How to Become an Independent Stock Broker

by Billy Williams ; Updated September 26, 2017
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With millions of new investors entering the stock market each year, many stock brokers are overwhelmed with business and barely able to meet the demand for new shares. As a result, new opportunities are available for independent stock brokers but many would-be brokers don't know how to become an independent stock broker Fortunately, there are few key steps that will help you take advantage of the opportunity in this industry.

Go to the National Association of Independent Securities Dealers and register to take a Series 7 Exam. The exam takes about six hours to complete with 260 questions, which you will have to pass with a score of 70 percent or higher.

Fill out and file a FOCUS form with the Securities & Exchange Commission, which will register your independent status. You can send it in by mail or electronically.

Set up an account at a brokerage like TD Waterhouse or Schwab to act as a custodian for any funds that you hold their on behalf of your clients. Although most brokerages that employ traditional brokers and also charge them fees based on the assets, they manage the independent broker is free of those onerous fees. At this stage, you can solicit clients and begin investing their money directly while keeping the lion's shares of the commissions and fees for yourself.


  • You can also contact brokerages across the 50 state to handle "order flow," which is the flow of orders coming from that brokerage that their brokers can't service. At times, a busy investment house in inundated with buy and sell orders, so having a relationship with these brokerages can yield commissions that they can't get to in a timely manner.

About the Author

Billy Williams has been writing since1988 on a variety of topics but focused in business/finance. WIth over 2 decades of experience in banking, real estate, business development, sales, and trading the stock market as well as having been published in "Futures Magazine." Williams holds a Bachelor of Arts in finance from the University of Texas Pan American.

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