Traditionally, commodity brokers buy and sell goods such as oil, grain, metals, sugar and coffee on behalf of their clients. However, commodity brokers now also trade complex financial products (derivatives) based on a wider range of assets, including shares, equities, stocks and bonds, with the idea of gaining large financial return. Typical responsibilities include:
- monitoring international market performance
- providing investment advice and market recommendations to clients
- trading on behalf of clients
- liaising with transport, shipping and insurance companies
- devising ‘hedging strategies'
- visiting international suppliers
- meeting with clients
- interpreting market reports
- negotiating price, specification and delivery details
- investigating new business openings.
Employers of commodity brokers include investment banks, commodity brokers, financial clearing houses and exchanges such as The London Metal Exchange (LME), ICE Futures and Euronext.
Commodity brokering is a career that offers high levels of responsibility, good opportunities for promotion and impressive financial rewards including generous salaries and large bonuses. However, long working hours and high levels of stress are common.
Most opportunities arise in London and other major cities. Vacancies are advertised by careers services, financial recruitment agencies, in The London Evening Standard, The Financial Times, national newspapers, and specialist publications such as The Economist. Early applications to major employers are advisable. Undertaking relevant sector/company research, attending presentations and networking are essential.
Commodity brokers are usually educated to degree level, and it can be harder for school leavers to find employment in this profession. However, school leavers do have the opportunity to undertake foundation level study for qualifications with the Chartered Institute for Securities and Investment (CISI), which have no formal entry requirements. You can then study for higher level qualifications to become a member of the CISI. It may take you several years to become sufficiently qualified to the level employers look for.
Graduates usually join a graduate scheme with an employer, and can have a degree in any discipline (min 2.1), although, qualifications in management, business, financial or numerate subjects may be preferred. A number of institutions offer specialist postgraduate qualifications, which can be advantageous, as can relevant work experience gained via job shadowing, placements or internships. Completing qualifications to become a member of the CISI is advisable as it shows commitment to the profession and can improve job prospects. Computer literacy is essential as the majority of trading is now automated.
Recruiters commonly have a lengthy and rigorous application procedure designed to identify motivated graduates who possess outstanding personal qualities and intellectual abilities. To succeed, candidates need to be ambitious, determined and able to cope with stress. On top of this you need to be quick-witted, numerically capable and able to negotiate. More on the skills you need for banking and investment graduate programmes.