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Bond Dealer


Description

In order to buy and sell bonds, you might need a bond dealer to help you with the transaction. Granted, but what does a bond dealer do and what exactly is a bond? A bond is a promissory note issued by a corporation or government to its lenders, usually with a specified amount of interest for a specified length of time. A bond dealer is a licensed salesperson and sometimes financial advisor who works for a financial brokerage house and carries out all financial transactions. They assist clients by providing bonding advice and recommending the bond or sale of securities. The dealer acts as the link between the investor and the bond exchange. Each day the a bond rate is set and when an investor wants to buy or sell a bond, the dealer relays the order through their financial firm's computers and makes the purchase, often for a small fee.

Bond dealers are becoming less important with the advent of online investing and the ability for people to buy their own bonds. One can purchase bonds on the Internet, by phone, at most banks, credit unions and trust companies. Bonds are available to purchase only at designated times of the year and the current rates are available in daily newspapers, at banks or through the investor.

Nowadays, bond dealers have to take on more of a financial planning role including other securities since bonds are not the only area people invest in. Being a bond dealer however, can be extremely stressful and emotional. Since the nature of the business is investing other people's money, dealers must take full responsibility should something go wrong. If you lose someone's earnings, you must be willing and able to take the heat and search for alternatives to improve the situation.

Most bond dealers are quite conservative in their investing and thoroughly research bonds before buying them. They must keep up with the latest market information and trends and constantly research new ideas and companies. Keeping the clients in mind, dealers must honestly consider your needs and situations before their own, in order to properly advise on investment opportunities. Further, dealers must then suggest new investment ideas to the client so that a client will entrust their money with the dealer in the future. This strong commitment to the client and the job can sometimes conflict with one's personal life because brokers have to be dedicated and on-call for their clients.

An important aspect of the occupation is finding prospective clients and building a customer base. Many bond dealers contact potential clients by cold calling or they meet new clients through business and social contacts. More established dealers might generate new business through referrals. Some write a column for a newspaper, or appear on television or radio shows to offer their financial suggestions.
 
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  Interests and Skills  
A bond dealer needs to have superior skills in interpreting, analyzing and researching information. They thrive on risks and competition and excel in sales. Good listening and communication skills also make a great bond dealer. A large part of the job deals with communicating with clients, in person and on the phone, and making new contacts. Therefore, dealers must respect client confidentiality and be culturally and emotionally sensitive. Bond dealers have the ability to understand complicated financial systems, keep up-to-date on financial matters and consider new approaches to problem solving. They must be confident in their financial knowledge and consulting as well as enjoy taking a methodical yet creative approach to research. Finally, they love working with numbers and are experts in the stock market.
 

  Typical Tasks  
  • Buy and sell stocks and bonds for individual investors, pension fund managers or companies such as banks, trust companies and insurance firms
  • Provide investment information and advice to clients
  • Review financial periodicals, stock and bond reports, business publications and other material to identify potential investments for clients
  • Monitor clients' investment portfolios and ensure that investment transactions are carried out according to industry regulations
  • Discuss investment objectives with clients and make recommendations accordingly (e.g. low risk securities only, or a balance of high and moderate risk securities with long term growth potential)
  • Maintain strict confidentiality regarding client information
  • Seek out new clients by identifying and calling on potential clients.
  • Bond dealers either work alone or with other financial planners, in fully equipped offices or out of their homes. Many dealers travel frequently to meetings at clients' homes or businesses and to conferences. They generally tend to work long hours due to the amount of research and planning put into each client's account. This is a fiercely competitive business with constant pressure to buy and sell bonds. They may also work evenings and weekends as meetings may take place at night or on a Saturday or Sunday.

  Workplaces, Employers and Industries  
  • Bond dealers are mainly employed by private financial related institutions. Some work for smaller financial planning businesses, few are self-employed, while others are employed on a full-time basis or contract their services to larger firms and organizations such as stock brokerage firms, trust companies, stock and commodity exchanges, banks and other lending institutions, investment companies, mutual fund companies, and private financial planning companies. Accordingly, self-employed dealers contract their services out to individual investors.

  Long Term Career Potential  
Some of the larger investment firms hire summer students, which is an excellent entry level position to learn from. Firms also recruit students on campus across the country during the spring. New employees generally start in entry-level discount broker positions and then with more experience and a better "feel" for the market, they move up and become investment dealers. Once comfortable in that area, many specialize in bonds and become strictly bond dealers. Advancement in this field depends almost entirely on the individuals' initiative, success and ability.

Successful bond dealers usually come equipped with years of experience, often in other sectors of business. Generally, they are not young and fresh out of university as people tend to entrust their money with older, more experienced investors. Also, it takes years to build up a wealth of clients therefore this career takes many years to achieve fully. Experienced bond dealers may decide to specialize in a particular aspect of investment, such as T-bills or hedge funds. Dealers can also move into supervisory or senior management positions in larger companies or professional associations. More established bond dealers might even be written about in financial journals if they choose profitable bonds and make a name for themselves in the financial community.
 

  Educational Paths  
Bond dealers require a college or university degree with a concentration in finance or business-related topics. Courses in computers and information technology are also important in the bond dealing field. Many dealers have Masters of Business Administration (MBAs) which has become a new industry standard. A Chartered Financial Analyst (CFA) degree is also important at many firms.

New bond dealers often spend their first couple of years developing a client base. This takes a lot of hard work, determination in the face of rejection, and persistence. It is often best to have experience in sales before getting started as a bond dealer. Experts suggest getting involved in the stock market and working as a summer student at a firm that invests in bonds.
 

Sources:
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, http://www.bls.gov/ooh/
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Employment Statistics, 2002, http://www.bls.gov/oes/2002/oes_nat.htm

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