How much did my boss make?
I interned at a very small PWM firm over the summer and just recently realized that my boss must have been pulling in a lot of money. At the time I was working for him the company had around 650m AUM with only four employees including myself. They worked with a lot of high net worth individuals and worked with other institutional investment management firms to create portfolios for their clients, as well as outsourcing a lot of their accounting to an outside firm. One of the employees was working mostly HR and BO tasks, while the other worked directly with clients and their WM needs. So what do you all think?
A lot more than you :)
500-700k
Probably a bit more than that. If they were taking in a blended 35 bps (and that would be assuming almost all institutional - assuming not massive accounts but chunks of 5M-10M), that's a gross of approx 2.2M. That pots not being divided equally by a long shot. If he's the primary rainmaker I would assume closer to 1M.
I would agree with this comment. My rule of thumb is always company profit = AUM*average fee*50% profit margin.
Let’s assume he’s not a rainmaker
Really hard to say. The three factors determining net comp are:
1. Fees (what do they charge)
2. What payout do they get?
3. Overhead (employee comp, office expense, etc.)
I'm in the independent world, so our payout is much higher. We have advisors that run lean shops with 100M books and net 1M + . That's all retail though so the client fee blend is more like 125 bps. I think the largest account is 10M and they pay 50 bps. Not knowing the client mix makes it very hard to predict. An institutional account investing 50M+ isn't paying the same fees as the retail client.
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