If you knew then what you know now

You can’t build a book the right way at Jones because you can only do transactional business.  You are wasting your time and talent there.

Spend less time working on, thinking about, going after accounts that are small for the effort spent.  I have no problem opening small relationships if it doesn’t look like it will be very resource intensive in the long run.  But…I would have spent more time trying to find people who were the type that I enjoyed calling when it was time to check in with them.  The bigger the potential relationship the better, but I should have focused on $/hr and enjoyment more than I did.  The EJ method of developing many relationships and see what pops would have worked better if I had been more focused that way; my peers that did so grew faster initially.

[quote=Cowboy93]Spend less time working on, thinking about, going after
accounts that are small for the effort spent.  I have no problem
opening small relationships if it doesn’t look like it will be very
resource intensive in the long run.[/quote]



This is where the EDJ platform fails (based on what I saw on the
website). These are the accounts that you set up with a target date
fund and move on. Easy to service and good in the long run as you have
a relation to handle bigger things in later stages of life.

[quote=AllREIT][quote=Cowboy93]Spend less time working on, thinking about, going after accounts that are small for the effort spent.  I have no problem opening small relationships if it doesn't look like it will be very resource intensive in the long run.[/quote]

This is where the EDJ platform fails (based on what I saw on the website). These are the accounts that you set up with a target date fund and move on. Easy to service and good in the long run as you have a relation to handle bigger things in later stages of life.
[/quote]

I'm not sure what website you are looking at that tells you how each individual IR manages his book, but your statement makes it sound like we all spend hours each day trying to figure out how to allocate a $10,000 account.  If they aren't buying a specific investment of their choosing, like a stock or individual bond, the only decision I have to make is what strategy fund I'm going to use.  Not quite the Fidelity Freedom approach, but pretty close. 

Broker24, while their assumptions about your business practices are wrong, they are correct about starting to focus on specific types of clients.  Even with only a year under your belt you need to start thinking very specific long term.  What do you like to do?  Insurance/Estate Planning, Retirement Plans for businesses, financial planning for individuals, retirees?  The quicker you can figure out what you enjoy the more you can target.  Nothing like building a book of stock buyers only to find out you prefer managed money. 

I'd also break out of the Jones marketing mold.  At your stage in the business the marketing strategy is to go doorknock another 500 doors.  You can do that if you want, but it will start to suck pretty soon.  Talk to some other brokers in your area, about advertising in the paper, mass marketing, etc.  Buy a list and go doorknock those people.  There are a lot of avenues besides doorknocking.  Oh yeah, become the king of referrals.  The people in my region who have grown the fastest have been the ones who as for referrals constantly.  Keep up the good work!  I'd like to keep making money on my LP.

If you must pursue small accounts, pick one or two series of asset allocation funds and stick with them as much as possible.  I personally prefer MFS, Accessor(accessor.com) or Oppenheimer, myself.

Keep your book simple and streamlined so you don’t have to follow too many different things.

Joe,

What indy outfit are you with?

Accessor funds are pretty good.

Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.  What I wish I'd done sooner is what I'm doing now...set a new business minimum.  As of 1/1/07, new business to be maintained by me is $250K.  Anything less will be assigned to an associate as soon as I reach $50 million AUM.  Under no circumstances will I do a CD under $50K and under very limited circumstances  (recurring roth contributions) will I open any new relationship under $10K.

I am moving upstream as well... $250K and up is the 2007 minimum, but I will open accounts for 200K if they elect to monthly contributions such as 2k-3k/ month into a CMA or brokerage account.

I have realized that it takes just as long to close an 800K account as it does a 300K account. Assessing my 2006, I realize that way too much time was spent on mining smaller accounts. I could have been focusing my time on larger relationships instead. Oh well- live and learn....

BTW- UCONN is 9-0 and rapidly moving up the rankings

[quote=Indyone]Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.[/quote]

Because when the CD matures, you have funded account, a happy client, and a relationship. This is a marketing route for less established advisors.

Alot of this is the idea of having customers pass a wall of fear, that prevents them from fully trusting new people untill they get a sense of the relationship and abilities on both sides.

[quote=Indyone]What I wish I'd done sooner is what I'm doing now...set a new business minimum.  As of 1/1/07, new business to be maintained by me is $250K.  Anything less will be assigned to an associate as soon as I reach $50 million AUM.  Under no circumstances will I do a CD under $50K and under very limited circumstances (recurring roth contributions) will I open any new relationship under $10K.[/quote]

When you start making serious cash consistently be disciplined not just in your 401k but build up cash reserves in your PA. The patient few with cash are typically rewarded. May 2002 I transferred in one of my largest accounts. We bought in middle October 2002. Throw a dart it is up, wish i’d had lots of cash.

[quote=$$$$$]

Joe,

What indy outfit are you with?

[quote=BankFC]Accessor funds are pretty good.[/quote]

You were the one who turned me on to them…thanks!

Although their support is less than impressive.

[quote=AllREIT] [quote=Indyone]Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.[/quote]

Because when the CD matures, you have funded account, a happy client, and a relationship. This is a marketing route for less established advisors.[/quote]

I hear you, but I can't imagine attracting anything but sh*tty little clients with this method...

[quote=Indyone][quote=AllREIT] [quote=Indyone]Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.[/quote]

Because when the CD matures, you have funded account, a happy client, and a relationship. This is a marketing route for less established advisors.[/quote]

I hear you, but I can't imagine attracting anything but sh*tty little clients with this method...

[quote=Indyone][quote=AllREIT] [quote=Indyone]Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.[/quote]

Because when the CD matures, you have funded account, a happy client, and a relationship. This is a marketing route for less established advisors.[/quote]

I hear you, but I can't imagine attracting anything but sh*tty little clients with this method...

[quote=AllREIT]

[quote=Indyone][quote=AllREIT] [quote=Indyone]Joe & I are both with LPL.

One thing I would do, particularly where you are, is lay off the $5,000 CDs.  For the life of me, I can't understand why Jones even runs those ads.  $5K CDs have got to be the most unprofitable, undifferentiated business you can do.[/quote]

Because when the CD matures, you have funded account, a happy client, and a relationship. This is a marketing route for less established advisors.[/quote]

I hear you, but I can't imagine attracting anything but sh*tty little clients with this method...

[quote=joedabrkr]
And what if you spend all that time having “the
conversation” only to learn that they were predisposed to opening that
5k “funded account” with you in a CD because they’re a rate hog, hate
risk, and that’s really about the only money that they have in the
whole wide world?
[/quote]



Sell them a fixed “bonus” annuity.



—

Actually at that point we have the serious conversation™



: This all the money I have from collecting bottles and cans for 25 years. I can’t afford to lose a single nickel.

: I have many clients with situations
similar to yours. What I usually recomend is either buying another CD,
or I can cut you a check and keep you on my list if anything else shows
up.

:Is that a real Van Gogh?

:Yes

1.  If you are still selling the firm rather than yourself, stop.  You have some experience, so YOU are the expert, not EDJ.

2.  Like has been said above, spend your time working with people who either have larger accounts now or potential to grow.  When you first start out it makes sense to allocate that $10,000 account to several different funds, not because the same can't be accomplished with an asset allocation fund, but because you need the practice.  You need to hone your presentation on the $10,000 accounts, so when the $100,000 or $1,000,000 presentation comes up, you don't blow it.  Now, those people go into an asset allocation fund, or some set allocation you do, don't waste time reinventing the wheel for small accounts.  I know they get a bad wrap, but the Putnam Asset Allocation funds have performed well, and their management problems are behind them, that's where my "park it and forget it" money goes.

[quote=joedabrkr]If you must pursue small accounts, pick one or two
series of asset allocation funds and stick with them as much as
possible.  I personally prefer MFS, Accessor(accessor.com) or
Oppenheimer, myself.

Keep your book simple and streamlined so you don’t have to follow too many different things.

[/quote]



Bingo! Unless you are getting paid an advisory fee don’t actively
manage money. You cannot keep track of so many things, especially for
small accounts.



If your platform has target date funds I like the American Century
Livestrong funds b/c of the nice Lance Armstrong angle. Combine that
with a TIPS fund, and you are all set for most clients.

I am amused by all the talk about the 5K CD account. Granted that is not an account that you want to build your marketing strategy around. When you are building your business you have to build your assets. Personally I prefer dollars that roll in month after month so I look at business retirement plans for businesses that are less than 25 employees and systematic investments for individuals. Too many advisors live by the rollover and die by the rollover. What better client can you have than a 30 ish couple that puts away 2000 per month? Duplicate that for about 100 of those and your business will be looking great when you throw in an occasional large rollover.

How many 30ish couples put away 2000 per month in addition to their

401k? Or are you talking about the money they are putting into that?

[quote=noggin]I am amused by all the talk about the 5K CD account. Granted that is not an account that you want to build your marketing strategy around. When you are building your business you have to build your assets. Personally I prefer dollars that roll in month after month so I look at business retirement plans for businesses that are less than 25 employees and systematic investments for individuals. Too many advisors live by the rollover and die by the rollover. What better client can you have than a 30 ish couple that puts away 2000 per month? Duplicate that for about 100 of those and your business will be looking great when you throw in an occasional large rollover.[/quote]

are you in IRD?

[quote=Broker24]How many 30ish couples put away 2000 per month in addition to their
401k? Or are you talking about the money they are putting into that?[/quote]

If you look at a 30ish couple who fully funds their Roth accounts, that is 8K per year. If those couples are serious about becoming financially independent they will want to be adding at least 20% of their income away yearly. If the couple is only making 100K to 120K then they should put away that kind of money to be independent at 50-60 years old. Obviously not everyone can do that but shouldn't we as advisors try to elevate our client's lifestyles?

EDJones654- No I am not in IRD.

[quote=noggin]

[quote=Broker24]How many 30ish couples put away 2000 per month in addition to their 401k? Or are you talking about the money they are putting into that?[/quote]

If you look at a 30ish couple who fully funds their Roth accounts, that is 8K per year. If those couples are serious about becoming financially independent they will want to be adding at least 20% of their income away yearly. If the couple is only making 100K to 120K then they should put away that kind of money to be independent at 50-60 years old. Obviously not everyone can do that but shouldn’t we as advisors try to elevate our client’s lifestyles?

EDJones654- No I am not in IRD.