Greed and The Fat Book

I've been thinking about my past career as a stock broker lately, which spanned about seven months before I had an attack of conscience...

The key to success as a broker is having a "fat book." In other words, be the account manager of a small group of customers that have a big wad of cash. How big? The numbers kept going up while I talked to more brokers but the consensus was that a good broker with 5 years experience should have at least $25 million under management and the big-swinging dicks (big time producers) should have between $50-100 million under management.

That's why people who try to start an account with full-service brokers with less than $100,000 will get short shrift: they don't want to deal with you because you're penny-ante. An account of $100,000 should generate about $1,000 gross commission for the firm. The broker, if he's a producer will get less than half of that paid to him; the rest goes to the firm. That's if the broker's honest, and the majority are. If you've got less than $100K, you are not worth much to an honest broker.

Beware the broker that takes you on if you've got less than $100K. If he's honest, he's either new, desperate, or callous. Any of these people can lose your money much faster than a regular broker...

And I won't even talk about the dishonest ones...

For an honest broker, the saying should be "beware of clients who think they know more than you do..."