Categories: Maintaining a Business

Stockbrokers – Everything you need to know

Welcome to our weekly post on small business industry! We took a couple of weeks off for the holiday, but now we are back and ready to tackle S – Stockbrokers! The financial industry is notoriously complex, so starting your own, private brokerage firm can be a bit tough. However, with a bit of experience and all of the right qualifications, it can be done!

Are stockbrokers heavily regulated?
Yup! Independent brokers have to jump through loads of regulatory loopholes before they’re allowed to open their business. This industry is very complex, and comes with a lot of risk, so naturally the government keeps a tight reign on it. Everyone that wants to work as a stockbroker must pass the Series 7, General Securities Representative Exam, offered by the Financial Industry Regulatory Authority. In addition to this, stockbrokers normally have to pass the Series 63 or Series 66 exam, depending on their state. And, depending on what you want to sell and your state, you may need to pass other exams as well.

What agencies do stockbrokers have to register with?
The Financial Industry Regulatory Authority, or FINRA, is the biggest self-regulatory organization in this industry and, while you can join another SRO, many recommend you stick with FINRA. Along with them, you need to send in applications to the Security and Exchange Commission for every state you want to sell in. Finally, you’ll need to check with your state to see what other regulatory bodies you’ll need to register with. Each state has its own requirements, so be sure to check with your state’s securities regulator.

How well are independent brokers doing?
While the financial industry has had a bit of trouble lately, it is getting healthier. And the high barriers of entry typically keep the pool of qualified stockbrokers small. However, in order to succeed in this industry, you need experience and a solid network of contacts. Otherwise no one will want to work with you. It’s a good idea to work with another firm before striking out on your own. After all, the success of your firm is contingent on your reputation and success. Prove those, and you’ll be better prepared to work independently.

Have any questions? Need help filing the paperwork to get your private firm off the ground? Give us a call at 1 (877) 692-6772!

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration.

Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law.

Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others.

Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.