Discounters pay.....

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gruntal92's picture
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Joined: 2006-05-15

Would someone please explain to me how an AE working at Schwab or TD Waterhouse or Scott trade gets paid?  I'm fed up with the "full service model and am wondering about going discount...Any thoughts. 

bankrep1's picture
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Joined: 2004-12-02

What is minimum wage.  $ 7.35 an hour?

The Judge's picture
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Joined: 2006-06-06

It is my understanding that brokers at a discount shop generally are paid a modest salary, with some incentives available for reaching certain goals.
I would definitely stay away from this type of position.  You generally deal with penny pinching, know-it-all, do-it-yourselvers who are more concerned about the cost of a trade than developing a properly allocated portfolio that enhances performance/reduces risk.  I read somewhere that the average internet trading account lost over 81% of it's value between 2000-2002.  I believe it.
IMO there are much better jobs out there that offer a lot more for an individual, even if it's out of the brokerage business. 

NASD Newbie's picture
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Since I retired I have been a client of Fidelity, and I go into their office at least once a week.
I find them to be quite professional--at least in dealing with the customers.  I must admit that I have not asked them for advice, nor would I.
I have interviewed some of them over the years.  I don't have the numbers but I think they're paid a salary and then take part in a bonus pool that is divided up among all employees with a second pool available to offices that are particularly profitable.
As for the statement that the average internet based account lost a huge portion of its value.  That would depend on how you measure it.
If the measurement is simply the number of accounts that lost all, or most, of their money I suspect there are a lot of $2,000 trading accounts that zero out--but I don't believe that older people who are managing their accounts on line are losing for lack of advice.
A cold, unvarnished, truth is that a smart person can get better advice by reading several publications, paying attention to what is going on around them, and using the Internet.
My wife is a very successful investor.  She has never worked in the financial services industry--all she does is what I mentioned above.
She needs an advisor like many of the kids who prowl this forum like she needs a dose of clap.
She is 58 and is one of the older computer savy types.  It is my well considered opinion that as the WW-II generation, that is not computer savy, is replaced by their computer savy children as the stewards of the family fortunes fewer and fewer will be seeking advice from somebody in an office down the street.
If you listen you hear "futurists" predicting that a day will come when everybody does something they refer to as "cocooning" which can be loosely described as never lreaving the house.  We'll download our movies, we'll have our groceries delivered after emailing a list to the store, and so forth.
I think everybody in this business needs to have a plan for what they'll do if their clients decide that they'll just make their own decisions--that they just cannot understand why they should give up even a few basis points, much less entire points, to a person who does nothing that they really need to be done.
When Mr. Jones realizes that he can generate his own report of how his account is doing it's nonsensical to think that he's going to pay some guy down the street fees to do it for him.
Would you?

NASD Newbie's picture
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To answer the question --it is my belief that a guy or gal at Fidelity will earn about $60 grand with no heavy lifting--and if you're willing to accept responsibility you might to to 100 grand.

NASD Newbie's picture
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Note to Bankrep--please see if you can figure out why you can't avoid all that space in your posts.

NASD Newbie's picture
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Additional note to Bankrep--making stupid statements like the comment about the minimum wage is unflattering.

badmove?'s picture
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Joined: 2006-06-10

Gruntal,
How could you ever leave Ryan Beck. Joe Battipaglia is the man!!

NASD Newbie's picture
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badmove? wrote:
Gruntal,
How could you ever leave Ryan Beck. Joe Battipaglia is the man!!

A good friend of mine rides "The Supertrain" to Princeton Junction with Joe Battipaglia.
Several years ago he invited several of us to come to the Princeton area to have dinner with Mr. Battipaglia.
As great a guy as he appears to be on TV, he's even a greater guy in person--and HUGE, I mean HUGE.  I think he was a big deal LaCrosse player in college--but not at Duke.
I do think he's often a bit crazy bullish, denying some realities that others see.
One of the mysteries is why he went to Ryan Beck--well, except for the huge pay package.  Ryan Beck has the reputation of being, er, questionable.

badmove?'s picture
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Joined: 2006-06-10

Ryan Beck bought Gruntal, which employed Joe B. We had a seminar 4 years ago, Joe B says if u must own 1 stock buy SIRI (@ 53). good job.

NASD Newbie's picture
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badmove? wrote:Ryan Beck bought Gruntal, which employed Joe B. We had a seminar 4 years ago, Joe B says if u must own 1 stock buy SIRI (@ 53). good job.
I know that, but in the confusion surrounding the acquisition Mr. Battapaglia was being courted by just about every firm in the street.
He could have written his own ticket but went to a second, or even third, tier firm instead of becoming the public face of a major player.
It was just strange--could be as human and basic as not wanting to commute into Manhattan any longer.

Devoted SA's picture
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Joined: 2006-03-28

gruntal92 wrote:Would someone please explain to me how an AE working at Schwab or TD Waterhouse or Scott trade gets paid?  I'm fed up with the "full service model and am wondering about going discount...Any thoughts. 
Is it the whole routine, your clients, what's got you fed up? Feeling burned out? Need to find a need pipeline?
Can you take a vacation - few days off - get a new perspective - come back hit it hard? Or are you just done?

bankrep1's picture
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Joined: 2004-12-02

NASD,

It was there, I had to take the shot.

iconsult100's picture
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Joined: 2005-09-07

NASD... I couldn't disagree with you more on this.  It's true that some people do have enough time on their hands and enough knowledge to do the research, but most people do not.  Most people are too busy working, playing with their kids, living life, and simply do not want to take the additional risk of managing their own portfolio.  I do not believe for 1 second that this industry will become obsolete.  The world of finance is too complex.

BACFA's picture
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Joined: 2006-03-26

Back to the OP's question...
I personally know brokers (not manager or any other fancy title) at the discount firms that are making a little over $200K.  The payout structure has changed considerably over the last few years.

NASD Newbie's picture
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Joined: 2005-08-01

BACFA wrote:
Back to the OP's question...
I personally know brokers (not manager or any other fancy title) at the discount firms that are making a little over $200K.  The payout structure has changed considerably over the last few years.

I rather doubt that--not to say you're not making an honest mistake.
There is not enough profit in the discount business to maintain the relatively fancy offices and pay a relatively bloated staff all that well.
What firm(s) are you thinking of?

Devoted SA's picture
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Joined: 2006-03-28

 I'll play devil's advocate for a moment and ask why NASD's wife didn't leave the managing of money to her husband who works in the industry?

NASD Newbie's picture
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Devoted SA wrote: I'll play devil's advocate for a moment and ask why NASD's wife didn't leave the managing of money to her husband who works in the industry?
Because she's much brighter than most women and enjoys doing it herself.
For the record she is willing to give up her right to vote if it would mean that women like you couldn't vote either.
She's more opinionated than I am.

Devoted SA's picture
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Joined: 2006-03-28

Ohhhhh did she burn her bra in the 60's too? Please. This wasn't a question about men vs. women you dolt. This was about YOUR own wife trusting YOUR abilities in the profession you've chosen.
 
She can't be that smart. She married you.

canucklehead's picture
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Joined: 2005-04-18

Dev SA and NASDy,
Can you guys hang on while I get a beer? Something tells me this is gonna be fun to watch.

Malcolm's picture
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Joined: 2004-12-02

DSA has too many zingers for him to even think of trying to handle.

JCadieux's picture
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Joined: 2005-01-23

NASD Newbie wrote:A cold, unvarnished, truth is that a smart person can get better advice by reading several publications, paying attention to what is going on around them, and using the Internet.Okay.  I'll bite.Which publications do you read?

Devoted SA's picture
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canucklehead wrote:
Dev SA and NASDy,
Can you guys hang on while I get a beer? Something tells me this is gonna be fun to watch.

Long as you get me one too and keep it on ice - I'm still working!

BACFA's picture
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Joined: 2006-03-26

At Schwab and at Fidelity, the brokers are getting paid to move money from the discount accounts into separates.  Generally, these are large accounts (at least $500K) that have not been traded actively.  Their grid does not translate neatly into our grids because they'll convert some of the revenue into future salary.  The brokers can choose to sit around and be "order takers" but the ones that are doing well are proactively calling the large accounts and convincing them to use managed money. 

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