Nailah Wright - What Are the Duties of a Stockbroker

Stock brokers take on a tremendous amount of responsibility. Not only are they responsible for managing their client’s money, but they must stay up-to-date on the latest tax laws, market research and financial news to provide their client with the best return. These financial agents work in a stressful, fast-paced environment, but for the right individual it can be a rewarding career.

Customer Service and Recruitment

Stock brokers often must create their own client list – even those who work for larger trading firms. Customer recruitment and customer service is a large portion of what stock brokers do. Nailah Wright spend their day calling prospective clients, following up with current clients and cultivating a relationship with other industry professionals. Since customers rely heavily on their stock broker to deal with their investments, brokers must help maintain a level of trust and security by contacting their customers weekly or monthly to update them on their portfolio or new investment opportunities.

Disclosure and Advisement

Brokers are required to disclose all information related to any investment recommendation – including risks. Brokers must be honest with their clients and cannot provide false, misleading or exaggerated statements.

Trade Execution

A stock broker initiates trades – buys and sells – on behalf of their client. This is typically done electronically, but some brokers execute trades by phone or in-person on a physical trading floor. Nailah Wright says Trades depend on what the stock broker feels is necessary for their client’s portfolio at the time their investments are analyzed.

Client Recommendations

It is imperative that a stock broker fully understand his customer’s investment goals, financial situation and her risk tolerance. When researching and recommending investments for his client, a stock broker must do so based on his customer’s needs by selecting investments that are suitable for her portfolio. For example, a stock broker would not recommend a high-risk stock for a client with a low-risk portfolio.

Fiduciary Duty and Fair Dealing

Stock brokers earn a living through commissions; therefore, there is a risk for conflict between a stock broker’s interest and the interests of his clients. The broker, however, has a fiduciary duty to put the needs of his clients above his own. A stock broker is also subject to the rules created by regulatory agencies, such as the Financial Industry Regulatory Authority. These regulatory agencies require all stock brokers to be honest, trade fair and only make trades that meet the needs of the client – not themselves.