Hi - I am in the initial stages of setting up my own CTA. How much should I pay a marketing guy who will raise assets for me?
Whether you have a track record or not, you need wealthy contacts to raise money. Unless your marketing guy has the right contacts, he will fail. You're probably best to put him on salary plus commission. If he can't prove himself in 12 weeks, get rid of him. About 12K base for the first 12 weeks with the opportunity to triple it if he can bring in a couple of million. If he can't raise $500K in that time, he is full of shit. Runningbear
I think we saw this before. I think consensus was that common incentives are 20% of your performance fee (or was it all fees?) on money directly sourced from your guy. So, he brings in $1M and, assuming you charge "2 and 20", he/she gets "0.4% and 4%" of that while you get 1.6% and 16%.
and how much should I pay him for the assets that he brings in? 0.5% of the assets raised is the industry standard?
Okay, here comes the twist. This sales person has close relationships with the IBs who would eventually raise assets for us. With the fee sharing agreement with the Introducing brokers, I am going to be paying 20% of the fees anyways. If I give 20% of the fees to this sale guy, I would be double dipping and would end up paying 40% of my fees.