The term stockbroker has been thrown around so frequently that I'm sure most of you guys have heard it at one time or another but what exactly is a stockbroker what do they do and why do investors need them that's what we're going to explain in this video we publish investor education videos every week so if you're new to lumo vest consider subscribing to our youtube channel a stock broker is a professional who executes buy and sell orders on behalf of the clients they don't make investments on your behalf instead they just implement your investment decisions if you want them to buy Apple at 230 dollars per share they'll execute the buy order for you if you want them to sell Apple automatically when it rises to 300 dollars they'll also do it for you what they don't do is they don't do the investment analysis for you stock brokers are not investment analysts they don't do the analysis for you and they really just execute your decisions you have to do that on your own to determine which stocks to buy and if you don't know how to analyze stocks check out the courses on our website you'll learn how to analyze the company's financials assess its business quality estimate a stocks valuation and many other important concepts it used to be that anyone who wants to invest in stocks must go through a human stockbroker who will process or buy and sell orders for this reason stock brokers played an absolutely critical role in the stock market and that's why everyone hears the word stock broker all the time
It was impossible to invest in stocks otherwise back in the old days because your investments won't be processed that's no longer the case nowadays with the rise of the internet this profession has largely been replaced with computers the buy and sell order submitted by everyday investors like you and I are processed electronically by computers as opposed to by humans you can buy and sell stocks at the click of a button on your computer without having to go through another human everyday investors pretty much won't interact with human stock brokers anymore there are still stock brokerage firms like Robin Hood Charles Schwab etrade Scott Reed TD Ameritrade infidelity where we can open accounts and submit buy and sell orders and they'll execute them for us but these are now processed electronically by computers so when you hear people say choosing a stockbroker they're referring to choosing a stock brokerage firm choosing a company that will handle your stocks buy and sell orders but the stock brokers profession didn't die out completely Stock Brokers still exist but instead of serving the everyday investors they really just serve the institutional investors companies with millions and billions of dollars making much larger investments that need personalized service for these institutional clients the stock brokers job is to find their clients the best possible price at which to buy and sell the stocks their clients won today's stock brokers have to be very well versed in the markets they have to know the major players in the market not just who they are but actually be able to communicate with them
they have to know whispers in the market like what different players are trying to buy and sell so they can get their clients the best price according to pay scale the average salary of a stock broker in the United States is $54,000 keep in mind that this is just salary as part of the total compensation package there could also be additional pay mechanisms like your end bonus and commissions but even if you just look at the base salary it's well above the US national median salary of approximately $31,000 so how do you become a stock broker in the movie
The Pursuit of Happyness starring Will Smith the main character Chris Gardner went through a long journey and finally landed his job as a stockbroker with no college degrees and no previous finance experience nowadays to become a stockbroker in the United States you generally need to have a college degree get hired by a company that will sponsor you for an industry license exam and then you must pass that license exam in the United States the exam is called series 7 series 7 is no joke the material is not hard to understand but there's a huge amount of content that you'll have to absorb other countries will have their own exams so that's an overview of what a stockbroker is hope you guys enjoyed it and hope you decide to subscribe see you guys next time
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