job choice, seeking advice and opinion
I am soliciting opinions on two opportunities I have that are apples and oranges in function.
1st opp is a first year external wholesaler with a top 25 fund family. The territory is tbd as well as channel (though probably independents). Higher starting salary but I have long term concerns with margin pressure and market share for active shops. Wholesaling continuous to face new challenges with ETFs and maxing out gross sales in a mature industry. I am fine with the travel and day to day.
2nd opp is as an advisor with a 1.5 billion RIA looking to expand. Not 100% on bps payout yet. They brought in over 80 mil in new AUM in 2015 with 4 advisors and need capacity for leads and referrals (very unique situation). They are also an all passive shop. Near term lower pay and inherent risk of building a book but helpfully mitigated by some of the firms current tail winds.
Thoughts?
Message me if you want more detail.
With the potential bear coming, I wouldn't worry about the future of active managers! haha
Most important question is what do you want to do? Wholesaling is pushing product, while an advisor is managing portfolios and such. Risk with wholesaling is that you're mostly dependent on the market and the performance of the funds. On top of that, actively managed mutual funds are a thing of the past and there's soon to be a huge exodus out of them. Risk with the advisor role is successfully building out a book, having the harder job of managing portfolios, and constant challenges to the payout structure by clients.
Go with the role where you have responsibilities you want. Wholesaling is fairly different from being an advisor.
I've had experience doing both for better and worse and could see myself doing either, b2b sales and end client managment. The RIA gig I wouldn't be managing assets, a dedicated PM would make the model calls I'd be managing relationships and hunting assets (no pressure on hawking annuities). Your comment on active managment headwinds is my biggest point of concern in the long run. The fund family does have scale and depth and would potentially have the ability to weather the contraction in active shops but there will still be margin pressure and a long term challenges.
I think the RIA would offer a chance to expand on other intellectual persuits and offer long term equity and recurring revenue, but the near term external wage is alluring even with challenges in active managment.
wrg
The two positions you're describing are both sales roles. You need to decide if you want to sell B2C (the RIA role) or B2B (the wholesaler role).
As one of the posters above described, external wholesaling is extremely competitive. The best wholesalers are very, very well compensated. Wholesalers deal with a more sophisticated, higher touch client base, which can create a lot of stress. Also, there is a lot of luck involved. If your firm's products underperform significantly over time your sales skills won't matter. Client flows will be poor or negative and eventually you WILL be blamed. I have seen many external wholesalers fired in this exact scenario. Of course, at the right firm and right time you can hit the jackpot.
The RIA position is what it is. You're selling to higher net worth individuals. While some are sophisticated, many are just looking for somebody they can trust and get along with to manage their money. It's a numbers game and your sales ability is the main driver. Once you build a book this is a relatively stable business. The rewards are lower though.
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