Internal/external wholesaler
Thoughts on the career path? Could anyone put forth knowledge on the path regarding compensation levels as well?
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Have worked in this space (both for companies as an employee and as an independent wholesaler) for many years. Know hundreds of others. Mutual Funds, Alts, Annuities, Life Insurance. All a little different but lots of things in common.
Assuming you're referring to a fund family or Alt distributor, lots of money to be made. Wholesalers will range from very technical / CFA types to almost completely relationship driven. Although it falls in the sales category, it's really more about account management and providing value (defined by the client). I have certain clients that want to get into the weeds on everything, and I have others that just want the 30,000 ft view. The key is learning about them / their business and figuring out how you can help them whether that be product, operations, sales support, business acumen, etc. Essentially, I am practice consultant. I understand what they're looking for and help them grow their way.
Comp for an external in the fund / alt space is 500k-1M (once you're established). Internals will range from 75k-150k. All of this is firm specific and pay plans vary by firm, product, channel, etc. But suffice to say, a good wholesaler will make those figures. Although you work for a company, you're really running your own distribution. Make your own schedule, build your own relationships. Typically a wholesaler will stay in that role for a long time OR move in to sales management where they supervise other wholesalers and are more involved in the corporate planning of sales initiatives.
A few quick questions if you don't mind:
1. What's it like being an independent wholesaler whereby you don't represent a specific asset manager? Do advisors pay you a consulting fee to give them thorough market analysis and advice on the best mutual funds for their needs?
2. When you refer to alt shops, are you talking like REITs, liquid alts, hedge funds, private credit, private equity etc...?
3. How beneficial do you think having the CFA is in this industry? From what I've heard, plenty of advisors are extremely unsophisticated and have no business managing hundred of millions of dollars so typically the wholesaler is more technically sound than the advisor.
So I wear a few hats:
1. Independent wholesaler for insurance products (life, annuity, LTC, disability). I have distributor contracts with many carriers and national wholesalers. I choose how, where, if to market a product(s) and receive overwrite commissions for all production. So I market to agents and help them design cases for their clients. There are firms that are massive in this space and market to thousands of agents. I'm more of a boutique shop and get very hands on with a much smaller agent base. Essentially I become their advanced case consultant and will even speak with their clients if they want. Also have many agent relationships that just write normal buisness and they use my shop for carrier access, quoting, underwriting, etc.
2. I'm a broker dealer OSJ (s24- branch) for a large independent broker dealer. Think of me as the branch manager of a group of FAs. That group could be hundreds or just a few. I act as wholesaler to the group meaning Fund company X will talk to me about their products and I'll "co market" them to my FAs. This is kind of a hybrid role as I'm not the fund wholesaler (typically Assst Mgrs have their own dedicated wholesalers for mutual funds) but I'm also not the retailer (that's the FA).
3. I also have my own retail clients.
Yes to your Alt shop question. These are typically company wholesalers. Again, I market their stuff to my FAs.
Having a CFA is not essential in the retail wholesaling space. Most don't, some do. If you clientele is more sophisticated, it becomes important more from an optics standpoint. If my client is a trust company and I'm speaking to their CIO, he probably has a CFA and I'll have more credibility if I have one (I don't). I used to joke that I could teach all the courses but never sat for the exam (which is true - knowledge goes a long way). In the wholesaling world, you'll have a wide spectrum of sophistication within your book. Very low to very high. You need to be able to work with all.
Will also add that the insurance wholesaling is generally very lucrative. Most companies have moved their distribution to independent (think AIG, Lincoln Financial, Allianz, TransAmerica, etc.) So if an agent wants to write a policy with them, they have to go through a wholesaler like me. I know many of these guys (well over 100). Some are lean shops who rep for a carrier or two. Others are national brokers with large support staff and write hundreds of millions of premium dollars across 50+ carriers. Both types do very well. The lean shop looks and acts more like a typical Fund wholesaler. They have a primary company and a few others to fill out opportunities. That's me. Very common for these shops to earn 500k to a few mil. The large national brokers bring in many millions of revenue, but they also have 50-100 employees to fund. The principal of those shops is typically making between 5M-10M.
The last company I "closely alligned" with had 50 of us. We were their wholesalers but were 1099s and were allowed to rep other companies. Just had to do $x production to keep our contract. Top guy did about 8M in comp, top 10 were overt a mil (that's 20% over a mil.) Top 50% were over 500k (I was in that group). Of course we all made other income with other carriers, the broker dealer branch mgmt, retail clients, etc. It's a great life and full of financial conversations (the market, macro) and both asset mgmt/ wealth mgmt. Kind of includes PB as you're always looking to address tax situations, connect with trust companies and lenders, etc.
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