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SMART SKILLS
HAVE you been following with great interest the stock markets turn bullish and break the upper barrier? Are the stock market prices the first page you look at in a daily? Do you enjoy sitting at home on Saturday evenings, working out your gains and losses? If so, then probably a stockbroker’s profession is ideal for you. Stocks and shares is a method to raise funds from the public for use by the government or private companies. Until a couple of decades, Mumbai was India’s first and only stock exchange and few industries were listed in the share market. Today, there is a stock exchange in every metropolitan city, where business worth crores takes place everyday. Moreover, now the National Stock Exchange
(NSE), established in 1994, provides nationwide trading facilities with access to investors all over the country. Broker’s business Stock brokers and capital market experts are qualified industry specialists who advise on buying and selling of stocks. The industry provides work to economists, accountants, financial analysts, industry specialists, capital market specialists, investment and financial planners, financial specialists and other such professionals. Firms in this business are generally organised into three departments. These include:
sales and trading for the owners of securities; investment banking for the firms and governments that issue securities; capital markets, which fall in between the other two divisions. The major areas of work include:
Capital Markets Specialists are employed by mutual funds and financial investment companies to keep track of emerging trends in the markets and work on capital decisions in the light of these trends. Securities Analysts are employed by investment advisers, brokerage firms, banks, insurance companies and other large financial institutions to give correct information on industries and markets. A Securities Analyst is usually an economics/commerce graduate. Investment Management involves dealing with analysis of the growth of an industry, the economic policies related to industrial financing, monitoring and review for sound financial management of resources. Some firms appoint Security Representatives who have varied duties, like opening accounts for new customers, obtaining all the information required to permit the customer to buy and sell securities through the brokerage firm. There are also jobs for marketing and sales representatives of security and investment firms specialising in specific areas such as handling institutional accounts or even in bond issues or mutual funds. Some firms also take on Registered Representatives or Account Executives who are salespersons working for a firm that is a member of one or more major stock exchanges. Take stock To enter this field it is important to understand the working of the stock exchange and money markets thoroughly. Different exchanges in the country today have different norms. So, it is essential to be knowledgeable on how it functions. Although a Bachelor’s degree in Commerce might just do the trick at the entry level, it is always advisable for you to get yourself training in specific financial interest areas. Most firms also prefer to take on MBA’s with a specialisation in finance, or postgraduates with specialised training in capital markets, stocks and securities or other courses in financial management. With professional qualification, you can either join a stock broking firm or stock exchange, or even open your own financial agency. In order to attain membership as a broker in the stock exchange, a minimum expense of Rs.1-4 crores has to be incurred. This is inclusive of both, the membership fee and the security deposit. This fee varies from time to time, depending on the status of the market. It also varies from one city to the other at any given point of time. Besides this, two years’ experience in the securities market is also required. The National Stock Exchange has introduced an online facility for testing and certification. It tests the practical knowledge and skills required to operate in the financial markets. The entire process of testing, assessing and scoring is fully automated, and anyone who has completed plus two is eligible for the exam. Study of
scrips A degree in Commerce/Economics is required to be eligible for the postgraduate courses in stocks and securities, capital markets, and other programmes in financial management. Postgraduate programmes in capital market studies, and in stocks and securities are available in select universities and institutes in the country. Moreover, postgraduate courses in economics and commerce are available in most universities in the country. To become a researcher, it is necessary to have a sound knowledge of finance, be informed on every industry and keep abreast with the ups and downs of the market. Equity Research is a very specialised finance field, requiring either an MBA in finance or a chartered accountancy qualification. Run the risk And apart from all the academic and financial requirements, to be in the capital markets business, you must have a feel for the market; knowledge, interest, a knack for learning about stocks and shares; and an analytical, logical mind. You must also have the powers of good judgment; tact in dealing with clients; and plenty of business acumen. But before stepping into this arena, you must remember that there are a lot of risks in playing with bulls and bears. The commodity being traded here is large volumes of money, not only in terms of the money involved, but the volatility of the shares being traded. When the market is doing well you can earn loads of money for yourself and your clients, but the stock market can also crash, so you have to be prepared! Stocks and securities is therefore a profession with a higher risk profile than others, and your professional growth, to a large extent, depends on the share market, over which one has little control. If you are good at your work, there are plenty of jobs waiting for you. You may choose to work in the Stock exchanges; or at the Securities and Exchange Board of India
(SEBI); with financial institutions; with investment banks; or you can also open your own financial consulting agency. Twenty per cent of our traditional banks also now own full-service brokerage firms. Profitable profession Until a few years back, the number of people who opted for a career in the stock market was very limited. But now, as the volume of business transactions handled by the stock exchanges throughout the country has increased, there is a big demand for more professionals. Starting salaries are also pretty good for those employed in the stock market. commerce/economics graduates can start earning in the range of Rs.8,000 to Rs.10,000 per month. Postgraduates in Capital Market Studies get starting salaries of Rs 15,000 to Rs 25,000 per month. Some companies also offer profit sharing or stock options. Stock broking is truly a profession of the new millennium. With more and more money being traded by the second, there is now a great demand for trained professionals. —
The writer is a noted career consultant
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