Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Half-Commission Man

What it is:

A half-commission man introduces potential clients to financial advisors in return for a cut of the commissions those advisors earn from the new clients.

How it works (Example):

Let's say John Doe knows Jane Smith, who has a net worth of $40 million. At a cocktail party, she mentions that she is looking for a new broker. John knows many advisors and tells Jane he is happy to vet some advisors for her and introduce her to his top picks.

John does the work, meeting with each broker. During those meetings, he cuts a deal whereby he gets a cut of the commissions a broker would earn from Jane if she becomes a client. Accordingly, Jane picks broker X and generates $15,000 in commissions for the broker, earning John $7,500.

Why it Matters:

Half-commission men earn a living by introducing clients to brokers and advisors, much like a dating service.