ETF wholesaling vs tech sales
Current second year wholesaler at a top 10 asset manager, is tech sales a better long-term path?
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Are you internal or external? What’s your total comp?
Internal I’d say I’m on pace for around 78-80k this year probably about 6- 12 months out from a promotion, however the company I work for followed the industry trend and recently made it much more difficult to become an external and added a hybrid roles
Would promotion be to hybrid or just a higher paid internal?
I don’t think wholesaling is going away but it’s definitely changing and there will be less of them. I don’t know a lot about tech sales but I’d guess that it has more longevity just because you can always change products within tech.
I honestly can't answer your question about tech sales vs wholesaling but I do have a couple of questions and ideas.
Questions
1. Do you only focus on ETFs and is there another person who works in the same territory focused on funds, SMAs, alts? Seems like you would be competing against each other internally, and that the average advisor does not need to talk to multiple people from the same firm?
2. Do you think your comp is low? I'm in my early 30s so a bit far away from this but had a ton of friends who were internals right out of school and feel like 80-100K is market for a the first 2 years as a true internal and then jumps up to around 150-200K as you move into the hybrid role.
Ideas- You are in a great spot and I totally agree that wholesaling is a great place to begin a sales career in the financial services industry, I know a lot of people who started where you did and all of them are doing very well. Here are some general ideas on where I think you can go and where I see people with your background moving to.
1. See a lot of people move to institutional after a couple of years as a hybrid and have a direct relationship management role.
2. Move over to the sales side of Sales and Trading at a bank, there is a lot of open junior roles at both larger banks as well smaller ones. This is not exactly a growing business but it is not as bad as this site makes it out to be and could bump your comp us well above current levels. Your background at a big asset manger and your client facing experience would play very well into this role and I'm sure you can quickly pick up the basics of how things work in this business.
3. Sales at a fintech- Focus on capital markets sales roles at alternative lenders (lending club, SOFI, Figure, yieldstreet etc. there are a ton of them), they can't make loans if they can't find investors to fund them. People are looking for yield, and there is a lot of VC money in this space right now. There are also people doing some interesting things in private markets equity (Forge is one that comes to mind) in this space as well.
4. Joining a team as a junior financial advisor, your average FA is around 60 years old a lot of these guys are looking to groom someone to take over their practice if you can find the right situation you can build a very nice career. The RIA space seems to have a lot of open roles for this type of situation, or you could look for roles in the private banking division at one of the larger banks (JPM, GS, Citi, CS) all have good programs to groom you into an advisor.
5. Sales at an alternative asset manager, alts will be a growing area for all asset owners especially on the retail side.
The comp seems about right. A 'normal' internal wholesaler salary in NYC is $75-100k. A lot of places are moving them to lower COL areas though, and I imagine that means lower comp too. Going north of $100k basically means being a rockstar at internal wholesaling and commiting to it as a career. Alternately, if you have a great relationship with your external you could see a very nice christmas card from him if the two of you have a very good year. I've heard of internals getting five figure 'thank yous' out of their external's pocket on top of their standard comp/bonus, but it isn't super common.
This is all hearsay of course from some former internals who took a pay hit to move off the desk and onto the ETF team.
Super helpful response you provided me with a lot of options I hadn't considered much appreciated. In regards to comp my company drastically underpays people primary reason I'm looking to get out as the job itself I enjoy quite a bit, but checked glassdoor today looking at comp for all the other top 10 asset managers and our base was 8-10k less with average total comp averaging out to about 20k less. Also spoke with a formal external a few days ago who only made 150k total comp which is absurdly below industry standards. No wonder we've seen so much turnover. Few follow up questions though
1.When you say institutional do you mean at my current firm or elsewhere?
2. Sales in S/T at an investment bank was actually my original goal early on in undergrad but got away from it for the reasons you mentioned it still appeals to me a lot but heard the industry is basically marked for dead especially on the equity side may be wrong, if I am definitely interested. You think I'd be competitive for those type of roles.
3. Fintech areas interests me a ton I think is a very appealing option I've recently considered much more strongly any ideas on what comp would be like in this space.
4. In terms of advising maybe 5-10 years from now but doubtful just don't have the desire right now for it although this is the most common path I've seen other internals leave my firm to take.
5. Also very appealing what specific roles or firms would you recommend targeting.
I know that was a lot but greatly appreciate your input
1. Its going to be easiest to do at your firm, but if your firm is underpaying people then it might be best to leave, just start looking around for other options and see what people pay and their career track on the sales side.
2. This website makes things out to be a lot worse than they are. Its not what it was pre-crisis and it most likely never will be, but there are still good seats out there and there are a lot of people making a very nice living at the job. I have only worked on the fixed income sales side so I can't speak to the equity side. I think you would be very competitive for a junior level role on a sales desk, you have your licenses, some client facing experience, and some basic market knowledge. I'm sure your firm is a huge client for every trading desk out there, people will respect that. Just got to get your story down and get your name out there.
3. I'm not really sure what the comp looks like here, it really varies but I think you could easily get yourself a gig making more than you are now.
4. That is fair, those seats will always be there and I think you would hit the ground running faster if you had more experience.
5. Blackstone, Oaktree, KKR, Goldentree, etc. Those are just the big names, a lot of smaller places where you can make good money helping to raise assets for all sorts of alts.
I would also check out capital markets desks on the retail side at the wirehouse firms. They provide sales coverage for their internal FAs in fixed income, equities, alts, structured notes, etc. I have a couple of friends who are in this space and both do really well, also a couple of interesting start ups doing similar stuff (Halo Investing, CAIS)
You’d still recommend going the s&t route? That’s where I wanted to end up but did IB to play it safe. Would still love to end up in a markets role eventually.
For OP yes, he seems to have the right personality and background to where it would make a lot of sense for him in the short term and maybe the longer term if he ends up being good at the job. For me personally, it really comes down to 3 things
1. I work 50 hours a week, maybe 60 if you count entertainment (not doing much with COVID)
2. I don't hate my job, I like the pace and the nature of the work, I was an athlete in college and this is nice outlet for it. There is a very concrete scoreboard.
3. I make a very nice living and actually have the time to enjoy it.
I know it might not be forever but I'm pretty confident that I will be able to find something else when that time comes. No sense worrying about that now. I had zero interest in banking and would have been awful at it.
This topic is actually right in my wheelhouse. My Brother in law is in tech sales. (high end monitors) He hates it and is looking to get out. He sees a big contraction happening when WFH goes away and a lot fewer positions in the industry, along with a lot less comp overall.
I'm a lot closer to you than you think although I was never a wholesaler, and I don't think we're coworkers since we don't have a separate ETF sales force. I'm part of a very small team that acts as the ultimate technical/positioning/analytics authority for a major chunk of the ETFs at a top 5 ETF firm. ETFs are a growth industry, particularly smart beta and thematic. There's no money to be made in bulk beta. Vanguard or iShares will undercut your S&P 500 ETF by one basis point and just steal all the assets. If you design a good smart beta ETF you've basically got a quant strategy that you can wind up and run at 20-70bps and sell as a better mousetrap. For thematic you can push close to 1% and if you win what Balchunas calls the 'shiny object' lottery still gather a ton of assets with almost no effort.
Personally, I'd suggest looking to stay in ETFs, but trying to pivot towards a more technical role instead of aiming for a classic external wholesaler position.
Appreciate your response, I agree with everything you said in terms of comp the estimate you said is spot on but still underpaid compared to that I'm a top wholesaler at the company making the low end of that. When you say more technical role what roles are you talking about specifically? While I agree with everything you said I want to stay in a role that is still primarily sales could definitely take a role that's more technical then just pure wholesaling, but don't really have desire to be an analyst or anything like that. I know sales isn't everyones primary goal, but I love the competitiveness of it and am a very extroverted person so it suits me well.
If you want the best of both worlds, look up Partnerships roles at F500 tech companies. The Fintechs (Affirm, Mastercard, AMEx etc) all have this. But so too does Facebook. Know someone anecdotally, but MD equivalents doing partnerships at the larger fintechs have a ceiling of around $700k for non-c-suite but rarely work more than 50 hours a week. Seems way less stressful than traditional sales because you already inherently have something that your clients want versus shoving a random mutual fund or shitty service down clients throats.
The Caveat is you become a world-class expert on the credit card industry which may be seen as less sexy than let's say working at GS. But at the end of the day = money, lower stress >> prestige.
Thanks for the response, haven't really heard of these roles before definitely something I'll look into though. I agree probably not as sexy as some of the jobs described earlier, but if they pay well with a good lifestyle who really gives a shit I'm trying to impress anyone just get paid and enjoy life hahaha.
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