Brokers Rising In the Ranks

Posted on August 1st, 2014 at 9:02 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

As investment bankers and traders face pay cuts, investment advisers expect higher compensation. One reason is that the broker-dealer industry is suffering from a shortage of new and younger talent, which makes old, proven producers even more pricy. For example, a top producer jumping from one big firm to another can demand a recruitment bonus of as much as three times the revenue he or she produces. Moreover, the average annual pay for a successful broker has remained relatively stable at about a half a million dollars. Even though an experienced banker also can expect a bonus reaching into the millions of dollars, their compensation is volatile. A bad year for deal making may mean a severely cut bonus and a couple of bad years could bring a pink slip.

Firms are courting brokers. For example, UBS has said it is focused on building a strong wealth-management business. On the other hand, UBS cut thousands of jobs in its investment-banking, commercial-banking and non-U.S. wealth-management units. Morgan Stanley's focus has turned more to wealth management and away from riskier Wall Street operations. Revenue from wealth management has averaged about $3.6 billion in each of the past four quarters, nearly as much as the combined $4 billion brought in by the firm's institutional securities unit, which includes the traditional businesses of investment banking and trading.

Still, the allure of investment banking and trading remains strong. But given the high compensation rate and relatively flexible work time schedule, bankers may prefer to become brokers.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele


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