Brokers’ ‘95 Earnings Average $123,839, Up 6%

Brokers serving individual investors earned an average of $123,839 last year, a 6% increase from 1994, as stock and bond markets surged, the Securities Industry Assn. said Tuesday.

They may make even more money in 1996 thanks to a stock market that, despite its recent decline, has broken many records this year, industry executives say. “When you have a market that’s acted like this one has acted, it’s going to be good for brokers,” said Raymond Mason, chairman of Legg Mason Inc., a Baltimore securities firm with about 1,000 brokers.

Retail brokers, those serving individuals, are paid mainly on the basis of the commissions they generate for their firm. Brokers typically take about 40% of the commissions they generate.

Despite last year’s gains, the average broker’s earnings remained below the 1993 peak of $128,553.

Average earnings may be skewed by the SIA survey’s methodology, which gives greater weight to earnings of brokers at larger firms. By another measure--median earnings, the midpoint between the highest and lowest reported earnings--the typical broker earned $78,856 last year, up from $72,636 but still down from $90,000 in 1993.

Meanwhile, institutional brokers, who serve pension funds and other big investors, earned an average of $289,405 last year, up sharply from $229,598 in 1994. Median institutional broker earnings were $147,068 last year.

Overall, the brokerage business has been an exceedingly lucrative one in the 1990s, thanks to the phenomenal bull market in stocks: Average retail broker earnings have risen 56% from $79,169 in 1990.