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How to start a brokerage firm

Updated July 19, 2017

Owning your own business can be a very rewarding experience. Although there is a lot to accomplish at first, once you get your company off the ground and thriving, there is nothing more thrilling. Starting any business involves a solid plan, determination, and a high level of personal motivation. Starting your own brokerage firm is no different, and also requires the additional knowledge and experience of a stock broker. Learn the basic steps necessary to start a brokerage firm and move it on a solid path toward success.

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  1. If you haven't already done this, now is the time to take your series seven test as a stock broker. You will not only need to be a licensed broker with prior experience in order to start your own brokerage firm, but you also must have your series seven certification. Ensure that all other broking licenses you have obtained in the past are current.

  2. Write a solid, comprehensive business plan. In order to convince investors and to secure a bank loan for your initial push into brokerage firm ownership, you must be able to clearly state the plan for your business. You can either write this plan yourself or hire a qualified writer to do it for you. If you have never written a business plan, it may be a good idea to hire someone with experience to do the job. Expenses such as this are the reason why it is important to have some start-up capital, even in the form of credit cards, right from the planning stage. Shop your business plan around. Meet with investors, present your business plan and sell yourself. Use your prior success as a stock broker and any business success or training as anchor points. You can also meet with bankers to talk about a loan, using your business plan to help determine the necessary amount.

  3. Consult with a securities lawyer. No matter how much prior experience you have in the brokerage industry, there are many licenses, registrations, and permits that are needed before you can legally open a brokerage firm of your own. A securities lawyer knows all of these requirements and can ensure your new brokerage business is on track and operating legitimately

  4. Find an office space. Once funding is in place and your securities lawyer is filing paperwork on your behalf, it is time to look at office space. Depending on how many brokers you want to initially hire and how many clients you already have, you may want to start small. Low overhead is always the best choice when starting out. It is more likely for a business to succeed that is grown over time, than one that instantly feels financial pressure.

  5. Sign up new clients. You likely will have brought over many clients from the previous firm you worked with, but in order to grow your business you must expand your client roster and bring in more money to satisfy investors and/or pay back your loans. Have a workable plan in place for client prospecting. This may involve seminars, webinars, informational mailings, and networking. Dedicate a specific amount of time each week to gaining new client interest. Continuous prospecting is just as important for the success of your business as meeting the needs of your current client base. With this workable business outline, your brokerage firm should be on a solid path to success.

  6. Tip

    Make sure before you leave your current brokerage firm that you will have some clients who will follow you to your new firm. Knowing that you already have a client base makes it easier to sell your business plan to investors. Have some capital saved up from your own pocket to pay initial start-up fees before securing funding. In many cases, these expenses are tax deductible.

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Things You'll Need

  • Experience as a Stock Broker
  • Securities Lawyer to Consult
  • Start-up Capital (money)
  • Business Plan
  • Office Space

About the Author

Robin Hale

Robin Hale a seasoned freelance writer/editor who majored in English at Edison State College in Fort Myers, Florida. As the founder and owner of Writers-Elite.com and Partnership Marketing of SW Florida, Robin has extensive SEO writing and marketing experience. Her web content is always engaging, relevant, and valuable to the reader.

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