Wealth Management BB vs BB Sales and Trading (Regional Office)

I have offers from both these, pay is the same, interested in both, not sure if I would be good at S&T but fancy a shot at it. Was wondering peoples opinions on the choice. Also what can senior wealth managers get paid? and if I went into the investments side of the business doesnt that open my doors to Asset Management? I would also like to move to a more central office if I took the S&T offer, what are the chances of me making the switch?

 
Best Response

I work in Wealth Management at one of the main firms and can provide some insight (at least for the WM part).

Within WM the range of earnings is extreme with newer (or less successful brokers) barely making enough to survive to top producers who easily bring home a 7 figure income.Since you build your book of business and also determine how it is ran and managed; it is ultimately up to you to determine how much money you want to make. Whether you are making 200K or 2MM you are in total control and can increase your income by simply bringing in additional assets.

At the wirehouse firms like Merrill Lynch or Morgan Stanley, you are looking at an average annualized production in the 850K range which translates to about 375K cash comp. Top 20% is doing over 1MM in production and up (440K cash comp and up), top 10% is doing over 2MM ( 920K cash comp and up). There is also deferred comp, stock, etc which typically adds another 3%to 5% in total compensation. I have a friend locally who generates over 5MM in revenue per year; I have heard the top producer for our firm generated over 16MM in revenue last year but have no way to verify this figure.

The money can be good.....but let me explain something that is extremely important which might have an impact on your decision. It takes a long long time to build a book of business. Once it is built this can be a wonderful gig. I make good money, decide who I want to work with and can come and go as I please but it has taken me a long time to get to this point. The averages and ranges I mentioned above are for established brokers that have been in the business for a minimum of 10 years. You will not make anything near those numbers initially or for the first few years. I have watched countless new brokers enter and then leave this business once they realized the level of time, work and commitment necessary to succeed. That is why the failure rate for new FAs is over 90%.

 

Hi sfbroker, this is really good insight. I have a current offer from a top WM shop but not as a FA but as a Home Office Analyst. I'm not too sure exactly what the role entails but could you shine some light on that position and how it relates to investment research?

 

Thanks very much, great to get some numbers. I am a pretty determined person but the failure rate is quite high to say the least. How do you go about getting clients? I hear stories of a lot of cold calling to start with?. With regards to the investment arms, I know a lot of it is discretionary portfolio management but do you think there is a chance to transition across to asset management as many firms are grouping AM with WM these days, all the more so if you study for the CFA.

 

The failure rate is so high because most people really don't understand what the job entails during the first few years. Yes, we manage portfolios and assist with various types of financial planning but for the first few years this is definitely a sales job. Cold calling, cold walking, networking, seminars, leveraging existing contacts, etc...it doesn't really matter as long as you can get out there and bring in assets to build your business. No firm will care how you do it as long as you are successful. It sounds straight forward but very few people have the personality or mental makeup to do this well. If you can do it then after the ramp up period you will enjoy a high level of income along with a level of job security that is unheard of in other wall street careers.

I've read countless posts on WSO on how transitioning out of wealth management is impossible, etc....not true. I have seen people in my office move on to IB, S&T and also AM but I would definitely say that this isn't the norm. In all cases these people came in, worked for a few years, went back to school or worked on obtaining their CFA charter. In all cases these people came in as either analysts for an established wealth management team or worked as a junior broker that focused more on the investment side of things as opposed to the business development side. Not a common thing to happen but with enough motivation anything is possible.

 

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