Agency brokers look a better place to work than the banks
In normal circumstances, the best salesmen would remain at the biggest banks. But these are not normal times. Agency brokerages offer salesmen a set percentage of the sales credit – something like 30%. Usually, banks offer a much smaller percentage than that – most likely in the region of 5%. But even if they keep their jobs at the banks, the best salesman are not going to be paid what they used to expect. Meanwhile their clients are growing increasingly disgruntled.
Via agency brokerage former salesman exiting the big banks can offer their clients narrower bid-offer spreads and be handsomely remunerated at the same time.
“It’s a relationship-driven business. It’s old-style broking rather than an aggressive screen-based activity where it all comes down to price,” says Bruce Howitt of Hoare Capital.
“We are building something very simple that used to be built 20/25 year ago, which is based on relationships,” says Andrew Umbers, chief executive of Evolution Securities.
Sales and trading desks at many big firms are in conflict. The sales teams are not happy with the service they are receiving from trading desks where bid-offer spreads are wide enough to drive a truck through.