Each day, hundreds of billions of dollars change hands on the major United States securities exchanges. This money is used to purchase stocks, bonds, mutual funds, and other financial instruments, called securities. Securities are bought and sold by large institutional investors, wealthy individuals, mutual funds and pension plans, and the general public. In fact, about half of American households own stock. Most securities trades are arranged through securities, commodities, and financial services sales agents, whether they are between individuals with a few hundred dollars to invest or between large institutions having millions of dollars. The duties of sales agents vary greatly depending on occupational specialty.
The most common type of securities sales agent is called a broker or stock broker. These are the people who sell securities to everyday people, also known as retail investors. Although only about 2 out of every 10 equities are held by small investors, most investors fall into this category. Because there are so many retail investors, they must work through a broker rather than trading directly on an exchange. First, the investor speaks with the broker, discussing the terms of the trade. Then, the broker relays this information to a trader at the company's headquarters. Because most securities companies are very large, they can often find other company clients who are willing to buy or sell the same security. Otherwise, the stock trader places an order with a floor broker at an exchange, or trades the stock on an electronic network. The broker charges a fee for this service, and may also make money by finding a lower price for the security than was arranged with the investor.
The most important part of a broker's job is finding clients and building a customer base. Thus, beginning securities and commodities sales agents spend much of their time searching for customers, often relying heavily on telephone solicitation. They also may meet clients through business and social contacts. Agents also join civic organizations and other social groups to expand their networks of possible clients. Many find it useful to contact potential clients by teaching adult education investment courses or by giving lectures at libraries or social clubs. Brokerage firms may give sales agents lists of people with whom the firm has done business in the past. Some agents inherit the clients of agents who have retired. After an agent is established, referrals from satisfied clients are an important source of new business.
Investment bankers are sales agents who connect businesses that need money to finance their operations or expansion plans with investors who are interested in providing that funding in exchange for debt (in the form of bonds) or equity (in the form of stock). This process is called underwriting, and it is the main function of the investment bank. Investment bankers have to sell twice: first, they sell their advisory services to help companies set up issuing new stock or bonds, and second, they then sell the securities they issue to investors.
Perhaps the most important advisory service provided by investment banks is to help companies new to the public investment arena issue stock for the first time. This process, known as an initial public offering, or IPO, can take a great deal of effort because private companies must meet stringent requirements to become public or be allowed to issue stocks and bonds. Corporate finance departments also help private companies sell stock to institutional investors or wealthy individuals. They also advise companies that are interested in funding their operations by taking on debt. This debt can be issued in the form of bonds. Unlike a stock, which entitles its holder to partial ownership of a company, a bond entitles its holder to be repaid with a pre-determined rate of interest.
Another important advisory service is provided by the mergers and acquisitions department. Bankers in this area advise companies that are interested in merging with or purchasing other companies. They also help companies that would like to be acquired. Once a potential seller or buyer is found, bankers advise their client on how to execute the agreement. Generally both buyers and sellers have investment banks working for them to make sure that the transaction goes smoothly.
Investment banking sales agents and traders sell stocks and bonds to investors. Instead of selling their services to companies for fees, salespeople and traders sell securities to customers for commissions. These sales agents generally work by telephone, calling customers and their agents to discuss new stock and bond issues. When an investor decides to make a purchase, the order goes to the trading floor. Traders execute buy and sell orders from clients and make trades on behalf of the bank itself. Because markets fluctuate so much, trading is a split-second decision making process. If a trader cannot secure the promised price on an exchange, millions of dollars could potentially be lost. On the other hand, if a trader finds a better deal, the bank could make millions more.
A small but powerful group of sales agents work directly on the floor of a stock or commodities exchange. When a firm or investor wishes to buy or sell a security or commodity, sales agents relay the order through their firm's computers to the floor of the exchange. There, floor brokers negotiate the price with other floor brokers, make the sale, and forward the purchase price to the sales agents. In addition to floor brokers, who work for individual securities dealers, there are also independent brokers. These are similar to floor brokers, except that they are not buyers for specific firms. Instead, they can buy and sell stocks for their own accounts, or corporate accounts that they manage,, or they can sell their services to floor brokers who are too busy to execute all of the trades they are responsible for making. Specialists or market makers also work directly on the exchange floor, and there is generally one for each security or commodity being traded. They facilitate the trading process by quoting prices and by buying or selling shares when there are too many or too few available.
Financial services sales agents sell a wide variety of banking, accounting, securities, insurance, tax preparation, and other related services. They contact potential customers to explain their services and to ascertain customers' banking and other financial needs. They also may solicit businesses to participate in consumer credit card programs.
Work environment. Most securities and commodities sales agents work in offices under fairly stressful conditions. The pace of work is very fast, and managers tend to be very demanding of their workers since both commissions and advancement are tied to sales.
Stock brokers and investment advisors generally work somewhat more than 40 hours a week, but they may not work at traditional times. Evening and weekend work is often necessary, as many of their clients work during the day. A growing number of securities sales agents, employed mostly by discount or online brokerage firms, work in call-center environments. In these centers, hundreds of agents spend much of the day on the telephone taking orders from clients or offering advice and information on different securities. Often, such call centers operate 24 hours a day, requiring agents to work in shifts.
Investment bankers in corporate finance or mergers and acquisitions typically work long hours and endure extreme stress, especially at the junior levels. Evening and weekend work is common. Because banks work with companies all over the world, extensive travel is often part of the job. With some experience, the workload becomes more manageable, but since higher-level workers generally have more contact with clients, they also tend to travel more.
Sales and trading departments typically work somewhat more than 40 hours a week, but not nearly as much as their counterparts in investment banking. They also travel less, and many only travel a few times a year for conferences or training. On the other hand, their jobs are incredibly stressful. For sales agents, every minute of the day that is wasted means they might have made another sale. Since both commissions and advancement are tied to sales, this can be very stressful. Traders have perhaps the most stressful jobs of all, as split second decisions can lead to millions of dollars being won or lost. Trading floors are very busy and often very loud. Exchange workers, much like traders, have highly stressful jobs because the bulk of their work takes place on the floor of the exchanges. However, exchange traders and workers typically work shorter hours than many other agents since most of their work is done while the market is open.
Exchange workers, much like traders, have highly stressful jobs, but the bulk of their work takes place on the floor of the exchanges, so hours are not very long. Trading floors of exchanges are even busier and louder than those inside of investment banks. Stress is very high, as millions of dollars are on the line for almost every trade, but workers who have made it to this level are generally up to the task.
Financial services sales agents normally work 40 hours a week in a comfortable, less stressful office environment. They may spend considerable time outside the office, meeting with current and prospective clients, attending civic functions, and participating in trade association meetings. Some financial services sales agents work exclusively inside banks, providing service to walk-in customers.
Unfortunately, no task data exists for this profession.
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