Going relentlessly up-market is expensive, and will take enormous patience from management and shareholders. An independent, fun-loving culture is also going to have a certain appeal. Remember, the bank-owned dealers have been steadily grinding down stockbroker compensation.
The few and the proud plus#
The dealer's direct-drive compensation plan, which sees 40 per cent of revenue paid out as compensation, plus its lucrative institutional franchise mean GMP can afford compensation that would rank at the top of the industry. If GMP can find these people, it can afford to pay them that much bullion. There's probably a few hundred such advisers in Canada. Only a few, smart stockbrokers can service clients at this level. A chief executive officer who trusts the investment dealer for advice on mergers and stock sales is also going to listen to the firm when one of its people offers advice on tax-efficient structures for stock options and estate planning. Goldman Sachs is able to feed clients into its high-end adviser team by milking its corporate ties to executives at major corporations around the globe.
Where a typical Canadian stockbroker would measure the size of their so-called book of business in tens or hundreds of millions, a Goldman Sachs stockbroker can aspire to caring for billions of dollars in client assets. The stockbrokers tend to be true wealth managers, able to handle the diverse personal finance needs of extremely wealthy clients. With just a few hundred stockbrokers, the unit is tiny by any Wall Street standard.īut Goldman Sachs has succeeded in this field by being extremely focused on the kind of advisers they hire, and the kind of investing clients they service. Goldman Sachs have a small retail sales team. While they don't talk about it much, the folks at However, there is a model that could work at GMP, one that brings us back to those inspiring Marines. The independent firms that are in this space, including First Associates, Canaccord Capital, Edward Jones and Raymond James, are going to be bidding for the same talent, which makes recruitment time-consuming and expensive.
Winnipeg's Richardson family is behind a high-end retail venture, staffed by proven managers, and is having trouble signing up brokers. Orion Securities opted out of the business last year, choosing instead to focus on institutional clients. Gordon Capital, a company similar in structure to GMP, took a run at building a sales force and failed. History shows just what GMP is up against. Building and maintaining a network requires management depth that GMP doesn't currently boast. Among other issues, stockbrokers require a fair amount of adult supervision, as the sector draws ever-increasing regulatory scrutiny. There are many who see the GMP partners as completely insane in attempting to enter the low-margin, incredibly competitive retail domain. These expansion plans have been the subject of intense conversation on the Street. In going public, GMP revealed plans to expand, devoting new capital to merchant banking and building a national network of up to 100 stockbrokers in the next few years.
0 kommentar(er)
