A Bonds Broker is someone who buys and sells bonds. Unlike stocks, these investments are not traded on a formal exchange. These brokers set the price of bonds by buying and selling them between institutional investors. This is known as the markup. It is up to the broker to determine how much he or she will charge, so the client should know exactly what to expect before signing on with a particular company. In addition, the Bonds Broker should have a platform to access current account information.
Typical commissions for bond brokers include dealer markup and markdown, but some charge flat fees based on trading activity or account size. An experienced investor should be able to ask questions about pricing and transaction costs and should be able to explain the relationship between them. If the broker seems overly opaque, consider using another broker or negotiating a lower fee. However, it’s best to have a good understanding of the markup before signing on with any company.
After passing the Series 7 exam, a Bonds Broker will be licensed to purchase and sell securities. A broker must be sponsored by a brokerage firm to sit for the exam. Ideally, the broker should be a member of a trade association or other professional organization. But this is not the only requirement for becoming a Bonds Broker. If you want to work as a bond broker, you can get experience first by taking an internship or employment with a brokerage firm. After Oct. 1, 2018, you’ll need to take a Securities Industry Essentials exam in order to become a securities representative.