Broker Compensation

July 26, 2012

Broker Compensation

Congratulations are in place for UBS per the link below.  The sample of T12 +/- $1MM USD was used to determine the winner . . . While we have some very good friends at UBS, it is our experience that each Wirehouse and Broker/Dealer don’t payout new hires EXACTLY the same.  Why the disparity?

In no particular order:  Mix of products, Production and/or TIB/LOE as compared to FAs at hiring firm, T12 as compared to TIB/LOE, U4 hits and the most critical is the speed at which an FA became a $1MM producer.  Grid location and flexibility can also be a regionally unique event that may be driven by the need to grow an area(s) so what works in Atlanta may not work in Boston or Miami versus NYC.

For example, we have a client that pays 55% on T12 > $3MM retroactive to $1 on a specific type of revenue and mix.  Other clients will never go past 50% no matter how the T12 is derived.  Others can go higher than 55% in hybrid RIA/Wirehouse models but those rates don’t account for hard & soft dollar expenses not accounted for in the traditional non-RIA broker model.


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