Specialist equity salesmen used to be rare and rather misunderstood creatures. They were seen as occupying an awkward halfway house between sales and research.
Of course they knew more about their sectors - utilities, biotechnolgy, etc - than did the generalist equity salesmen. But in the 1980s and early 1990s it was the generalists who tended to write the direct business, so they earned more than the specialists.
Equally, the specialists could not match the in-depth knowledge of the equity analysts.
These days debate continues about whether sales or research should control the specialists. But almost everyone agrees that they add value. The best specialist salesmen now earn much more than the best generalists.
The generalist salesman used to control access to entire accounts. His bonus (rarely hers) was linked to the importance that broking firms placed on the relationship with fund manager clients such as Schroders, Mercury (now part of Merrill Lynch), or Fidelity.
But with the biggest equity clients now all trading centrally, neither generalist nor specialist salesmen write many tickets (i.e. book trades) themselves any more.
The role of the generalist is now more like that of account manager. Generalists who want to make serious money need to focus on specific accounts and work hard on knowing each and every thing about that account.
How a fund manager makes investment decisions, how it reviews and rewards its brokers, the names of all the portfolio managers and analysts, as well as how each individual prefers to receive his/her broking service - this is the information that a good generalist will have at his fingertips.
The specialist salesmen, on the other hand, have now come into their own, because they can add enormous value to an analyst or team. Basically, their job is to make their team as famous as possible.
Analysts have to develop and write research as well as satisfy corporate finance demands, and as a result they don't have much time left for communicating with fund managers. When time is short, only major fund management clients will receive a call from the analyst himself.
The vast majority of accounts will get their regular service via the specialist salesman, who will also invest a lot of time tailoring the service according to individual client need. The best specialists will speak to 90 or 100 fund management clients at least once a week.
Good specialists now earn basic salaries around 150,000 and bonuses of up to twice that sum. If they have catapulted their analysts to the top of the surveys (Institutional Investor, Extel etc) and considerably increased their employer's market share in the sector, there's a good chance that they have materially contributed to corporate finance income. This will ensure their bonuses.
Margins in corporate finance are substantially higher than in share trading and execution, mainly because it is a far less transparent marketplace with less pressure on prices.
Generalists, on the other hand, rarely earn basic salaries in excess of 100,000 and because they can hardly ever be linked to successful corporate finance deals, are unlikely to see bonuses calculated in multiples.
So then, how to become a specialist? If you are already a generalist, it can be difficult.
But the chances are that you have naturally been more interested in some sectors than others, and will have built up more knowledge of them.
Who are the lead analysts in those sectors? Where do they work? Do they have specialists working with them at the moment? If not, perhaps you could position yourself as an ideal candidate.
Don't wait for a headhunter. It pays to contact them yourself, especially if you know them already or have acquaintances in common.
If you are just entering the industry after university or business school, and you know that you are more salesman than analyst, you should take a look at the sectors with big companies and ample corporate finance opportunities.
Then start positioning yourself as a strong candidate for specialist sales. After all, in future it could be the generalist, not the specialist, who is the rare phenomenon.