COMMODITIES FLOOR BROKER

Because securities and commodities sales agents must be knowledgeable about economic conditions and trends, a college education is important, especially in larger securities firms.

In fact, the overwhelming majority of workers in this occupation are college graduates. Although employers seldom require specialized academic training, courses in business administration, economics, and finance are helpful.

A stock broker sells or buys stock on behalf of a customer. The stock broker works as an agent matching up stock buyers and sellers. A transaction on a stock exchange must be made between two members of the exchange - a typical person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker.

Securities and commodities sales agents, also called brokers, stockbrokers, registered representatives, account executives, or financial consultants, perform a variety of tasks, depending on their specific job duties. When an investor wishes to buy or sell a security, for example, sales agents may relay the order through their firm’s computers to the floor of a securities exchange, such as the New York Stock Exchange.

Most investors, whether they are individuals with a few hundred dollars to invest or large institutions with millions, use securities, commodities, and financial services sales agents when buying or selling stocks, bonds, shares in mutual funds, insurance annuities, or other financial products.

In addition, many clients seek out these agents for advice on investments, insurance, tax planning, estate planning, and other financial matters.

There, securities and commodities sales agents known as floor brokers negotiate the price with other floor brokers, make the sale, and forward the purchase price to the sales agents. If a security is not traded on an exchange, as in the case of bonds and over-the-counter stocks, the broker sends the order to the firm’s trading department. Here, using their own funds or those of the firm, other securities sales agents, known as dealers, buy and sell securities directly from other dealers, with the intention of reselling the security to customers at a profit. After the transaction has been completed, the broker notifies the customer of the final price.

Commodity Floor Brokers

Securities and commodities sales agents also provide many related services for their customers. They may explain stock market terms and trading practices, offer financial counseling or advice on the purchase or sale of particular securities, and design an individual client’s financial portfolio, which could include securities, life insurance, corporate and municipal bonds, mutual funds, certificates of deposit, annuities, and other investments.

Not all customers have the same investment goals. Some individuals prefer long-term investments, for capital growth or to provide income over a number of years; others might want to invest in speculative securities, which they hope will quickly rise in price. On the basis of each customer’s objectives, securities and commodities sales agents furnish information about the advantages and disadvantages of an investment. They also supply the latest price quotes on any securities, as well as information on the activities and financial positions of the corporations issuing the securities.

Most securities and commodities sales agents serve individual investors; others specialize in institutional investors, such as banks and pension funds. In institutional investing, sales agents usually concentrate on a specific financial product, such as stocks, bonds, options, annuities, or commodity futures. At other times, they may also handle the sale of new issues, such as corporate securities issued to finance the expansion of a plant.

The most important part of a sales representative’s job is finding clients and building a customer base. Thus, beginning securities and commodities sales agents spend much of their time searching for customers-relying heavily on telephone solicitation. They also may meet clients through business and social contacts. Agents often join civic organizations and other social organizations to expand their networks. Many sales agents find it useful to contact potential clients by teaching adult education investment courses or by giving lectures at libraries or social clubs. Brokerage firms may give sales agents lists of people with whom the firm has done business in the past. Some agents inherit the clients of agents who have retired. After an agent is established, referrals from satisfied clients are an important source of new business.

Financial services sales agents sell a wide variety of banking and related services. They contact potential customers to explain their services and to ascertain customers’ banking and other financial needs. In doing so, they discuss services such as loans, deposit accounts, lines of credit, sales or inventory financing, certificates of deposit, cash management, mutual funds, or investment services. They also may solicit businesses to participate in consumer credit card programs. Financial services sales agents who serve all the financial needs of a single affluent individual or a business often are called private bankers or relationship managers.

With deregulation of the financial services industry, the distinctions among sales agents are becoming less clear as securities firms, banks, and insurance companies venture further into each other’s products and services. The agents’ jobs also are becoming more important as competition between the firms intensifies.