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How to Become a Stock Broker

When people or companies want to buy shares, they do so through a broker or bank with the help of a manager, analyst or stockbroker. Brokers are familiar with the financial markets and the various types of investment products available to clients.

They communicate with their customers to determine the types of investments and products that best suit their financial objectives and current investment portfolio . Then they manage the documentation involved in the transaction.

Although brokers must have knowledge of finance and investments, they must also have very strong sales skills . A large part of the broker’s job is reaching out to potential clients. Most brokers are required to meet certain sales quotas in order to remain employed, and they are responsible for bringing in new clients and selling stocks or other investment products.

What training is required to become a stockbroker?

Many brokers prefer to employ brokers who have at least a bachelor’s degree , preferably in the areas of economics. Many colleges offer degrees in economics. Looking for that degree with an emphasis on finance can be good preparation for a career as a broker.

Students in finance programs take courses that involve math and science, in addition to basic management courses such as economics, accounting, business law, marketing, administration, organizational behavior and information systems. These courses can cover topics such as business capital management, investments and portfolio management, financial modeling, risk management, financial markets and institutions and corporate finance.

Early career

Some students do internships with brokerage firms while completing the course . Completing an internship can provide students with valuable experience that will help them determine their career and make them more attractive candidates for jobs after graduation.

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Graduates of programs that involve economic areas can seek employment with brokerage firms. Most brokers provide new employees with job training that can last several months. During training, new stock brokers learn about the financial markets and the products that their broker sells. They also learn sales strategies and prepare to obtain the necessary licenses to legally work as a broker (MiFID 2). When the training period ends, brokers are expected to create their own customer base and start meeting sales targets.

Taxation of Dividends

The taxation of dividends has undergone significant changes in recent years. Dividends distributed by national companies are subject to a  28% release fee.  The  entity that pays the dividends is obliged, at the time of payment, to retain the portion corresponding  to the application of this rate, which it then delivers directly to the State.

Taxation of Dividends

Although it is not fiscally interesting, the  dividends received can be included in the remaining income . In the case of national shares, they  are partially exempt from tax, as only 50% of dividends are actually taxed. Therefore, 50% of the dividends received must be included in annex E of the income statement.

If you receive  dividends from shares listed on international stock exchanges , you will also have to worry about your tax obligations. In this case, dividends are subject, in the country where they were paid, to withholding tax at the rates in force in that country. However, if payment is made through a national financial intermediary, a tax payment on account will also be made in Portugal at the rate of 2%.

  • If your  financial intermediary is not based in Portugal , you will need to complete annex J (referring to income obtained abroad) of the income statement, which will indicate the total amount of gross dividends received abroad (which are included 100%) , as well as the amount of tax withheld abroad;
  • In  case the financial intermediary is headquartered in Portugal , it must complete Annex J, but also indicating the payment on account made in Portugal. In this case, the Tax Authorities will do the accounts using an international double tax tax credit mechanism that aims to prevent the investor from being penalized twice with the payment of tax (in Portugal and in the country where the income was obtained). Thus, in practice, the national investor will not pay more tax than he would pay if the income was obtained in Portugal.