Breakdown

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Feb 28, 2007 7:23 pm

what's the typical breakdown for a new piece of business? For simplicity, a $1,000,000.00 sale.... what's the typical fee paid to the firm and what percentage of that goes into an FA's pocket?

Feb 28, 2007 9:06 pm

As a generalization, if it goes into a fee based account, the firm will charge between 75 and 150 BPS, probably toward the lower end due to the size of the account, as a generalization, use 100.  Payout ratio is between 35 and 50% depending on a number of factors, namely your level of production and how many years you've been with the firm.  The average is generally 40%.


So I would say the firm takes in 10,000, you get 4,000.  Now you know why the wires want you to raise 10MM+ annuitized to keep your job...even if you do, you're still only getting paid $40,000.

Feb 28, 2007 9:31 pm

At least most wirehouses start you on a salary with periodic bonusus to get you started.
success magnet, how old are you? just curious.

Feb 28, 2007 9:33 pm

Closer - 44. What's BPS?

Feb 28, 2007 9:39 pm

Basis point=.01%       100 Basis Points = 1%     10,000BPS=100%

So if the firm grabs 100BPS of the $1,000,000.00 they bring out $10,000.
If you come away with 40% of that you get yourself $4,000.

Pretty darn measly.

Feb 28, 2007 9:40 pm
successmagnet:

Closer - 44. What's BPS?





Basis points. Often referred to as 'BiPs'.



100 bps=1.00%.

50 bps=.50%

1 bp=.01%

Feb 28, 2007 9:42 pm

Sorry guys.



I hadn't realized that Closer had already answered.

Mar 1, 2007 2:45 am
Closer:

Basis point=.01%       100 Basis Points = 1%     10,000BPS=100%

So if the firm grabs 100BPS of the $1,000,000.00 they bring out $10,000.
If you come away with 40% of that you get yourself $4,000.

Pretty darn measly.





Here's the deal, 1bp of $1million is $100, 1bp of  $1,000 is $0.1.



So count up your dimes and benjamins.



BTW, this also why bond futures are for $10M since then 1bp == $1000.




Mar 1, 2007 6:11 am

We're talking a fee based investment, right? What about $1M in a 3% load mutual fund?