Northwestern Mutual Commission Payout Grid

[trustandadvice]

I was recently told that Northwestern Mutual raised the payout grid for investments to 95% for reps who come together and have more than a combined $1,100,000 in GDC. Is this true?

Does anyone have a snip/snapshot of the NML investment payout grid??

 

[scagnt83]

That is awfully high for a captive B/D. PAS tops out at 75% as far as I know. I think NYLS was at 70% last I checked. But I do not have the answer to your question.

 

[DHK]

I was recently told that Northwestern Mutual raised the payout grid for investments to 95% for reps who come together and have more than a combined $1,100,000 in GDC. Is this true?

Does anyone have a snip/snapshot of the NML investment payout grid??

I don't have a copy of the payout grid for NML. However, they tend to operate more like a wealth management wirehouse investment firm. Even their rep websites look more like Merril Lynch and similar firms like that.

I don't know about 95%, but for $1.1m GDC and encouraging working in teams... looks like that could very well be true.

Of course, they still need to meet their LADL production. (Life, Annuity, Disability, long-term care, etc. I don't know if they call it that, but I'm sure they have some other way to categorize their core production metrics.)

 

[PrivClientSG]

I was recently told that Northwestern Mutual raised the payout grid for investments to 95% for reps who come together and have more than a combined $1,100,000 in GDC. Is this true?

Does anyone have a snip/snapshot of the NML investment payout grid??

I don't have a copy of their payout grid. I can tell you that their B/D was more robust that other insurance company BD's, certainly more focused on capturing AUM, and yes, the BD certainly had much more of a "wealth management" and "investment firm" than any other insurance company BD. That said, 5 basis points for every producer over $1.1mm? If so, if they were looking to attract those type of producers, then I guess there's a reason to publish/market that. If not, they could make it an unwritten deal. Regardless, I don't know if a BD would work for 5 basis points.

I do know a NW rep who does more than $1.1mm, and he was getting 90% -- but that was a one-off, special, negotiated deal. I am sure there could be others with the same deal, but it wasn't a payout that was on their grid at the time.

 

[Tahoe Ray]

I don't have a copy of their payout grid. I can tell you that their B/D was more robust that other insurance company BD's, certainly more focused on capturing AUM, and yes, the BD certainly had much more of a "wealth management" and "investment firm" than any other insurance company BD. That said, 5 basis points for every producer over $1.1mm? If so, if they were looking to attract those type of producers, then I guess there's a reason to publish/market that. If not, they could make it an unwritten deal. Regardless, I don't know if a BD would work for 5 basis points.

I do know a NW rep who does more than $1.1mm, and he was getting 90% -- but that was a one-off, special, negotiated deal. I am sure there could be others with the same deal, but it wasn't a payout that was on their grid at the time.

The b/d is getting 5%, not 5 basis points.

A lot of b/ds work on this model. LPL pays 90-100% because they make money elsewhere like platform fees, sweep accounts, revenue sharing, ticket charges and all sorts of non-compensable actions.

I doubt anyone posts a NWL grid and while that % would be extraordinarily high for their model, it's not like other companies aren't doing the same thing.

 

[PrivClientSG]

The b/d is getting 5%, not 5 basis points.

A lot of b/ds work on this model. LPL pays 90-100% because they make money elsewhere like platform fees, sweep accounts, revenue sharing, ticket charges and all sorts of non-compensable actions.

I doubt anyone posts a NWL grid and while that % would be extraordinarily high for their model, it's not like other companies aren't doing the same thing.

5%, right...I was looking at the pay-out to the agent as an AUM fee...got it...I still think an insurance company BD -- which is very, very different than an indy like LPL -- would be hesitant to work for 5%. I know LPL pays that high, but their business model is different. Yes, they make money elsewhere. However, the insurance company BD is a different animal. I know that insurance company BD's negotiate on (large) AUM cases and the payout, and they tend to play hard-ball, LOL.

Regardless, absolutely agreed, I can't see anyone posting a pay-out grid. Thanks.

 

[scagnt83]

LPL pays that much, but you get zero support. Captives usually provide an enhanced level of support.

Then they charge around $10k per year in various fees and insurance. Plus a 90bps annual expense charge. Schwab is about the same, but you can get up to 95% with them.

Also, NWM usually requires agents to hire a part time assistant within 3 years. So throw in a $20k deduction for that. And most LPL reps I know have at least a part time assistant as well.

The payout % is only part of the net take home. 90% can turn into 60% real quick after all the costs.

 

[PrivClientSG]

LPL pays that much, but you get zero support. Captives usually provide an enhanced level of support.

Then they charge around $10k per year in various fees and insurance. Plus a 90bps annual expense charge. Schwab is about the same, but you can get up to 95% with them.

Also, NWM usually requires agents to hire a part time assistant within 3 years. So throw in a $20k deduction for that. And most LPL reps I know have at least a part time assistant as well.

The payout % is only part of the net take home. 90% can turn into 60% real quick after all the costs.

The differences between the captive BD and the indy was my point. Yes, the pay-out only tells part of the story...90 turns into 60 with the flip of a number, LOL.

 

[NMFNMDRT]

95% is true. To get that the rep has to produce a high 6 figure insurance production to go with the investment production. No staff or expense requirements.