BEST CLOSES or Techniques
Okay, I’m not sure if it’s me, the market, or both, but I’m having pretty big challenges closing business. Obviously this can be through a number of various reasons like insufficient rappor with prospects, poor trust built, lack of identifying needs, blah blah blah.
However, I'd like to use this forum as a way to share best practices in what has worked most effectively for any of you for closing the deal. Maybe its a closing line, a question you ask (or a series of questions for that matter), or just a technique that has worked well for whatever reason. PLEASE SHARE IT. Here's an example: 1.) "Mr. Jones, the only way we can make any money at all is eventually by selling at a profit. The only way we can sell at a profit is by getting started. Let's just sign the paperwork and get our plan to work." 2.)" Mr. Jones, you've already decided a long time ago that you needed to make a change. Otherwise, you wouldn't have been here. We both know that by doing nothing at all you won't change your situation. It will stay the same...the problem will still be there. The plan/strategy I've proposed addresses X and X and does X and X. Thats a substantial improvement from where you are. Keeping that in mind, let's not hold our breath and lets move into... In order to do that we just need to fill out the preliminary paper work here..." 3.) "Mr. Jones, I understand that this is a big decision, but the reality is that if you keep it the way that it is now, the portfolio won't put you in a favorable position down the road. This plan/straegy/investment will give you a higher chance to meet your goals based on blah blah blah. Doesn't that make sense?" Proceed to close again.. 4.) "Mr. Jones, I can't tell you that I know that this is a better plan than any other plan out there. But what I do know is that we've taken the time to try to understand you to the best of our abilities in order to find out where you are, where you want to be, and what might be getting in your way. My basic conviction is that the best plans are the ones that you actually put to work than the ones that you don't. This is certainly one of those plans. If you can agree, then we've made a big step towards progress. The next step is..." Some of these are old school tactics or corny stuff that I just made up along the way mixed in with things I've read in the past. I'm sure people have better ways to close. I've read them b4 on here, but forgot what posts have it. Always good to update new approaches.“What’s your social security number?”
“A smile works well. A gun and a smile works better.”
- Al CaponeI think you’re talking too much. Get to the point.
I close by reminding them of my Nobel Prize in Economics, that my best friend is Myron Scholes, I have a ‘secret’ formula that picks winners 74.38476% of the time, that I waive all my fees if they lose any money in the market, I need a new roof on my house, and that we share the same [religion, ancestry, sex, sexual-preference, politics].
Works like a charm“Does this plan sound good” Yes
"The next step would be to transfer your accounts from X over here, we'll transfer everything in kind, that means nothing will be sold or change until it arrive here...then we will get together and discuss implementing the plan" Does that sound fair?I don’t usually take no for an answer…I just keep asking questions and say…“When you move your account over…blah…blah”…that helps…When you say that about 20 times in a conversation…They usually start to believe they are moving it to you by the end of the conversation… It’s worked well for me .
Baba is right, I usually don't even talk about buying or selling anything until they have their account transfered. Then your garaunteed some business at some point. If you bug them too much before they transfer, they have the option to ignore your calls.... If they transfer over their money...they have to listen to you at some pointin all seriousness, if you are looking for a closing line or great phrase to use to close the deal, the train has already left the station. nothing you can say AT THE END will ever make up for a poor process, lack of client by-in along the way, lack of trust, or a general feeling of warmth/respect you should have earned before ever uttering a closing statement.
[quote=theironhorse]in all seriousness, if you are looking for a closing line or great phrase to use to close the deal, the train has already left the station. nothing you can say AT THE END will ever make up for a poor process, lack of client by-in along the way, lack of trust, or a general feeling of warmth/respect you should have earned before ever uttering a closing statement.
[/quote] +1. It does not matter what close you use, just that you ask for the business. Everything before the close will determine if you get the business.I just outline my plan for doing better (whatever "better" is to them). When I am done, I say "this makes sense to me, but what do you think of it?" At that point, they usually say it makes sense to them too. You're done, open the account. If they say it does not make sense to them, ask why, and go from there.
[quote=wind3574]…
Baba is right, I usually don't even talk about buying or selling anything until they have their account transfered. Then your garaunteed some business at some point. If you bug them too much before they transfer, they have the option to ignore your calls.... ...[/quote] I believe you, I just can't imagine having a client just move their account to me without an idea of what I'm going to do with it. For someone to move, the pain of moving has to be less than the anticipated future joy of the move. How do they anticipate anything if they don't know what you are going to do with their money? Every once in a while, I have a referral or someone who is fed up with their advisor, and they want to move no matter what, but most people have to be "sold" to come over. Part of that selling involves letting the client know what I'm going to do with their money.I have been really successful with pointing out everything wrong with their current portfolio. Once they realize they are getting screwed, either by bad investments or wrap fees/high mutual fund fees…they usually want to move no matter what…Once they realize something is wrong, they ask for your advice. At that point you are golden. Just talk about diversification, great quality funds versus the ones they have. I have not had to go in depth about what I would do. I typically talk about how they could improve their portfolio over all, and they usually want to transfer it in kind (Maybe because by not talking specific investments…you rid of the whole salesmen gig for a few minutes). Then I offer to do an “In Depth” discussion of where we should put it after the transfer.
1st step is showing them the problems in their portfolio, and making them believe it. 2nd step is discussing an over all idea of how they could better their portfolio 3rd step transfer account 4th step is a detailed actuality of what specific investments you would put them in... thats exactly how I do it...and it works well for me....Im about $30,000 gross, at about 2 1/2-3 months out[quote=wind3574]I have been really successful with pointing out everything wrong with their current portfolio. Once they realize they are getting screwed, either by bad investments or wrap fees/high mutual fund fees…they usually want to move no matter what…Once they realize something is wrong, they ask for your advice. At that point you are golden. Just talk about diversification, great quality funds versus the ones they have. I have not had to go in depth about what I would do. I typically talk about how they could improve their portfolio over all, and they usually want to transfer it in kind (Maybe because by not talking specific investments…you rid of the whole salesmen gig for a few minutes). Then I offer to do an “In Depth” discussion of where we should put it after the transfer.
1st step is showing them the problems in their portfolio, and making them believe it. 2nd step is discussing an over all idea of how they could better their portfolio 3rd step transfer account 4th step is a detailed actuality of what specific investments you would put them in... thats exactly how I do it...and it works well for me....Im about $30,000 gross, at about 2 1/2-3 months out[/quote] I disagree with this. I don't speak about the former advisor and rarely see what they have before the transfer paperwork is being signed and I need a copy of the statement. If they are sitting in front of you, they are unhappy with something. If you focus that unhappiness on portfolio construction (which they don't understand anyway), at some point in the future some other broker will tell them what is wrong with your portfolio, and they will listen because you have told them this is what being a "good" financial advisor is about. It is easy to tear apart a portfolio with hindsight. If instead you focus on your process, what YOU do, and set expectations, you will be far more successful. Your focus on what is wrong with the other portfolio also sends a message to the prospect that they made a mistake. After all, they agreed to it. Some people will not admit mistakes, generally your A types with money. Allow prospects to improve without making a value judgement.Most of the people, I have found do not have a clue what any of their statements mean nor what investments they are in, so they haven’t felt like they have done anything wrong. The main thing is, they do really need some adjustments. I got a million dollar account last week, because he was paying 52% of his dividends and income in fees at his other firm and had absolutely no idea…In a market like this…they need to know whats wrong with their portfolio…
It's worked great for me and I have built alot of trust in clients by being honest and making them aware of the things their other advisor did not tell them....once they are transfered...I give them full disclosure of their statements, educate them on what investments we are putting them in and tell them exactly what they are paying....and I have transfered alot of accounts..[quote=wind3574]Most of the people, I have found do not have a clue what any of their statements mean nor what investments they are in, so they haven’t felt like they have done anything wrong. The main thing is, they do really need some adjustments. I got a million dollar account last week, because he was paying 52% of his dividends and income in fees at his other firm and had absolutely no idea…In a market like this…they need to know whats wrong with their portfolio…
It's worked great for me and I have built alot of trust in clients by being honest and making them aware of the things their other advisor did not tell them....once they are transfered...I give them full disclosure of their statements, educate them on what investments we are putting them in and tell them exactly what they are paying....and I have transfered alot of accounts..[/quote] Out of curiosity, 52% of divs into what fees? M&E? Fee based account? Internals? Please elaborate.Wind you say things that most true newbies with Jones have no clue about. What is your background? What resources are you pulling from i.e. local vets, literature, etc.?
He had 3 accounts…2 IRA’s and 1 Trust… One of his IRA’s was a managed account, that he was paying a 4% wrap fee on. It came out to be roughly $12,000 a year for one managed account. That alone was 52% of the income/dividends that he earned annually on all 3 accounts combinded. Not to mention all the unnessesary fee’s he was paying in B and C shares. You really dig deep in someone’s portfolio and you can almost always find an advisor, who’s taking advantage of them…Good way to get accounts…
This approach works well...but only if you are focusing on whats best for the client and not going to just put them right back into something they shouldnt be in...I've transferred over accounts...just to get them out of a wrap fee and not made a dime....Eventually i'll get some business by doin whats best for them... JAXSON - What sort of things do you mean? My background...Bachelors in Psychology...Master's in Business... Work- DHS facility for abused children...Business to Business Corporate Sales....Managed a touring band for awhile.... This is my first go round with this industry, but it's payin off in big ways. I'm puttin up some great numbers. I also just kind of read what I can. I glance at the WSJ and things, but it's so full of crap nowadays.... I get a book off Amazon every now and again...and reglance over my old series 7 stuff from time to time...and I will definitly get advice from Vets if needbe...but only if you are focusing on whats best for the client and not going to just put them right back into something they shouldnt be in…I’ve transferred over accounts…just to get them out of a wrap fee and not made a dime…
This is a very confusing statement to me. Are you saying the portfolio in your opinion was right for the client but the fee wasn't so you transferred it in-kind just to eliminate the fee to the client? What type of wrap account is charging 4%? What do you plan on doing with the B shares? Hold or penalty?Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas…
As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff?[quote=wind3574]Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas… I do not work at SB or use LA as a money manager. That fee says to me SMA. Yes?
As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff? What are you putting these people into. Your own stock porfolios? Class appropriate MF's? [/quote]Keep in mind, that is a 4% wrap fee on a $300m account.
Let’s give the guy a chance to respond, maybe he is telling the truth.
Of course he's telling the truth! Why would he lie?
I just transferred an account from Jones, where they were charging him a 5.75% commission every three years... I'm telling you man... it's everywhere! Accounts flying in left and right with HUGE fees.Wind for President!
[quote=wind3574]He had 3 accounts…2 IRA’s and 1 Trust… One of his IRA’s was a managed account, that he was paying a 4% wrap fee on. It came out to be roughly $12,000 a year for one managed account. That alone was 52% of the income/dividends that he earned annually on all 3 accounts combinded. Not to mention all the unnessesary fee’s he was paying in B and C shares. You really dig deep in someone’s portfolio and you can almost always find an advisor, who’s taking advantage of them…Good way to get accounts…
This approach works well...but only if you are focusing on whats best for the client and not going to just put them right back into something they shouldnt be in...I've transferred over accounts...just to get them out of a wrap fee and not made a dime....Eventually i'll get some business by doin whats best for them... JAXSON - What sort of things do you mean? My background...Bachelors in Psychology...Master's in Business... Work- DHS facility for abused children...Business to Business Corporate Sales....Managed a touring band for awhile.... This is my first go round with this industry, but it's payin off in big ways. I'm puttin up some great numbers. I also just kind of read what I can. I glance at the WSJ and things, but it's so full of crap nowadays.... I get a book off Amazon every now and again...and reglance over my old series 7 stuff from time to time...and I will definitly get advice from Vets if needbe...[/quote] So he should pay you 5.75% upfront so in 5-8 years he can realize the cost difference??? But wait you work at Jones so in that time frame you will have switched his fund company so he pays another 5.75% or maybe 4.25%.. I think it's stupid that you're selling point was fees, when you are going to jack him for 5.75% and then never doing anything else with the portfolio because you are strapped into one fund company... Doesn't Jones still endorse PutnamNo Jones doesn’t reccommend Putnam… Why do you guys always have to bash everything? Don’t you have anything better to do? Whats the purpose of this forum if you do nothing but bash people on it? I was simply answering a question…Doesn’t matter what kind of fee’s SB allows or jones allows…
This guy had a 4 % wrap fee on $300,000 managed account. Those are facts. I'm not going to dispute that. As far as all the sh*t talking on the B and C shares, seriously guys grow up. I said "unnecessary fees", meaning why pay 2% a year on a fund for 7 years when A shares work out less in the long run. Same goes for the opposite, why buy an A share if your only going to hold the thing for 3 years for some reason, then C shares would make sense. Stop trying to question everything I say, I'm not on this site to argue about what I put up as numbers, or the difference between A, B, and C shares...grow up[quote=Sam Houston][quote=wind3574]Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas… I do not work at SB or use LA as a money manager. That fee says to me SMA. Yes?
As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff? What are you putting these people into. Your own stock porfolios? Class appropriate MF's? [/quote] [/quote] I am trying to have a conversation with you but you keep getting distracted. Maybe we can learn something from each other. Answers?Sam - I apologize, I just get tired of the crap in here…Yes i am putting them in class appropriate funds. Most people hold these things long term, or plan to so A shares are definitly appropriate. What I am finding is most advisors just don’t want to have the commission talk to the customers, so they put them in B shares or C shares. I just try to get rid of as many “unnecessary” fees as possible. I guess alot of guys in here find it hard to believe someones actually doing whats best for the client… Right now it’s difficult for older generations, so I try to focus more on single bonds, cds, UIT’s, and the occasional bond fund for them.
No SMA...It was just an IRA account, managed by Lord Abbot. SB really screwed him on the deal. He had 2 IRA accounts. 1 with nothing but bonds and bond funds, the other with single stocks. When SB had LA take over the stock account they transferred the bonds into the managed account, and were taking the 4% "Management fee" on not only the stocks, but the bonds too....That kind of thing pisses me off...Ok, last couple of questions then we can wrap this up. $1mm client, $300m in one ira. How much in the other ira and how much in the trust? Mainly MF’s in the trust (b and c shares)? Did you transfer everything in kind? Did you cover all three transfer fees? How did you determine the 4% wrap fee? Listed on statment as a 4% wrap fee? Extroplating a quarterly fee?
I don’t even know if a fully loaded VA can come out to 4%. Something sounds fishy.
[quote=wind3574]Sam - I apologize, I just get tired of the crap in here…Yes i am putting them in class appropriate funds. Most people hold these things long term, or plan to so A shares are definitly appropriate. What I am finding is most advisors just don’t want to have the commission talk to the customers, so they put them in B shares or C shares. I just try to get rid of as many “unnecessary” fees as possible. I guess alot of guys in here find it hard to believe someones actually doing whats best for the client… Right now it’s difficult for older generations, so I try to focus more on single bonds, cds, UIT’s, and the occasional bond fund for them.
No SMA...It was just an IRA account, managed by Lord Abbot. SB really screwed him on the deal. He had 2 IRA accounts. 1 with nothing but bonds and bond funds, the other with single stocks. When SB had LA take over the stock account they transferred the bonds into the managed account, and were taking the 4% "Management fee" on not only the stocks, but the bonds too....That kind of thing pisses me off...[/quote] Only being out (new/new) for a couple months, how may UITs have you positioned in client portfolios? Which ones do you like the best (VKAC, FT etc)? Back in the day, you weren't really able to talk UITs until PDP or Top Gun class or something like that. The thing that's most odd is the fact that a rookie, with no prior industry experience, would be posting truly amazing numbers on an internet forum. How many EJ reps are there out 2-3 months doing that type of production...not too hard to narrow it down, I'd guess.i am also curious how he has a wrap program using B and C shares. is this possible at other B/D's?
Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.
Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions
IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)
IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares
Trust = $500,000 in bonds and mutual funds…B and C shares
This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…
We are breaking it into…
IRA = Stock positions/ Equity Mutual funds
IRA = Bond positions/Bond Funds
Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)
Mike - It does sound fishy…Thats why I transfered it.
Not saying it's impossible but, is there any chance at all you were working of the year-end 2008 statement it it was 3,000 for the year? If not, 4% is waay high. That seems a bit more plausible (1% wrap fee). I assume these are VKAC IMITs or MUTs you're using...Just curious why you'd use those as opposed to all individul MBDs. Does Jones still have the aggregation rule on individual fixed income?Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.
Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions
IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)
IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares
Trust = $500,000 in bonds and mutual funds…B and C shares
This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…
We are breaking it into…
IRA = Stock positions/ Equity Mutual funds
IRA = Bond positions/Bond Funds
Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)
Mike - It does sound fishy…Thats why I transfered it.
No, I was working off the 4th quarter statement. It was $3,000 per quarter. It said it plainly on the statement. It was 4%. We really shouldn’t be arguing this, because thats what it was. The client called SB and gripped and they said “Oh well, we can cut it in half”…
I don’t feel comfortable putting $500,000 or half of his portfolio in individual bonds for diversification reasons. But the largest reason we are spreading it out between Bonds, Bond Funds and UIT’s is the fact that we can get a better rate this way. We can get some good Munis paying 5% or so and we can have that solidity in safety, but I put some of it in bond funds to take advantage of some of the higher rates being paid on the lower rated bonds and also the upside to the growth of the share price. I would never have my clients own these individually but by investing some of their money in Tax Free Bond Funds he can take advantage of having a portion in High Income. Alot of bond funds are paying 5-8%, so its really mostly to raise their total income. By doing this I added about $4,000 projected a year to his income from what he was previously getting.
Am I being asked all these questions because noone believes a rookie can be successful and do things right?..Just curious…Kind of tired of all my actions being questioned…
Wind, you are being questioned because many of us can’t imagine how a b/d would ever allow one of their reps to screw a client with a 4% fee. It doesn’t sound possible. Therefore, my thinking is that you are wrong about something. For instance, maybe it’s an account that has a maximum fee of $3,000 per quarter. I don’t know, but logic says that something doesn’t add up with this.
Actually, no, you're misreading me. The extraordinary level of your success as a new EDJ FA is astounding. As such, you should be a blueprint for all rookies. However, surely you can understand how one might question just a teeny tiny bit the validity of the claims, no? I suspect that if I were as off the charts as you when I was new I probably wouldn't be posting this stuff on an interenet message board. Your numbers, if true, are so far out of the norm that it wouldn't be hard for EDJ to figure out which rookie out 3 months is spending time posting on a board (and, although your intent is not to post anything that could get you in trouble, "slips of the tounge" do happen). If the numbers aren't true then...well I guess there'd be some justification for the skepticism, right? In any event as I mentioned out of curiosity, does Edward Jones still have the bond aggregation rule for indivdual bonds?No, I was working off the 4th quarter statement. It was $3,000 per quarter. It said it plainly on the statement. It was 4%. We really shouldn’t be arguing this, because thats what it was. The client called SB and gripped and they said “Oh well, we can cut it in half”…
I don’t feel comfortable putting $500,000 or half of his portfolio in individual bonds for diversification reasons. But the largest reason we are spreading it out between Bonds, Bond Funds and UIT’s is the fact that we can get a better rate this way. We can get some good Munis paying 5% or so and we can have that solidity in safety, but I put some of it in bond funds to take advantage of some of the higher rates being paid on the lower rated bonds and also the upside to the growth of the share price. I would never have my clients own these individually but by investing some of their money in Tax Free Bond Funds he can take advantage of having a portion in High Income. Alot of bond funds are paying 5-8%, so its really mostly to raise their total income. By doing this I added about $4,000 projected a year to his income from what he was previously getting.
Am I being asked all these questions because noone believes a rookie can be successful and do things right?..Just curious…Kind of tired of all my actions being questioned…
i don’t see how it is possible. not saying you are lying, just that without seeing anything i cannot make heads or tails of it. my b/d would not allow it. i believe our ceiling is 2.5%
Well, I typically don't post on this site until late night after work. I don't usually spend my days posting...but i am away from town for a week.....In any event...The fee WAS 4%. The client even called the Advisor on it and the Advisor said, "Oh well, we can cut that in half", sh*t 2% is still rediculas.....so he transfered the account to me. the clients question to the advisor was "Why did you do this 5 years after I started this, why not earlier? Why address this after I find out"...The advisor even admitted it......So questioning it is not really necessary...I may be new but I can read a statement ya know?
Johnny - Yes Jones still has the aggregation rule....I'm only actually investing about $300,000 of the Tax free account.....He does have some good stuff in it..I'm not selling everything...I've spoken with compliance already....It's not an issue... I'm just getting alot of "are you sure's"...I'm new guys but I'd like to think I'm brighter than the average joe...ya know?[quote=wind3574]
I don't usually spend my days posting...but i am away from town for a week.....
[/quote] That's convenient[quote=wind3574]
Johnny - Yes Jones still has the aggregation rule....I'm only actually investing about $300,000 of the Tax free account.....He does have some good stuff in it..I'm not selling everything...I've spoken with compliance already....It's not an issue... [/quote] Why would you feel the need to all compliance?I always work with compliance, to make sure there will be no issues…Same reason you asked me about the aggregation rule…
What I am about to say will be taken as criticism, however it is not. Take it how you want. You don't know what you don't know. Your concentration on showing people what is wrong with their portfolio seems to center on costs. Great. You pulled out the EDJ playbook. You will never be the cheapest and clients that are gained using your techniques will leave you in the blink of an eye when your portfolio hits a rough patch because someone else will show them "what is wrong" with their portfolio and a lower cost. You set this into motion when you pitched them your process. This is weak and you will suffer for it. You state that you will make house calls and always be there for clients. Wait until you get a book built. You will not be able to live up to the service expectations you are setting. There are not enough hours in the day. The sooner you start underpromising and overdelivering the better off you will be. I will take you at face value that you are having the success you are and say that you are getting these clients because you are promising them something that you can deliver today, but won't be able to as your success grows. Clients will not understand that you have gotten busy. They will expect the constant attention you are promising and most likely will give in the beginning. When this stops, they will leave. B shares do not cost an additional 2%. They don't. It does not matter when it was bought or when it converts, if it is wrong for a client sell it. Period. Right now you can actually save them some money being the fund values are most likely down. I highly doubt they were in a 4% wrap account. If someone from SB wants to correct me feel free. What you have done though will likely cost the client far more by transferring the stock portfolio in kind. Now you have to run the portfolio without any idea of what purpose it was used for or the strategy behind it. I have yet to meet a newb (or many vets) that have the time or skill to do this effectively. You could have had it liquidated without commission at the previous firm and put them with a money manager that will accomplish your objective for this money. I also highly doubt bonds were transferred into the portfolio to collect a fee. You can't do that at my firm. Again, anyone from SB can correct me. I always found amusement with people that bitched about C shares and then sold UIT's. Seems to be a conflict there. A share class that charges 75 bps above an A share is unnecesary, but a UIT that charges more is a good deal? Peoples problem with you on this site has nothing to do with your success, it has to do with your "look at me" attitude. Stop posting your age, city, production screen and any other personal details. EDJ has a policy against posting on this forum. Learn a little humility and keep working hard and you will be just fine.Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.
Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions
IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)
IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares
Trust = $500,000 in bonds and mutual funds…B and C shares
This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…
We are breaking it into…
IRA = Stock positions/ Equity Mutual funds
IRA = Bond positions/Bond Funds
Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)
Mike - It does sound fishy…Thats why I transfered it.
What I am about to say will be taken as criticism, however it is not. Take it how you want. You don't know what you don't know. Your concentration on showing people what is wrong with their portfolio seems to center on costs. Great. You pulled out the EDJ playbook. You will never be the cheapest and clients that are gained using your techniques will leave you in the blink of an eye when your portfolio hits a rough patch because someone else will show them "what is wrong" with their portfolio and a lower cost. You set this into motion when you pitched them your process. This is weak and you will suffer for it. You state that you will make house calls and always be there for clients. Wait until you get a book built. You will not be able to live up to the service expectations you are setting. There are not enough hours in the day. The sooner you start underpromising and overdelivering the better off you will be. I will take you at face value that you are having the success you are and say that you are getting these clients because you are promising them something that you can deliver today, but won't be able to as your success grows. Clients will not understand that you have gotten busy. They will expect the constant attention you are promising and most likely will give in the beginning. When this stops, they will leave. B shares do not cost an additional 2%. They don't. It does not matter when it was bought or when it converts, if it is wrong for a client sell it. Period. Right now you can actually save them some money being the fund values are most likely down. I highly doubt they were in a 4% wrap account. If someone from SB wants to correct me feel free. What you have done though will likely cost the client far more by transferring the stock portfolio in kind. Now you have to run the portfolio without any idea of what purpose it was used for or the strategy behind it. I have yet to meet a newb (or many vets) that have the time or skill to do this effectively. You could have had it liquidated without commission at the previous firm and put them with a money manager that will accomplish your objective for this money. I also highly doubt bonds were transferred into the portfolio to collect a fee. You can't do that at my firm. Again, anyone from SB can correct me. I always found amusement with people that bitched about C shares and then sold UIT's. Seems to be a conflict there. A share class that charges 75 bps above an A share is unnecesary, but a UIT that charges more is a good deal? Peoples problem with you on this site has nothing to do with your success, it has to do with your "look at me" attitude. Stop posting your age, city, production screen and any other personal details. EDJ has a policy against posting on this forum. Learn a little humility and keep working hard and you will be just fine.[/quote][quote=wind3574]Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.
Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions
IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)
IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares
Trust = $500,000 in bonds and mutual funds…B and C shares
This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…
We are breaking it into…
IRA = Stock positions/ Equity Mutual funds
IRA = Bond positions/Bond Funds
Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)
Mike - It does sound fishy…Thats why I transfered it.
I dont post my …name…city…blah blah…Someone else did that…and I have contacted the admin in the forum for that…
My conversations with clients and prospects do not center on costs…That is simply a way to get the customer to listen to me. My conversations are built on relationships. I understand having a book of business is hard to keep in contact with everyone, that being said I know people who do it and I plan to be one of those people. The problem with everyone in this forum is that most of you have this “I can’t do it, so you can’t” attitude. Every piece of criticism I have gotten was because they couldn’t, no one can.
It was a 4% wrap fee. Believe that if you want to, or don’t. I’m the one handling it so it doesn’t matter if you think thats true. And Bonds WERE transferred from one account to the other…Thats per the client, Not me and confirmed through past statements. See another thing about your post is that you don’t have a clue about the whole situation, so don’t criticize (and yes, you can add the disclaimer that you aren’t, but you are). I already spoke with this client about selling the stocks prior to transfer, He however didn’t want to do that. Not my choice.
B Shares - It does matter and they do cost more. When your in a B share for 7 years that charges 1.91% annual fee?..How is that not more than maybe .24 a or a .76 over the long haul?
I’m not going to dispute this crap anymore…It sounds like you guys don’t have anything better to do than to bash people who are doing well…get off your ass and go see people…and maybe you could continue to make house calls…I’m done with this forum…Grow up guys…seriously…
I can't imagine one would need to have had alot of contact with compliance over the course of a 3 month career. I don't see what there would be an issue with in this case, unless of course someone would have side-stepped the aggregation rule, knew it, and wanted to see if he needed an LOA signed prior to the trade as opposed to getting an FSPEND and returning to the client after the fact to obtain it. I haven't sold an IMIT or a MUT in years. What are the breakpoints on those these days? The next broker that comes along looking at the EDJ statement with long IMITs under water might be able to shoot some holes in a portfolio like that if the client were conditioned to be focused solely on fees and performance only is all I'm saying.I always work with compliance, to make sure there will be no issues…Same reason you asked me about the aggregation rule…
Hey Slappy, I tried to be nice. There is a large number of clients who are willing to listen and will take the "cost" bait in a bear market. You need to do things that work in bull market also as they occasionally happen. But you have been in the business for 3 months now so you've got it figured out. Sorry. You are very thin skinned for this business. Color Key: Blue=Sam All other colors=WindyI dont post my .IF you didn’t see the numbers…sorry…but they were posted…. …name…city.I live in Oklahoma City…blah blah…That could come off as arrogant, but i can tell ya, i am only 25 and beginning my career. I have a B.A and an M.B.A. It would definitly help me to have it on there…Someone else did that…and I have contacted the admin in the forum for that… Those were your posts.
My conversations with clients and prospects do not center on costs…It’s easy for a nice looking, very personable, small town boy, who graduated from a local Big 12 college to come in and swoop accounts out from under an advisor with $100M book, who hardly calls them and charges them a wrap fee…… I tell them that I have done alot of reviews and it seems that alot of people in the neighborhood have been paying un-necessary fees on their account and that there have been some better deserving investments that should have been placed in their portfolios The main thing i focus on is not throwing up on them with what I can do for them. They don’t care what I can do. That is until you give them a review and you make them see what is wrong with their portfolio (Fees, bad investments, etc). …That is simply a way to get the customer to listen to me. My conversations are built on relationships. You think this, however you cast the die on the doorknock. I understand having a book of business is hard to keep in contact with everyone, that being said I know people who do it and I plan to be one of those people. The problem with everyone in this forum is that most of you have this “I can’t do it, so you can’t” attitude. Every piece of criticism I have gotten was because they couldn’t, no one can. You will find out, don’t say I didn’t warn you.
It was a 4% wrap fee. Believe that if you want to, or don’t. I’m the one handling it so it doesn’t matter if you think thats true. And Bonds WERE transferred from one account to the other…Thats per the client, Not me and confirmed through past statements. See another thing about your post is that you don’t have a clue about the whole situation, so don’t criticize (and yes, you can add the disclaimer that you aren’t, but you are). I already spoke with this client about selling the stocks prior to transfer, He however didn’t want to do that. Not my choice. This absolutely proves my point. He moved to avoid the fee because you told him it was “soooooooo” bad, not for your advice. You will lose him for exactly the same reason some day.
B Shares - It does matter and they do cost more. When your in a B share for 7 years that charges 1.91% annual fee?..How is that not more than maybe .24 a or a .76 over the long haul? Please educate me, what B share (symbol) @1.91% compared to what A share @.24%?
I’m not going to dispute this crap anymore…It sounds like you guys don’t have anything better to do than to bash people who are doing well…get off your ass and go see people…and maybe you could continue to make house calls…I’m done with this forum…Grow up guys…seriously…
seriously, are there advisors on this site who are allowed to charge a 4% fee?
Ok, back to closing arguments. I learned one yesterday I’m going to try out.
"Try my split-strike conversion strategy. You’ll be happy. Trust me."
I think the fee is slightly higher than 4%.
I’m just going to come out and say what everyone is thinking… DJ WIND, you are a liar!
Do you honestly expect anyone to believe the crap you are posting. Lightening strikes once, maybe even twice, but dude you hit a home run every single time. WHATEVER BROTHER!
You’ve spent the entire day posting in the forum - I spent the entire day door knocking. Enjoy goals soon.
Dorian is the only newbie I know that can tell the stories Windy claims. You know Dorian don’t you Windy?
I know just who this guy is … he ain’t doing it. Trust me!
I'm shocked! I don't doubt you know who he is. I don't know who he is, I just know he's full of BS. I was a Pacesetter at EDJ, worked hard, knocked doors, got my nose bloodied and neither I, nor anyone else at the time - even the superstars were even close to putting up these numbers with this amount of ease. I would be interested to know how many new/news as a % are Pacesetters these days. I remember Bob Gregory, John Bachmann or someone giving us a talk at the Pacesetter awards meeting remarking how "Pacesetters" were the backbone of the company. The good old days - probably the last Pacesetter class to stay at the World Trade Center (Marriott?).I know just who this guy is … he ain’t doing it. Trust me!
Wind's approach sounds like the old A.L. Williams (Primerica) kitchen table slam....
Convince the client that the existing rep is screwing them and stealing their money. That you are the White Knight and going to work for free.
Also, depending on the portfolio makeup - a comparison of the fee as a percentage of the dividends/interest may be misleading. If the portfolio is growth oriented - there may not be dividends to compare against. What's the dividend yield on AGTHX?
Sam is right - this type of approach may be successful in the short run - but, be prepared to lose those clients during the next downturn. What would be interesting to hear is - after you have pointed out all of these bad investments - what you would have done during that same time frame?[quote=maddog]
Sam is right - this type of approach may be successful in the short run - but, be prepared to lose those clients during the next downturn. [/quote]Wind will be 70 the next time we have a downturn like this.
[quote=buyandhold] [quote=maddog]
Sam is right - this type of approach may be successful in the short run - but, be prepared to lose those clients during the next downturn. [/quote]Wind will be 70 the next time we have a downturn like this.[/quote] What? - the market only cycles every 70 years?
[quote=wind3574]
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Posted: 11 March 2009 at 11:49pm I was just curious if any other EDJ rookies are having great success? I just posted a $10,000 gross day. Makes me love my job... Well, I typically don't post on this site until late night after work. I don't usually spend my days posting...but i am away from town for a week.....In any event...The fee WAS 4%. The client even called the Advisor on it and the Advisor said, "Oh well, we can cut that in half", sh*t 2% is still rediculas.....so he transfered the account to me. the clients question to the advisor was "Why did you do this 5 years after I started this, why not earlier? Why address this after I find out"...The advisor even admitted it......So questioning it is not really necessary...I may be new but I can read a statement ya know? Johnny - Yes Jones still has the aggregation rule....I'm only actually investing about $300,000 of the Tax free account.....He does have some good stuff in it..I'm not selling everything...I've spoken with compliance already....It's not an issue... I'm just getting alot of "are you sure's"...I'm new guys but I'd like to think I'm brighter than the average joe...ya know? [/quote] How did you have $10,000 day, while not being at work this week? I'm sure there will be some excuse, but if this is not an indication that he is lying, I don't know what is.
[quote=wind3574]Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas…
As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff?[/quote]Wind -
how long have you been in the business, a week? If i told you that Marilyn Monroe had a d*** would you believe that too?
SB, or any other company which is at all legitimate, doesnt charge 4% for a managed account. The max is 3%, and nobody, i mean nobody has charged 3% in 10 years. Most charge 1-1.5%.
Get your facts straight. And wake up and realize that half the time clients and prospects dont know what the hell they are talking about.
I suppose you quoted the client 3% and figure they will think thats a steal.
I have been really successful with pointing out everything wrong with their current portfolio. Once they realize they are getting screwed, either by bad investments or wrap fees/high mutual fund fees
wind is a tool. wont be in biz in 3 years. used car salesmen
a. advise people as if it was your mom's money-NO exceptions.
b. listen to people.
c. never trash other guy. focus on what YOU can do for them
d. be humble. "Great question, I have no idea the answer. I will find out."
e. set very very very low expectations. under sell. set them up for worst case.
f. focus long term
g. learn stocks and bonds. get into a wrap program where YOU run the money as quickly as you can. (you CAN do it) Stocks/bond/cash-period
h. qualify (so HARD) you CANT waste your time with peanuts. qualifing is very hard. if you dont, you wont make it. big people are SCARY. you must overcome this fear.
i. find out as QUICK as you can whether some one REALLY could be your client. (so HARD). ask this question. "Could you become my client?" very hard to do.
Will save you so much time.
j. ask for the order. (very hard).
if they say yes. STFU.
go for it.
k. repeat (a) above ever single day.
[quote=Sportsfreakbob] [quote=wind3574]Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas…
As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff?[/quote]Wind -
how long have you been in the business, a week? If i told you that Marilyn Monroe had a d*** would you believe that too?
SB, or any other company which is at all legitimate, doesnt charge 4% for a managed account. The max is 3%, and nobody, i mean nobody has charged 3% in 10 years. Most charge 1-1.5%.
Get your facts straight. And wake up and realize that half the time clients and prospects dont know what the hell they are talking about.
I suppose you quoted the client 3% and figure they will think thats a steal.
[/quote] It gets better than that. Not only did he see it on a statement, but they called the other advisor about it. Plus the other advisor had transferred bonds into the account to collect the "4%" fee on those also.
One has to wonder what the client was gripping when he called...The client called SB and gripped and they said “Oh well, we can cut it in half”…
He was gripping his ankles as wind was showing him his brand new A share portfolio
One has to wonder what the client was gripping when he called...[/quote] To quote my 25 year old M.B.A. friend Windy, "Thats rediculos"[quote=wind3574]The client called SB and gripped and they said “Oh well, we can cut it in half”…
I guess life is pretty easy when you just shove everyone into GE, Home Depot, Intel, Johnson & Johnson and McDonalds…
But I am concerned about the Spendulous Bill, I wonder if there is some perspective available on that?I guess life is pretty easy when you just shove everyone into GE, Home Depot, Intel, Johnson & Johnson and McDonalds…
i am now totally clueless about what this thread is all about. (but its funny)
[quote=maddog][quote=buyandhold] [quote=maddog]
Sam is right - this type of approach may be successful in the short run - but, be prepared to lose those clients during the next downturn. [/quote]Wind will be 70 the next time we have a downturn like this.[/quote] What? - the market only cycles every 70 years? [/quote]
This is not a cycle, this is a crash.
[quote=wind3574]Sam - I apologize, I just get tired of the crap in here…Yes i am putting them in class appropriate funds. Most people hold these things long term, or plan to so A shares are definitly appropriate. What I am finding is most advisors just don’t want to have the commission talk to the customers, so they put them in B shares or C shares. I just try to get rid of as many “unnecessary” fees as possible. I guess alot of guys in here find it hard to believe someones actually doing whats best for the client… Right now it’s difficult for older generations, so I try to focus more on single bonds, cds, UIT’s, and the occasional bond fund for them.
No SMA...It was just an IRA account, managed by Lord Abbot. SB really screwed him on the deal. He had 2 IRA accounts. 1 with nothing but bonds and bond funds, the other with single stocks. When SB had LA take over the stock account they transferred the bonds into the managed account, and were taking the 4% "Management fee" on not only the stocks, but the bonds too....That kind of thing pisses me off...[/quote]I am at SB - you have no idea what you are talking about. Moving the bonds into a managed account and charging even a penny on them as a fee is not permitted. In addition if the client had individual stocks in it and the account is being managed by LA, then it IS an SMA.
As far as being afraid to show the commission - thats great - you show the 5.75% commission - you are my hero. I prefer to tell the client that there is no commission to buy and sell, but there is a fee for my advice and knowledge.
You are 2 1/2 to 3 months in, and you 1. have 30k gross in and 2. are trying to tell us this crap and get upset when we dispute it?
You are full of crap, you dont know what you are talking about, and you need to get a thicker skin.
[quote=theironhorse]i don’t see how it is possible. not saying you are lying, just that without seeing anything i cannot make heads or tails of it. my b/d would not allow it. i believe our ceiling is 2.5%[/quote]
He is lying. SB or ANY wirehouse or ANY legitmate b/d would not allow a 4% fee on an advisory account.
Please teach me how to do $30k in my first two and hal months and spend so much time on a message board.
[quote=wind3574]
thats exactly how I do it...and it works well for me....Im about $30,000 gross, at about 2 1/2-3 months out[/quote] I know some advisors that put their parents in a $600,000 annuity in their 2nd month as well.Source URL:https://www.wealthmanagement.com/forums/rookies-trainees/best-closes-or-techniques