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Monday, February 04, 2008

How to become a stock broker

I spent last night at a superbowl party at a friend's house. He does very well and owns a brokerage house. We got to talking and I asked him, only half jokingly, how can one become a stockbroker?

"It's easy" he said, "you just have to take the series 7 test."

"How do you get to take that test," I asked.

"Simple" he said. "Just read some of the study material, go to a local testing center, pay 300 bucks, and take it. When you pass, you get a liscense."

"And then I could trade stocks?" I asked, incredulous.

"Yep, it is that easy."

"So theoretically, I could get study material from Amazon, read it this week, and by next week I could be a licensed stockbroker, work for you, and start making money?"

"Yes, only you don't even have to purchase the study material. I'll give it to ya."

Now that is un-@#$%-believable!

A family practice doc, who makes about as much as a mildly successful broker has to go through at a minimum the following difficult gates before he can earn a only a modest living:
  • The MCAT (trust me, this test is very challenging). Your score--ie how well you do--determines if you can go to med school and where you can go.
  • Step 1 USMLE-the first of 3 parts to our lisensure exam. We can take it only after 2 years of medical school have been completed--the most challenging years. I studied about as much as most students do, which was 15 hours a day 7 days per week for 6 weeks. Like the MCAT, the score means even more than pass/fail and can affect the economic outlook for the rest of your life! This is a very high pressure test.
  • Step 2 USMLE-the second part of our lisensure exam. We take this one after we've completed at least 3 years of medical school. By the time you get here, you're pretty much home free.
  • Step 3 USMLE-the final test for licensure. You take this test during your first or second year of residency training. Actually it is a difficult test, but for the most part one's score is irrelevant.

After our family practice doc completes 4 years of medical school AND passes all 3 USMLE parts AND completes an accredited residency program, only then can he APPLY for permanent state licensure so that he can start to treat patients on his own.

And there is one more hurdle for most of us, including our family practitioner. We MUST become certified by our respective specialty boards. This entails completion of all the above PLUS an application to simply be allowed to take the exam PLUS recommendations from practicing doctors that attest to our competency and character AND THEN you must pass the exam. And these tests ain't easy.

After all this is done, you have to send proof that you compeleted all the above and send it to the credentialing commitees of EVERY hospital you wish to practice in and EVERY insurance company you wish to participate with and EVERY state you in which you wish to be lisensed.

And you must update it every 1-2 years.

For our family practice doc, if he was to hit no road blocks along the way, the process would take him a minimum of 8 years and cost at least $100,000. For me, a specialist, the process began in 1988 when I began to study for the MCAT and it ended in February of 2003, when I passed by final test for certification by The American Board of Urology. Total cost ~$125,000 and only vague memories of my life outside the hospital between age 26 and 32, when I was a resident in urology.

So here's what I said to my friend.

"When can I start work?"

Good luck.

The IU.