In the last few decades, technological advances have changed brokerage operations dramatically. Though the core responsibilities remain the same, how these responsibilities are carried out is quite different. This transformation has affected every area of brokerage operations, including the educational background required. Though brokerage operations are not as lucrative as many other areas of finance, it is also less competitive and can be used as a stepping stone to other careers in finance.
Brokerage Operations Responsibilities
Brokerage operations positions often vary drastically, but the key responsibility is ensuring accurate securities records are kept. Since technology has transformed record keeping, it should come as no surprise that technology has had a major impact on brokerage operations. The more things are automated, the less need there is for checks on accuracy.
A comparison of the number of brokerage clerks at the beginning of the 1990s and the early 2010s highlight just how dramatic the decline in brokerage operations positions was. In 1990, there were 190,000 brokerage clerks, by 2013, there were only about 60,000. Even though recent decades have seen a massive decline in brokerage operations jobs, it is expected that this decline will not only cease, but that growth will occur. These newer roles in brokerage operations will be based on overseeing the computerized aspect of record keeping.
The Five Areas of Brokerage Operations
There are five main areas in which a role in brokerage operations may be involved. Depending on the specific position and the firm, a role may include some combination of these areas.
Purchase and Sales – These brokerage clerks check that securities traded between financial services firms and client accounts move appropriately.
Dividends – Brokerage clerks in this area check that when dividends are due, they are collected and end up in the correct accounts.
Transfers – These brokerage clerks are responsible for any changes made to the registration of securities certificates. Due to the declining use of paper certificates, positions in this area are becoming more rarer.
Receiving and Delivering – Positions in this area require overseeing securities certificates moving from firm to firm. Again, since paper certificates are becoming less common, these roles are also disappearing.
Margins – These positions deal with the loans that allow the borrower to purchase securities, also known as margin loans. These clerks ensure clients are abiding by all the rules of the margin loan.
Education
Previously, only a high school degree was required to get a job in brokerage operations, but as the field has changed, so have the educational requirements. Now, to get most brokerage operation jobs a bachelor’s degree is required. One of the benefits of a career in brokerage operations is that unlike in some other areas of finance, no education beyond a bachelor’s is required. Though there’s no specific certification required, a Series 7 license may be helpful. How helpful a Series 7 license will depend on the position. If the operations clerk will be interacting directly with clients, the license gives them more flexibility on what they are and are not allowed to discuss.
Salary
Roles in brokerage operations are less competitive than many other careers in finance, but they also typically come with lower salaries. The salary range for a career in brokerage operations varies widely depending on the position, the firm, the level of experience, and even the location of the job. According to Glassdoor, the average annual salary for a brokerage clerk is $25,681, while the average annual salary for a brokerage operations analyst is $54,250.
Career Path
Though roles in the brokerage operations space may be less lucrative than other positions in finance, they offer training and experience in many different areas of finance that can help get other positions. For example, a Series 7 license is required to act as a financial advisor. If you have this license and financial experience it can be relatively easy to transition to a role as a financial advisor, which can have an annual compensation of $100,000 or more.
Is a career in Brokerage Operations Right for You?
A career in brokerage operations typically does not have the lucrative salaries that many other roles in finance do, but it also typically doesn’t have the long hours. A role in brokerage operations comes with less of the excitement of many areas of finance, but for those who don’t mind this, it can be a great way to learn the ropes of finance and eventually move up to a more lucrative and exciting position.
About The New York Institute of Finance
The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.
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