Varonika Brown - Profile of Stockbroker

by Myra Thomas

She’s young, African-American, and well informed on the “in’s and out’s” of Wall Street. Varonika Brown would probably not fit most people’s stereotypical view of a stockbroker. But, nonetheless, she’s forging ahead and carving out a niche for herself amongst the bulls and the bears.

As a stockbroker at the Baltimore-based Chapman Company, Brown spends her days dispensing advice on everything from the falling share price of dot.com companies to the value of a diversified portfolio. Chapman Company is an African-American owned full service investment banking firm and broker/dealer. Brown notes that working for a Black-owned business does make a difference. “Many of the ideas that I have are taken seriously here,” she adds.

Most people are unaware of what an average day for a stockbroker is like. But, Brown says her day begins much like any other professional. However, you have to love dealing with the public to do the job effectively, she says. The morning begins with Brown reading the major financial newspapers and checking out the financial news networks on television. Then, Brown will look at her client portfolios, to get an idea of what needs to be done. She’ll answer calls, and make calls to customers---recommending stocks and warning against others. Company sales meetings also round out a routine day. While a small number of her clients come through cold calling, the vast majority comes through recommendations and advertisements of the Chapman Company’s products and services.

While she admits that being a stockbroker certainly isn’t for everyone, Brown enjoys the challenge. “We don’t have salaries as brokers,” she adds. “So, we don’t get paid unless someone invests, and we earn a commission.” Now, some might fear that stockbrokers would then have a client invest, just to earn a commission. Brown notes that any decent financial professional truly earns their commission on the repeat business with established clients. A stockbroker needs to work extra hard to make sure a client is earning a satisfactory return, so that client will return to that same broker.

Brown graduated from Florida A&M University in 1996, with a degree in broadcast journalism and a minor in economics. After a stint as an account executive for Prudential Securities, Brown sold insurance and annuities for Prudential Insurance. Then, Brown moved on to the position at the Chapman Company. Along the way, she has taken a variety of qualifying professional tests, like the Series 7, and received financial training to handle clients.

Brown notes that she especially enjoys being able to help African-Americans become more savvy investors. “I want to impart the financial education on to the next generation, to teach them how to invest,” she says. Unfortunately, Black Americans still fall short, when it comes to saving and investing in the market. “It’s starting to change, though,” notes Brown. “There may not always be a person that looks like you on the other side of the table. You need to trust the person you have your money with. And, with the way that many African-Americans are raised, we were taught to put our money in the bank or a money market account.” To some, it all boils down to an issue of safety. And, while a bank certificate of deposit or a passbook savings account may be safe, these types of accounts also won’t earn you the returns necessary to retire.

This past year was particularly tough for investors playing the market. However, Brown notes that people shouldn’t get discouraged, as investing in stocks and mutual funds can require long hold positions. “There will be bad days,” she says. “The market has been very volatile lately. With the rollercoaster we’ve been dealing with, you have to explain the situation.” In the long haul, Brown says that investors should look for returns of between 10 to 12%, over a ten year-period. Says Brown: “Some years you will lose, and some years you will make more. But, that’s what you have a financial advisor for…to listen to your needs, risk tolerance, long range and short range plans.”

To get your financial house in order, Brown suggests that everyone first look at the bills that would still need to be taken care of even after you die---such things as car loans, house mortgage or rental payments for a spouse or children, college expenses for kids. A good term life insurance policy is always useful in this situation. Make sure not to underestimate the amount your family might need to live off of in the future. “Even if you have investments, you won’t get the value out of them at that time,” she says. “While there may be a penalty, no money you put into a brokerage account is untappable.” But, to maximize the investment, you need to let this money grow over time.

Brown also recommends some other “first steps” for novice investors. “You need to put aside money in a good 401K at work,” she says. “Take out an IRA, a traditional one or Roth IRA, if you can do that.” She recommends checking out the features of the different types of IRA’s to find out which one better suits your income level. She adds: “You’ll never have too much cash when you’re older.”

Mutual funds and brokerage accounts are useful to all investors. Fees on these accounts differ, depending on the firm and on the amounts invested. But, commissions on some accounts run from 1% to 5% of the transaction. Knowledge is also key in becoming financially sound. Brown recommends checking out such websites as Morningstar.com and the Wall Street Journal’s website at WSJ.com. Morningstar.com, for one, ranks mutual funds.

While websites can be helpful, having an educated financial advisor is even better. “I try to break down this mysterious puzzle into little pieces,” notes Brown. “I highlight the risks involved. But, ultimately, the biggest risk is in not putting your money in the market.” Despite the uncertainty involved with playing the street, any successful saver needs to buy and sell stocks, invest in mutual funds and the like, in order to maximize financial returns. Brown hopes she can help you do that.

Myra A. Thomas is a business writer in New Jersey

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