum efficiency in operations so as to increase your profits.

Finally, you need to network with potential customers, or persons who can refer you to others for sizeable orders.

Get in touch with mentors to help you grow in the field and remember that many deals are often derived from referrals, so never down-play the benefits of networking and good customer service. We wish you Godspeed.