Financial literacy 101: getting to know a stockbroker

Ever wondered what a stockbroker does all day?

Luckily for me, I know someone willing to be interrogated in the name of financial literacy…

Stockbroker or Wealth Management Specialist David Russell from Wilson’s Advisory has given me an insight into his day, and how he got his saving and spending habits down pat.

Financial literacy 101: getting to know a stockbroker

What does a typical day look like for you?

There’s really no ‘typical’ day. I’m always up early to fit in a run and a bit of playtime with my daughter before heading to the office about 7am. The work day kicks off with a meeting where we discuss overnight market action and any news or announcements from the companies we research. It’s our job as advisors to take this information back to our clients and take any necessary action, like buying or selling shares.

As well as making sure our existing clients’ portfolios are well positioned, I spend a big part of my day chasing new business. This takes many forms, from meeting prospects referred by existing clients, to presenting at a business lunch or having coffee with accountants and lawyers to build my professional network. A couple of times a month I’ll attend an evening networking event, but usually, I’m able to get out of the office by 5pm.

What did you study to become a stockbroker?

I could be the only stockbroker who has a Bachelor of Music majoring in Performance (Trombone)! But my clients are glad to know I also have a Bachelor of Commerce majoring in Accounting, and a Professional Diploma in Stockbroking from the Stockbrokers Association of Australia.

There is no set degree or qualification needed to enter the financial advice world, but most of my colleagues would have studied either economics, commerce or business at university. The most important prerequisite is having a passion for stock markets and helping people reach their financial goals.

The key advantage stockbrokers have is access to information. Generally, people don’t have time to find the right companies, they don’t know where to look for information and they don’t know what’s a good price to pay. Stockbrokers solve this problem.

Do you feel like you have a good relationship with money? If so, why?

I was lucky that my parents were great role models who instilled good saving and spending habits. I received pocket money for helping with chores around the house and had savings goals to work towards – a Game Boy and Walkman are two big purchases I recall saving up for. As soon as I started working at a part-time job my focus was on saving and investing rather than spending.

Personally, I think spending habits have as much potential to grow people’s wealth as saving habits. I recognise the value of money and seek to maximise what I can get for it. I’ll buy grocery staples when they’re on special, I’ll buy last season’s runners and I make my coffee at home instead of getting it from a café. They’re only small amounts individually but it all adds up so that I can use these savings for a nice holiday or dinner out with friends.

What kinds of clients do you have?

Realistically, clients I add the most value to have more than $500,000 available to invest. At this level I can tailor a direct share portfolio for them, that takes advantage of Wilsons’ proprietary research.

That being said, I have smaller accounts and I have provided general advice about how to get started investing for people with as little as $5,000.

I believe the most important thing to do is get started with a saving and investing strategy no matter how small. The magic of compounding returns will soon work for you.

What should people expect when they meet with/hire a stockbroker?

Stockbrokers, Investment Advisors and Financial Planners all provide a similar service these days. When choosing one to work with you need to find someone who listens to what you’re trying to achieve who can relay appropriate strategies that are easy for you to understand. It’s not rocket science!

Thanks to new regulations, fee disclosures should be quite transparent. Unfortunately, I still meet prospective clients that aren’t sure how much they’re paying their current advisor and what they’re receiving for this. Make sure the stockbroker or adviser you meet is crystal clear around their fees and value proposition.

Why should people consider using a stockbroker?

There are a lot of options when it comes to investing – managed funds, listed investment companies (LICs), exchange traded funds (ETFs) and managed accounts. Stockbrokers help clients invest in all of these. Each option has its own advantages and disadvantages with suitability dependent on the clients’ circumstances.

My clients deal with me so that they don’t miss out on opportunities. The key advantage stockbrokers have is access to information. Generally, people don’t have time to find the right companies, they don’t know where to look for information and they don’t know what’s a good price to pay. Stockbrokers solve this problem.

Where do you get professional financial advice? Have you used a stockbroker?