How To ... Become a stockbroker

2013-07-03 10:00

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One reader has a passion for stocks and wants to know what is needed to qualify as an investment analyst

Njabulo writes:

I have a profound passion for financial markets.

I am currently a security officer but I want to be an equity analyst someday.

I love to analyse markets and listed companies, both domestic and offshore. What can I do to achieve my dream?

Maya replies:

Your question reminded me of Vusi Mkhondo, who I met for the first time 12 years ago after he had just started on his quest to become a stockbroker.

Today, he’s the CEO of Lefika Securities, a firm he started with two partners when he could not find employment in an industry for which he had a tremendous passion.

Mkhondo’s journey began when he completed a?BSc degree in microbiology but struggled to find a job. He then realised microbiology was not really

his passion.

As he said at the time, when he matriculated with good marks, the only option was medicine and stockbroking was not really something career counsellors spoke about.

Inspired by the TV show Traders, Mkhondo enrolled to do a course offered by the South African Institute of Stockbrokers, which was a year-long course and effectively made him a qualified stockbroker.

“Things are not so easy today,” says Mkhondo, who explains that presently one has to have a degree, or alternatively have four years’ working experience and write numerous exams.

Although it may have been easier to become a qualified stockbroker in those days, it was virtually impossible to find a job. So Mkhondo decided to create his own job by starting his own broking business with two partners, Yolanda Boikanyo and Tebogo Shakong.

“It was a favourable time to start our own black owned stockbroking firm due to the requirements of the financial sector charter, but we needed capital and experience,” says Mkhondo, who partnered with SA Stockbrokers.

Mkhondo’s new firm, Lefika Securities, brought the black empowerment credentials to the partnership and SA Stockbrokers brought the infrastructure, including a trading licence.

Eventually, Lefika Securities was successful enough to acquire its own trading licence in 2006, and formed its own independent company – just in time to experience the worst trading conditions in recent history with the market collapse of 2008.

“That was a big challenge, we couldn’t have started at a worse time,” says Mkhondo.

But seven years later, the business is growing from strength to strength, acquiring its bond licence in 2009 and recently signing an agreement with Canaccord, a London-based broker, which will provide Lefika Securities with local and global research capability.

Even when I met Mkhondo for the first time 12 years ago, I was struck by his passion, determination and intelligence.

He had a great deal to overcome, coming from a poor background and not having the contacts to open doors. Yet he succeeded by creating his own future.

His story is an inspiration for those who have a dream, but it is also a story of hard work and commitment.

A career in the markets, or any career for that matter, won’t come easily – you have to work for it.

Learn about the markets and get involved

Prove your passion

You need to demonstrate this passion by getting involved in the markets and learning about them. The best thing to do is to start learning about the market and investing yourself.

If you do not have money to start trading, look at entering the JSE Virtual Trading Game ( and simulated trading on Fin24’s Dashboard programme ( If you are still studying, you can enter the JSE/Liberty Investment Challenge (

If you are comfortable to start investing your own money, you can open an account with a stockbroker that offers simulated trading and

then move into trading your own money. In this way you learn and when you approach companies you will be able to show that you have knowledge, not only a passion.

Most firms do require a qualification so consider studying part time.

You could also find out about getting a security job at a stockbroker and ask if someone would help train you.

A lot of the time, it is just about finding someone who is willing to spend the time to train and that can be the most difficult part, as you need to prove that their investment of time and effort into you will be worthwhile.

What you need to get a foot in the door

If you are deciding on the financial markets as a career, take time to learn about the various roles and careers, and decide which one you would be best suited for.

Erica Bruce of the South African Institute for Stockbrokers says when people ask her about getting into stockbroking, they usually mean they want to be traders.

Personality is an important determinant in following a career as a trader. This as companies look for people with an outgoing personality who can work easily with numbers.

A degree is not a requirement to become a trader, but it is a distinct advantage, especially to get a job at a large firm.

You do not necessarily need a finance-based degree. There are many engineers, for example, in stock broking; but you must have the ability to grasp mathematical concepts.

If you do not have a degree, you can write the Registered Persons Examinations, which include: introduction to financial markets, regulation and ethics, and equity market.

Bruce says these are the basic requirements before you can apply for a job. If you wish to become a trader, she advises you also write the Registered Securities Trader exam. Information on these courses can be found at

The South African Institute of Stockbrokers is in the process of registering a formal, three-year university qualification for the financial markets, and is currently working with the University of Johannesburg and government to put the course together. It will be a workplace qualification, which means it will include work experience.

“It is hard for a youngster to get their foot in the door, which is why we are putting together this workplace qualification,” says Bruce.

»?Email for more info

Essential DNA of an equity analyst

In terms of Njabulo’s specific question about becoming an equity analyst, Lucy Jones, equity analyst at Lefika Securities, provides the following information:

The minimum academic requirement is a BCom degree. However, preference is given to newly qualified chartered accountants (CAs) because of their in-depth knowledge of accounting. Computer literacy, with MS Office, is also required.

Although it is usually not a requirement at a junior-analyst level, being a CFA charter holder is a huge advantage. To earn the CFA charter, you must have four years of qualifying investment-work experience, become a member of the CFA Institute, pledge to adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct, apply for membership to a local CFA member society and complete the CFA Programme.

Newly qualified CAs have an advantage because three years of articles counts towards the four years’ work experience and many enrol for the CFA Programme while doing articles. Hence, by the time they leave for investments, they would already have completed some, if not all, of the exams.

Characteristics we would look for in an analyst include, but are not limited to, the following:

» Excellent communication skills, both verbal and written, which will be put to good use with colleagues, clients and top management at companies;

» A passion for financial markets;

» A curious and questioning mind;

» A robust personality that can process and overcome criticism, as research is constantly scrutinised and criticised by clients and colleagues alike; and

» A confident, self-motivated and proactive personality.

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