Securities, Commodities, and Financial Services Sales Agents
|Quick Facts: Securities, Commodities, and Financial Services Sales Agents|
|2017 Median Pay||$63,780 per year
$30.66 per hour
|Typical Entry-Level Education||Bachelor's degree|
|Work Experience in a Related Occupation||None|
|On-the-job Training||Moderate-term on-the-job training|
|Number of Jobs, 2016||375,700|
|Job Outlook, 2016-26||6% (As fast as average)|
|Employment Change, 2016-26||23,300|
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Securities, Commodities, and Financial Services Career, Salary, and Education Information
What Securities, Commodities, and Financial Services Sales Agents Do
Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets. They sell securities to individuals, advise companies in search of investors, and conduct trades.
Securities, Commodities, and Financial Services
Duties OF SECURITIES, COMMODITIES, AND FINANCIAL SERVICES Sales agents
Securities, commodities, and financial services sales agents typically do the following:
Contact prospective clients to present information and explain available services
Offer advice on the purchase or sale of particular securities
Buy and sell securities, such as stocks and bonds
Buy and sell commodities, such as corn, oil, and gold
Monitor financial markets and the performance of individual securities
Analyze company finances to provide recommendations for public offerings, mergers, and acquisitions
Evaluate cost and revenue of agreements
Securities, commodities, and financial services sales agents deal with a wide range of products and clients. Agents spend much of the day interacting with people, whether selling stock to an individual or discussing the status of a merger deal with a company executive. The work is usually stressful because agents deal with large amounts of money and have time constraints.
A security or commodity can be traded in two ways: electronically or in an auction-style setting on the floor of an exchange market. Markets such as the National Association of Securities Dealers Automated Quotation system (NASDAQ) use vast computer networks rather than human traders to match buyers and sellers. Others, such as the New York Stock Exchange (NYSE), rely on floor brokers to complete transactions.
The following are examples of types of securities, commodities, and financial services sales agents:
Brokers sell securities and commodities directly to individual clients. They advise people on appropriate investments based on the client’s needs and financial ability. The people they advise may have very different levels of expertise in financial matters.
Finding clients is a large part of a broker’s job. They must create their own client base by calling from a list of potential clients. Some agents network by joining social groups, and others may rely on referrals from satisfied clients.
Investment bankers connect businesses that need money to finance their operations or expansion plans with investors who are interested in providing that funding. This process is called underwriting, and it is the main function of investment banks. The banks first sell their advisory services to help companies issue new stocks or bonds, and then the banks sell the issued securities to investors.
Some of the most important services that investment bankers provide are initial public offerings (IPOs), and mergers and acquisitions. An IPO is the process by which a company becomes open for public investment by issuing its first stock. Investment bankers must estimate how much the company is worth and ensure that it meets the legal requirements to become publicly traded.
Investment bankers also connect companies in mergers (when two companies join together) and acquisitions (when one company buys another). Investment bankers provide advice throughout the process to ensure that the transaction goes smoothly.
Investment banking sales agents and traders carry out buy and sell orders for stocks, bonds, and commodities from clients and make trades on behalf of the firm itself. Investment banks primarily employ these workers, although some work for commercial banks, hedge funds, and private equity groups. Because markets fluctuate so much, trading is a split-second decisionmaking process. Slight changes in the price of a trade can greatly affect its profitability, making the trader’s decision extremely important.
Floor brokers work directly on the floor—a large room where trading is done—of a securities or commodities exchange. After a trader places an order for a security, floor brokers negotiate the price, make the sale, and forward the purchase price to the trader.
Financial services sales agents consult on a wide variety of banking, securities, insurance, and related services to individuals and businesses, often catering the services to meet the client’s financial needs. They contact potential clients to explain their services, which may include the handling of checking accounts, loans, certificates of deposit, individual retirement accounts, credit cards, and estate and retirement planning.
Work Environment for Securities, Commodities, and Financial Services sales agents
Securities, commodities, and financial services sales agents held about 375,700 jobs in 2016. The largest employers of securities, commodities, and financial services sales agents were as follows:
Securities, commodity contracts, and other financial investments and related activities: 43%
Credit intermediation and related activities: 43%
Self-employed workers: 5%
Management of companies and enterprises: 4%
Most securities, commodities, and financial services sales agents work many hours under stressful conditions. The pace of work is fast, and managers are usually demanding of their workers, because both commissions and advancements are tied to sales.
Investment bankers travel extensively because they frequently work with companies in other countries.
Because computers can conduct trades faster than people can, electronic trading is quickly replacing verbal auction-style trades on exchange floors. The environment of the stock exchange is changing as a result, with more traders carrying out orders behind a desk and fewer working on the exchange floor.
Because most of the major investment banks are in New York City, employment of securities, commodities, and financial services sales agents is concentrated in that metropolitan area.
Securities, commodities, and financial services sales agents usually work full time, and about 1 in 3 worked more than 40 hours per week in 2016. In addition, they may work evenings and weekends because many of their clients work during the day.
How to Become a Securities, Commodities, or Financial Services Sales Agents
A bachelor’s degree is required for entry-level jobs, and a master’s degree in business administration (MBA) is useful for advancement.
Securities, commodities, and financial services sales agents generally must have a bachelor’s degree to get an entry-level job. Courses in business, finance, accounting, or economics are important, especially for larger firms. Many firms hire summer interns before their last year of college, and those who are most successful are offered full-time jobs after they graduate.
Numerous agents eventually get a master’s degree in business administration (MBA), which is often a requirement for high-level positions in the securities industry. Because the MBA exposes students to real-world business practices, it can be a major asset for jobseekers. Employers often reward MBA holders with higher level positions, better compensation, and large signing bonuses.
Most employers provide intensive on-the-job training, teaching employees the specifics of the job, such as the products and services offered. Trainees in large firms may receive technical instruction in securities analysis and selling strategies. Firms often rotate their trainees among various departments to give them a broad understanding of the securities business.
Securities, commodities, and financial services sales agents must keep up with new products and services and other developments. They attend conferences and training seminars regularly.
Licenses, Certifications, and Registrations
Brokers and investment bankers must register as representatives of their firm with the Financial Industry Regulatory Authority (FINRA). To obtain the license, potential agents must pass a series of exams.
Many other licenses are available, each of which gives the holder the right to sell different investment products and services. Traders and some other sales representatives also need licenses, although these vary by firm and specialization. Financial services sales agents may need to be licensed, especially if they sell securities or insurance. Most firms offer training to help their employees pass the licensing exams.
Agents who are registered with FINRA must attend continuing education classes to keep their licenses. Courses consist of computer-based training on legal requirements or new financial products or services.
Although not always required, certification enhances professional standing and is recommended by employers. Brokers, investment bankers, and financial services sales agents can earn the Chartered Financial Analyst (CFA) certification, sponsored by the CFA Institute. To qualify for this certification, applicants need a bachelor’s degree or 4 years of related work experience and must pass three exams, which require several hundred hours of independent study. Applicants also must have an international passport. Exams cover subjects in accounting, economics, securities analysis, financial markets and instruments, corporate finance, asset valuation, and portfolio management. Applicants can take the exams while they are getting the required work experience.
Securities, commodities, and financial services sales agents usually advance to senior positions in a firm by accumulating a greater number of accounts. Although beginners often service the accounts of individual investors, they may eventually service large institutional accounts, such as those of banks and retirement funds. Getting an MBA may also help advancement opportunities.
After taking a series of tests, some brokers become portfolio managers and have greater authority to make investment decisions regarding an account.
Some experienced sales agents become branch office managers and supervise other sales agents while continuing to provide services for their own clients. A few agents advance to top management positions or become partners in their firms.
Many investment banks use an “up or out” policy, in which entry-level investment bankers are either promoted or terminated after 2 or 3 years. Investment banks use this policy to ensure that entry-level positions are not occupied long term, allowing the bank to bring in new workers.
Analytical skills. To judge the profitability of potential deals, securities, commodities, and financial services sales agents must have strong analytical skills. This includes computer programming skills which they use to analyze financial products.
Customer-service skills. Securities, commodities, and financial services sales agents must be persuasive and make clients feel comfortable with the agent’s recommendations.
Decisionmaking skills. Investment banking traders must make split-second decisions, with large sums of money at stake.
Detail oriented. Investment bankers must pay close attention to the details of initial public offerings and mergers and acquisitions because small changes can have large consequences.
Initiative. Securities, commodities, and financial services sales agents must create their own client base by making “cold” sales calls to people to whom they have not been referred and to people not expecting the call.
Math skills. Securities, commodities, and financial services sales agents need to be familiar with mathematical tools, including investment formulas.
SALARIES FOR securities, commodities, and financial services sales agents
The median annual wage for securities, commodities, and financial services sales agents was $63,780 in May 2017. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $33,060, and the highest 10 percent earned more than $208,000.
In May 2017, the median annual wages for securities, commodities, and financial services sales agents in the top industries in which they worked were as follows:
Securities, commodity contracts, and other financial investments and related activities: $96,550
Management of companies and enterprises: $77,870
Credit intermediation and related activities: $47,260
Many securities and commodities brokers earn a commission based on the monetary value of the products they sell. Most firms pay brokers a minimum salary in addition to commissions.
Trainee brokers usually earn a salary until they develop a client base. The salary gradually decreases in favor of commissions as the broker gains clients.
Investment bankers in corporate finance and mergers and acquisitions generally earn a base salary with the opportunity to earn a substantial bonus. At higher levels, bonuses far exceed base salary.
Securities, commodities, and financial services sales agents usually work full time, and about 1 in 3 worked more than 40 hours per week in 2016. In addition, they may work evenings and weekends because many of their clients work during the day.\
Job Outlook for securities, commodities, and financial services sales agents
Employment of securities, commodities, and financial services sales agents is projected to grow 6 percent from 2016 to 2026, about as fast as the average for all occupations.
Services that investment bankers provide, such as helping with initial public offerings and mergers and acquisitions, will continue to be in demand as the economy grows. The United States remains an international financial center, meaning that the economic growth of countries around the world will contribute to employment growth in the American financial industry. An aging population and the decline of traditional pensions may boost demand for these workers, as individuals approaching retirement seek brokers to facilitate securities purchases.
However, continuing consolidation in the financial services industry is projected to slow employment growth for these workers over the next decade. In addition, automated trading systems have reduced demand for securities traders. Because simpler stock purchases can be made online without a broker, financial firms will focus on hiring sales agents with specialized areas of expertise and strong customer-service skills.
Financial regulation, including restrictions on proprietary trading, has shifted employment among traders from investment banks to hedge funds; however, this shift should not affect overall employment growth for the occupation.
The high pay associated with securities, commodities, and financial services sales agents draws many more applicants than there are openings. Therefore, competition for jobs is intense.
Certification and a graduate degree, such as a Chartered Financial Analyst (CFA) certification and a master’s degree in business administration (MBA), can improve an applicant’s prospects.
Employment projections data for Securities, Commodities, and Financial Services Sales Agents, 2016-26
Employment, 2016: 375,700
Projected Employment, 2026: 398,900
Change, 2016-2026: +6%, +23,300
Careers Related to securities, commodities, and financial services sales agents
Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.
Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.
Real estate brokers and sales agents help clients buy, sell, and rent properties. Although brokers and agents do similar work, brokers are licensed to manage their own real estate businesses. Sales agents must work with a real estate broker.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Securities, Commodities, and Financial Services Sales Agents, on the Internet at https://www.bls.gov/ooh/sales/securities-commodities-and-financial-services-sales-agents.htm.