There are many reasons why someone might transition between the retail and institutional sectors of the investment industry, but it's not always an easy switch. If you think your talents and career goals might be suited more to one sector than the other, read on to find out how you can switch gears.

The Retail Sector
The retail sector provides products and services to individuals with assets of a few million and less, and is the most common entry point into the investment industry. Unfortunately, there are only two broad career paths that encompass the vast majority of employment opportunities: administrative positions (secretarial, operations, sales assistants, etc.) and commissioned sales positions (brokers, financial planners, advisors, etc.). Of course, there are upper echelon positions that require advanced degrees and high levels of expertise, but such jobs are few and far between. (To learn more, read Finding Your Place In The Financial Industry.)

For individuals that envision a high paying, intellectual career of analyzing and thinking about investments, the retail side of the industry is not the place to be. As is the case with any industry, administrative positions simply don't pay well and offer little intellectual fulfillment. Moreover, commissioned sales positions (or brokers) are just that, positions where the key requisite talent for success is the ability to sell products and services. Nonetheless, the financial rewards can be significant, with most successful brokers making hundreds of thousands of dollars each year. (To learn more, see Preparing For A Career As A Broker Or Trader.)

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Fierce Competition and Ethical Conflicts
With such financial rewards at stake, the competition to acquire new business is incredibly fierce. As such, achieving a stable and desirable income can often take five to 10 years, or more. As a general rule, the best way to be successful in retail is to begin with a myriad of wealthy friends and family that are willing to get you started. Otherwise, building a customer base will almost certainly be an uphill battle, even if you are a truly gifted and ambitious salesperson. (To learn about what it takes to attract clients, read Targeting Ideal Customers, Alternatives To The Cold Call and Cold Call Without Getting The Cold Shoulder.)

Another major career consideration is the ethical conflict brought about by the retail sector itself. Brokers generally do not get paid unless a product or service is sold. As a result, the customer's best interests can sometime take a back seat to the broker's need to generate income. The practice of "churning" is probably the most commonly known example of this ethical conflict. It is an unfortunate side effect of the industry's structure that brokers are continuously weighing the need to make money against making appropriate recommendations. People often find this inherent conflict of interest an untenable situation and opt out of the profession. (For related reading, see Understanding Dishonest Broker Tactics and Is Your Broker Acting In Your Best Interest?)

The harsh reality of the retail side is that unless you are content with an administrative role, are a truly gifted salesperson, or are blessed with wealthy friends and family, your best bet is move over to the institutional side of the industry, which offers multiple lucrative career paths that require a more diverse set of talents.

The Institutional Sector
The institutional sector is broadly defined as firms that serve either high net worth individuals or institutions such as endowments, foundations, corporations and pension plans. Additionally, institutional clientèle generally employ investment professionals as retained advisors on an ongoing basis, as opposed to purchasing products, thereby sidestepping some of the ethical issues associated with the retail industry.

Generally speaking, the institutional sector serves sophisticated clientèle. As such, firms in this industry require high-caliber investment professionals and a diverse pool of intellectual talents. As a result, salaries are substantially higher on the institutional side. Moreover, sales positions comprise a modest portion of career opportunities. (To learn more, read What Is A Registered Investment Advisor?)

Outgoing Personalities Not Always Required
Some of the more notable non-sales career opportunities include securities analysis, investment manager analysis, macroeconomic analysis, statistical analysis, professional writing, marketing, relationship management and consulting. In stark contrast to the retail sector, a shy, highly analytical person could have a lucrative career doing analysis for an investment management or consulting firm. In fact, these sorts of positions are plentiful in the industry and can pay very well.

Essentially, there is a hierarchy of talent sets within the institutional sector. At the bottom rung of the ladder are "grinders"; these are the people who provide the heavy number crunching and analytics. The next level up is the "minders"; they with existing clients and manage relationships. Finally, at the top of the ladder, are the "finders"; these people bring new business in the door. As is the case with the retail side, salespeople are the most valuable.

Higher Pay, Harder Entry
If you are not fortunate enough have friends or family on the institutional side, or to have attended one of the nation's elite educational institutions, entering the institutional sector can be a very difficult process. Generally, entering this field through the consulting portion of the industry is the path of least resistance, whereas entering the investment management industry can be the most difficult. However, there are many ways to get your foot in the door.

First, if you haven't already, seek graduate-level education such as a master's degree or a master of business administration (MBA) from a reputable institution. Secondly, seek other professional credentials such as the certified public accountant (CPA) or chartered financial analyst (CFA) designation, both of which look great on a resume and may help you to get an interview. Additionally, it is essential that you join local professional organizations to network. Both local CFA and CPA societies hold periodic luncheons, which serve as great opportunities to meet people and learn about potential employers. (For more information, see The Benefits Of Joining A Professional Association.)

Making the Switch
The most important aspect of moving over to the institutional sector is to "pound the pavement" to get your resume circulated and to generate interviews. Moreover, depending on how serious you are, you may want to consider moving to a large city with a well-developed financial industry, such as New York or Chicago, to maximize your chances of getting hired to a solid company. Also keep in mind that credentials are great on for your resume and will likely help in generating interviews, but are by no means a key to success.

Chances are that with enough hard work and patience, getting an entry-level position in the institutional sector is feasible. However, in order to move up through the ranks to an intellectually and financially rewarding position, you must be humble, hard working and ambitiously keep an eye open for new opportunities. As is the case with the retail industry, high levels of compensation tend to attract high levels of competition. As such, being shy or overly cautious in your career will be detrimental.

Final Thoughts
The retail sector is a great place to be if you have wealthy friends and family to get you started or are a gifted salesperson; however, making a career in retail remains one of the most challenging tasks in the entire investment industry. If you have a passion for the investment business but just don't have what it takes to make it as a broker, there are many options available to you in the institutional sector. It is one of the most developed and competitive industries around, so if you want to be a part of it be patient, work hard and keep at it!