Earnings for registered reps in the United States fell for the first times in seven years in 2001 according to a report from the Securities Industry Association.

The SIA’s Report on Production and Earnings of Registered Representatives notes that average gross commissions and fees fell 17.5% from $485,478 in 2000 to $400,538 in 2001 (all amounts in U.S. dollars).

Average total earnings slid 17.7% from $199,804 in 2000 to $164,393 in 2001. Median gross commissions and fees dropped 18.9% from $366,042 to $296,923, and median total earnings fell 20.3%, from $140,744 to $112,227.

“The decline in broker compensation reflects what happened more broadly in 2001,” said Steve Carlson, SIA vice president and director of surveys, in a news release. “It was a tough year with a slowing economy, market instability, and the tragic events of September 11. It was trying for investors, and not surprisingly, reps’ lower total earnings reflected that.”

The SIA also noted that fee-based products now account for more than one quarter of an register rep’s total gross commissions and fees, rising from 20.1% in 2000 to 26.1% in 2001.

“Clients have more opportunities than ever to select the type of relationship that works best for them, and this builds stronger, long-term relationships based on trust and customer preference,” said Carlson. In 1996, less than 10% of production came from fee-based products according to SIA’s survey that year.

While 2001 was the first time that some brokers had seen a bear market, the industry continues to be populated by seasoned reps. On average last year, reps had worked at their firm for 8.4 years, and in the industry for 11.2 years. Overall, the rep turnover rate was 19.2%, with newer reps (brokers working one to two years) having the highest rate of separation (36.3%).

The size of the average retail branch remained relatively constant. In 2001, respondents had 14.2 reps, 6.5 sales assistants, and average gross commissions and fees in excess of $5.6 million. In 2000, branches averaged 14.6 reps, 6.7 sales assistants, and production of $6.2 million. Non-producing branch managers, who typically oversee larger, more complex branches, had higher earnings ($415,379) than producing branch managers ($312,812).

New information in this year’s survey includes the average number of active accounts per rep (542), average value of an active customer account ($127,018), and average value of total customer assets per rep ($66,367,593). The average and median payout rates in 2001 were 37.6% and 35.3%, respectively.

The survey’s results are based on responses from 34 member-firms, which collectively employed more than 47,200 registered representatives and generated almost $19 billion in gross production during 2001. These firms had 3,070 branch managers and operated 3,782 branches.