Confessions From a Stock Broker – My Little Green Book

New York Stock Exchange

A few months ago I shared some of my confessions from working in the fast food industry. The responses ranged from laughter to disgust to shock over some of my experiences. To be honest, I was not too terribly surprised by the response as I saw a variety of, we’ll just call them “interesting”, things in my few short stints in the fast food industry. As I stated in that post, I have always been intrigued by first jobs of celebrities and some of the crazy things they did. Now, I may not have been a lion tamer like Christopher Walken was, but I have had my share of interesting jobs. Today, I want to peel back the curtain of another industry that I had the fortune, or misfortune, of working in for four years prior to taking the plunge into self employment – the online brokerage industry.

Some (like Mrs. Frugal Rules) might say it was working in that industry that pushed me over edge into self employment. Honestly, this post probably also fits in my Taking the Plunge series as it had a fairly big impact on why we decided to start our own business. That said, I am going to do my best to keep biases to a minimum as I do not want them to cloud many of the things I want to share. I am not proud of some of the things I was told to do while there; ultimately, moral conflict is the reason I left as I was uncomfortable with what I was expected to do. I share many of these things because when you invest money with an online broker, or even a financial planner you might assume a number of things. You might assume that the people you’re speaking with are knowledgeable, that they care about how your portfolio is doing or that they are there to serve you and that no one else matters. Sadly, many of those assumptions would be off base and it’s my desire to share some of these things with you so that you have a realistic understanding of what you’re getting yourself into when you are investing in the stock market through the platform of an online broker. So, without any further ado, here are some of my stock broker confessions from my little green book:

  • If you call in to your online brokerage, you’re likely to get someone who has no clue what they’re talking about. They may have passed a test, but often have no experience in the industry or do not invest themselves.
  • You’re paying how much for your stock trades? We only pay in the neighborhood of $2 or $3 per trade. The rest is pure profit. If you’re paying more than $7 per trade folks, call in and ask for a lower commission.
  • That stock broker who is helping you is quickly determining how they can sell to you. They’re compensated to do so and if they don’t meet their numbers they’re canned.
  • All of our back office work is done in a third world country that has no clue about regulations or standards.
  • We’re often taking care of three other things while talking to you…managing instant messaging, playing on our smartphone and putting you on mute to talk to our neighbor…so I hope you do not want us paying attention to you.
  • We’re tested and measured like lab rats in a scientific study. If we spend more time than we should on the phone with you, we don’t qualify for a bonus or may be written up.
  • Don’t let your grannie call in, because we’ll sell to her in a heartbeat and convince her that she needs to let it ride in equity funds.
  • Wonder what the guy is doing when they’re speaking on the phone with you…grooming themselves extensively if they’re like my neighbor.
  • You want us to spend our money to give you better products/services…what a crazy thought – we’re spending it on our fancy new buildings.
  • When the queues light up like a Christmas tree they’ll throw the cleaning crew on the phones before they do an assistant manager or higher.
  • Our one qualification for helping you is whether or not we can sell a ketchup popsicle to a woman wearing white gloves.
  • We don’t care that you can hear everything going on in the background. That’s why we ring a massive gong whenever anyone makes a sale. Sorry if the noise disrupts your conversation with one of our underpaid, overworked, stressed out and understandably apathetic associates.
  • We are at the receiving end of everyone’s anger over their losses. How is our stress relieved? Not with walking breaks or staff lounges but candy bars. Our managers literally roam the aisles throwing candy bars at our heads and setting soda cans on our desks. Oh, and they like to blow kazoos in our ears as motivation and encouragement while we’re on the phones, because that’s exactly what you want at the end of a stressful day – sugar and chaos.


Have you ever had a job that you’ve not been proud of? What did you do about it?


Photo courtesy of: Rob Young

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About the author:

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. You can connect via Twitter / Facebook.

78 comments on “Confessions From a Stock Broker – My Little Green Book

  1. John,
    Great post, and it doesn’t surprise me in the least. I went to biz school in NYC, and what I saw (especially in the attitudes of some professors) was a bit shocking in how cavalier they are with the small fortunes of their clients. They literally do not give a crap about a small, private investor and the focus is almost exclusively in valuation of equities. The rest of the focus is on private venture capital raising. Really no mention of anything else.

    Although I’ve had lots of jobs, there’s not many I don’t feel good about. Of course there are days when I’m not too proud of what we’ve done, but the overarching intent of what we were trying to accomplish was generally noble. But, when it comes to just plain making money in sales, I know it can get slimy quickly.

    Thank you for the insight. I thought it was a good reminder of what’s out there plus it was pretty entertaining. Good luck.

    Patrick recently posted..Celebrating the tragic death of a commuteMy Profile

    • Thanks for your input Pat. I would tend to agree, in general, that there is little weight given to the Mom & Pop investor. If you’re not doing a truckload of trading or do not have a chunk of money with the broker, then generally you’re meaningless to them. I know this is not always the case, but sadly it is for the majority of the time.

    • I think you might have misread it Glen. The $2-3 per trade…that is what the brokerage is charged. The problem is that most brokerages are $7-10 if not higher thus there is a huge amount of profit made on each trade. Multiply that by hundreds of thousands done a day and the broker is making a killing.

    • That’s exactly what they want you to think DC. However, it is all about the sale and is about the bottom line for them. Unless you have a bunch of money or do a lot of trades then they generally do not care.

    • Sadly, it really is not very surprising if one gives much thought to it. I would tend to agree Roger, that if you do go the route of having someone manage your investments for you then it should be a fee-only advisor.

    • Thanks Laurie. I think you might have misread it though. The $2-3 per trade is the cost to the brokerage. Thus, when you’re paying $8+ for a trade there is fat profit in it for the brokerage. When you multiply that by hundreds of thousands of trades per day that is a massive amount of money for the brokerage.

    • You’re right on that Cat! No one can care for your money like you do. It’s sad but true. The $2 trades though is simply the cost to the brokerage. When you as the client are paying anywhere from $8 and up for a trade then you have massive profits. Way too many people fail to negotiate their commission.

    • Fun is one word for it Greg. ;) There were many days that I had to seriously hold myself back from slugging someone. That, added with the fact that they wanted us selling to little old ladies showed me it was time to get out.

  2. Oh wow. Thank you for opening your little green book and sharing these observations with us John! To be honest, I’m not too surprised by these observations because people in that kind of industry need to make money to live too, and in all brutal honesty, like Cat mentioned above, no one truly cares about your money except for yourself!
    Girl Meets Debt recently posted..Talking About Student Loan DebtMy Profile

    • That’s exactly it GMD, you’re the only one who’ll watch out for your money 100% of the time. To think otherwise will just likely get you in trouble.

  3. I once worked, briefly, as a headhunter. I went home after the first day on the job with the worst headache I’ve had in my life. I couldn’t take any more after just four days and just didn’t go into work on Friday. My boss called me at home. When I told him I’d quit, he expressed regret saying he thought I had good potential. I told him I considered that an insult and hung up. :-)
    Kurt @ Money Counselor recently posted..School Debt SqueezeMy Profile

    • I’ve heard some things about being in the headhunter business. In the end, it’s really just sales and nothing else. At least that’s what I have been told.

    • Oh, I am too Kim. I think if it were up to my wife I would’ve quit several years earlier. They just had people stressed out to no end AND they sought to alleviate that with candy & soda…now that’s a GREAT combination. ;)

  4. Haha wow, this is crazy. I guess I assumed a lot of this happened, but I didn’t know for sure. This list can probably be duplicated for almost any type of salesperson out there. It’s disheartening, but just what we have to deal with. As long as you know about these points, you’ll be less likely to get scammed into doing something you shouldn’t be doing.
    Jake Erickson recently posted..Dave Ramsey’s Baby Step 6: Pay Off Your MortgageMy Profile

    • I would agree Jake that many of these things could be duplicated for many sales type roles (in general). It has also opened my eyes up to being more aware to scams and making sure I know what I am doing when I sign something.

  5. Wow that was enlightening on a somewhat disturbing level. I can see why you wanted to leave that job. I don’t think I’ve ever had any jobs I’m not proud of, but I did have one job which made me really see the dirty side of my industry. I was a movie trailer editor for like 6 months. I hated it from the moment I stepped foot in there to the time I left. It felt sleazy, fake, shallow, hollywod-ish, stressful…I could go on. It made me despise my one true love: movies. Well, for a bit anyway, but luckily I quit before I got too depressed and I moved back to seattle and had to start all over temping again for awhile…but it was totally worth it. BTW you just inspired a blog post for me! :)
    Budget and the Beach recently posted..Link Love/Week in Review 4/26/13My Profile

    • I agree Tonya, it was disturbing on many levels. Once I saw that I could not sleep at night because what I was expected to do, I knew I had to leave. Not to mention the fact that my wife had been pleading with me to leave for several years. Glad to be of some inspiration. :)

    • It is crazy Mackenzie, though not surprising. The crazy thing is all of those jobs got moved to a third world country, because the American counterparts were too “expensive”. Yet, the CEO got a massive pay bump the week after the jobs were moved.

  6. The incentives sounds pretty hardcore. I guess it has to be in order to stay competitive with other brokerages out there. I don’t think I have what it takes to work in a high stress environment where I’m monitored and could be canned for not pushing a product. It’s nice to get a discount on trading commission though lol. Thanks for sharing your experience.
    Liquid recently posted..Not All Wealth Is Created EqualMy Profile

    • They were pretty hardcore. You could make good money at it, but even at that the incentives were peanuts compared to what you were making for the firm. Sadly though, we did not get discounted commissions. I had to pay the same commission as everyone else.

  7. This is nuts! I appreciate this isn’t the most appalling part of your post, but it kills me nonetheless. “Our managers literally roam the aisles throwing candy bars at our heads and setting soda cans on our desks.” Because poisoning your moral standards isn’t enough — they have to poison your body, too! Crazy stuff. Thanks for sharing, John!
    Kendal recently posted..Frugal & Fickle: A Tough ComboMy Profile

    • I agree Kendal. Every once in awhile is one thing, but it was regular and we were already sitting for 8+ hours a day so we did not need crap given to us multiple times per week.

  8. I’m sorry that you had such a poor experience in the financial industry. I can’t blame you for wanting to leave and jump into self-employment. I’ve been fortunate that I never experienced what you went through, but there is a lot of pressure to succeed or make sales, so it’s an environment that’s ripe for people willing to take advantage of others. Before I returned to private practice, I had the unfortunate task of taking some practices away from advisors. It broke my heart.
    Shannon @ The Heavy Purse recently posted..The Sweet Spot: Where Spending & Frugality CoexistMy Profile

    • That there is Shannon. The sad thing is that they do not advertise it as a sales job but that is really what it is. If the clients actually need it then it’s one thing, but selling to little old ladies because they were generally easy to take advantage of is a completely different thing altogether.

  9. Thanks for sharing that John. It sounds typical of any type of call centre we call up to for help, online support or to calling in to book something we need. Most times it’s just a test they pass and they have no bloody idea what they are going on about. Interesting stuff reading about the reality about what happens behind closed doors in some professions.
    Canadian Budget Binder recently posted..Junk To Funk: Some Woman Down The Road Left Me With HardwoodMy Profile

    • Exactly Mr. CBB. That’s generally all it takes for many to end up on the phones to help people. Having this experience has made me much more empathetic towards those who’re in roles like this and to be more understanding towards them.

  10. Wow…

    Hard to find anything else to say. This is truly unreal. Especially throwing cleaning staff on the phones instead of upper level management. It’s no surprise you wanted to go switch over to working for yourself. You can bet I’m going to be doing a lot of research about who I let handle my money in the future!
    BrokeMillennial recently posted..Confession: I Avoided the Millennial CurseMy Profile

    • It was surreal many days Erin. I would go home feeling so dirty many days and knew that there had to be something better. That research is vital as you’re the only one who’ll care about your money all the time.

  11. None of this surprised me, or probably anyone else who has ever worked as, with, or near a call center.

    That said, good luck on any sales person trying to sell me, especially over the phone. I don’t care if you can sell a ketchup popcicle to a woman in white gloves, or ice to an eskimo. However much you want a commission, I simply don’t want to be talking to you.
    Edward Antrobus recently posted..Property as investment?My Profile

    • I am the same way Edward, I can’t remember when I ever bought something over the phone. Having this job though has given me more empathy for individuals in a role like and realizing that they’re only doing their job and not to get upset at them.

      • I generally keep my temper and only start raising my voice when the person on the other end is not getting it or giving my blatantly wrong information, like my issue with CareOne a few weeks ago when one rep told me that the legal department (whom I had already spoken to previously) didn’t exist. Even then, I calmly pointed that out 3 times first.
        Edward Antrobus recently posted..Property as investment?My Profile

        • I generally give them a warning or two and then I’ll kindly say that I need to go and will hang up if everything is done for what I called in for.

  12. Haha interesting… candy bars and kazoos?! I can only imagine. Working against your morale code is unfortunately something that I’m sure not uncommon, even more so with cutbacks and so on. Sadly, it happens a lot and in every industry. A friend of mine worked as a personal trainer at one of the large chains here and got some really big guy, riddled with health problems to drop quite a bit of weight and they were making really good progress. My friend quit, after one day his boss, seeing all the progress he had made, told him to change the program. “If he gets too much better,” he said “he won’t come by our gym anymore.”

    • Yep. Sounds unbelievable I know…but I couldn’t make that kind of stuff up even if I tried. That’s a crazy story about your friend. I know that keeping clients is important, but at what point does it simply become wrong?

    • I agree Anna. That was the final straw for me. I love to make money, but it can’t be at the expense of others…it’s just wrong on many levels.

  13. Definitely the joys of a call center, but extra scary since it is dealing with people’s money. I was part of a call center team as part of a job rotation for only 3 months and that was long enough. People hit a new level of frustrated after being transferred 5 times and then I am the lucky one to pick up!
    Greg@Thriftgenuity recently posted..Birds of a Feather Save TogetherMy Profile

    • Agreed Greg. That just makes it even worse. Oh, I HATED being at the receiving end of someone who had been transferred that many times. They would, understandably so, be pissed and I would be on the receiving end of it. But, hey, at least I got a free candy bar out of it. ;) Thanks for stopping by Greg!

    • Interesting. I’d be interested to know who that was. There are ones that I know of that I will not advertise for (also the one I worked for of course) because of their practices. Too few know about it and think it behooves me to share it so people don’t get themselves tied up with outfits that are not looking out for them.

  14. I’ve always had a hunch that the people you talk to on the other side of the phone were really no better at investing than I was. You just confirmed another suspicion that I’ve always had: That there is a lot of craziness going on around the person I’m talking to. I swear every time I call anyone in customer service, it always is very loud and it sounds like there is a party going on in the background. I guess it must be the kazoos.
    MMD @ IRA vs 401k Central recently posted..Can I Borrow Against My 401k Plan? Not If You Can Help ItMy Profile

    • Oh, if you only knew MMD. Many have no clue at all and passed a test and know little about the market. It’s sad, really, but it’s what helps them get cheap labor.

  15. I love it! The truth revealed! I worked in the IT industry for a number of years in the IT support area. I had a great deal of respect for the TRADERS, but quickly learned the truth about the brokers. I can remember many a time when I had to argue with my broker over making a trade because they didnt think it was a good idea. I’d always ask why and I would usually get an “our analyst blah blah blah” reply. I never got a reply as to why THEY though it was a bad or good idea,
    Jose recently posted..My Six Thousand Dollar Boat RideMy Profile

  16. “We’re often taking care of three other things while talking to you…managing instant messaging, playing on our smartphone and putting you on mute to talk to our neighbor…so I hope you do not want us paying attention to you.” I guess at least they have the decency to put themselves on mute? I hate it when I”m on the phone with someone and can hear them typing in the background.
    KK @ Student Debt Survivor recently posted..Save $50 a Month Not Dry Cleaning-5 TipsMy Profile

    • There was actually a guy in my area who got fired because he thought he had the phone on mute and was cussing. The client was NOT very happy.

  17. Like others, I wasn’t too surprised by what they wanted you to do. Their main goal is to make a profit and not really make others money. This is another reason I personally prefer index funds. They can go up and down like other stocks, but it’s easier for me to invest in and I don’t feel that I’m getting the short end of the stick….or am I?
    Justin recently posted..I’m Torn About the Site: What should I do?My Profile

    • That’s ok Amanda, I think there are plenty out there that still have the thought that the place they do their investing with is above board. It was surprising for me when I got into it.

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