Training and Advancement
The securities, commodities, and other investments industry has one of the most highly educated and skilled workforces of any industry. About 2 out of 3 workers have a bachelor's or higher degree. The requirements for entry are high—even brokerage clerks often have a college degree. The most successful workers at all levels have an aptitude for numbers and a keen interest in investing. In addition, most people in the industry are required to be licensed by the National Association of Securities Dealers (NASD) before they can sell securities or recommend specific investments. To be licensed, brokers and assistants must pass an examination that tests their knowledge of investments. Various licenses are available for different investment products; however, the one most brokers and broker's assistants receive is the “Series 7” license, which requires a passing score on the General Securities Registered Representative Examination administered by the NASD. Since 1995, the NASD also has required all registered persons with licenses to undergo a continuing education program approximately every 3 years in order to retain their licenses. Classes consist of computer-based training in regulatory matters and training on new investment products.
A number of professionals in this industry begin their careers as brokerage clerks. Depending on the actual job, brokerage clerks can be high school or college graduates. Positions dealing with the public, such as broker's or sales assistant, and those dealing with more complicated financial records are increasingly being held by college graduates. In addition, these jobs require good organizational ability, phone skills, and attention to detail. A Series 7 brokerage license can make a clerk more valuable to the broker because it gives the assistant the ability to answer more of a client's questions and to pass along securities recommendations from the broker. Clerks may be promoted to sales representative positions or other professional positions. Some of the larger firms have training programs, especially for their college graduates, that provide clerks with the skills they need for advancement.
A college education, although not essential, is increasingly important for securities, commodities, and financial services sales agents because it helps them to understand economic conditions and trends. In fact, the overwhelming majority of entrants to this occupation are college graduates. Still, many employers consider personal qualities and skills, such as self-motivation and the ability to handle rejection, more important than academic training. Many employers prefer persons who have been successful in other sales careers. Employers seek applicants with good communication skills, a professional appearance, and a strong desire to succeed.
Securities, commodities, and financial services sales workers must meet Federal and State licensing requirements, which generally include passing an examination and a background investigation and, in some cases, furnishing a personal bond. Most of the large brokerage firms provide formal classroom training for new brokers that can last a couple of weeks to several months. Smaller firms usually rely on informal on-the-job training.
Although there are no specific licensure requirements for becoming a personal financial advisor, most advisors must be knowledgeable about economic trends, finance, budgeting, and accounting. Therefore, a college education is important. Personal financial advisors must possess excellent communication and interpersonal skills to be able to explain complicated issues to their clients. Many advisors earn a Certified Financial Planner credential, also referred to as CFP (R), issued by the CFP Board of Standards, or a Chartered Financial Consultant (ChFC) designation offered by the American College in Bryn Mawr, Pennsylvania. To receive these designations, a person must pass a series of exams on insurance, investments, tax planning, employee benefits, and retirement and estate planning; must have the required experience in related jobs; and, in the case of the CFP (R), must agree to abide by the rules and regulations issued by the Board of Standards. The CFP (R) exam has been revised in recent years; candidates are now required to have a working knowledge of debt management, planning liability, emergency fund reserves, and statistical modeling. It may take from 2 to 3 years of study to complete these programs.
Entry-level financial analyst and other managerial support positions usually are filled by college graduates who have majored in business administration, marketing, economics, accounting, industrial relations, or finance. Many of the large companies have management training programs for college graduates in which trainees work for brief periods in various departments to get a broad picture of the industry before they are assigned to a particular department. Those working as financial analysts are encouraged to obtain the Chartered Financial Analyst (CFA) designation sponsored by the CFA Institute . To qualify, applicants must have at least 3 years of qualifying experience and pass a series of rigorous essay exams requiring an extensive knowledge of many fields, including accounting, economics, and securities.
Advancement opportunities in the securities, commodities, and other investments industry vary by occupation. To advance into the managerial ranks or enter some of the more lucrative and prestigious jobs on Wall Street in New York City, a master's degree is becoming essential. In investment banking, for example, most firms select the top candidates from the Nation's most prestigious business schools. However, because many business schools accept master's degree candidates only if they have some job experience, many securities firms hire analysts with a bachelor's degree and provide them with the experience they need, assuming that they will eventually obtain their master's degree.
The principal basis of advancement for securities, commodities, and financial services sales agents is an increase in the number and size of the accounts they handle. Some eventually manage the assets of clients. Although beginners usually service the accounts of individual investors, a select few eventually may handle very large institutional accounts. Administrative support workers such as brokerage clerks may advance to sales agent positions or to other professional positions. Financial analysts may advance to positions in which they manage investment portfolios or negotiate investment banking deals.