Retail to institutional or vice versa

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Jun 5, 2006 4:05 pm

just wandering if any of you old timers..jk..ever went from trading to retail or vice versa? Also I was wandering why the institutional side of the business looks at us in retail brokerage the way the way they do? We actually have to go out and build a business from the ground up so I am unsure of how or why they would make light of the retail end?

Jun 6, 2006 1:34 am
keith121883:

Also I was wandering why the institutional side of the business looks at us in retail brokerage the way the way they do? We actually have to go out and build a business from the ground up so I am unsure of how or why they would make light of the retail end?


For those few institutional salesmen who even have an opinion, here's why:


At a big investment banking firm:


1. Institutional brokers make significantly more money than the AVERAGE retail broker. And their job is fairly easy. They know ours isn't.


 2. They don't have to go out and get clients - it's viewed by management as a waste of their valuable time. Their assigned clients - their job is just to make more out of them.


3. They tend to have better educational pedigrees.


4. They have better equipment and support.


5. They generate more revenue for the firm.


6. Most of them would have been hired as retail brokers if they wanted the job. Very few of us could break into that side if we wanted to (remember 'Wall Street').


7. They're paid a big salary - don't have to work on commission.


8. They work 9 hours a day.


I think it's better to be a million dollar producer than an institutional salesmen, but anything else - the lifestyle is better on their side.


And they know that.

Jun 6, 2006 9:37 am

Why is it so hard to switch from one side to the other

Jun 6, 2006 9:52 am
keith121883:

Why is it so hard to switch from one side to the other




SF broker laid it out pretty clearly.  It would be easy to go from institutional -> retail.  It would be hard to go from retail -> institutional.

Jun 6, 2006 10:47 am

I understand that, I just dont see why it would be harder. SF broker laid out why they hate on retail and the difference between the two sides.

Jun 6, 2006 11:02 am
keith121883:

I understand that, I just dont see why it would be harder. SF broker laid out why they hate on retail and the difference between the two sides.


A) Its only hard to switch from retail -> institutional, not vice versa.


B) Its hard because institutional is a much better and much more selective job.  Why would it be easy to transition to a better job thats not even on the same career track?


C) The few people on the retail side that would be welcome to switch (i.e, well educated and big producers) are by in large content where they are. 


Jun 6, 2006 11:10 am

There is a certain arrogance on the Inst side. There is a general "we're above the retail guys" mentality. Typically they carry degrees from fine regional business schools and have a certain "pedigree" This may be where their confidence and semi-arrogance are borne....

Jun 6, 2006 11:33 am

Many of the roadblocks that I've seen exist in the relationships and the ease of networking into that arm of the industry.

Jun 6, 2006 11:35 am

I personally think the retail side is more difficult and generally have a higher respect than I do for inst. (not that I don't respect them).

Jun 6, 2006 2:03 pm

Thanks guys appreciate the info. Another good post for keith. Alright giggity giggity

Jun 7, 2006 1:39 am

whats the difference between the retail side and the institutional side?

Jun 9, 2006 2:29 pm

(Speaking from a dealer point of view) Retail sells to the public. Institutional sells to corporations, funds, pensions, governments ect. I was on the retail side at one point so I know its possible to transition. I dont think we look down on retail at all. The income is what keeps us here. We do work as hard. In the beggining as a capital market rep I was making some 400 - 500 dials a day and only reaching approx 50 potentials. Most guys plateau around 100mm - 200mm a year. At 2 - 4 bucks per bip (fixed income) its no wonder why we would want to transition to the retail side. I have ultimate respect for those who dare to make a living on the retail side. Its not as easy as it used to be. Hats off to all of you.   

Jun 9, 2006 3:39 pm

(Speaking from a dealer point of view) Retail sells to the public. Institutional sells to corporations, funds, pensions, governments ect. I was on the retail side at one point so I know its possible to transition. I dont think we look down on retail at all. The income is what keeps us here. We do work as hard. In the beggining as a capital market rep I was making some 400 - 500 dials a day and only reaching approx 50 potentials. Most guys plateau around 100mm - 200mm a year. At 2 - 4 bucks per bip (fixed income) its no wonder why we WOULDNT want to transition to the retail side. I have ultimate respect for those who dare to make a living on the retail side. Its not as easy as it used to be. Hats off to all of you.   

Jun 11, 2006 1:02 am
AAA insured:

(Speaking from a dealer point of view) Retail sells to the public. Institutional sells to corporations, funds, pensions, governments ect. I was on the retail side at one point so I know its possible to transition. I dont think we look down on retail at all. The income is what keeps us here. We do work as hard. In the beggining as a capital market rep I was making some 400 - 500 dials a day and only reaching approx 50 potentials. Most guys plateau around 100mm - 200mm a year. At 2 - 4 bucks per bip (fixed income) its no wonder why we WOULDNT want to transition to the retail side. I have ultimate respect for those who dare to make a living on the retail side. Its not as easy as it used to be. Hats off to all of you.   


My statement related to institutional equity sales...