Magazine article American Banker

'94 Was Down Year for Pay, Too - Bank Brokers Averaged 17% Less

Magazine article American Banker

'94 Was Down Year for Pay, Too - Bank Brokers Averaged 17% Less

Article excerpt

Last year's mutual fund rout took its toll on bank brokers, whose pay fell 17% from 1993, a new study finds.

Bank investment products representatives - who are compensated mostly by commissions on product sales - got an average of $67,000 last year.

That was a far cry from the $80,500 they were paid on average during the bull market of 1993, according to the report by Kenneth Kehrer Associates, Princeton, N.J.

Mr. Kehrer compiled the compensation figures by checking with brokerage executives at large and small banks.

Even with the setback, brokers continued to take home more than many bank employees, including some senior executives, industry observers said.

But bank representatives' paychecks still lag those of their counterparts at nonbank brokerage houses.

Nonbank brokers got an average of $117,000 last year, compared with $129,000 in 1993, according to figures released last week by the Securities Industry Association, New York.

The compensation chasm between bank brokers and their nonbank counterparts will likely persist, bankers said.

Representatives at traditional brokerage houses tend to do more business because they've been around longer and have built a large base of customers, said R. Gregory Knopf, vice president of investment products at Union Bank, Los Angeles.

And while banks focus on mutual funds and annuities, nonbank brokerages offer more individual stocks and bonds, Mr. Knopf said.

Banks are more interested in putting their customers into products for the long term, said Keith Pipes, senior vice president at Great Western Investment Management, Chatsworth, Calif. …

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