There was a time when the institutional side of a securities firm would walk with a swagger. After all, it was you, the retail financial advisor, who was stuck making presentations at a coffee table with mom-and-pops. Institutional brokers, meanwhile, were busy selling fancy derivatives to some extravagant, incredibly wealthy hedge fund manager. After a presentation, just imagine the institutional salesman retiring for drinks and steaks at Frank Joseph's steakhouse downtown. You? You probably climbed back into your SUV and drove home for a meal with your family.
Turns out, you might have the better life. As you know, investment bankers, securities analysts, derivative salesmen — employees from nearly every business unit — are getting fired. In total, about 50,000 securities industry employees in the United States lost their jobs this year. But not retail financial advisors; the wealth management units, by comparison, are doing very well.
A blog called HereIsTheCity.com, a five-year-old financial news website based in London, has created a new league table: The Credit Crunch In Context. “We thought it would be interesting to work out just how much in write-downs and credit losses firms have written off per wholesale banking employee,” the site says. (By wholesale employee, the site means non-retail brokerage, or private client wealth management staff.) The site's findings are amazing. Here is an excerpt:
|Firm||Write-downs/Credit Loss||Wholesale Bankers||Loss Per Banker|
|Wachovia||$7 billion||3,900||$1.8 million|
|UBS||37 billion||22,000||1.7 million|
|Citigroup||40.9 billion||30,000||1.4 million|
|Merrill Lynch||31.7 billion||48,100||659,044|
|JPM Chase||9.8 billion||25,000||392,000|
|M. Stanley||12.6 billion||38,050||331,143|
|Goldman Sachs||4.1 billion||30,000||133,667|
By contrast, turn to our compensation survey, and note that wirehouse advisors, on average, grossed about $500,000 last year. (Some other surveys say the average wirehouse production is even higher — closer to $800,000.) That may have seemed small potatoes once, but it sure glows by comparison now.
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