What exactly stockbrokers do?
- Thread starter rafael3000
- Start date
Millydog
If you use a wirehouse your payout will be from 25-45% of the total fees generated. Fees generally go from 1% for small accounts ( less than $200,000) down to .30 % (for accounts over 2.5 million) - these #'s vary by firm. The B/D pays expenses.
The financial planning B/D's that focus on managed accounts, insurance, tax and estate planning usually pay much higer - up to 94% for very large producers, but, you bear all office, phone, and other operating expenses.
Wirehouse - Pain Webber, Merrill, Smith Barney etc.
F/P's - Linsco, Royal Alliance, and some of the insurance company B/D's.
So...... you can do the math - do not forget that your expenses will be considerable if you go the Financial planning route.
If you use a wirehouse your payout will be from 25-45% of the total fees generated. Fees generally go from 1% for small accounts ( less than $200,000) down to .30 % (for accounts over 2.5 million) - these #'s vary by firm. The B/D pays expenses.
The financial planning B/D's that focus on managed accounts, insurance, tax and estate planning usually pay much higer - up to 94% for very large producers, but, you bear all office, phone, and other operating expenses.
Wirehouse - Pain Webber, Merrill, Smith Barney etc.
F/P's - Linsco, Royal Alliance, and some of the insurance company B/D's.
So...... you can do the math - do not forget that your expenses will be considerable if you go the Financial planning route.
Wow... some of these posts are right on.
I resigned from a major firm about a month ago. There were many reasons, including absolutely NO market knowledge training providing (just sales training), cutbacks of commissions, and a conflict or 2 with management. I had been at the firm for over 4 years and built a nice book of business, but it was time to go out on my own.
I truly believe if the general investing public knew how little their brokers actually knew about the markets, they'd think twice before paying those outrageous commissions.
I resigned from a major firm about a month ago. There were many reasons, including absolutely NO market knowledge training providing (just sales training), cutbacks of commissions, and a conflict or 2 with management. I had been at the firm for over 4 years and built a nice book of business, but it was time to go out on my own.
I truly believe if the general investing public knew how little their brokers actually knew about the markets, they'd think twice before paying those outrageous commissions.
If you need $10 million to make $100k,that isn't really worth the effort to make that amount.I say learn how to trade,start a hedge fund,raise $10 million,and you can make 100k-200k just from the annual management fees,plus 20% of the profits.So if you can earn 50% a year,that's $1 million a year in incentive fees.
Also,it must be tough getting clients nowadays.There is so much free research on the internet,discount brokers,do not call lists,and who in the world really enjoys cold calling.
Also,it must be tough getting clients nowadays.There is so much free research on the internet,discount brokers,do not call lists,and who in the world really enjoys cold calling.
Yeah 10 million seems like a lot of money to have to raise just to make 100k a year, but in reality most people don't need a broker these days as you said. I wonder if you can be a broker and trade your own personall acounts at the same time. I would guess not , due to the insider information that one could possibly exploit. But if you could it would be a nice way to bring in extra cash while trading.
contrary to what etrade ads show you, most people are too busy to screw around with it. how many people have time to sit down and read and decipher a prospectus on anything?
there is a viable market for informed salespeople in any profession. so if you're going to stay in the biz, I hope you a) have a conscience and b) are a professional.
These days you probably need 20+ mil to generate 100k net/year.
firms have low payouts for low producers. And trading fees are too low to go any route but managed $ which pays a trail of .5 to 2% soooo maybe 1.25 avg/yr on 20 mil is 250k gross and if your lucky u net 40% and then you have to pay your taxes.
btw Morgan just turfed a 1000 brokers making 150k/yr or less.
It sounds like you guys are talking about that movie: Boiler Room (2000)
A reviewer of this movie writes:
As a 26 year veteran Financial Consultant with one of Wall Streets premier firms, I can attest with certitude that the illegal trading practices potrayed in this movie are highly accurate. This film should be viewed by anyone who has ever considered speculating or even investing in the market. The freaks in this movie really do exist and are more than willing to pump these overhyped "penny stocks" to an unsuspecting clientele. SEE THE MOVIE AND KISS OFF THOSE OUT OF THE BLUE "HOT STOCK" CALLS. They are mostly phonies.
A reviewer of this movie writes:
As a 26 year veteran Financial Consultant with one of Wall Streets premier firms, I can attest with certitude that the illegal trading practices potrayed in this movie are highly accurate. This film should be viewed by anyone who has ever considered speculating or even investing in the market. The freaks in this movie really do exist and are more than willing to pump these overhyped "penny stocks" to an unsuspecting clientele. SEE THE MOVIE AND KISS OFF THOSE OUT OF THE BLUE "HOT STOCK" CALLS. They are mostly phonies.