---
title: "What is a Stockbroker?"
description: "What is a stockbroker? Requirements and duties of brokers and how they help manage your investments."
canonical_url: https://trendshare.org/how-to-invest/what-is-a-stockbroker
markdown_url: https://trendshare.org/ai/what-is-a-stockbroker.md
published: 2016-12-11
last_updated: 2016-12-11
content_license: https://trendshare.org/about/disclaimer
---
# What is a Stockbroker?

Source: https://trendshare.org/how-to-invest/what-is-a-stockbroker
Updated: 2016-12-11
## What is a Stockbroker?

A stockbroker is a professional licensed to buy and sell financial
instruments on a stock exchange on behalf of other people. Several
characteristics apply to this definition:

**Educational guidelines include a degree in finance or business
administration**. Brokers need a good understanding of business and
financial transactions, especially principles of valuation, debt, and
accounting. This helps them evaluate investment opportunities.

**Employment guidelines usually involve working with a brokerage
firm**. While it's possible for a stockbroker to work as an individual,
it's much more common for several brokers to work together to pool assets and
experience and reduce risk.

**Licensing requirements include the "Registered Representative"
designation in the US**. Requirements and regulations vary by country.
In the US, brokers obtain the "Registered Representative" designation by
passing the [General Securities Representative Exam](http://www.finra.org/industry/series7) (or Series 7 exam).

Especially in the US, someone can only be called a "stockbroker" if they are
registered to sell stock—measured by passing the Series 7 exam.

Beyond the standard registration, brokers can be licensed for further
duties. To oversee multiple brokers, to ensure regulatory compliance, and to
approve various types of advertising and marketing materials, a *registered
principle* must obtain an additional license. Similarly, a special type of
registered principle is licensed to oversee options trading and exposure.

## What Does a Stock Broker Do?

A broker **mediates security transactions**, helping you sell
stocks, bonds, derivatives, and other financial instruments.

A broker **sells investment advice**, intended to help you
manage your investment portfolio.

A broker sometimes **invests on your behalf**, making trades
within your portfolio.

This, of course, leads to commission charges. Sometimes it's well worth it;
see [how stockbrokers make money](https://trendshare.org/how-to-invest/how-do-stock-brokers-make-money)
for more information about which fees and services are worth paying.