Sales staff in asset management can no longer expect to eat what they kill. The rise of index products and exchange-traded funds within the sector has made it much harder for buy-side firms to justify huge pay packets for their sales staff. You can still make $1m a year or more, but it might take you 15-20 years of hard work to get there.
“Most [asset management] sales today involve lots of people – it’s not the stereotype of an individual salesman going around picking up orders,” said Alan Johnson, the founder and managing director of Johnson Associates. “With most fund firms now having a distribution strategy across multiple channels, it requires a more nuanced comp system, more of a hybrid – that’s where the world is going, and it’s the kind of thing you’ve got to get right.”
“It’s not as simple as saying, ‘The sales guy get 15% of the AUM he brings in’ or ‘You eat what you kill’ or something,” Johnson said. “Recognize how good it’s been – the industry has been blessed – but our view in 2016 is it’s going to be harder going forward because of fee pressures from index and ETF products."
An entry-level institutional salesperson or internal wholesaler is likely to make a salary in the mid-five figures, say, $60k or so right out of college.
A mid-level institutional salesperson or an external wholesaler with some experience typically makes a little over $100k per year.
Once you move up to become a reasonably successful independent sales executive, it’s realistic to make $150k or more, and as you gain more experience and start bringing in some big clients on a regular basis, you can surpass the $300k threshold.
After you’re 15 years in and still successful, you can bring in $500k or more, including base salary and bonus.
The compensation for star rainmakers will range from $700k to $1m or more, which is really good money, but it takes some people 20 years to get to that level. Many people never get there.
[caption id="attachment_250879" align="alignnone" width="662"] Source: Johnson Associates[/caption]
The traditional career path for an aspiring long-only asset management salesperson on the retail side is to start out as an internal wholesaler, holding down the fort back in the office and providing support to the senior sales staff. Hopefully you would distinguish yourself enough to get promoted (or hired by a competitor) to become an external wholesaler, where you meet directly with clients and prospects face-to-face. Now the rise of hybrid wholesalers offers up additional opportunity.
As for the traditional sales ladder on the institutional side of the business, you’d start out as an entry-level salesperson dealing with smaller accounts and simpler products, then move from junior or novice to mid-level to senior/experienced and, if everything goes extremely well, eventually achieving star status.
“That’s a 20-year career path,” Johnson said. “If you started out in your early 20s could be very successful by your early 40s and have fun and make plenty of money along the way.
“It’s an interesting and lucrative profession to be in, with always something new, but I’m not sure if they’ll be as many of those jobs going forward,” he said. “You have to be smarter, because clients are more demanding, it’s harder to get meetings with people, and you don’t get much time with them."
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