Compensation structure at wirehouses

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Aug 8, 2006 12:34 am

At a place like SB or UBS, how does it work for money you bring in?  Both as a trainee and after your training prog is over?  I've read that you take whatever amt you're managing and then you multiply that by 1% then 30-35% of that.  I'm not sure what the terminology is, so some instruction would be helpful.

Aug 8, 2006 12:46 am

that is pretty close...

you figure you will charge a typical client 1% for managed accounts, and you will be splitting it with the wirehouse starting out around 35%

so, 10mil at 1% =$100,000 x .35 = $35,000

but you must realize that not all the money you bring in will be in managed accounts...

Aug 8, 2006 9:05 am

I took a look at the site.  Seems to be a pretty good source of info.  What section has the payout grids?

Also, just to confirm my understanding.  So let's say for the sake of this example, you have 100% managed accts.  Once you have $XXmm under management, does that mean that your pay is based off that AUM amount, and any additions you get to your book are just added to that figure that the calculation is based off?

Also, what of the commission-based portion of the income?  How is that calculated?


Aug 8, 2006 8:54 pm

Apparently they like to take down posts with that link.  Anyways, chances are you will not have a 100% fee based book.  However, if you hypothetically did, then yes, you're just building on your AUM stash.  Comission based does not neccessarily have a "set" calculation.  If clients do not trade often, you may charge them commission on transactions (commission depends on what instruments and class of shares being traded) instead of charging them for a managed account.  For info on why that is bad, check out the front page articles on this site.