Current ETF Internal Wholesaler who has been approached by another firm
I currently work at a large ETF firm (top 10 ETF firm). I have been there for around 2 years and my territory has grown at a nice clip. I make way more money than anyone my age should be making and am on pace for $200k this year as an internal. I really enjoy my job and the people I work with but we are run like a mutual fund shop, which is starting to wear on me. Management doesn't understand that ETFs are more about winning allocations within PM portfolios and less about picking up tickets in brokerage accounts. Because of this, we are held to pretty ridiculous call quotas and leads to many internals around me manipulating numbers (fax machines, phone trees, etc.). Along with this, the only exit strategy here is being moved to the outside and we have recently stopped promoting from within...dead end.
I was recently contacted by another ETF firm who has asked me to interview for an Institutional role. I would still be an internal, make a similar amount of money, but am intrigued by adding "Institutional" to my resume. Any thoughts on the prospects of an Institutional ETF wholesaler? Like I mentioned, I am relatively happy with my current position, obviously the pay helps, but am starting to worry about exit strategies...
Seems like you are ready to get out, might as well check out the role. As for the institutional aspect, I assume you'd be selling pension funds, endowments and foundations? I find it much more interesting talking to these type of clients compared to FA's although they are can be a pain in the ass as well
What are you looking to do in the end? Do you want to become an external or hoping to use this new internal role to open the doors to different opportunities.
As someone in your industry but younger maybe I can give some advice. In the ETF industry it's not as easy as you would think to find wholesalers since the industry is still dwarfed by MF's. In this respect, you have bargaining power.
Not sure what the position would entail, but being successful as an Institutional wholesaler in ETF's largely depends on the types of ETF's you offer. If they're complex in nature, then this will be targeted towards Institutional investors, but if they're more plain vanilla and broad it could be a mix of Institutional/Retail or just targeted to Retail. How challenging your job will be is largely dependent on what products there are. Get details on this from the employer.
Also make sure your philosophy is in line with that employer's. It won't go well if it isn't.
It's interesting that you feel that the complex ETFs would cater more to Institutional investors. I actually had the complete opposite thought. My feeling was that Institutional investors would be more likely to use beta products. Reason being, I thought larger institutions believed that their process drove the Alpha on a portfolio and they wouldn't want to add "smart beta" ETFs.
We bring in new wholesalers on a quarterly basis moving to the ETF side so I think there are going to be more and more out there. Did you see my age somewhere? How do you know you're younger?
My understanding was similar to yours, but I think it's changing today. Most institutional investors will use beta products since that's what most ETF's in the market today are. But to differentiate ETF's now it's not just about bringing products to the market, but showing in certain situations how that can generate alpha in a portfolio. This is where the rise of smart beta ETF's has come into play.
Again, it depends on the investor and their strategy but that's what I've been seeing today. Most ETFs unless they're very plain vanilla like an S&P 500 replication or another very popular index replication, aren't going to be marketed for a retail audience. They are usually more positioned to financial advisors since they're considered more sophisticated in these spaces.
In my experience, it's best if the wholesalers are on the same page as management. If you don't agree with the strategy it's difficult to sell the product since different people are going to have different ideas on what it is that the market wants.
I'm only assuming I'm younger since i'm an analyst.
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