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(Photo source: Visual China)

Blue Whale News, August 3 (Reporters Li Danping and Wang Wanying)Layoffs, salary cuts and job transfers are no longer new terms in the securities industry.

"But there is no need to lay off brokers in securities firms, and there is not much room for salary cuts. The basic salary is already very low. If they fail to meet performance evaluation indicators for several consecutive months, they will automatically leave under the last-in-first-out mechanism. Not to mention the front desk employees, if a branch office cannot generate revenue to achieve profitability, suffers long-term losses, and cannot cover rent and labor costs, it may be merged or laid off." Zhang Meng, deputy general manager of a branch office of a North China securities firm, told reporters bluntly.

As the presence of brokerage branches becomes increasingly weak, one can imagine the living environment of brokers on the front line.

"Although we are all in the same brokerage firm, compared with colleagues in other business lines, we in the sales department are the bottom-level 'financial migrant workers'. We really can't work anymore and are already planning to escape. The market conditions are not ideal, and there are basically no commissions for new account openings and transaction commissions. I have not experienced good times since I entered the industry. In order to get performance commissions, some colleagues even 'pay out of their own pockets' to buy products to meet KPIs. They don't understand whether we are employees or customers." Liu Tao, a brokerage broker born after 1995, complained to the Blue Whale News reporter.

Once the self-purchased products suffer losses, the brokers are almost working at their own expense. The “trilogy” of brokerage sales departments was once a hot topic, namely “bringing capital into the team, helping family members to configure products, and taking out loans to configure products yourself.” The final chapter of the “trilogy” is often the final departure after resources are exhausted.

Self-deprecation is the lowest level of "financial migrant workers"

A salary table of brokers from a leading brokerage firm in North China obtained by a Blue Whale News reporter shows that broker ranks can be divided into four levels, namely junior, ordinary, senior, and experienced, with a total of ten levels. The rank and grade are determined once a month, and the new indicators in the past three months are used to determine the rank. Each level and each level corresponds to a different basic salary and transportation and communication subsidy, which constitutes a fixed salary. The monthly performance reward is capped at 2,000 yuan, which is determined by the number of new valid accounts added in the month, the process assessment score, and the business department assessment score (including active service for new customers, the first transaction of new customers, the number of new margin trading accounts, etc.), plus the monthly lunch subsidy benefits, which constitute the monthly salary of a broker.

For example, the lowest level of broker salary is 4,150-5,750 yuan, and the highest level of senior level is 10,200-11,800 yuan. In addition, marketing performance bonus is calculated separately.

(Photo source: provided by the interviewee)

The basic salary of small and medium-sized securities firms is relatively low. Li Min, a staff member of a western securities firm's sales department, told reporters that the fixed part of the minimum salary structure for account managers in his institution is "1,750 yuan + performance." He joked, "Sometimes the salary I get is really not as much as that of my migrant workers."

The situation of another medium-sized brokerage is similar. A broker showed the reporter the employee assessment form of his institution. The "wealth consultant" with a job level of 2.1 has a monthly salary of 2,700 yuan, an annual revenue of 100,000 yuan, and a standard product holding of 12 million yuan; the "chief institutional consultant" with a job level of 6.6 has a monthly salary of 35,000 yuan, an annual revenue of 6 million yuan, and a standard product holding of 350 million yuan. In addition, the assessment and grading standards above level 6 also include the number of super-diamond customers, that is, the so-called high-net-worth customers. This group of people, no matter what type of financial institution, are well-deserved "hot cakes".

(Photo source: provided by the interviewee)

"The base salary of leading securities firms such as the 'Three Zhongs and One Hua' or slightly larger securities firms is generally higher. The base salary of brokers who have just entered the industry is generally at the lowest level. If they have sales experience or relevant resources, the base salary will be slightly higher. But if the performance is not good after joining the company, the base salary will mostly be lowered." Wang Xing, an employee of the business department of a leading securities firm pointed out.

Through the recruitment platform, the reporter found that the basic salary for securities brokers/account managers is mostly between 3k and 8k. Taking Beijing as an example, the Boss Direct Recruitment website shows thatChina Merchants SecuritiesThe base salary of a securities broker/account manager in a certain branch is 5k; the salary of an account manager in a branch of Galaxy Securities is 4k-8k; and the base salary of an account manager in another small or medium-sized brokerage is 3k-6k.

In general, in addition to the basic salary, the source of income for securities brokers is basically the sum of "commission income + product income + institutional business income + margin trading interest income". The commission points set by each brokerage firm are different, and there are also some marketing activity rewards.

If securities brokers want to earn more, they have to rely on marketing commissions. However, under the current performance indicators, "unsellable" products make brokers, whose basic salaries are not high, very "passive". Some even "pay out of their own pockets" to buy products to meet their KPIs.

"In our sales department, to live comfortably, you need to have at least 1 million yuan in funds per month. For employees on probation, the six-month performance target is about 7 million yuan. In fact, the company also has some other indicators. If you can't complete the assessment within the specified time limit, you will be eliminated." Li Min pointed out. He said frankly that in the current market environment, "It is difficult to survive without resources. Some people even buy products at their own expense to boost their performance."

In this regard, some people in the industry also joked that "brokerage firms recruit clients, not employees."

A Blue Whale News reporter found on a recruitment platform that a recruitment message clearly stated that "those with relatively rich business resources and who can make important contributions to the development of the sales department will be given priority."

"I have to meet sales targets to keep my job. If customers don't buy, I have to buy it myself," Li Min said. "But the rate of return on the product is hard to guarantee. After buying the product, the loss is large, which is equivalent to working at a loss."

"If your performance is not good, you may be under various pressures, such as being frequently criticized by your boss or being criticized in the group chat. Under pressure, you will buy products yourself." Wang Xing told reporters. "Last year, a new employee in our company borrowed more than 100,000 yuan from the bank to buy products. There are also more senior colleagues who were persuaded by the fund manager on the roadshow to buy a fund of one million yuan at their own expense in order to boost performance. As a result, they lost nearly half of their money in one year."

The "trilogy" of a brokerage business department was once a hot topic in the relevant field, namely "bringing capital into the team, helping family members configure products, and taking out loans to configure products yourself." The final chapter of the "trilogy" is often the eventual departure when resources are exhausted.

Income plummets, and a wave of resignations

The difficulty in meeting performance targets has also led to a continuous decline in the overall income of securities brokers.

"During the bull market, the monthly salary was very considerable, because all the customers were moving, and you would get commission income as soon as they moved. It was no problem to earn 40,000 or 50,000 yuan a month. Now the income has shrunk to one-third of the previous level, and the commission has almost also been reduced to one-third of the previous level, or even lower," Li Min told reporters.

There are many sales department employees who post complaints about their salaries on social media platforms. Unlike the "golden collar" employees of investment banks who show off their high salaries, sales department employees are more likely to complain about their low salaries. The employee who posted the post pointed out that as a frontline worker who has worked in a first-tier city for many years, his years of hard work "cannot make up for the salary of a dishwasher" and "I still don't know how long I will have to hold on in the cold winter."

(Photo source: social platform)

At present, due to the natural loss of existing old customers or the shrinkage of assets, brokerage firms have no choice but to launch a commission "price war" to attract new customers, from 13,000 to 12.5,000, and then from 1.5,000 to 1,000. Some brokerage firms have already reduced their commissions to "5% off for 1%".

A broker told the reporter that attracting new customers is not for the bonus of opening new accounts, "but for marketing and selling products."

"After acquiring customers, we have to start marketing, mainly under the banner of wealth management, to provide asset allocation for customers. However, the market effect is not good now, most products cannot make money, and customers are more cautious and risk-averse, so it is difficult to sell them." Li Min said bluntly.

Even the products that can be sold are mostly low-risk products with low commissions. Liu Tao, another employee of a brokerage business department in Jiangsu and Zhejiang, said, "Risk and return are positively correlated. Now the market is not good, so we sell income certificates or bond funds, which are low-risk and have low commissions." Therefore, in the sluggish market, the difficulty of completing each assessment indicator has increased sharply. He further added, "If the fund cannot be sold, the same is true for other products. It is also more difficult to generate income from margin trading and securities lending, and it is difficult to meet the indicators."

The difficulty in meeting the targets also means that it is difficult to get commissions. Some sales department personnel told reporters that they "basically have no hope of getting commissions."

This has also directly led to a sharp decline in the salary level of sales department employees who rely on commission income, and a wave of resignations has emerged. Industry data can directly prove this. Wind data shows that the number of securities brokers peaked in 2017, with more than 90,000 at that time, and then showed a gradual decline. By the first quarter of 2024, it had shrunk to 36,500, with more than 50,000 people "escaping."

"Not to mention brokers without resources, even colleagues in our sales department who have some connections at home or who switched from banking have left by 60 to 70 percent this year," Li Min said, "because it's boring, they can't make money, and they don't see hope." As for the employees who still choose to stay in the sales department, "either they are under pressure to survive, or they haven't been squeezed dry, or they have a large customer base."

In fact, even if you don’t voluntarily resign, the risk of being “optimized” is increasing. Many securities firms have embarked on the path of reducing costs and increasing efficiency, and most of the securities business departments with poor performance are facing the risk of being eliminated. In the first half of this year, includingEverbright Securities, SDIC Securities,Guolian Securities, Donghai Securities,Caitong Securities、CITIC Securities、Founder Securities、Hongta SecuritiesMany brokerage firms have closed down their branches. Previously, a Blue Whale News reporter reported on "Retain customers or close branches? The trend of closing brokerage branches is spreading to first-tier cities such as Shenzhen and Hangzhou".

Some of them will be transferred to branches or other institutions, while some will face the fate of being "optimized". Industry insiders pointed out that most of the optimized personnel have signed performance commitment letters and basically cannot get compensation. Even if they can get compensation, the amount is relatively low based on the base salary of "n+1".

(Note: At the request of the interviewees, all names in the article are pseudonyms)