Gross per broker is the amount of money a broker or registered representative brings into a financial firm over a given accounting period. This sum is important, as the overall productivity both of individual brokers and offices is usually measured in terms of the gross earnings. Brokers review the firm's accounting carefully to confirm it is correct and identify any problems, as they do not want their gross to be improperly counted. Errors can be addressed by providing paperwork to back up a dispute claim.
In addition to being a measure of productivity, gross per broker can also mean the difference between having a job and being let go. Most firms have quotas for their personnel. Brokers who fail to meet their quotas must either have a very good explanation for the failing, or face a firing. The quota amount can vary, depending on the market, the firm, and the broker's specialty. Brokers usually track their overall commissions to see if they are on target for making quota, and may recruit additional clients or push clients to invest more heavily if they are concerned about not making their required gross per broker.
Pay for brokers is also based on gross per broker, commonly a percentage of overall commissions. One third is a common percentage. Brokers can also be given bonuses for exceeding quotas or making specific earnings targets. Using earnings to calculate salary is designed to act as a motivator to push brokers into bringing in more for the firm, as they will be actively rewarded for higher earnings. It can also create a highly competitive work environment as brokers square off against each other for honors like being the top earner in the firm over a particular time period.
Firms use their sales records to calculate gross per broker. These records must be meticulous, as they are used to track individual client accounts and are subject to inspection. Brokers engaging in trades outside the firm will not have these trades recorded as part of their gross and can be penalized for taking business away from the firm. The rules at individual brokerages vary, but generally doing business with clients outside a firm can be a firing offense, and may be illegal in some cases.
Gross per broker earnings are often publicly reported and discussed in the firm to remind brokers that they are constantly being monitored and to create a more competitive atmosphere.
