As an ex-stockbroker and now Managing Director of a stockbroking and research advisory firm, it is not uncommon for people to ask, “what do you do as a stockbroker?”.
It’s a career that many still believe consists only of drugs and market manipulation, so I thought the best way to rid people of the delusion of Hollywood movie depictions of Wall Street in the 90’s, would be to give an honest illustration of a day in a life of a stockbroker at Maqro Capital.
8:00am Arrive at the office
By this point, I will have conducted my research on the train or Uber ride to work, scrolling through emails to see if any interesting publications I am subscribed to has something worth reading. Generally, I stick to the factual information; economic data, company announcements and global index market movements (personal insights or opinions only distract me). Not doing this would be the equivalent of forgetting your pencil to an exam. Sure, I can ask my colleague next to me when I get in, but not without the stench of failure I would be spreading with my utter incompetence. Let me remind you, as a stockbroker or investment adviser, you are responsible for managing millions of dollars of other people’s money, the least you could do is bring a pencil.
8:30am VIP Meeting
A quick 30-minute meeting held only by those who brought a pencil and have come in early enough to have the time to share valuable insights or opinions. This can be had over the office water dispenser or outside during our morning coffee, but do not let these casual discussions fool you. In fact, it is usually these discussions that can mean the difference between a profit or a loss for the day.
9:00am Late comer’s Market Wrap
Now the be fair, our employment contracts do say 9:00am start, but as they say, early bird gets the worm. And at 9:00am on the dot, one of the advisers will have the opportunity to show the entire firm why he deserves to be in the position he has.
As he presents the daily market wrap, which goes through everything we need to know for the day ahead, Junior Advisers will be aggressively taking notes as to fast-track their progression to a lisenced adviser as soon as possible. Preparation is key, as the last thing you want to do, is speak to a client who knows more than you about the interest rate decision up ahead, so it is a sacred meeting at the firm which is attended with extreme care.
9:20am Client Acquisition
As a stockbroker, you generate brokerage. Now usually, the size of that brokerage will be correlated with either the volume of trades you place, or the size of your book. For those of you who missed a key component in the Wolf of Wallstreet, generating higher brokerage fees by executing a higher number of trades is referred by the industry as “churning” an account. Now as my father taught me, “it’s only those who can’t succeed the right way, who try and do it the wrong way”. So at Maqro Cap, we focus on having a large client base to increase our brokerage revenues, rather than the former. And to do that, you need to be able to on-board clients. So hit the phones and sell. Not very glamorous I know, but it’s the menial tasks that happen in the background that will generally drive success.
For those who smoke, this is a time of serenity. A trading floor can get louder than a nightclub, I swear I have had better conversations with a stranger at the bar, than some phone calls made in the midst of the roar of brokers when a key announcement is released, especially anything price sensitive. So, this is a time to let the blood pressure settle and relax before the intensity levels given by volatile market fluctuations return.
2:00pm Client Management
Now as I write this section, I have realised that most of the broker’s tasks are extremely ad hoc. Naturally, with an active strategy or a view on the market as a dynamic beast compared to something static, every day is interesting. Client management is where you manage the relationship between adviser and client, something of an art really. You see, this is a combination of building a genuine rapport with the client, but also an opportunity for your clients to hurl abuse when a stock decreases in value (rightfully so). But for those who have a true passion for their jobs as a stockbroker, this can be the most rewarding time of the day. It’s the small wins and compliments that give a hardworking adviser the strength to keep pushing forward through the harsh winds of the market.
Markets are well and truly closed by this time. And after a long day of trading and speaking to clients, you really have two choices. One, be the better version of yourself and work on the mounting pile of administrative tasks that were due yesterday, or two, continue your brochure calls to grow your client book. Now growing your book is paramount but take your foot off the pedal when it comes to paperwork, and the clients you have acquired won’t be trading with you. So, it’s the diligence at the end of the day that differentiates the rich broker to the broke brokers.
5:30pm Call it a day
Unlike a lot of careers, stockbroking is not really an hourly job, it’s a performance-based role. So, it doesn’t matter whether you stay in late or go home early. Heck, it doesn’t even matter if you stay in bed, as long as you are getting things done. This is really the key component of a stockbroker that many people don’t understand. Sure, there are smarter people, with years of experience, higher qualifications or simply a better sense of market fundamentals, but the real indicator for success in this industry is your ability to endure. Stockbroking is a marathon, not a sprint. Take your time, maintain internal motivation to stay on the pulse no matter what, and sooner or later, success will come your way.
As I proofread this article, I have realised that it is was not a plausible idea to attempt an illustration of an average day of a stockbroker within a suitable word limit. But hopefully this snapshot was able to provide a glimpse into the exhausting, yet surprisingly rewarding, life of a stockbroker.
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