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Compensation as a relationship manager

Disclaimer: The views and opinions expressed in the vapa Swiss independent wealth management blog posts featured on this page are solely my own and do not necessarily represent the views of any institutions or organisations I may be associated with. These posts are intended to share personal insights and perspectives and should not be interpreted as official statements or positions of any affiliated entities.

As a private banker considering a switch to an independent wealth manager, it is crucial to compare compensation models carefully beside the platform service offering. While some companies offer attractive payouts of 70% or more, it is essential to understand the calculation basis and assess the sustainability of the business. No firm can operate with a 30% top-line revenue share, or your new employer is engaged in window-dressing pending a sale.

To assess a compensation model, you can start by analysing your business plan adapted to the wealth management platform offering matching your wealthy client’s needs. Then, compare payout schemes by starting with gross revenue of one million and challenging the wealth management company to show you the final compensation, including social insurance deductions. Further, ask them to prove how the payout would have changed during the last 3–4 years of business. Be cautious of compensation models with high variable cost allocations. Ensure you have complete control over optimising your payout, and surpluses are paid out quarterly.

Compare apples with apples. If you are not paid first in the value chain of a wealth manager, move on in your job hunting process.

Source: LinkedIn

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Graphic depicting various compensation models in wealth management, highlighting key factors in evaluating and comparing payouts.

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