Comments (8)

Jul 10, 2017

depends on the size of the business. check out my topic history, I did a bunch of stuff on PWM a few years back.

round numbers: if you charge 1%, multiply that x AUM, then multiply that by 40-50% (typical margins)

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Jul 12, 2017

Thanks for the reply, yes I've read all your PWM articles, great job!
Do you know from what those margins depend from?

Jul 12, 2017

depends on the firm, how much revenue you do, how experienced you are, and so on.

example: someone at a wirehouse who has 30y experience and does $4mm in annual revenue gets higher payout (margin), say 50% than someone who'd 5y in the business doing $200k in revenue, who might get 35%.

independent firms usually have gross margins in the neighborhood of 80-95% but when you account for staff expenses and so forth, it ends up being comparable to wirehouse advisors.

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Jul 14, 2017

thanks for the quick reply, I've heard independent firms usually offers higher margin, but didn't know about the staff expenses

Talking about margins, for someone who's 5y in the business for instance, what would be the base comp if payout is 35%?

Jul 14, 2017

comp = revenue x margin

that ought to answer the question, lemme know if I've misunderstood

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Jul 17, 2017

pardon my english, maybe I didn't express myself correctly.

I was trying to understand what would be the base salary of an employee if he's bonus is equal to 35% of payout

Jul 17, 2017

no base salary, your compensation is a direct result of the revenue you bring in. it's 100% tied to that. you eat what you kill. capiche?

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Jul 18, 2017
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