Amp P2
Anyone with experience who cares to trade a couple of PMs on this topic? No need to air in public. If you PM me, I’ll tell you what I’m wondering about.
3rdyrp2 would probably be the better choice but I will try my best to answer your questions…
Thanks, I PM’d you. Anyone else who cares to PM, I’m trying to get a strategic sense of where things are headed.
shoot me a pm. I was a p1, but still have many friends in p2.
Thanks, I am trying to get a sense if the company will eventually eliminate p2 in favor of p1 employees. Is the company supporting P2 for the long term?
they are trying to get as many folks as they can back into P1. They are trying to go wirehouse model payouts, insurance company support.
they are offering many p2's bonuses and checks to go back to p1, including higher payouts, as well as they just changed and raised the restrictions for p1's going p2.
I believe you must be referring to larger metropolitan areas. I don’t believe there is one P1 office in the entire half of my state. We are all P2 offices. We haven’t heard anything about AMP and their desire to change back to P1. They did increase the requirements for AFAs to become P2 advisors though.
I don't see the P1 model as being productive outside of metropolitan areas.Yep, I am in the NJ/PA area, and have heard of multiple offers to large producers to get them to come back to P1, and many P1’s trying to go P2 being denied, even with fairly large production for amp.
Of course AMP is making the offers. Thats corporate America and AMP sees the value the P2 offices can add to HO if the can be transferred back into P1 models. I don’t see any P2s making the transition back though unless they are ready to retire or something. The P1 model is for those who do not want the equity in their business. I would say that AMP would like to have AFAs under a P1 instead of a P2. It would be more profitable to AMP. I would not be surprised if they do away with P2 and require practices to choose P1 or P3 but I don’t see them forcing a P2 to change to a P1.
If you know someone that would like to be P2, I recommend they move to an AFA under a P2 then transition to a P2 themself.Why not just go straight to p2 if coming from the outside? I wonder how the company’s recruiting effort at getting P2s from the outside, vs. trying to get experienced brokers at P1 (or starting from scratch). Just wondering how competitive AMP will be down the road, or if economies of scale will keep P2 viable vs. the competition. Around spinoff time from Amex,there were questions if AMP would eventually be sold. I just wonder if the company is growing in terms of number of reps or market share, how is the Cracchiolo strategy playing out. I see cost reductions and slow, positive changes, is the company changing fast enough?
Just like any other company, AMP will recruit what they believe to be most profitable to AMP.
I believe AMP is suprised how profitable the P2 practices are as opposed to the P1 model that caused a lot of the bad rap Ameriprise recieved. P1s will not have equity in their practice so I do not see it as ever being a good option for independent minded advisors. I have not been around since the AMEX days but it does not seem like the number of reps is increasing because so many stay as AFAs under their P2 advisor to maximize payout %. The number of AFAs is increasing. Someone else will have to chime in as to P1's results because like I said earlier there is not a P1 office within 200 miles at least. As far as Cracchiola is concerned, I don't think he could move much faster. AMP has made a lot of aquisitions and the perks from HR Block will benefit probably more then any of the others.I guess the AFAs represent the next generation, whether it’s an AFA who is gearing down to retirement or gearing up to possibly buy a practice.
It is nice to see the aquisitions, a broader insurance portfolio would be a good sign. I guess the company's strength has always been the relative stability of the independent field force. Before P2 there were contractors, a fiercely independent breed. The franchise requirements have remained relatively unchanged for over a decade and have mostly been driven by the regulatory environment, not company policy. Cracchiola, on balance, seems to be a good captain of a conservative ship.I live in an area where there are 5 P1 offices within a 40 mile radius and I’ll tell you one thing, there is ZERO way that more than 10% of P2 advisors in this area would accept any type of deal to go P1. There’s something to be said for being in total control of operations in your office (I’m an AFA so I’m not necessarily living the dream yet but I see it on a daily basis w/my senior advisor and the other senior advisor in the office) and working on your own schedule. Every P2 advisor in this area left P1 at some point in the past, so I don’t see what the corporate office could implement that would make them think that the P2 side would just accept some new “streamlined business process” or whatever corporate-speak that our execs annoying like to use to transition back to P1 and work in a corporate office and share staff/supplies/technology/resources with other advisors when you once had all that stuff to yourself. In short, I don’t think we’ve got anything to worry about.
Exactly. Our practice aquired an office from a retiring 50yr vet. He is transitioning to an AFA and one of our AFAs will transition to a P2 advisor.I guess the AFAs represent the next generation, whether it’s an AFA who is gearing down to retirement or gearing up to possibly buy a practice.
[quote=Milyunair]Why not just go straight to p2 if coming from the outside? I wonder how the company's recruiting effort at getting P2s from the outside, vs. trying to get experienced brokers at P1 (or starting from scratch). Just wondering how competitive AMP will be down the road, or if economies of scale will keep P2 viable vs. the competition. Around spinoff time from Amex,there were questions if AMP would eventually be sold. I just wonder if the company is growing in terms of number of reps or market share, how is the Cracchiolo strategy playing out. I see cost reductions and slow, positive changes, is the company changing fast enough?[/quote]
amp changed the rules on the AFA to p2 route. they made it damn near impossible now for p1's to go afa under a p2, and then indy themselves.
most of the recruiting, at least here in the north east is to get people from the outside to a p1 platform.
On the surface, vs a wirehouse, you get a bit higher payout at a lower level, and more promised support.
for the people already there, they are getting the short end of it.
p3 is not an option in the northeast, and never talked about.
P1 is basicly where they are investing the money into. Heck, they now even forced the fvp's (branch managers) to start producing and a reduced base.
Yeah, I get the impression the resources are going to P1. P2s probably have little incentive to pitch proprietary products, which are not bad in all cases (like insurance). I have to think the overall strategy leaves money on the table. Seems like so much potential not quite actualized, in terms of a mix of branding and independence, just from my POV. But overall, a decent value proposition with flexibility in terms of how you want to affiliate with a b/d. Never dull, since the IDS days.
Lets be honest.... p2 is positioned as independent, but lets be honest, you are not trully independent. You are still restricted to one variable annuity, and 3 insurance products.
Dont get me wrong, they are not bad products, but there are others out there.
P2 is ameriprise with a higher payout 81% to 91%, but you pay your own ticket charges, office space, the whole 9 yards.
essentially, you are paying all of your own expenses anyway, but giving up 20% or so of your pay on average, not including technology fees, ticket charges, etc, just so you have no FVP on your ass, supposed equity in your firm, but have the ability to hold your 7 and 66 just so you can do commissioned based business.
lets be honest, Amp can at any point in time choose not to renew your independent contractor status, keep the clients. Don't kid yourselves... Ameriprise thinks of your clients as their clients, and will fight for them.
P2 advisors are between a rock and a hard place honestly going forward. Amp is putting more into the p1 platform to get high producers there, raising the minimum production every year. when I was leaving a few years ago, I beleive the average p2 advisor was writing just shy of 150k? gdc. and for the most part, they were very happy, taking home after expenses and after the grid around 75k and coasting by.
Amp is no longer happy with that and trying to recruit those shyed out brokers writing 300k, whom to a wirehouse are a nobody in the big picture.
I understand in the midwest, p2 is the way of life, but not on the coasts. It will be very interesting to see where it ends up. Most people at amp i speak with, both in management, p1 and p2 all see pressure and requirements going up. I know of a few 250k - 400k producers at amp that were told they could not go p2.
Any p2 producer under 400k ought to be looking at the RIA route, most of them are using SPS wrap account anyway, and giving up 25bpts on administration fee, might as well go RIA, and keep 100% of the business.
the existing p1's are also in a hard place. They are not getting any support unless they are over 200k. the new recruits either got salary plus nice grid, others took a nice grid locked for a few years. Existing p1 advisors are essentially still on the base draw, and their payouts cut to nothing.
Only good places to be within AMP are P1 writing over 400k, or p2 with a million dollar practice.
With P2, what is great is that AMP is throwing money at you to go buy up existing books of businesses so you can replace those insurance policies and annuities and sell them RAVA and a VUL. They even forgive the loan after 7 years.... woohoooo.
Btw, for the AFA's.... why do you think your P2 took you on as AFA... your production gets pooled into theirs. This was shut down recently.
Alot of the AFA's that were brought in, are those P1's who couldnt hack it to 250k gdc or higher and were having their payouts cut even more. They called their P2 buddies and were offered the same gig but with the bigger payout. Its a win for the afa/p1 as they no longer had an fvp, and got a higher payout in alot of instances, and a win for the p2 advisor as they got some more production to pool together to get a higher payout. And of course... when the AFA fails out of the business.... freee clients.... wait wait... not anymore, P2 advisor has to pay to Corporate P1 on any p1 assets that go with advisor to AFA role.
really, the only winner here is ameriprise corporate. they have a wide distribution channel. Put advisors in a position to take the upfront comp, RAVA/VUL/A Shares, since there is no salary and only draw.... then... when advisor leaves business or leaves amp, they cant take anything away except assets, and all the RAVA and Insurance business... and oh yeah, REITS stay with the firm cause they dont have selling agreements with anyone else.
Humn.... so this is why all the P2's stay p2..... because they wouldnt be able to take 1/3 the assets away anyway.
sorry guys, that it turned into a rant... I really owe alot to my amp days, and enjoyed them every minute. The products are actually pretty good, and financial planning is the cornerstone.
My issue with amp is corporate values towards advisors.
Good grief. I don't even know where to start. Amp is a company and they, like all companies, will do what is best for Amp first. You either work with it or against it. For the practice I am with it seems to work great thus far. And must be far better then P1 since nobody is P1 anywhere near us.
About the clients... What company doesn't think the clients belong to them. AMP, AMEX, IDS even when the company had or has contracts stating the ownership of client relationships advisors still sold them to each other under the table.debolt, there are no p1 offices around you, as you said, because most are small p2 offices. p1 is primarily on the coasts, and TX. =)
Yes, advisors sold clients under the table. keyword, under the table.
Thanks for the perspective. Maks, looks like your RIA is rewarding.
It's always interesting to try to fathom the future course of the industry and the company. It seems that AMP's strengths include leaving the little P2 alone and offering easy affiliation with a solid brand. That's not cheap for franchisees, but in a changing regulatory environment and with regard to AUM accumulation and referrals/branding , the cost-benefit analysis of affiliation gets harder.Great thread. I have not worked with AMP long so some of this is KoolAid still. I am intersted in the good and the bad. I think the aquisitions AMP has made will benefit all of us P1 and P2 (maybe not so much P3s, I actually don't know of any personally). So it will be interesting who AMP will target the new resources torwards. I am sure it will be more profitable for AMP to target P1 offices. As I have heard that AMP would like to duplicate the P2 office model in a P1 atmosphere.
What a great time to be an advisor, when looking back a couple of decades. Now clients, advisors, and custodians want the same thing, to pay or charge a flat fee for AUM.
Even the AMP aquisition of Seligman must be about two things, AUM, and bringing a more efficient cost structure to that management ( margin compression). But clients don't mind paying one or more percent for the perceived value of having you waiting at the other end of the phone. That puts advisors in a very good position. So AMP's strengths would necessarily come from a "marketing mix" of profit centers, obviously a self sustaining P2 would contribute, but the resources (profits) would go toward higher margin investments (P1), aquisitions (to help pay fixed costs and create economy of scale) - and basically the proprietary products would pay cost of capital incentives (management and shareholders). What would be enjoyed by all is branding. Since the market place is "confused", that value may increase. Figuring out how to leverage that (expensive) comparative advantage is a little harder. In the spirit of (IDS) the company, no one will do it for you.[quote=DeBolt]
Great thread. I have not worked with AMP long so some of this is KoolAid still. I am intersted in the good and the bad. I think the aquisitions AMP has made will benefit all of us P1 and P2 (maybe not so much P3s, I actually don't know of any personally). So it will be interesting who AMP will target the new resources torwards. I am sure it will be more profitable for AMP to target P1 offices. As I have heard that AMP would like to duplicate the P2 office model in a P1 atmosphere.
[/quote] I think over the next few years the huge majority of available resources will go to the P1 program. Not because they are trying to force any P2 advisors back into P1, but just because P1 was such an absolute failure over the past few years that they need to build it back up from scratch. There's not really a whole lot of fixing up that needs to be done on the P2 side. For example, in 2007 there were about 60 advisors in my P1 office. I left last year, and today there are about 14 advisors still in my old P1 office. Thats over 75% that either left the company or left to go P2 in less than a 2 year time span and our office was in the top 10 in total GDC for P1 in the country in 2007.But here is the thing... the p2 offices are just happy to be staying the same. Most of them are not growing. The reason why there were so many who went p2 after p1 is because they could not keep up with the increased requirements at P1.
While there were no major issues with p2 from the advisor's standpoint, there were from corporate. They are no growth in production, and they make a lot less from P2 than P1's on a percentage basis. If the market can support a p1 office in the area, they would gladly throw that up instead of a p2 contract. Now if the area does not have demographics to support a 50 person p1 office, they will rather get little of something, than alot of nothing. Hence why alot of areas have p2 only.
The issues ameriprise had with p1, is solely based on who they tried to hire before becoming ameriprise and shortly after. I was an advisor coach at amp, and the vast majority of folks I worked with, were straight out of college kids. Many lived with their parents. So 100k in gdc, or 50k in income was alot to them. They never believed the fact that 400k is really where you need to be.
So you were one of the guys that smelled like booze and cigars, cherry picking the business cards out of the fish bowls and sucking up the left overs when a kid got canned?
Thanks for the reputation!!
Mak, maybe the question is, is AMP just muddling along, or do they have some sort of strategy? My impression is that the question never really changes. If p2 had a future, they would probably put more resources to it. ( To leverage the large percentage of CFPs, and demographics of independent offices, and so on. )
A lot of work was apparently done to standardize quality (financial plannning), I guess you'd have to ask if the strategy is market-driven or top down. Maybe this is a metaphor for corporate America, there's always the question of how efficient can you be when you're big, and also, what's best for the shareholders? How could the work bees know for sure? After all, with regards to the whole wirehouse and b/d world, and even with regard to small RIAS, who knows what the big boys have planned in terms of changing regulation. The uncertainty is killing me. ( Not really, time to go back to sleep.)Here is what Ameriprise thinks of P2, straight from their site.
"This option provides outstanding income potential and gives you the freedom to build equity in your own practice. As a franchisee, you pay an association fee and cover the expenses of running your business. The association fee allows you limited use of our trademark and access to the recognition and goodwill associated with our strong national brand."
thats it. You still pay your own expenses, E&O, compliance, office expenses, technology, etc.
so essentially, you are paying all of the expenses of the RIA's, plus, you are paying Ameriprise fees and restricting yourself to being a captive insurance agent, using one VA carrier, and taking a haircut..... just so you can use Ameriprise, the branding and name. and oh yeah... for all your hard work, they let you buy ameriprise stock as the equity of your practice.
http://www.joinameriprise.com/careers/experienced-financial-advisors/our-business-models/compensation-framework.asp
Starting in April:
Ameriprise Financial announces expanded variable annuity offeringsDate : 12-11-2009
This communication is intended for advisors on the SunGard brokerage platform. Ameriprise Financial has entered into distribution agreements with three additional variable annuity providers. In second quarter 2010, advisors will be able to offer products from four variable annuity product carriers: RiverSource, AXA Equitable, Lincoln National and MetLife. At least 90 days prior to the effective date, Ameriprise will distribute communications with more details about the annuity offerings.
Note: this communication is meant for advisors on the SunGard brokerage platform.
As part of our company's strategy to help you grow your practice and expand our set of products and services to be a leading wealth management firm, Ameriprise Financial Services, Inc. (Ameriprise Financial) is pleased to announce the expansion of our variable annuity offering.
After thorough analysis and due diligence, Ameriprise Financial has identified three new carriers who best met our key criteria of sales success, financial soundness and competitive product offering. The products offered from these firms, along with those from RiverSource, provide a competitive and well-rounded variable annuity offering.
In the coming weeks we will work through the details for the introduction of these carriers into our system and further communicate more specific information related to when they will be available for sale.
In second quarter 2010 advisors will have access to variable annuity products from the following carriers:
Carrier*
A.M. Best Rating**
Highlights
RiverSource
A+
Eighth in VA sales for Q2 2009 (VARDS) Fourth in overall annuity sales for Q2 2009 (VARDS and LIMRA) Dalbar award-winning advisor and client service every year since 2003 RAVA 4 Advantage has the most VA subaccounts rated four and five stars from Morningstar*** The only carrier providing up to 6% guaranteed income as early as age 65 from a GMWBAXA Equitable
A+
Fourth in industry VA sales for Q2 2009 (VARDS) Third in industry VA sales in 2008 (VARDS) First in 2008 total industry Guaranteed Minimum Income Benefit (GMIB) sales, representing 43% of total GMIB sales (LIMRA)Lincoln National
A+
Seventh in industry VA sales for Q2 2009 (VARDS) Fifth in industry VA sales in 2008 Fourth in Guaranteed Lifetime Withdrawal Benefit (GLWB) industry sales 2008 (LIMRA)MetLife
A+
First in industry VA sales for Q2 2009 Second in industry VA sales in 2008 Second in 2008 total industry GMIB sales, representing 33% of total GMIB sales (LIMRA) * Not all products or features offered by these carriers are available in all states.
** As of Dec. 1, 2009
*** RiverSource Product Research, compared to Top 10-selling VA contracts as of November 2009. The Morningstar ratings for subaccounts, commonly called the star rating, is a measure of a subaccount's risk-adjusted return, relative to similar subaccounts. Subaccounts are rated from one to five stars, with the best performers receiving five stars and the worst performers receiving one.
See the Variable Annuity Carrier Overview posted under Related Materials for detailed information about the current products offered by each carrier. The variable annuity compensation schedules can be found on the AdvisorCompass® site (see Related Links).
Training required to sell the new carriers
Advisors who would like to sell products from the new carriers will be required to complete training to familiarize themselves with the carriers and their product features and benefits.
The course will be available via Ameriprise University in mid-March 2010.
Servicing clients' existing annuities
Concurrent with the launch of the new carriers, advisors will also be able to service clients' existing annuities from the carriers listed below. This service provides advisors the opportunity to capture new assets from existing clients and to acquire advisor practices with substantial annuity business.
Advisors may accept additional contract payments and receive time of sale compensation and trail commissions as paid by the following carriers:
Allianz Life Allmerica Financial/Commonwealth Allstate Life Insurance Aviva Life and Annuity AXA Equitable Genworth Financial The Hartford ING Integrity North America Jackson National Life John Hanc*** USA Kemper Investors Lincoln Benefit Life Lincoln National MassMutual MetLife Nationwide Life Ohio National OneAmerica Financial Pacific Life Insurance Phoenix Life Insurance Principal Financial Protective Life Insurance Prudential Life Insurance RBC Life Insurance RiverSource Life Insurance Co. Security Benefit Life Sun Life Assurance Co. of Canada (U.S.) SunAmerica Annuity and Life (formerly AIG) Transamerica Life Western National Life(formerly AIG) Western Reserve Life Assurance
MAKS... We get it dude. You took your ball and went home. It's ok.
How many other businesses give you the opportunity to build an empire out of a license and a phone? For that, I will forever be grateful to the principles studied in the dark days of winter at " Daybreak with Doug " in Chasska, MN at the old IDS training center.
Thanks.
If you click “Post Options” you can edit your post to fix typos. I do it all the time.
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