How Much Do Stockbrokers Make?Guest Post
Stockbrokers get paid more than most workers. Estimates of the median combined salaries and commissions received by people who sell stocks and other securities to investors range from $62,910 to $149,664 a year. The estimates vary depending on the source of the estimate and the method used to gather data, with estimates derived from self-reports and job postings by employers running considerably higher than government data collectors. Brokers with more experience, and those working certain areas of the business, may also earn more. Here’s what you need to know.
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Stockbroker Pay Basics
The U.S. Bureau of Labor Statistics is one widely quoted source for annually updated data on how much workers in various professions get paid. For 2021, BLS says the median pay for securities, commodities, and financial services sales agents came to $62,910 per year.
The median value separates the highest-earning half of brokers from the lowest-earning half. The BLS pay data includes salaries paid by employers, which may be banks or brokerages or other financial institutions, as well as commissions brokers earn for trades.
Some non-governmental sources report higher figures for broker pay. Comparably, which collects anonymous submissions from workers providing information about their own paychecks, says the median stockbroker pay is $130,303 a year. ZipRecruiter, which gets its information by scanning employer job postings and uses an average instead of a median figure, says pay typically comes to $12,472 per month, or $149,664 a year.
All these sources indicate that stockbrokers earn substantially above the typical wage. According to BLS, median pay for all U.S. workers across all professions in 2021 came to $45,760, less than half the median annual earnings of brokers handling securities transactions.
Other Broker Earnings Data
Job title and responsibilities can affect broker pay. The BLS median broker pay figure includes earnings of managers who oversee brokers, as well as brokers working for credit intermediation companies that help arrange loans. Workers whose duties are primarily the traditional broker’s tasks of assisting investors with securities transactions earn more than managers and loan brokers, according to a more detailed BLS analysis. These brokers, who also earn money from commissions, generate median earnings of $98,030, according to BLS.
Like other occupations, earnings vary by experience. More experienced brokers earn more, in part, because they have better-developed client bases and so generate more commissions. Trainee brokers just starting out are more likely to be completely reliant on their base salary.
Broker earnings also differ by location and market, among other factors. The best-paid brokers can command median annual earnings of $778,494, according to Comparably, while the worst-paid have to get by with just $17,660.
Stockbroker Pay Background
A broker is someone who helps buyers and sellers conduct transactions. In addition to the stocks, bonds, commodities and other securities handled in transactions assisted by stockbrokers, brokers may participate in buying and selling real estate and insurance products.
Brokers generally are compensated at least partly by commissions on their transactions. They may also receive a base salary from their employers. For stockbrokers, commissions based on the volume of shares being traded are part of the trading fees clients pay. These fees fund the activities of the brokerages and pay brokers. Other broker fees may include flat trade fees and, for options, per-contract fees. Some brokerages don’t charge commissions, but generate income in other ways.
Brokers generally have bachelor’s degrees, often in finance-related subject areas. They are also required to be licensed to trade securities. For instance, a Series 7 license is one of the most basic licenses issued by the Financial Industry Regulatory Authority (FINRA), that allows brokers to conduct their business.
Brokers often work more than the usual 40 hours a week. They may put in nights and weekends contacting prospective customers or conducting investment seminars to generate leads for new securities clients.
Despite the demands of the job and its prerequisites, stockbroker employment is robust and growing at a healthy rate, perhaps because of the chance to earn more than most other jobs. There are about 46,600 jobs in the field, BLS says, and that is expected to grow at a rate of 10% annually from 2021 through 2031.
Stockbrokers are paid considerably better than the typical worker, with annual compensation coming in at a median $62,910, according to government figures. Some private industry estimates of typical broker earnings are significantly higher, and the best-paid workers may expect to be paid in the high six figures. Brokers earn a combination of salary and commissions, and more experience generally means more pay. To get hired, brokers generally need a college degree and securities licenses, and may have to work longer hours than the typical worker.
- A financial advisor can help you understand what stockbrokers charge and how to use their services to help you reach your financial objectives. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Investors may pay a variety of financial advisor fees in exchange for help with their financial affairs. Some of these most significant of these may include percentage-based fees for assets under management, commissions on securities trades and hourly or flat fees for preparing financial plans. Not all financial advisors charge all fees and some levy a combination of commissions and hourly or flat fees.
Article by Mark Henricks, SmartAsset.