馃攳
How to become a Stock Broker? | Full Time Careers in Stock Market | Harsh Goela - YouTube
Channel: Goela School of Finance LLP
[1]
Do you know
[2]
in the world of Stock Markets,
[4]
which is the most aspirational career?
[6]
Stock Broking!
[7]
You might think stock-brokers be like this:
[19]
Or do you think of them as
[23]
But definitely, most of us assume this:
[30]
Today, We will discuss
[32]
how to become a stock broker?
[34]
What is their business horizon?
[35]
What is the past of this business?
[37]
Is it profitable or not? Basically,
[39]
Today's video will be lengthy but
[41]
It will be a very knowledgeable video.
[42]
So, without any delay, let's start introduction:
[49]
Hi Guys, My name is Harsh Goela.
[51]
I am an Investor, trainer & mentor in Stock Markets.
[54]
Today, I come with one of the most requested
[56]
videos for you.
[57]
How to become a stock broker?
[59]
I will cover all the points today.
[63]
What points do we cover in this video?
[64]
First of all, I will tell you
[66]
What is a Stock Broker? I am assuming
[68]
you clicked this video as you want to be.
[70]
So, you might have an idea but still
[72]
I will give you an overview of a Stockbroker.
[74]
Then, Overview of the Industry.
[78]
Changes that took place in the industry.
[80]
then, How to Become a Stock Broker.
[83]
What are its legality issues, requirements?
[85]
after covering this,
[87]
I will tell you three types of Broking?
[89]
Which one is the easiest for you?
[92]
In the end, Special Bumper surprise for you.
[96]
So, watch this video till the end.
[98]
let's go!
[98]
Now, What is a Stock Broker?
[101]
Now, Broker means an intermediary,
[105]
Middleman, brokers are everywhere.
[108]
Assume one side yourself & Exchange
[110]
On another side, you want to buy shares &
[112]
Exchange is selling shares which it owns.
[114]
Now comes the Stock Broker in middle.
[116]
You will ask the Stock Broker & he will
[118]
buy these shares for you, for which he
[120]
charges commission. Now, do we
[122]
need to have such Brokers? In property,
[124]
we directly buy, Stock market is not like that.
[126]
Broker is mandatory in Stock Markets.
[129]
Either you or broker doesn't have a Demat account
[132]
or trading account then you can't trade
[134]
in Exchange. These are SEBI's norms.
[136]
So, Brokers comes in middle for their clients
[138]
follow rules & regulations.
[140]
If any jumbling take place then directly
[142]
Stock Broker is blamed.
[143]
Now, discuss the overview of the Broking Industry.
[146]
Now, listen to it as a story, I will explain
[148]
you everything as this industry is the one
[150]
that has seen rampant changes as a
[152]
stock Broking Industry. In my experience,
[154]
I don't see any other industry which has
[156]
observed that much changes than
[157]
The Broking Industry. It's incredible.
[159]
Okay, Let's start now!
[161]
What happens in Brokerage?
[162]
It has two things that play a massive role.
[164]
Margin & Volumes.
[166]
Margin & Volumes!
[167]
Margin is defined as
[169]
brokerage earned in a trade.
[171]
It is a profitable margin.
[172]
Volumes are defined as
[174]
the number of people doing trade.
[176]
Now you will watch,
[177]
what has happened in brokering industry?
[179]
Volumes are touching the sky on the next level
[181]
especially because of Covid.
[183]
As you also have heard about the
[184]
opening of a number of Demat accounts,
[185]
a number of people are trading,
[186]
5-6 people have opened in your relation
[188]
& many emerged as Stock Gurus on internet.
[190]
Why? as volumes have increased
[192]
immensely but sadly for the brokering industry,
[195]
Margins at their lowest position.
[198]
like if Broker asks you only 2 rupees,
[200]
then some say he is asking for a big amount.
[202]
as Our habits are very bad.
[204]
It might happen that if you enter into markets,
[206]
you will feel Brokers asks for such prices.
[208]
But this is not the scenario, let me tell you
[210]
about the earlier rates when my father
[212]
was in Stock Markets in the late 90s.
[216]
Broker charges were 2% at that time.
[218]
Broker charges were 2%.
[221]
It was ridiculous.
[223]
Today such charges seem like jokes!
[225]
okay! In 2010, when I was in markets,
[227]
I remember my brokerage was 0.2%
[229]
on delivery & 0.02% on Inter-day trading.
[232]
At that time these were the rates.
[234]
If your volumes are good i.e if you are
[235]
a big player, then you can negotiate
[237]
with broker. But generally, this was the rate.
[239]
0.2, 0.03 like this.
[240]
Now, after 2017-18, Zerodha arrived,
[243]
& it has completely changed the game.
[246]
Now, let me tell you, In Brokering industry,
[248]
There were three types of brokers.
[250]
First: Bank Brokers.
[251]
Bank Broker like SBI securities,
[253]
ICICI Securities, HDFC securities, any
[255]
type, all these big banks
[257]
had security firms, had brokers
[259]
& they used to charge heavy.
[261]
Their rates were 0.5, 0.05. Why?
[264]
Earlier, you have to give a cheque.
[266]
Cheque on T+2, then the cheque
[268]
returning & suppose if suddenly good
[270]
trade or an opportunity comes,
[271]
don't have money, you will not be allowed to buy it.
[273]
But this does not happen with Bank Brokers as
[275]
Bank account, security account is with them, so
[277]
they have a massive advantage
[279]
that's why they used to charge heavy.
[281]
Traders never visit them.
[283]
as they don't get any profit in such trades.
[285]
Then comes the Institutional Brokers.
[287]
Second Type: Institutional Brokers.
[289]
This includes Karvy, JioJet, IFL,
[292]
angelone, earlier it was angelbroking,
[294]
then ShareKhan, Motilal Oswal
[297]
the list is full & unending.
[299]
They were Institution Brokers.
[302]
we could negotiate with them & generally,
[304]
every trader used to prefer them as
[306]
they were safe & full-time brokerage houses.
[309]
Bank Broker was also safe but simply
[311]
they were better, price effective & good value.
[313]
1. Bank Brokers
[315]
2. Institutional Brokers
[317]
Then comes Discount Brokers.
[319]
Yes, at that time
[320]
AKA, Online Brokers,
[322]
Discount Brokers.
[323]
They keep everything online,
[325]
which diminishes your brokerages.
[327]
They don't need to maintain offices,
[328]
they don't need to hire people, they don't need
[330]
large workforce. Easy! But
[332]
the fact is Discount brokers never succeeded.
[334]
They all failed.
[336]
I am telling you, every discount broker had
[338]
a life of 2-3 years &
[339]
all of them used to get closed. All of them.
[342]
Why?
[343]
they never get the volumes.
[345]
People never trusted them.
[347]
Then in 2017-18, I remember that
[349]
it was about 0.
[350]
I come from that history so I thought
[353]
Discount Brokers are Okay, Not interesting.
[355]
But
[356]
The Kamath Brothers rocked the industry
[359]
of stock markets. They took it
[361]
on another level. They redefined
[363]
discount brokers. They
[365]
removed the name of discount brokers.
[366]
They are new-generation brokers.
[368]
They were the trailblazers.
[371]
Now Groww, Upstocks, Fivepaisa entered
[373]
Netmoney and many more brokerages
[375]
apps have been entered on this platform.
[377]
So, Brokering industry has become so
[379]
severe & competitive that it has no limit.
[382]
In the future also,
[383]
AS our income grows, Genji income grow,
[386]
the millennial income grow, they will put
[388]
money, so more volume will increases
[390]
But Margin will decrease continuously.
[393]
Some people are assuming that at one point
[395]
of time they will not have to pay for brokerages.
[397]
So, This is the whole industry of Brokering.
[399]
As you have seen, how technology
[401]
has changed the full game & now
[403]
Now Brokering become a high-risk game.
[405]
People think this in many ways accordingly.
[408]
This doesn't work.
[410]
Brokering is so high risk that you have
[412]
given margin & market fall straight gap down.
[414]
No Margin, money lost, Brokers falls down.
[416]
first, it is a very high-risk game.
[418]
Second, there are many rules & regulations.
[420]
Like SEBI, Exchange, Repository schemes.
[423]
It is very difficult to survive for a broker.
[425]
If filed a plea against broker then
[427]
It is the responsibility of the broker to prove
[429]
themselves right, not yours.
[431]
It's the broker's responsibility to prove. So,
[433]
Brokering industry is very difficult
[435]
on an overall basis & now margins are so low that
[439]
it becomes difficult to breathe.
[441]
Now, How to Become a Stock Broker?
[443]
All the legalities and processes
[445]
I will tell you. Let's start!
[447]
Our First Regulatory body,
[450]
Regulatory Body in our country:
[452]
SEBI (Security Exchange Board of India)
[454]
So, First of all, if you want to become
[457]
a broker, you have to register yourself with SEBI.
[459]
What are its requirements?
[461]
SEBI will check your Net worth, your
[463]
educational qualifications,
[465]
your adequate manpower, resources,
[467]
your skills, facilities, equipment
[469]
& your infrastructure.
[471]
Basically, it's a very long list.
[472]
I have dropped the link in the description.
[474]
You can check SEBI's guidelines.
[476]
As these guidelines change with time.
[478]
Okay, Got the SEBI 's solution.
[480]
After this, you need to member at
[482]
the Exchange, which two Exchanges are there?
[484]
NSE & BSE. Right!
[486]
Suppose, in NSE, you need alpha membership
[489]
you should have the following things:
[491]
Your age should be at least 21.
[493]
You should have minimum 2 years
[495]
of experience working under a broker.
[498]
Your minimum Net Worth should be
[500]
10 lakhs. You should have a certain
[503]
amount of fees which includes security
[506]
which you need to submit with Exchange.
[508]
Requirements link of both NSE & BSE
[510]
are present in the description.
[512]
You can check them out.
[513]
A regulatory body, Exchange completed.
[515]
Now comes Depository.
[517]
Our country has two Depositories
[519]
CDSL & NSDL.
[521]
The Demat account which a broker has
[522]
when your clients would have Demat shares,
[525]
these demate shares will be with whom?
[527]
These were submitted with Depositories.
[529]
Either CDSL or NSDL.
[531]
There is a list to become their participants.
[534]
Link is present in the description.
[536]
You can check them. You can access them.
[538]
Now, let's see the time frame & paperwork.
[541]
It requires time to be a participant.
[543]
This time can be 7-8 months
[545]
to get a brokering licensee.
[546]
This is the minimum time frame.
[548]
You require money around 2-4 crores.
[551]
These are estimated figures of research.
[553]
between 2-4 crores, you can get a broker
[556]
license. You should have that amount.
[558]
You can take courses to become a broker.
[561]
There is a bonus for you in the description
[564]
which has a link for requirements of SEBI,
[566]
requirements link for NSE, Repository
[568]
requirement links are there & after that
[570]
good stock brokering courses, which
[572]
degrees & qualifications you require to
[574]
become a stockbroker & all the certifications
[576]
are available in that bonus for you.
[578]
Download them after watching this video
[580]
You can find all details there.
[582]
Now, let's see three types of brokerages
[585]
trending & which fits you the best.
[587]
Okay! At the Bottom,
[589]
Affiliate Brokering.
[591]
basically, you can be an affiliate broker of anyone,
[594]
you will get a link & those who will
[596]
open an account, you will get your commission.
[598]
In trading, you will get a slight commission.
[600]
The Distribution of Commission's system is
[604]
negotiable & depends upon your reach.
[606]
You will see a big finance YouTuber
[609]
will suggest you open an account using their link,
[611]
they are saying this because they
[613]
have their Affiliate link & if you open with
[615]
their link, they got commission also in trading.
[617]
This part depends but generally
[619]
this is the trend. This is not a bad thing.
[622]
Don't take in the wrong sense.
[624]
This is good if you also have your audience
[626]
where you can reach out to1.5 lakhs people
[628]
then you should do it. Just imagine,
[630]
Out of 1 Lakh people, if 1% open the account
[633]
it will be 1000 people & now imagine
[636]
it becomes your passive source of income
[638]
without any legal liability & issue.
[640]
So, this is Affiliate Brokering.
[642]
Now comes just above this,
[643]
Associate Person, Okay!
[645]
What is an Associate Person?
[646]
I am an Associate person. But what is it?
[648]
You give security to the broker
[650]
you give him fees & the broker makes your tag
[653]
separately & you will make Demat account
[656]
of your clients. So, you will manage them.
[660]
Brokerage share is 50-50.
[662]
Again it is in a contract but negotiable.
[665]
Generally, Brokerage is 50-50.
[667]
50% belongs to the broker & 50% is yours.
[670]
In the 90s I want to take an Associate's license.
[674]
so, I applied for AP.
[675]
I completed the formalities but same time
[677]
Rules of Exchange changed but again
[679]
when I become 22-23 years old,
[681]
I applied again in 2014.
[683]
This time I applied for Angel Brokering,
[685]
which has become Angel1. It is completely
[687]
Non-sponsored video, so don't take it otherwise.
[689]
So, I opted for it & my logic was
[691]
that my friends used to take advice from me
[693]
for stock markets including relatives
[695]
so, I thought I had a huge client base
[699]
& I will ask them to open a Demat account
[700]
this will become my passive source of income.
[702]
I will help them precisely but when I tried
[705]
to what I dreamed of opening Demat accounts
[707]
like 10 accounts daily but
[709]
when I went to people, no one opened
[713]
their account, they completely denied me.
[715]
So, this idea didn't work, But with time
[717]
I remember within 1 or 2 years
[719]
I & Aditya managed to open 70-80
[721]
account. So, I used to earn
[723]
20-30 thousand rupees monthly
[724]
with brokerages. Now, moving ahead
[726]
how we develop it? You will see
[728]
I am still an Associate registered with Angel.
[731]
But I don't tell this on youtube.
[733]
I use that for my private community only.
[736]
How? I recommend all my students
[738]
to open their account there.
[740]
Then I will be able to see their accounts
[743]
directly, how they are trading?
[745]
In Month End, we usually check
[747]
How the student is trading?
[749]
We check the Profitability of every student.
[751]
If not profitable then what's the reason?
[753]
We compare month to month.
[754]
So, we can mentor students from this angel.
[757]
We have our team of Mentors which track
[759]
down their every trade. If they see useless trades
[762]
then we immediately alert them.
[763]
So, if you are interested in the course,
[765]
The mentorship program link is in description.
[767]
You can check it out.
[768]
So, this was my experience as an AP.
[770]
Definitely, this is good. If you think
[772]
you have your audience which trust you
[774]
& they will open accounts then AP
[776]
is better than Affiliate Program.
[778]
It has more formalities but far better also.
[780]
On the top is a Full-time Broker.
[784]
The issue with Full-time brokers is
[787]
I am no one to tell the experience of full time
[789]
broker as I am not a Full-time broker.
[791]
So, what is happening today?
[793]
Now, It's time for a special surprise.
[795]
In this video, we have
[798]
we have a special guest.
[801]
She is Devina Mehra Mam.
[803]
I don't even need to introduce Devina Mehra Mam.
[805]
I am so thankful to her that she agreed
[807]
to this. She is one of the most renowned
[809]
female investors in our country.
[811]
She with her husband Shankar Sharma Sir,
[814]
who is a celebrity in stock markets in the country.
[816]
Both of them together had
[818]
co-founded First Global.
[820]
This brokerage started in the early 90s.
[822]
They are full-time brokers. They went into
[823]
PMS and other services also.
[825]
This is the one broker house about which my dad
[827]
says they got this game to an international level.
[828]
they were trailblazers of that time.
[830]
They have experience from that time.
[832]
There is no one better who can guide you
[834]
about the advantages of Full-time Broker
[836]
as a career & also disadvantages. So let's
[838]
go to Devina Mehra mam.
[839]
The world has moved a lot since then
[841]
for one technology has made a big change
[845]
as it has in many other industries
[847]
as well & one important thing is that
[850]
Transaction cost for the investors has
[853]
come down. All of you have
[855]
seen that or you can ask your parents
[857]
what kind of brokerage used to be charged
[859]
back then & what they are now.
[863]
Well, you have practically very low
[865]
brokering charges being
[867]
made. So, for investors
[869]
that is a good thing that cost has come down
[871]
but if look at brokering as a business or
[873]
as an industry that means the margin
[875]
have become very thin. So, you need
[877]
scale, technology which is
[879]
why a lot of old-time or smaller brokers
[882]
have actually gone out of business.
[884]
Like mam is telling you, the same thing I told you.
[886]
How margins have come down & old-time
[888]
brokers have disappeared were as new age
[890]
technology brokers have entered. So, Margins
[892]
are definitely low. If margins are less then
[895]
How did these brokers earn?
[896]
Many times if you see, you
[898]
delve deep into the finances of a
[900]
Brokering company. You will find the money
[902]
is being made through some form of lending
[905]
or fund based activities or some other
[908]
activities altogether which may be
[910]
asset management, advisory, or something
[912]
else. Pure Brokering as a business you need
[916]
to be very high tech, you need to have
[918]
skill, you need to be very nimble to be able to
[921]
make money out of brokering alone.
[923]
To become a Full-Time Broker, competition
[925]
is very fierce. So, definitely, you need to
[928]
be high tech & second only brokering will
[931]
not be a source of income. As mam said
[933]
You can go into advisory, PMS & lot of
[935]
other things also. Now let's see
[937]
what is the final answer?
[938]
Should we take Brokering as a career?
[940]
If you are looking at Brokering as a career,
[942]
then there are, of course, there are many
[946]
parts where you can go from, still
[949]
there is some scope for a deep
[951]
dealing desk, there is an operation site,
[954]
there is a risk. If you are looking at it
[956]
as from the point of analyzing
[959]
stock i.e. the research end.
[961]
So, that's another opening obviously but
[964]
there if you seriously want
[966]
to be in research or
[968]
analyzing industries in stocks then
[971]
better move in my view is
[974]
at least you may not get entry directly,
[977]
so you have to start off from
[979]
the brokering side or we call the sell
[981]
side as you are selling too.
[983]
Investors whether they are institutions or
[985]
retail to move to the by side which is
[988]
managing the assets or advisory.
[990]
So, now you have the whole scope
[992]
of things for that. So, honestly
[994]
telling brokering is a stepping tool for you.
[997]
Technically for me, Brokering is stepping
[998]
tool for me. after becoming a full-time broker
[1000]
you will earn money from brokering is not
[1002]
possible, as brokerages are not left.
[1004]
You will suffocate. Their margins are so low
[1006]
that player can't survive until
[1008]
you have extremely deep pockets. For this
[1010]
if you get client base, database,
[1014]
providing services then you can also go into
[1016]
Financial Analysis, Research Analysis,
[1018]
Equity Analysis, Personal finance management
[1020]
& many more.
[1022]
This is what Brokering is.
[1024]
So, ultimately would I recommend
[1026]
you to start brokering, I would say you must try.
[1028]
Do you have a client base? Try AP!
[1030]
not working, Try Affiliate as this will
[1032]
be a stepping stool for you for
[1034]
bigger things if you are planning to
[1036]
make a career here. If stock Brokering
[1038]
excites you. Well, Guys,
[1040]
That's it in this video.
[1041]
So, we covered a lot, researched a lot.
[1044]
Akash Kumar co-helped me in this research.
[1046]
So, A Big thanks to Akash.
[1048]
Please Like the Video!
[1049]
Research requires a lot of time.
[1051]
Don't forget to check Devina Mehra's videos.
[1053]
I will provide you her links in the description.
[1054]
She is the one person to look upon.
[1056]
Again, A Big Thanks to Devina Mehra Mam
[1058]
for taking out time from your busy
[1060]
schedule & don't miss to checkout
[1062]
the bonuses. Watch all videos.
[1064]
We have made good Quality videos.
[1065]
You will enjoy & invest your time also.
[1067]
This is Harsh Goela.
[1068]
Goela School of Finance.
[1069]
Financially Empowering you!
Most Recent Videos:
You can go back to the homepage right here: Homepage