Real Payout After Ticket Charges

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May 15, 2006 6:54 am

How much do ticket charges impact an Indy's business?  I know that some firms have a payout of 90%, but what is the usual payout after ticket charges?  Thanks in advance.


DD

May 15, 2006 8:32 am

Great question. It varies. Mine are very low because I do tons of annuity business. I have friends who trade a lot of stock. It seems like their ticket charges eat up about 10% of their gross.

May 15, 2006 9:57 am

If I was Indy, I estimate my ticket charges would be more than $15,000 per year.  


May 15, 2006 10:18 am

[quote=Malcolm]

If I was Indy, I estimate my ticket charges would be more than $15,000 per year.  


Malcom,



Where do you come up with that estimate?

May 15, 2006 11:08 am

$15 per trade times the aprox number of yearly trades I make.  I manage several equity discretionary portfolios for my book of biz.  Accounts have anywhere from 30 to 65 stocks and I am using MATES to place most trades.  A similiar system I am told can be used at LPL.  I am missing something?  Thanks. 


May 15, 2006 11:45 am

I just ran mine from last summer to the present and I am at exactly 85.40% with ticket charges included.  To be fair, I have a low volume of transactional business on the networked platform...much of my retail mutual funds and all of my annuities are direct and pay out at 90%.  That is probably close to half of my biz.  That amount again is in fee-based business and perhaps 10% of my business is in retail stocks/bonds/mutual funds that face normal ticket charges.  Trails are of course paid out at 90%.  Fee-based is subject to administrative charges, so a typical $300K account at 1% would pay out 78.8% of gross.  A million dollar fee-based account at 1% would pay out at 83.3%.  If you charge more than 1%, these numbers will be higher since the admin costs are fixed at so many BPs, depending on account size.


My numbers are a bit higher than what my recruiter showed me in my sample run, probably because as an indy, I'm much more sensitive to ticket charges and have structured my business accordingly.  If you give your recruiter detail from your trailing 12, your prospective B/D should be able to give you a very close estimate of payout after ticket charges.  They can also tell you what your platform/contract/E&O costs would be.

May 15, 2006 2:52 pm

I have a very balanced business.  15% annuities, 40% mutual funds, rest is bonds and equites, syndicate, etc.... and I have found my NET payout to be somewhere around 81-82%.  It might be 79% one month and 83% the next month...but it seems to average a little north of the 80% over the longer term. 

May 15, 2006 2:55 pm

Thank you all for the good information.  There is a lot I am going to have to consider.  Hey how about this market? Finally the SOXX just broke down so look out below.  Best regards.  M