Validity of Statement

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Jan 19, 2007 9:20 pm

First and foremost, great threads - a veritable wealth of valuable information and entertainment.  I'm trying to be a good newbie and am currently doing some research on the "business".  I'm curious of the validity of the following statement:

 "...from what I've researched, consider this: on average, it's going to take $1 million of client's investments for you to make $6,000 annually."

Does this sound about right?


Jan 19, 2007 9:37 pm

That’s a gross generalization. It depends on what channel. If you had

$100mm AUM, that would put your income at $600,000. You might be

able to do that indy, but I doubt it at a wirehouse or regional. It also

depends on how much is fee based vs. commission, how much new

business you do, etc.

Jan 20, 2007 6:56 am

I agree with Broker24 …it does matter on the business mix and if you do ancellary business …loans for your client (bank channel) … and life insurance… I will give you and eample… $150k in an IRA earmarked as an ineheritence for the children… take that money fund a 10 pay annuity …set up a life policy to get the money to client’s heirs  (death benefit by the way now at $250,000) and if the client passes before the insurance company gets all the payments bonus for the heirs… anyway that case paid out $14,000 gross… so you can see it all depends on how you use what is there…  

Jan 20, 2007 11:13 am

And at Jones I would have made about $1.75 net/net/net/net on that case.

I like to throw a bone to you guys once in a while....

Seriously, Buk, it might be easier to estimate average payout, for say $50mm in assets at a wire or regional, doing a traditional mix of business or something.  But fee-based and ancillary business can throw it way off.  My partner in the office just got a $30K gross payout on a life case, and he is only about a $300K/yr producer, so that will be about 10% of last year's gross for 2007.  He does a lot of estate planning, so he has a nice ROA for his asset size (lot of large insurance cases).

Jan 21, 2007 9:42 am

I usually looks like this:

$1,000,000 client at .75% fees charged annually (this is low, but you would

be new, and lowballing your fee) = $7,500 per year in commissions


Apply a 40% payout for a new advisor, and you are left with $3,000 in W2

income from that single client.

Good luck,


Jan 21, 2007 11:34 pm

Thanks for clarifying.  Great info.!