AMA: Internal Wholesaler at a Mutual Fund

krazyk's picture
Rank: Senior Baboon | 220

I work at a large MF in the Northeast as an internal wholesaler. For those of you who don't know what that is, it's basically inside sales. I make outbound dials to financial advisors to sell them our mutual funds among other things. I have over 4 years of work experience and am going for Level II of the CFA Program. Because I tend to read AMAs the most on here, I'm paying it forward with one of my own. Ask away.

Comments (105)

Jan 25, 2015

What is pay like and how is it structured? What's the difference between external and internal wholesale.

Jan 26, 2015
BEAST MODE TRADER:

What is pay like and how is it structured? What's the difference between external and internal wholesale.

The average pay is between $70-90k in total comp for an internal who works at a MF. It's usually higher for those working at REIT shops that are the "flavor of the day" - can be anywhere from $80-120k.

Base is around $40-50k with the rest of the comp being commission paid monthly.

An internal works at the home office supporting an external who works out in the field - aka the external lives in the territory they cover. The disparity in pay is enormous. Our top external wholesalers cleared north of $1 million in 2014. Average external wholesaler pay is around $400-600k.

Jan 25, 2015

What do you like and dislike about your job? What kind of kid would you recommend pursue this job?

Jan 26, 2015
DickFuld:

What do you like and dislike about your job? What kind of kid would you recommend pursue this job?

I enjoy the hours of the job, to be honest. It's a straight 9-5 with one hour of lunch, and absolutely no pressure to do overtime unless you need to get things done for your territory. There is a lot of leeway in how you organize your day as long as you hit your metrics. The pressure in hitting your sales goal really falls on your external wholesaler's shoulder - he's the one who will get canned if the territory does not bring in revenue.

I think outgoing people and those who played sports competitively in high school or college will succeed. It translates well into sales. Now we don't look for straight-up jocks who can't pass their Series 7, but those with intelligence and self-motivation. This isn't a bad way to make a living for someone who's fresh out of college.

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  • Anonymous Monkey
  •  Apr 30, 2016

As an internal at a MF company based in the midwest, I will tell you this - while you can do an average job working 9 to 5, it's really important to cater your hours to coincide with the territory you support. My company has outreach to the entire country - across all time zones. Too often, I see internals come in to work their 9 to 5 based on their own clock. If their territory is on the east coast, they really should be in by 7 - to make sure that they can get the started with their east coast customers. On the other side, the west coast internals should plan on staying until at least 7.

    • 1
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Jan 26, 2015

If you don't mind getting more granular, how exactly does the commission payout work? Is it a lot harder to become an external wholesaler? Interested because I graduated in the northeast and one of the few things that were recruited for on our campus (no finance career fair senior year) was internal wholesale at Putnam. I didn't really want anything to do with mutual funds and work on a trading floor now but jw more about what I decided not to pursue.

Jan 26, 2015
BEAST MODE TRADER:

If you don't mind getting more granular, how exactly does the commission payout work? Is it a lot harder to become an external wholesaler? Interested because I graduated in the northeast and one of the few things that were recruited for on our campus (no finance career fair senior year) was internal wholesale at Putnam. I didn't really want anything to do with mutual funds and work on a trading floor now but jw more about what I decided not to pursue.

Commission at most MF is based on gross sales, which means you get paid basis points on all sales that come in. Rarely do you find a company paying on net sales, in which case redemptions would get backed out of the gross figure. A company doing this would find it hard to keep talent in times of major redemptions (see PIMCO). The calculation of your basis points all depends on your yearly sales goal, and each company does it differently.

It's becoming harder to get an external gig. There's more competition and you find a lot of people in the industry going for their CFA, CAIA, or CIMA designations to differentiate themselves.

Jan 26, 2015

IMO, sales gets overlooked by a lot of folks interested in finance. Who would have thought that you could make more than your average HF analyst by wining and dining financial advisors?

Jan 26, 2015

How many externals/territories are there? Is there quite a bit of travel involved for them in order to get in front of advisors?

Jan 26, 2015
baseball22:

How many externals/territories are there? Is there quite a bit of travel involved for them in order to get in front of advisors?

For big MF companies, it's normal to see over 50 externals. Travel is extensive - you're on the road everyday having 4-5 meetings per day. This is not door-to-door selling a la yesteryear - there is already a well-developed pipeline of producers and prospects that you meet.

Jan 26, 2015

First, thanks for doing this. Second, is it possible to go straight to an external wholesaler role or is it typically internal and the transition to external? Is sales experience necessary or just desired? I'm an FI analyst but given where I live I would have to go the external wholesaler route. Thx in advance.

Jan 26, 2015
joey joe joe shabadoo:

First, thanks for doing this. Second, is it possible to go straight to an external wholesaler role or is it typically internal and the transition to external? Is sales experience necessary or just desired? I'm an FI analyst but given where I live I would have to go the external wholesaler route. Thx in advance.

You almost always go from internal to external. Unless you are very well-connected, it's rare to see someone go straight to an external gig. Sales experience isn't necessary, however they will ask you in the interview why you want to do sales, and you must have a good answer.

It helps tremendously if you are already licensed with the Series 7 and 63 when you apply.

Jan 26, 2015

externals get paid more than I expected, though I'm assuming that's more commission based.

what's the douchiest thing a broker's ever done/said? either to you, your external, or some other story.

also, describe any differences with working with wirehouses versus indy shops/RIAs, I'm curious about that.

Jan 26, 2015
thebrofessor:

externals get paid more than I expected, though I'm assuming that's more commission based.

what's the douchiest thing a broker's ever done/said? either to you, your external, or some other story.

also, describe any differences with working with wirehouses versus indy shops/RIAs, I'm curious about that.

Probably not the douchiest thing, but it's funny whenever I man a booth at an investment conference and advisors who have no intention of doing business with us, come to our booth to make chit chat with the sole intention of grabbing one of our trinkets. Then they scurry away as if they never spoke to you.

I did hear one story of an advisor who did less than $1mm of sales (which is nothing) demand tickets to the Super Bowl because he was a whale and could do millions more. Yeah right. Needless to say, he didn't get his tickets.

Big difference between indy and wirehouses. Independents tend to be smaller producers and thus, have more time to talk over the phone. It's not uncommon for me to have 20-minute conversations. Wirehouse guys are much tougher to get over the phone, and when they do answer, it's a "What are you selling and what's so good about it in 30 seconds or less?". Consequentially, burnout is faster for wholesalers who cover wirehouse firms.

Jan 26, 2015

yeah there are maybe 3 managers we could ask for something like that from, but even then, super bowl tix aren't exactly easy to come by.

if you don't mind sharing, what's your territory? I wonder if we've spoken before...

Jan 26, 2015

As a side note, the financial advisory model is rapidly evolving. A lot of the independent advisors are starting to look more like RIAs - offices with a few partners, an investment committee, 1-2 analysts, and an operations team. For those guys who cannot get a job as a Research Analyst, it may be worth it to apply to these types of offices as the competition is much less.

Jan 26, 2015

What is the external wholesaler's job like on a day-to-day basis? It always seemed to be extremely cushy from an outsiders perspective who didn't really know much about it. Was the job changed much in the fallout from the financial crisis? I was always confused for example by why an insurance company would have one wholesaler for fixed annuities and one wholesaler for variable annuities

Jan 26, 2015
Pio nono:

What is the external wholesaler's job like on a day-to-day basis? It always seemed to be extremely cushy from an outsiders perspective who didn't really know much about it. Was the job changed much in the fallout from the financial crisis? I was always confused for example by why an insurance company would have one wholesaler for fixed annuities and one wholesaler for variable annuities

Annuities have, by and large, become an almost extinct business for all but the select few (Jackson National). Credit that to low interest rates.

A typical external wholesaler's day looks like this:

7:00 am: Wake up, eat breakfast, check agenda for the day, put on a suit and tie (not Jos A Banks, for the money you're making you can afford a custom suit from Brooks Brothers)
8:00 am: Drive to your first meeting of the day, fighting through rush hour traffic
9:00 am: Get to the meeting at a local breakfast place, sit down with one of your best advisors, has $10 million with your firm, consistently drops tickets, shoot the breeze and talk about which new funds he should be looking, review performance of any existing positions
10:00 am: Leave meeting, have thirty minutes before next appointment, fiddle around with Gmail calendar
10:30 am: Meet with a prospect, finds out he does biz with XYZ fund company, has $80mm AUM, is looking for a good multisector bond fund, sell him ours, he hints that he can start doing business if you support his next client event, he's asking for $1000, you mull it over and agree to follow up next week
11:30 am: End meeting, drive over to a steak house for lunch meeting at noon
12:00 pm: Sit down for lunch with a group of advisors who come from the same office, they do some biz with your firm but can do considerably more, this is the meeting where you develop rapport and if they really like you or your funds, can start driving significant sales
1:30 pm: End lunch, rush out of the steakhouse to make a client appreciation event one of your advisors is hosting at a country club
2:00 pm: Get to the venue, schmooze with the advisor and hand out trinkets (firm-branded water bottles, pens, etc.), have a thirty minute talking spot, you go over market outlook and mingle with everyone over hors d'ouevres afterward
3:30 pm: Leave the country club and make the drive back home to your wife and two young kids
4:30 pm: Get home, enter in meeting details onto your laptop, game plan for tomorrow's agenda, look over emails, and have a chat with your internal about the day

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Jan 26, 2015

you forgot

7pm-?am: steak dinner followed by bars & strip joints with brokers

or was I supposed to not mention that

Mar 18, 2016

1

Jan 26, 2015

Are certain MFs known to be great spots for either internal or external wholesalers? Or is it fairly homogeneous across the board?

Jan 26, 2015
BankSouth32:

Are certain MFs known to be great spots for either internal or external wholesalers? Or is it fairly homogeneous across the board?

Not all MF companies are created equal. It all boils down to if your firm has a wide product offering and if performance is good. You can have the best relationship with a financial advisor, but if your fund has 2-3 straight years of underperformance, he will start looking elsewhere even if he doesn't want to. He has a duty to his clients as well.

Right now, BlackRock and Goldman Sachs are top places to be a wholesaler. They're crushing it. On the other end, firms like Virtus, Pioneer, Fidelity, etc. are bleeding assets, I believe. Fund flow data is important to look at before deciding where to work. You don't want to jump on a sinking ship.

Jan 26, 2015

Thanks for doing this, nice to see a profession we don't normally see on here.

What's your plan going forward? Do you want to try to make the move to external? What's the career progression like for an internal?

Jan 26, 2015
Cruncharoo:

Thanks for doing this, nice to see a profession we don't normally see on here.

What's your plan going forward? Do you want to try to make the move to external? What's the career progression like for an internal?

Depending on the firm, internals have a number of places they can go. The most popular, and obvious, choice is to get promoted to the outside. Other areas are product management, institutional sales, and national accounts.

My goal is to continue on the CFA track and eventually break into an entry-level research position on a portfolio management team. This is rare, but I know what I want to do and will keep networking within the company. Being an internal provides good exposure to portfolio managers (since they present at sales meetings), so we'll see where my efforts take me.

Jan 27, 2015

can a full-time MBA student recruit into External? What is the strategy or approach?

Jan 27, 2015
Jake-S:

can a full-time MBA student recruit into External? What is the strategy or approach?

Unless you have previous experience in outside sales, I wouldn't count on it. In this line of work, there is more value in getting experience as an internal wholesaler than a full-time MBA.

An MBA likely won't teach you sales skills, public speaking, organizing and attacking a sales territory, blocking out 2-3 months worth of meetings, etc.

However, that being said, an MBA definitely will not hurt you. When an internal is considered for a promotion, an MBA will always be looked upon favorably.

Jan 27, 2015

can a full-time MBA student recruit into External? What is the strategy or approach?

Jan 27, 2015

I know some guys who left being Financial Advisors for a wholesaler because it was so much easier and the pay was way better. This has definitely been an option in the back of my mind as it very common for guys to leave where I currently work for this.

Jan 27, 2015
Banquero:

I know some guys who left being Financial Advisors for a wholesaler because it was so much easier and the pay was way better. This has definitely been an option in the back of my mind as it very common for guys to leave where I currently work for this.

Correct. It's very common for younger people who just couldn't cut it in a financial advisor training program (Morgan Stanley, Edward Jones, Merrill Lynch, etc.) to jump over to being an internal wholesaler.

You go from working 8am-8pm to country club hours and better pay. It's a no-brainer. Unless your father runs a $200mm practice, 99% of folks who go into a financial advisor program don't make it.

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Jan 27, 2015

Definitely sounds more appealing, if you could rank the top 5 or top 10 wholesalers to work for who would you list?

Jan 27, 2015

Do you think the role/importance of the wholesaler will change over the next few years? How's the job security?

Next stop: Flavortown!

Jan 27, 2015

My two cents here: with many Advisors moving to fee based models (from commission) as well as the growth of discretionary programs (e.g. Rep as PM) the role of the wholeseller is going to be less about schmooze are more of a technical sales role in the future.

Jan 27, 2015
jdubh5401:

Do you think the role/importance of the wholesaler will change over the next few years? How's the job security?

The roles of both external and internal wholesalers are constantly evolving. We were much more important pre-dot com boom, when financial advisors had no way of getting fund information without meeting with a wholesaler. Now, mutual funds have been commoditized and information is freely available online - there isn't really anything that separates one fund from another besides performance.

There is more emphasis on wholesalers to cultivate relationships and provide value-added to their clients. Along with selling, we'll help advisors with business-building ideas, client events, and portfolio analysis.

As with any job in the financial industry, it's only as secure as the economy we're in. If markets crash, then expect headcount reduction as firms try to consolidate territories and reduce expenses. Right now, it couldn't be a better time to be wholesaling - investors are confident after having 5 years of a bull market.

Oct 4, 2016

My apologies if something similar has been asked to you previously but I was curious to the difficulty of transitioning into this position. Becoming an internal wholesaler interests me a lot and I have done well in my two years of experiences in a financial sales/customer relations position.

Jan 27, 2015

In your original post you said that you have four years of work experience. Have you been in the internal wholesaler role that entire time? What is the career progression like for the role and transitioning?

Jan 27, 2015
BankSouth32:

In your original post you said that you have four years of work experience. Have you been in the internal wholesaler role that entire time? What is the career progression like for the role and transitioning?

I originally didn't start out as an internal wholesaler. I got licensed elsewhere with my Series 7 and 63 in a more client-service role. I've been an internal for just shy of four years, and at this point, I'm ready to make a move.

The career progression is fairly simple. You internal wholesale for 2-4 years. It takes at least one full year to learn all the ins and outs of your territory, develop relationships with advisors, and most importantly work well with your external wholesaler.

In your second and third years, running the territory becomes much easier and you become a leader on the sales team. If you consistently hit your metrics and stand out to senior management, you'll be considered for an external spot when they become available.

If you do all of the right things, you can be making $200k all-in in your first external gig by the time you are in your mid to late 20s.

Jan 27, 2015

I am a research analyst at an RIA in the northeast, and am a primary point of contact for internal and external wholesalers. My firm uses a relatively small number of mutual funds and it takes a while before we decide to commit assets to a fund.

Thus we won't end up using funds from the majority of the wholesalers who I talk to. I try to walk a fine line and let them give their pitch and not be a dick, but then again I don't want to lead them on if we have no intention of using their funds in the near-term. What are your thoughts on this and what is the best way to respond if it is not going to be a fit?

Jan 27, 2015
whitecollarandsuspenders:

I am a research analyst at an RIA in the northeast, and am a primary point of contact for internal and external wholesalers. My firm uses a relatively small number of mutual funds and it takes a while before we decide to commit assets to a fund.

Thus we won't end up using funds from the majority of the wholesalers who I talk to. I try to walk a fine line and let them give their pitch and not be a dick, but then again I don't want to lead them on if we have no intention of using their funds in the near-term. What are your thoughts on this and what is the best way to respond if it is not going to be a fit?

The way your RIA does business is quite common. All that wholesalers expect is an opportunity to come in and give their pitch. If the advisor feels that it's not the right time, or not the right fund, then the least they can do is politely tell their wholesaler as much. That way there is minimal time wasted for the wholesaler, and he can move on while at least keeping you in mind later down the road.

The worst thing an advisor can do is lead a wholesaler on by first asking for support, then not committing the business the wholesaler expects. So in a sense, there is some honor involved in this industry.

  • Anonymous Monkey
  •  Apr 30, 2016

As an internal for a boutiquey MF shop in the Midwest, I will tell you that I would rather hear you tell me the truth, as opposed to leading me on. That said, it's never bad practice to run through your story with a potential client - to work on your delivery. So, go ahead, ask any question you want when an internal calls you to pitch something. We don't mind the conversation and enjoy the fact that someone is actually asking us questions, versus telling their assistant to let the guy know that "they're out of the office or tied up in a meeting right now ---- send him an email".
Bottom line - even if you don't buy from us, you're helping us improve our craft, and giving us something to record from an activity standpoint - to drive our metrics. Our boss, and our external partner really just want to know if we're advancing the conversation with potential clients. In the end, while it's our job to sell/consult, it's just as big a part to find out who is NOT going to do business with us - to save the externals the hassle of wasting their time with a piker. That said, doing the same with an external is BS. If they're wasting their time with people who have no intention of buying, the opportunity cost is much higher.

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Jan 27, 2015

Once you make it as an external wholesaler, most people end up staying there. The pay and lifestyle are great. However, some folks have managerial ambitions and can move onto becoming a National Sales Manager, which means managing a group of externals. You'll be making $500k or above easily.

Jan 27, 2015

Can you transition directly into a DCIO role if you have been working as a senior analyst for an institutional manager or do you still start in the internal side working with RIA's? Given our size, $40bn, I usually have 2 - 3 meetings a week with DC guys and then a few with PM's every month. So, I have a strong understanding of how I want to be sold something and the selling is more technical, at least on my end.

Thanks.

Jan 27, 2015
ThorsteinVeblen:

Can you transition directly into a DCIO role if you have been working as a senior analyst for an institutional manager or do you still start in the internal side working with RIA's? Given our size, $40bn, I usually have 2 - 3 meetings a week with DC guys and then a few with PM's every month. So, I have a strong understanding of how I want to be sold something and the selling is more technical, at least on my end.

Thanks.

Good question. DCIO roles are not different, they still have internal and external positions, however they qualify as institutional sales, not retail sales (higher level of prestige and better pay). For someone like you, I'd imagine starting out as an internal DCIO specialist and working your way up to an external gig.

With your background, I can't imagine you not getting interviews for an internal DCIO role.

Jan 27, 2015

How many regions are there/how are they broken up? I'm assuming that the New York market has more wholesalers than the North Dakota market

Next stop: Flavortown!

Jan 28, 2015
jdubh5401:

How many regions are there/how are they broken up? I'm assuming that the New York market has more wholesalers than the North Dakota market

I cannot imagine North Dakota having more than one wholesaler - for any firm. Big funds like BlackRock will have at least 50 wholesalers. Small funds and asset managers can have as few as 10. The breakup is very, very specific to the company, so it can differ widely from one fund to the next.

Densely populated regions such as the Bay Area (San Fran, Silicon Valley) can have 2-3 wholesalers without any overlap.

Jan 6, 2017

I work for a top 20 active MF shop. We have over 100 External Wholesalers. We've got a Manhattan guy for each wirehouse. The 'Dakotas guy' also covers 2/3 of Montana. It's all about where the assets are.

Jan 27, 2015

@krazyk

I'm in PWM, at my office we get the lunch meeting pitches from wholesalers a few times a week usually, mostly about annuities.

You said you got your 7/63 somewhere else, so I take it that means you transitioned from retail/PWM into wholesale? I totally get the hours and all as far as reasons why, if that's it then that's it, any other color you could add would be great.

Also, how does the comp work, is it rigid production based targets or do you get bps on the fund fees in your territory?

How hard is it to change over from PWM? I imagine that's probably the most common path to wholesale?

Jan 28, 2015
kj5159:

@krazyk

I'm in PWM, at my office we get the lunch meeting pitches from wholesalers a few times a week usually, mostly about annuities.

You said you got your 7/63 somewhere else, so I take it that means you transitioned from retail/PWM into wholesale? I totally get the hours and all as far as reasons why, if that's it then that's it, any other color you could add would be great.

Also, how does the comp work, is it rigid production based targets or do you get bps on the fund fees in your territory?

How hard is it to change over from PWM? I imagine that's probably the most common path to wholesale?

As an internal, you're not just dialing away selling funds all day. There is a big misconception about that. I would say 60% of your time is over the phone, and the other 40% is divvied up running investment reports (Morningstar, Zephyr), reading up on capital markets, sorting through territory data on Excel, speaking with your external wholesaler, meetings with product managers, etc.

So in that sense, we have more responsibilities than people outside the industry imagine, and it makes the job quite fulfilling. The only thing that would make it better is for pay to be more in line with externals.

Comp is split between salary, commission, and bonus. Commission is determined by how many basis points you get paid on every $ that comes into your fund. Each fund company calculates this number differently, and it can become very convoluted. Let's just say that if your territory goal is $100 million for the calendar year, and you bring in $80 million, you will make 20% less than your targeted annual commission.

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Jan 15, 2017

People actually still use Zephyr? I use to be with the company that made Zephyr and that product was dying hard.

Jan 28, 2015

Thanks for doing this, +1. Would you mind breaking down an internal's average day? For MF companies that offer ETFs, do those get wholesaled as well i.e. BlackRock iShares funds? If so, I imagine Vanguard has to be up there as top companies along with the one's you listed?

Jan 28, 2015

Appreciate the feedback man, +1. I'm looking to move into a more sales-oriented role so this is definitely helping me narrow down my options. One more thing, do you see a lot of wholesalers with the CFA designation? I wasn't sure how common/necessary that is for this role.

Next stop: Flavortown!

Jan 28, 2015
jdubh5401:

Appreciate the feedback man, +1. I'm looking to move into a more sales-oriented role so this is definitely helping me narrow down my options. One more thing, do you see a lot of wholesalers with the CFA designation? I wasn't sure how common/necessary that is for this role.

It's rare to see a wholesaler with the CFA charter. It's not necessary to become a wholesaler, but the industry is changing such that having one gives you a huge boost in credibility. CFA is highly regarded in Institutional Sales.

Jan 31, 2015

@krazyk

Who sets up all the meetings? Is it you/your team dialing for dollars calling up offices or how does that work?

Oct 12, 2016

Depending on your external wholesaler, he/she (yes, there are women in this field and they are very good at what they do) will either rely on you to get them a good chunk of their meetings, or have you work in conjunction with a scheduling assistant that they pay out of their own pocket for. For example, the wholesaler will try to get meetings with his/her established relationships ("A" producers) and let you work on the "B" and "C" producers. It is not easy to get 1000 meetings a year - that is a huge amount of volume and will likely decrease as the industry continues to evolve.

Feb 21, 2015

I'm a college senior graduating in 3 months with a finance degree and a pretty strong resume and hope to begin work in October (ideally). Becoming an internal wholesaler looks like an extremely attractive option as I'm looking for a sales position within finance.

With a few months to myself after May, what can someone like me do to better prepare for the job as an internal wholesaler at a mutual fund?

Outside of school, some of the activities I'm involved with include: working at my school's call center cold-calling alumni 10 hours a week for donations, & belong/actively participate in toastmasters international on a weekly basis

(what skills can I try to hone in, and how can I...that will set me up for success as an internal wholesaler?)

Apr 15, 2015
MileHighMoney:

I'm a college senior graduating in 3 months with a finance degree and a pretty strong resume and hope to begin work in October (ideally). Becoming an internal wholesaler looks like an extremely attractive option as I'm looking for a sales position within finance.

With a few months to myself after May, what can someone like me do to better prepare for the job as an internal wholesaler at a mutual fund?

Outside of school, some of the activities I'm involved with include: working at my school's call center cold-calling alumni 10 hours a week for donations, & belong/actively participate in toastmasters international on a weekly basis

(what skills can I try to hone in, and how can I...that will set me up for success as an internal wholesaler?)

Learn how to present. Watch YouTube videos of Steve Jobs, Bill Clinton, etc to see what they do so well. Every MF firm will want excellent presenters.

Secondly, go to the website of the MF you'll be working for and study the fact sheets of their top funds. Know its competitors and what makes your firms' product different.

Knowing how to present (at the end of the day, selling yourself/your product) and knowing your funds inside-out is going to put you at a huge advantage.

Mar 15, 2015

I'm a external myself, not for funds but K plans which obviously contain the funds. Wholesaling is a great gig if you're a people person. It sounds cushy but you will work your butt off. I work very closely with the retail and DCIO guys, pay is very good for all of us across the board. Dont plan on going right to an external role, you have to cut your teeth as an internal. On average I work 50-60 hours a week, but I enjoy my job so it's not bad. I'm home almost every night (dense territory unlike the guys who cover multiple states) and make great money, but it can be stressful if you have a series of slow months and you are not hitting your numbers. Also, I have an education degree, wholesaling doesn't put a big emphasis on what school or degree you have, they want personable people who can present well, will works their butts off and are competitive.

Apr 25, 2015

I think the fact that you have an education degree is very interesting. I have a finance degree myself but I'm guessing that the most important aspect of the internal/external role is being able to sell and being able to handle the financial information.

As I look for the optimal internal wholesaling job I keep seeing under the job requirements section of a job posting that they constantly require "1-3 years of financial sales experience". If you're an external and were previously an internal I assume, how did you get the job? Did you have previous financial sales experience? Or a series 6, 63 & 7?

Jul 10, 2015

Hey guys sorry for being MIA but I started with a new company just a few days prior to my lasts posts so I've been concentrating on my territory and job.

To answer a few questions...
1) you don't necessarily need financial experience. I had a year and a half customer support for a fund company and then a recruiter found me for an inside gig. I've seen other guys come from all different backgrounds.
2) it's sales, every company has different metrics...you eat what you kill
3) you are not going to find a higher base. It's a starting position, you have to work your way up just like everywhere else in this industry. Starting comps are all similar regardless of what you are selling.
4) I wouldn't really say there are easier things to sell over other, they all have their challenges. in my role we are not looking for guys to drop tickets. I'm punching holes in competitors and keeping up with DOL regulations in order to win business.

If you are not a Type A personality, aggressive, goal oriented and can't handle rejection this is NOT the job for you.

Mar 16, 2015

What's the best route for someone to become an internal wholesaler? I hold an MBA with sales experience, but not related to finance. Essentially I am trying to break into the industry, but I'm finding it difficult without a Series 7. What positions should I aim for that will sponsor me to attain my Series 7? I am not opposed to entry level positions.

Mar 20, 2015

Most places will sponsor you for your 7 when becoming an IW. Check job boards or just hit all the career sections of many of the fund company websites.

May 6, 2015

I'm making the transition into sales, I'm expecting a few offers at different firms for internal wholesaler positions. What would you look for to pick the best (or the easiest to sell)? They all have similar base with target comps. Also, you mentioned 70-90k, is that comp possible in first year? I'm looking to replace about 80k salary.

Oct 12, 2016

Go with a firm that has a strong reputation in the industry and a broad fund lineup. I cannot stress enough that you do not want to be associated with a firm that has had bad press in recent years (think Virtus/F-Squared) or a shop with just 1-2 products - when they have a performance slump you'll go from selling to defending.

So to clarify total comp, it'll be $40-50k base salary, $20-35k commission, and $0-20,000 bonus (which is driven by company-specific metrics and usually paid quarterly). Can be as low as $60,000 up to $100,000+ if you are in a great territory and hit your bonus targets.

May 20, 2015

@krazyk Do you have daily/weekly/monthly call metrics that you need to hit? Is your bonus based on tangibles such as total activity (calls/emails/meetings)?

Oct 12, 2016

I realize that I'm responding to questions from over a year ago - I had a baby around that time and was basically MIA - my apologies.

To answer your question, fund shops have metrics that you need to hit to keep your job. They tend to be in the range of 50-60 outbound calls per day and 10-12 conversations per day (of those 50-60 attempts, not on top of). So if you average around those minimums for the month, you should be good, but to get the quarterly bonus, you'll have to exceed those mins by a fairly large margin.

As you can guess, that encourages a lot of "gaming" within the internal sales desk.

May 21, 2015

First off, This has been an amazing thread to read and very helpful. Thank you!!

I currently work in performance measurement / analytics for a large Firm and am progressing through the CFA. I'm increasingly considering transitioning from a BO/MO analytics role to a sales role, however I'm now ~5 yrs into my career. Would transitioning to internal be easy from performance measurement? is there another sales role with higher starting base that I could pursue given my background ?

Your insight is greatly appreciated.

Oct 12, 2016

Ah, I would tell you to re-evaluate your reasons for wanting to go into sales and whether you would be a fit for such a role. If you still want to go into sales after some thought, there is no better way to break in than by being an internal wholesaler at an asset manager.

To get a sales role with a higher starting base would be tough. The comp in this line of work is very back-end heavy, i.e. a bulk of it comes from commission/bonus and the salary is there just to keep you afloat.

If you're in performance measurement and on the CFA track, the logical transition in my mind would be to try to get into a Portfolio Specialist/Client PM role, albeit at a junior level.

Jun 2, 2015

Bump

"Change is inevitable, growth is optional." - Winston Churchill.

Nov 9, 2015

Bump, any more insight on interviewing for this position?

Mar 18, 2016

2

Oct 12, 2016

Be able to answer these questions flawlessly, as they come up in almost every sales interview:

  1. So tell me about yourself?
  2. Why do you want to work in this industry?
  3. Why sales?
  4. Why do you think you'd make a good salesperson? Give me an example.

Ultimately, it is about fit. They may throw in a technical question but it'll be easy if you pay any attention to the markets. For example, "What's the 10 yr Treasury trading at currently?"

Dec 2, 2015

The 2 factors that drive sales are fund performance and brand recognition. The best salesman in the world can't sell a dogshit mutual fund that has bad long-term performance. With this is in mind, being at the right firm at the right time is the key to wholesaling. Imagine working for a large shop with great brand recognition, coupled with having several funds that rank well against their peers. You're riding on the gravy train because good mutual funds virtually sell themselves.

As far as hours go, most external wholesalers only work Monday-Thursday. Friday is typically an office day or dedicated to golf. In a typical day, a wholesaler will have a breakfast meeting, a mid-morning meeting, lunch meeting and then an afternoon meeting or happy hour. The "wining & dining" culture is eroding as regulatory pressure is increasing. Before the crisis, wholesalers literally had a blank check when it came to entertaining clients. Those days are over.

The only major downsides of wholesaling is the constant travel and pressure to meet sales goals. Being on the road 4 days a week isn't for everyone and believe me, it gets old after a while. In terms of sales goals, each wholesaler recieves a new target each year that is dependent upon the size of the territory and previous year's sales. If you don't meet goal, your commission is reduced. If the problem persists, you are fired.

At a decent firm, you can expect to make $250k-$1mm+.

    • 1
Dec 2, 2015

I'll add to the above that fees are becoming more and more of a criterion when choosing funds.

The MF complex is commoditized - nothing separates American Funds, MFS, Franklin Templeton, PIMCO, etc. from one another. Performance and low fees speak volumes.

Dec 2, 2015

I agree 100%, fees are one of first things that investors look at. 401k plans and pensions have become VERY fee conscious, almost to the fact where low fees>performance.

Feb 23, 2016
krazyk:

I'll add to the above that fees are becoming more and more of a criterion when choosing funds.

The MF complex is commoditized - nothing separates American Funds, MFS, Franklin Templeton, PIMCO, etc. from one another. Performance and low fees speak volumes.

That is correct, and hence why the importance of relationships that you build for your book of business.

Great post all in all, I worked also for as an external and now I'm on the institutional side.

Feb 26, 2016

Anyone know someone/have heard of what IW is like at Lord Abbett?

Mar 24, 2016

bump looking to hear what people have to say about the above posters question, looking at a position at Lord abbett

Apr 2, 2016

Lord Abbett would be great, it's a household name which helps tremendously. I'm at a 30B shop in socal as an internal we make about 100-120k but externals 300-800k...cap is at 3M for them but doubt that will be attainable anytime soon. Nobody has mentioned Hybrid wholesalers yet- an "in between" role where you spend 1 week at the home office doing the internal work, sales calls follow ups getting meetings...then go in the field for 1 week and drive sales in person. Normally smaller budget, say 50k, and 150-200k comp but great to cut your teeth and be sure its what you want to end up doing. Only a few shops have hybrids though, maybe ~20% of them. In my opinion, one of the best kept secrets in finance is external wholesaling. Plenty of people look down on wholesalers for being essentially cheerleaders for fund families but if you can grin and bear it then smile, go home, and collect your half mil a year. It is very competitive though to go external, you need to be a true people person. Almost on the level of an actor or politician, which can be very annoying at times. Swallow your pride a lot, travel a TON. Anyways, its great if it matches your personality! Go for it if you have the opportunity and if external isn't your thing you'll have other opps after a year or two. Cheers

    • 1
Apr 18, 2016

Appreciate you taking the time for questions, I hope you're still open to answering some. Im about to graduate from a non target school. I have no relative work experience and I am a CFA level 1 candidate. I have no desire to go into the external wholesaler/financial advisor route, I have more interest on the research side. However, I have an offer for an internal wholesaler job at a respectable insurance company. I planned on working here just for experience to get the 48 months while I take the CFA and get my foot in the door somewhere. What are the exit opportunities like from an internal? Specifically getting into IB or finding a research job? I'm great with sales, I just have no desire to be on the advising side as a career.

Apr 18, 2016

double post - sorry

May 3, 2016

I'm also interviewing for a number of internal positions. I think it may have been answered but is External definitively the only career move if I become an Internal? I spent several years at a big name bank in Wealth Management, as a Client Service Associate. I'm getting my MBA now in Finance and Marketing. Could an Internal potentially become some sort of Product Manager or Product Marketing Specialist?

May 6, 2016

Short answer...yes.

May 9, 2016

To elaborate on MC80's answer, if you work as an internal wholesaler at a big MF company, the opportunities are limitless. Given that you hustle, work hard, and network your ass off, you can transition into Product Management, Institutional Sales, Marketing, etc. Some at my firm have even worked their into a Trader/Research Associate position on a Portfolio Manager's team.

Two biggest things you can do for yourself is get the CFA and network.

May 9, 2016

Secondly, to add on to the above, an internal wholesaler position is a great way to get your feet into the Asset Management industry. Everyone needs to start somewhere - our current CEO actually started out as an internal some 20+ years ago, and I consider him to be one of the best CEOs in our line of work because he knows the business from the ground-up.

I know several people who have started out as an internal who have gone to become Portfolio Specialists raking in a comfortable $250-350k a year, working 40 hours a week.

Personally, I find that lifestyle to be much more attractive than doing the crazy 80 hr weeks in banking for that slim shot of making Managing Director.

Sep 23, 2016

I have a question regarding travel. How much travel does and internal & external do?

Oct 12, 2016

Internals travel about 2x per year in their assigned territory, usually to tag along with their external and get some exposure to clients. In your 2nd year, you may be lucky enough to represent your company at an industry conference. Some of those are held in really nice locales. If I had a choice, I'd fight tooth and nail to go to one in Las Vegas :)

Externals are on the road all the time. >80%

Oct 6, 2016

Internal wholesalers don't travel much at all. Maybe go to a few conferences a year (those hosted by their best flowing broker/dealer clients), and once in awhile go on "tour" with the external wholesaler to meet some of the "A" clients in the territory.

External wholesalers travel constantly. If you are in a densely populated territory, like a city, you will mostly be on the road during the day, but home most nights. If you are in a rural territory (or cover a large area because you're at a smaller firm with fewer wholesalers) you could literally live in hotels Monday - Friday. It's all over the board for externals, but you will be on the road constantly, the difference being whether you sleep in your own bed or not. Externals will also attend conferences for their best broker/dealer clients, as well as have to travel for home office meetings/conferences.

    • 1
Oct 31, 2016

I have an opening interview in a few days with a firm that focus's on mutual funds, hedge funds and PE. Any guidance on what to focus on for the interview? What is best to convey to the interviewer? (I have two years of experience post grad from a state school)

Dec 30, 2016

Late on this, hope you're still somewhat available to answer. Before my question, thank you for all the insight, it has been much appreciated as a student considering this line of work.

Now for my questions. There has been a lot of discussion on external wholesalers territories/travel and then how so it impacts their lifestyle. My question is where or not externals have much say in choosing their territory? Is it straightforward and laid out when applying? Or do they have the opportunity to move after some coverage time? I'd presume the latter would be rather ineffective (from a firm standpoint), as they already would have a large network in one area and be ditching it for a more desired territory.

My second question is exit opportunities for IWs. I know external is the goal from a monetary perspective, but that comes with the road lifestyle. If you were to consider other positions (than external) what kind of timetable is the norm for someone to stay as an IW before moving up or out? You've mentioned 4 years and you're looking elsewhere, have you seen most others follow that timeline?

Thanks so much for your time. These answers have been very helpful.

Best Response
Dec 31, 2016

You don't have much say, at least when starting out. If you are an IW you pretty much take the first open external spot and a good company will try to move you where you want to go in a couple of years if a territory opens up and you are hitting your numbers. Some territories will require you to jump on an airplane regularly, others you can drive across pretty quickly, it all dependent on the area of the country your in. Typically the more dense your territory the higher you can expect your quota. That's one thing a lot of people are overlooking here, THE QUOTA. if you don't hit the company numbers, you can plan on looking for another job...it's friggin stressful. Any sales rep that hasn't had a few sleepless nights in their career is either lucky or lying.

Normal time as an IW is at least 2 years I'd say. I did it in 1.5 but it took me quitting my company and coming back to do it (long story). And ideally I would have never started or stayed at my original company as long as I did if I had to do it again.

Jan 2, 2017

Interesting. Thanks for this resource, I'll pm u OP

My finance blog: AdviceAboutFinance.com

Twitter @samleefinance

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