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What is the difference between a Stockbroker, an Investment Banker and a Trader? Watch

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    Trader vs Stockbroker vs Investment banker
    What different tasks do you do in each profession?
    Which earns the more on average/has the potential to earn the most
    Which is more/less stressful?
    Which have better/worse hours?
    Which is harder to get into?
    What would you say is best overall?
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    (Original post by HamzahPatel)
    Trader vs Stockbroker vs Investment banker
    What different tasks do you do in each profession?
    Which earns the more on average/has the potential to earn the most
    Which is more/less stressful?
    Which have better/worse hours?
    Which is harder to get into?
    What would you say is best overall?
    'Stockbrokers' don't exist in any given quantity anymore. The paths you should be looking into are: inter-dealer broking, trading, sales, private banking, asset management, equities/credit/fixed income research and investment banking.

    Tonnes of info out there already:

    Mergers and Inquisitions, the Unofficial Guide to Banking, AllAboutFinanceCareers and the Investment Banking Guide by Vault, Wall Street Oasis - FAQ


    - I-banker will earn more than a broker in most circumstances, but a good broker can earn a lot
    - I-banking is more hours and greater stress at the entry level but then becomes more about sales/wining and dining at the senior level (hours decrease too). Broking is about shmoozing/closing accounts more than anything
    - I-banking is more difficult to get into
    - Best overall is subjective, I'd go for IB because of the exit opportunities and skillset it gives you


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    (Original post by HamzahPatel)
    Trader vs Stockbroker vs Investment banker
    What different tasks do you do in each profession?
    Which earns the more on average/has the potential to earn the most
    Which is more/less stressful?
    Which have better/worse hours?
    Which is harder to get into?
    What would you say is best overall?
    A trader is a market maker providing liquidity to the financial system. A stockbroker/inter-dealer broker gives advice and facilitates buying and selling of stocks. An investment banker advises large corporates on capital raising services and mergers and acquisitions.

    Senior investment bankers and traders will typically earn more than stockbrokers but this is dependent on the role/bank/product/team. A top senior investment banker or trader can normally earn over £500,000-£1,500,000 after bonuses.

    Investment bankers have more chronic stress, traders have a lot of short-term stress and to a lesser extent, stockbrokers do as well. Arguably, an investment banker has the most stressful job.

    Investment bankers have by far the worst hours followed by traders/stockbrokers.

    Investment banking and trading are equally as hard to get into. Arguably, inter-dealer broking may be slightly easier.

    Investment banking because of hard skills development, and exit opportunities.

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    (Original post by Commercial Paper)
    A trader is a market maker providing liquidity to the financial system. A stockbroker/inter-dealer broker gives advice and facilitates buying and selling of stocks. An investment banker advises large corporates on capital raising services and mergers and acquisitions.

    Senior investment bankers and traders will typically earn more than stockbrokers but this is dependent on the role/bank/product/team. A top senior investment banker or trader can normally earn over £500,000-£1,500,000 after bonuses.

    Investment bankers have more chronic stress, traders have a lot of short-term stress and to a lesser extent, stockbrokers do as well. Arguably, an investment banker has the most stressful job.

    Investment bankers have by far the worst hours followed by traders/stockbrokers.

    Investment banking and trading are equally as hard to get into. Arguably, inter-dealer broking may be slightly easier.

    Investment banking because of hard skills development, and exit opportunities.

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    I'll add that IDB, if you are thinking ICAP, BGC, GFI etc has less barriers to entry, you should consider your exit carefully. Traditional voice broking is a dying industry and many of these companies are slow and clumsy in implementing the technological changes that are needed to ensure their survival. There is also a lot of consolidation going on in the industry and at least many of the older brokers have recently found themselves either doing **** all every day, or out of work. On top of this, you must consider the massively different cultures and how that will very likely impact how you are able to move around.

    Broking in an IDB is the most stressful situation you could find yourself in. 8 hours screaming at the top of your lungs, client entrainment doing what it does to your liver several times a week getting home at 3 then getting up at 5, everyone trying to f*** you over for your clients money, incredibly aggressive characters (concentrated at management level often), getting abuse all day long from traders when they're loosing money and see you as a punch bag, and if you don't like casual nudity, forget it.


    Stockbrokers exist today as agency brokers that offer a research service, as well as additional services such as deeper trade analytics and CSA's. Entry reqs higher than IDB and similar to banks, as many analysts will have started at a bank and moved to one of these, probably with the aim of hopping over to the buy side at some point. Regulation is throttling these guys in many cases, so do your research on MiFiD.

    If you can, go to an investment bank.
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    I'll also add that broking at an IDB or market maker is rarely intellectually simulating work.

    You don't need to know why the market moved. You don't need to know why your client is selling that day. You don't need to be able to make a price based on anything other than the last x number of prices that have dealt that day.

    You don't care.

    All you care about is a bid and an offer.

    Of course the best brokers are smarter, but you'll essentially be matchmaking and it's bloody repetitive.
 
 
 
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