Expert: Tad Borek - 2/12/2009

Question
HI!  I want to be a stockbroker, but realize they also do things like IRA's and such.  However, my main interest is in stocks/commodities and hedging techniques.  If I plan to take this route I want to make sure I am not just selling insurance and retirement funds all day.  Is this the case, cause I am into the trading aspect using options and such. Also if brokers get paid on commission, is it hard to find clients? thanks!

Answer
misskitty, if you're interested in things like stock trading, commodities and hedging techniques you'd probably be disappointed with most "retail" financial jobs, meaning ones where your customers are individual investors. Those are considered high-risk areas of investing and represent a small part of most individual investors' portfolios (in fact commodities & hedging techniques aren't typically used at all). Even stocks aren't the meat & potatoes of the typical client - especially for a new stockbroker. Look at it from the perspective of the company employing you...they're required by law to supervise their employees, and if a new broker loses a lot of money by doing some risky trading strategy, the company can be liable for losses. So realistically you aren't going to see aggressive or fancy investing approaches done by inexperienced brokers and advisers.

But let's say that's what you want to do. Here are two ways of getting there...

1. do your time in a retail position as a stockbroker or investment adviser representative, until you have enough years under your belt that you're allowed to move up to these kinds of trading strategies for clients. You might even start in a trading-related position because it sounds like you don't have an interest in the planning side of this business. Larger advisory firms have "portfolio managers" whose job is implementing trades for the firm's clients. Brokerage firms have trading desks, which could involve no client interaction.

2. forget about retail and pursue something like an MBA, then the CFA credential. That would line you up for money-management jobs with mutual fund companies, hedge funds, investment banks, pension funds, etc - "institutional investors" - which sounds to me better suited to your areas of interest. To read up on this option, check out the CFA Institute and the pathway to getting that CFA credential (google those terms). You might even ask that organization if you could attend one of the regional CFA meetings just to meet people in the biz and ask questions about the career.

-Tad