Stockbrokers act as intermediaries between investors (who want to buy shares) and companies looking to raise capital by selling securities.
There are generally three types of stockbroking services: advisory, where a stockbroker only offers advice on investments; execution-only, where they buy and sell securities solely on a client’s instruction; and discretionary, where full control is given to a stockbroker to trade and make decisions on a client’s behalf.
Stockbrokers typically specialise in certain fields such as equities or debt markets, and can be found in banks, financial firms, or specialist brokers. Their income is largely commission-based, which means they get a percentage of the value of every trade they help facilitate.
Malaysia has two stock markets, the Kuala Lumpur Stock Exchange (KLSE) and the Malaysian Exchange of Securities Dealing and Automated Quotation (MESDAQ). Stock markets are regulated by the Securities Commission Malaysia (SC), and the activities of stockbrokers are licensed and regulated by the SC too.
While anyone with a graduate degree and the right experience can be a stockbroker, employers sometimes prefer numerate, business, financial, or management degrees.
You will be also be required to apply for the New Capital Markets Services Licence issued by the SC, which is necessary for professionals dealing in securities or derivatives.
You will typically start off as an associate at banks, wealth management firms, independent registered investment advisors, or broker-dealers. Your employer may require you to start out shadowing a mentor to gain on-the-job experience before allowing you to hit the trading floor yourself.
This line of work has infamously long hours ̶ fourteen-hour work days aren’t uncommon. However, the financial pay-out from commissions on each trade you oversee can be very impressive. Additionally, ambitious individuals will be able to take on a lot of responsibilities early on, and enjoy good promotion opportunities.
Around the world, stockbrokers are diversifying their range of services to include financial consultation and planning. Where stockbroking in the past only dealt with the trade of high-risk, high-return securities, brokers are now more akin to financial advisors who offer full financial planning services.
Stockbrokers need numerical skills to crunch the numbers and make recommendations to clients. They must also demonstrate commercial awareness through a constantly updating knowledge of financial industry and market trends.
Stockbrokers have to serve multiple clients at once, so other key attributes include being detail-oriented, patient and able to multitask effectively. They must have excellent communication, interpersonal and negotiation skills since they will spend most of their time interacting with clients.
Strong IT skills are a must, since stockbrokers will be doing a lot of work on specialised terminals or trading software. The ability to make tough decisions even in the face of ambiguity, and to thrive in a high-stress working environment will also be crucial to ensuring you succeed in this line of work.