This post originated from an RSS feed registered with .NET Buzz by Jeff Key. Original Post: Do stockbrokers need a college education? Feed Title: Jeff Key Feed URL: http://www.asp.net/err404.htm?aspxerrorpath=/jkey/Rss.aspx Feed Description: Topics revolve around .NET and the Windows platform. Latest .NET Buzz Posts Latest .NET Buzz Posts by Jeff Key Latest Posts From Jeff Key

Today's Motley Fool email newsletter had a Q/A section and one of the questions was the subject of this entry.  My answer:  No, they don't, but they probably do.  The gotcha is that it very well isn't in finance.

Here's their response:

No, but they must pass the "Series 7" licensing examination and sometimes a "Series 63" exam, too. Successful completion of these tests permit brokers to advise you, solicit business from you, and execute transactions on your behalf. But these tests don't measure the ability to discern outstanding investments. Just because someone passed an exam doesn't necessarily mean she knows what's best for you.

I was a finance major in college and had an internship at Merrill Lynch for a couple years in an office that dealt directly with people like you and me (and others with way more money).  My boss was a great guy, had an MBA in Econ from Harvard, was previously a CEO, etc.  Perfect for the job.  Others, though, weren't, in my opinion.  They were great sales people, and I do mean great.  They would hire top sales people from other firms, have them learn enough to take the Series 7/63 exams and set them free.  Don't get me wrong, Merrill had the best research in the industry, so they weren't shooting blanks, but the fact that a strong sales background got you in the door quicker than anything else really bothered me. 

This certainly isn't a Merrill-only problem and I was there at the beginning of the internet boom, so it's understandable considering people wanted to buy as much as possible, but it just didn't seem entirely ethical to me.  That was my last job in finance.

Moral of the story:  Only deal with financial consultants that have been referred by close friends or family.  Be skeptical and research investments on your own.  Ask questions, ask questions, ask questions.