Brokers generally make money through the commissions that they charge to the clients for the trades. In India, the average salary ranges around Rs 5 to 6 lakhs for persons with some experience. For beginners, it starts with approximately Rs 2-3 lakhs per annum. If the broker is registered and working for a company, the average salary is maintained throughout their service. Also, companies pay bonuses and other perks to their brokers. More seasoned and experienced professionals can easily earn in crores. But it requires a huge experience in trading which comes with years.
Stock brokers make money in several ways. Some of the majors are enlisted below.
- Broker Fees: The advices are costly. Brokers advise clients about a diverse variety of things that are required by the clients. For advice, brokers charge money. The client may have heard about some new stocks that may be profitable for trading purposes. Brokers analyse the shares and give information to the client whether the given commodity is profitable or not. They do all the research for you and push you to take the profitable path for that stock. Hence, the charges are here. Different brokers and companies may have different plans according to which the advice is given to clients.
- Referral bonuses: Companies may sometimes persuade investors to buy any particular stock. For this, they give referral bonuses to the brokers, so that they bring in new investors. For each new sign-ups the broker gets bonuses, and hence the companies also profit with new clients.
- Commissions: This is the prime source of wages for stockbrokers. The commissions that they charge for trading shares. It is more dependent on experience. The better is the broker, the more commission they charge from the clients. The commission means here that a percentage of each trade per share is given to the broker. The percent varies and is what decides the income of brokers. Best and experienced brokers in the industry charge more.
A stock broker earning depends on three factors: trading volume, no of active clients, brokerage charges. Higher the volume, the higher will be the brokerage generated for the brokers. A similar principle applies to the other two factors. It is not easy to put any specific numbers for the earnings of stockbrokers. But the business prospects are very bright and rising every passing day. The starting salary of the stockbroker varies from anything between Rs. 2 to 3 Lakh per annum. As one gain experience, he can earn Rs. 5 to 7 Lakh per year. From 2003 to 2007, the broking industry of the Indian equity bull market showed rapid growth, all before the financial crisis. Stockbrokers in India are passing through prosperous situations. Their opportunities and possibilities are rising day by day
Conclusion:
Nowadays investing in the stock market is getting more popularized in India. Both youngsters and adults invest in stock markets. It’s the stockbrokers who help them in their business. Stockbrokers are professionals who execute trading of various demand for stocks and other financial statements on behalf of the clients. They also function as an investment advisor and a legal registered representative authority for doing these transactions. For each type of transaction and advice, they receive their commission which may be termed as brokerage charge also. It varies greatly with their experience and even the type of clients and companies they are working for. They often receive commissions for their services, but individual compensation can vary greatly depending on where they are employed. For trading of stocks in the stock exchange, people need legal access inside it. It is where stockbrokers come into the picture.
We have got mainly three types of brokers in the main market: discount brokers, bank brokers, and full-service brokers. Nowadays, discount brokers have more possibilities compared to others. A discount broker is a stockbroker who carries out buy and sells stocks at a lesser commission rate. However, they do not provide investment advice to clients. Stock Brokers also ensure that their stock trading company also makes a maximum profit in the long run. There is a very good prospectus of earning money for stockbrokers which are discussed in this blog.