Asked in Investing and Financial MarketsSalary and Pay RatesParamore
How much money does a investment broker make?
September 13, 2011 4:18AM
An investment broker's revenue is derived from to primary sources: The amount of assets he or she is managing for clients & the amount of transactions they broker. Over the past few years the transactional model is leaving & more investment brokers are focusing on growing the amount amount of assets they manage becaus ethis better alignes the clients interest with their own - growing assets.
Typically they will earn about 1% revenue on the assets they manage. This percentage may vary depending on what the agreement is with the clients they take on, its a good estimate nonetheless. The top 5% of investment brokers in Canada will manage assets over 100 million dollars. That translates to about $1 million in revenue before expenses. Expenses include the the percentage the investment brokers firm takes because of the basic services they offer the investment broker to operate his or her business: phone, fax, computers systems, assistants on a base salary. Investment brokers must also pay their own advertising to promote their services as well.
If the investment broker works for a smaller firm banner, they will will usually let the investment broker walk away with more of his gross revenue than the larger firm because they cannot offer the same level of business services. As an example, in these cases, an investment broker managaing 50-60 million can earn almost asmuch as the investment broker at a mnajor firm who is managing 85-100 million in assets.
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