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Can a Felon Become a Stockbroker?

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There are resources available for felons to start a new career. Many employers have found that felons make good employees. Some felons may have an interest in the financial field and have thought about being a stockbroker.

This blog post will address the issue of whether or not a felon can become a stockbroker.

  • What Is a Stockbroker?
  • What Education/Training Does a Stockbroker Need?
  • How Much Does a Stockbroker Earn?
  • An Opportunity for Felons?
  • Recommended Action


What Is a Stockbroker?

A stockbroker sells stocks and securities to individual clients. A stockbroker deals with a wide range of financial products.

A stockbroker analyzes a potential investment and advises a client based on that client’s needs. A stockbroker is paid through commissions, so each broker must pay close attention to the stock market and note trends as they develop. The better the advice a stockbroker gives, the more money he or she makes.

A broker must have a broad knowledge of securities and commodities, and must be able to analyze a company’s financial reports.

While a stockbroker has many duties, most typically do the following:

  • Contact prospective clients
  • Offer advice on buying and selling stock
  • Buy and sell stocks and bonds
  • Buy and sell commodities such as corn, oil, and gold
  • Monitor financial markets and investments

A successful stockbroker has many essential skills, including:

  • Analytical skills to judge the potential of possible deals
  • Customer service skills to put clients at ease
  • Decision-making skills to make quick decisions
  • Detail-oriented to track changes in the stock market
  • Initiative to create their own client list
  • Math skills to be familiar with an investment formula

What Education/Training Does a Stockbroker Need?

A stockbroker must have a bachelor’s degree to get an entry-level job. A bachelor’s degree in business or finance are helpful for a stockbroker career. A business degree will cover a wide range of business-related courses. Graduates will become familiar with securities and trading stocks. They will also learn other aspects of a company, such as marketing and ethics.

A finance degree is another great choice for individuals interested in working as a stockbroker. A finance degree will go more in-depth into subjects likely to be encountered by a stockbroker, such as investments and risk management.

Courses a business or finance major can expect to take in order to become a stockbroker include:

  • Introduction to marketing
  • Business law
  • Introduction to finance
  • Managerial accounting
  • Valuation of securities
  • Investment banking
  • Business quantitative analysis
  • Financial accounting

A stockbroker must register as a representative of his or her firm with the Financial Industry Regulatory Authority (FINRA). To obtain a license, a candidate must pass a series of exams.

In order to take the exams to become a licensed stock broker, an individual must be sponsored by a FINRA-registered firm. Typically, this means being hired by a brokerage firm or investment bank before getting licensed.

Most states require stockbrokers to take and pass the Series 7 and Series 63 exams. The Series 7 exam covers financial topics relating to the trading of many different types of securities and Series 63 focuses on state rules and laws.

Depending on the firm, additional licensing exams may be needed. Some stockbrokers may choose to pursue certification that, while not required, may improve professional standing and earnings.

How Much Does a Stockbroker Earn?

According to the U.S. Bureau of Labor Statistics there are approximately 375,700 licensed stockbrokers. The median income level was $67,310 in 2016. The median is the salary at which half of the stockbrokers receive more and half receive less.

Geographic location, certification, experience, and specialization could have a significant impact on these earnings. For example, a stockbroker on the East or West coast typically receives a higher salary than one in other areas of the country.

This occupation is expected to show an average growth of 6% by 2026. The economic growth of the U.S. will add to the need for stockbrokers. An aging population reaching retirement age and the decline of traditional pensions may also increase the demand for stockbroker services.

An Opportunity for Felons?

A felon can pursue any college degree he or she wants. Approximately 60% of colleges consider criminal history in their admissions process, although there is no standard policy regarding a background check. For many colleges, a background check may simply be asking a question regarding any convictions on the application.

Any felon that wants to get a degree to pursue a stockbroker career can find a college that will accept him or her. A felon may have difficulty getting accepted into some schools, but there are programs that will accept a felon.

A Series 7 license, issued by FINRA, is required for trading most financial securities. The license has three parts:

  • Sponsorship by a FINRA member
  • Licensing exam
  • Passing the background check

Anyone with a felony conviction is automatically disqualified from receiving a Series 7 license for 10 years from the date of the conviction. All Series 7 applicants must submit fingerprints. Failure to truthfully disclose all criminal history can be grounds for denying a Series 7 license.

The FINRA reviews each application. This analysis takes into account:

  • Nature and seriousness of the offense
  • Length of time that has elapsed since the conviction
  • Whether any intervening misconduct has occurred
  • Mitigating or aggravating circumstances
  • Precise nature of the securities-related activities
  • Disciplinary history of the member firm and the responsible supervisor

After passing the Series 7 exam, the employer will attempt to register that person with FINRA at which point the background checks will occur that lead to disqualification if a criminal past that has not been expunged or sealed.

It is important to be honest when applying for certification as a stockbroker. If a felony isn’t disclosed but is found on a background check, this constitutes fraud and is punishable. It is a crime to falsify any application which could result in being sent back to prison.

In order to be successful as a stockbroker, it is essential for felons to be honest about their background. They are already viewed with negative perceptions of being dishonest, untrustworthy, and unwilling or unable to follow directions from authority figures.

Having their record expunged can give them the chance needed to begin with a clean record and succeed in becoming a stockbroker. Expunging a criminal record allows anyone to honestly state on an application that he or she has not been convicted of a crime.

Recommended Action

It is a significant challenge, but it might be worth it for a felon that wants to become a stockbroker. Having his or her record expunged and also documenting any training programs or additional education could make the essential difference in a felon succeeding in becoming a stockbroker.

Having support from family, friends, or previous employers can make a huge difference. A felon doesn’t have to be defined by his or her crime. We are not defined by our mistakes but by how we recover from them. He or she can begin again and live an honest life no matter how difficult it might seem.

What do you think about this blog post? Have you or someone you know been in the situation of trying to become a stockbroker with a felony? What was that like for him or her, and how did he or she achieve success? Please tell us in the comments below.

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