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Securities, Commodities, and Financial Services Sales Agents - What They Do

How to Advance (Advancement)
Although not always required, certifications enhance professional standing and are recommended by employers. Brokers, investment advisors, and financial services sales agents can earn the Chartered Financial Analyst (CFA) designation, sponsored by the CFA Institute. To qualify for this designation, applicants need a bachelor's degree, four years of related work experience, and must pass three exams which requires several hundred hours of self-study. Exams cover subjects in accounting, economics, securities analysis, financial markets and instruments, corporate finance, asset valuation, and portfolio management, and applicants can take the exams while they are obtaining the required work experience.

Brokers, investment advisors, and financial services sales agents usually advance by accumulating a greater number of accounts. Although beginners often service the accounts of individual investors, they may eventually handle very large institutional accounts, such as those of banks and pension funds. After taking a series of tests, some brokers become portfolio managers and have greater authority to make investment decisions regarding an account. Some experienced sales agents become branch office managers and supervise other sales agents while continuing to provide services for their own customers. A few agents advance to top management positions or become partners in their firms.

Investment bankers who enter the occupation directly after college generally start as analysts. At this level, employees receive intensive training and have little contact with clients as they spend most of their time producing “pitchbooks“—information booklets used to sell products. After 2 to 3 years, top analysts may be promoted to an associate position or asked to leave. Recent graduates from MBA programs can start as associates, which is similar to the analyst position, but with more responsibilities, such as leading a group of analysts and having contact with clients. After 2 to 3 years, associates are promoted or terminated. Successful associates can become vice presidents, and vice presidents may advance to become directors, sometimes called executive directors.

Securities, commodities, and financial services sales agents held about 317,200 jobs in 2008. About 49 percent of jobs were in the securities, commodity contracts, and other financial investments and related activities industry. About 15 percent of all workers were self-employed.

Because of their close relationship to stock exchanges and large banking operations, most of the major investment banks in the United States are based in New York metropolitan area. Smaller investment banks can be found in many major American cities and some major investment banks have operations in other cities, although most of their business remains in New York.

Job Outlook
Employment is projected to about as fast as the average. Keen competition is expected as the number of applicants will continue to far exceed the number of job openings in this high-paying occupation.

Job Growth
Employment of securities, commodities, and financial services sales agents is expected to grow 9 percent during the 2008-18 decade, about as fast as the average for all occupations. Consolidation of the financial industry, mainly stemming from recent global financial problems, will be the largest inhibitor of employment growth. Increased levels of industry consolidation often result in duplicated tasks among workers, a scenario that is expected to result in layoffs of many broker, sales, and investment banking positions. Additionally, the deregulation of financial markets in past decades has broken down the barriers between investment activities and banking, resulting in competition between traditional banks and securities companies on all levels. However, many of the major investment banks are now owned by large banks and most major banks also have brokerages, which allow their customers to quickly and easily transfer money between their personal banking and investment accounts. The ability of customers to access accounts online, as well as manage their personal investments through the Internet, will result in fewer brokers as well.

Competition for jobs will continue to be keen with more applicants than available openings. Additionally, the recent financial crisis has resulted in mass consolidation in the financial industry, a scenario that will likely result in fewer positions as companies attempt to streamline operations by eliminating duplicate tasks.

Entry-level sales agents, particularly those with previous sales experience, should face better prospects in smaller firms, as opposed to larger firms, where many positions have recently been eliminated. Investment banking is especially known for its competitive hiring process and candidates will face particularly keen competition for the relatively few openings. Having a degree from a prestigious undergraduate institution is very helpful, as are excellent grades in finance, economics, accounting, and business courses. Certifications and graduate degrees, such as a CFA certification or a master’s degree in business or finance, can also significantly improve an applicant’s prospects. Competition is even greater for positions working in exchanges.

Employment in the securities industry is closely connected with market conditions and the state of the overall economy and is highly volatile during recessionary periods. Turnover is high for newcomers, who face difficult prospects no matter when they join the industry. Once established, however, securities and commodities sales agents have a very strong attachment to their profession because of their high earnings and considerable investment in training.

The median annual wage-and-salary wages of securities, commodities, and financial services sales agents were $68,680 in May 2008. The middle half earned between $40,480 and $122,270.

Because this is a sales occupation, many workers are paid a commission based on the amount of stocks, bonds, mutual funds, insurance, and other products they sell. Most firms provide sales agents with a steady income by paying a “draw against commission”—a minimum salary based on commissions they can be expected to earn. Trainee brokers usually are paid a salary until they develop a client base. The salary gradually decreases in favor of commissions as the broker gains clients.

Investment bankers in corporate finance and mergers and acquisitions are generally paid a base salary with the opportunity to earn a substantial bonus. At the higher levels, bonuses far exceed base salary. This arrangement works similarly to commissions but gives banks greater flexibility to reward members of the team who were more effective. Since investment bankers in sales and trading departments work alone, they generally work on commissions.

Brokers who work for discount brokerage firms that promote the use of telephone and online trading services usually are paid a salary, sometimes boosted by bonuses that reflect the profitability of the office. Financial services sales agents are also paid a salary, although bonuses or commissions from sales are starting to account for a larger share of their income.

Benefits in the securities industry are generally very good. They commonly include healthcare, retirement, and life insurance. Securities firms may also give discounts to employees on financial services that they sell to customers. Other benefits may include paid lunches with clients, paid dinners for employees who work late, and often extensive travel opportunities.

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Academic Programs of Interest

Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. With a finance education you will be equipped with tools for understanding the function and applications ...more