Securities, commodities and financial services

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Most investors use securities, commodities and financial services sales agents when buying or selling stocks, bonds, shares in mutual funds, insurance annuities or other financial products. Many clients seek these agents for advice on investments, estate planning and other financial matters. As deregulation of the financial services industry is implemented, the distinctions among these sales agents become less clear.

Securities and commodities sales agents, also called brokers, stockbrokers, registered representatives, account executives or financial consultants, may perform a variety of tasks. When an investor wishes to buy or sell a security, for example, sales agents may relay the order through their firm's computers to the floor of a securities exchange, such as the New York Stock Exchange. There, securities and commodities sales agents known as floor brokers negotiate the price with other floor brokers, make the sale and forward the purchase price to the sales agents. If a security is not traded on an exchange, as in the case of bonds and over-the-counter stocks, the broker sends the order to the firm's trading department. Here, other securities sales agents, known as dealers, buy and sell securities directly from other dealers using their own funds or those of the firm, with the intention of reselling the security to customers at a profit. After the transaction has been completed, the broker notifies the customer of the final price.

Securities and commodities sales agents also provide many related services for their customers. They may explain stock market terms and trading practices, offer financial counseling or advice on the purchase or sale of particular securities and devise an individual client's financial portfolio.

The most important part of a sales representative's job is finding clients and building a customer base. Most securities and commodities sales agents serve individual investors, but others specialize in institutional investors, such as banks and pension funds.

Financial services sales agents sell a wide variety of banking and related services. They contact potential customers to explain their services and to ascertain customers' banking and other financial needs. In doing so, they discuss services, such as loans, deposit accounts, lines of credit, sales or inventory financing, certificates of deposit, cash management or investment services. They may solicit businesses to participate in consumer credit card programs. Financial services sales agents who serve all the financial needs of a single affluent individual or a business often are called private bankers or relationship managers.

Most securities and commodities sales agents work under fairly stressful conditions. Established securities and commodities sales agents usually work a standard 40-hour week. Beginners may work longer hours. Financial services sales agents work 40 hours a week in a less stressful environment.

Training and qualifications

Securities and commodities sales agents must be knowledgeable about economic conditions and trends. A college education is important, but many employers consider personal qualities and skills more important than specific academic training. Employers seek applicants who have considerable sales ability, good interpersonal and communication skills and a strong desire to succeed. Some employers make sure applicants have a good credit history and a clean record. Self-confidence and an ability to handle frequent rejections also are important ingredients for success.

Securities and commodities sales agents must meet licensing and certification requirements. Most employers provide on-the-job training to help securities and commodities sales agents meet the registration requirements for certification.

Banks and other credit institutions prefer to hire college graduates for financial services sales jobs. A business administration degree with a specialization in finance or a liberal arts degree including courses in accounting, economics and marketing serves as excellent preparation for this job.

Job outlook

Barring a significant decline in the stock market, the number of securities, commodities and financial services sales agents should grow faster than the average for all occupations through 2010. As people's incomes continue to climb and they seek better returns on their investments, they will increasingly need the advice and services of these sales agents. Although growth in stock trading over the Internet will reduce the need for brokers for many transactions, but the rapid overall increase in investment is expected to spur employment growth.

The number of financial services sales agents in banks will increase faster than average as banks expand their product offerings in order to compete directly with other investment firms.

Earnings

Securities, commodities and financial services sales agents held 367,000 jobs in 2000, including 90,000 who were self-employed. Their median annual earnings were $56,080 in 2000. Median annual earnings in the industries employing the largest numbers of securities and financial services sales agents in 2000 were:

Security and commodity services $71,260
Security brokers and dealers 69,550
Mortgage bankers and brokers 39,740
Personal credit institutions 37,690
Mortgage bankers and brokers 36,590

Related links

For general information on the securities industry:

The Securities Industry Association, 120 Broadway, New York, NY 10271.

Adapted from the Labor Department's Occupational Outlook Handbook.