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Stockbroker Vs. Financial Analyst

Stockbroker and financial analyst careers require similar backgrounds and both jobs involve analyzing investment markets daily. This article distinguishes the commonalities and differences between these two finance careers for your convenience.

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Comparing Stockbrokers to Financial Analysts

Stockbrokers are salespeople who sell stocks, bonds, and other financial securities. Financial analysts are financial experts who help companies with investment decisions. Below is a comparison of these two financial careers along with salary and education info.

Job Title Education Requirements Median Salary* (2016) Job Growth* (2014-2024)
Stockbrokers Bachelor's degree; master's degree may be needed for advancement $67,310 (all securities, commodities, and financial services sales agents) 10% (all securities, commodities, and financial services sales agents)
Financial Analysts Bachelor's degree; master's degree may be needed for advancement $81,760 12%

Source: *U.S. Bureau of Labor Statistics

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Responsibilities of Stockbrokers vs. Financial Analysts

Stockbrokers and financial analysts are both experts in financial markets. They determine how stocks and securities might perform based on experience and the analysis of financial data. This involves studying and analyzing global markets on a daily basis to provide clients with the best information for making investment decisions.

Stockbrokers are salespeople; they sell financial assets like stocks directly to personal clients or negotiate sales on the 'floor' at a stocks or commodities exchange. Financial analysts, on the other hand, use their expertise to guide companies toward promising investments to improve profitability. Though both professionals may offer financial advice to clients, the stockbroker's goal is the sale, while the financial analyst's goal is accurate analysis.

Stockbrokers

The goal of stockbrokers is to sell stocks, securities, and other financial products to clients. They contact and acquire individual clients to analyze their financial goals and needs; they then determine what investments best meet their goals and attempt to make a sale. If they make the sale and the stock is successful, they will hopefully earn referral clients and expand their client base. Successful sales also typically result in commissions, which form a significant part of the stockbroker's pay. Alternatively, stockbrokers may work for securities or commodities exchanges where they negotiate prices and complete sales for traders. Call centers are common, and the main hub for stockbrokers is the New York City metropolitan area.

Job responsibilities of a stockbroker include:

  • Analyzing market changes around the clock
  • Building relationships with clients
  • Buying and selling securities and commodities
  • Making split-second decisions in stressful environments
  • Conducting 'cold calls' with potential clients

Financial Analysts

Financial analysts work inside companies to research needs, resources, and investment opportunities. Analysts use their skills to determine where a company should put their money to achieve financial growth. First, they evaluate a company's financial records and history, preparing written reports that pinpoint areas like management effectiveness and overall company value. They may then evaluate and recommend investment opportunities.

Financial analysts do not sell stocks or bonds; they research market trends in tremendous depth to make recommendations for clients. They often manage portfolios and may be responsible for the performance of short-term and long-term company investments. Some financial analysts specialize in a country, region, or industry since they must possess high-level expertise in the financial laws, regulations, and policies relevant to a given area or field.

Job responsibilities of a financial analyst include:

  • Conducting financial risk analysis
  • Developing investment strategies
  • Making buy or sell decisions on behalf of a company
  • Keeping clients advised on major and minor market shifts
  • Explaining investment decisions to stakeholders

Related Careers

Stockbrokers and financial analysts work hard to keep up with all the fluctuations in the global financial market. Stockbrokers who juggle the sales and management of many financial products may enjoy working as financial managers, monitoring and directing the financial health of an organization. Financial analysts, who help companies with investments, might instead take on work as budget analysts, helping to organize and streamline a company's finances.

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