ML Financial Advisor and POA

You forgot the BMW Lease for the first 2 years you get…Black with a Bull front license plate.

[quote=rightway]You forgot the BMW Lease for the first 2 years you get...Black with a Bull front license plate. [/quote]

HA!  That would be interesting...but not the way that things work.  Besides, why would I get rid of my current car for a BMW?

Another great thing about ML is that I live about 2-miles from their huge Hopewell complex.  That allows for a slightly lower pay than the NYC firms but not much of one.

As I’ve said here before, you do NOT want a high salary in the POA program.  

[quote=WealthManager]

According to the school’s placement survey, last year’s graduates entering Private Client Services had a base salary of $100K with a $20K signing bonus and a $40K guaranteed year-end bonus. 

[/quote]

Those people are largely becoming salaried private bankers, not commission-paid brokers. The private banks and independent asset management (wealth management) boutiques pay rookies considerably more and their job is largely to service existing clients or develop relationships from well-established sources. Their lifestyle and experience is considerably more corporate and better when they are just starting out.

At ML or any of the enormous wirehouses, you will be given substantially less pay and will be expected to get clients. Your life will be miserable and degrading for a few years, as you desperately try to build a book of clients and avoid getting fired for failing to meet your fairly lofty, firm-determined  goals. You will, however, be given the chance to earn significantly more than a private banker or a junior partner in a boutique wealth management shop, and after 7 plus years of busting your ass - cold calling, begging for money, you will OWN your own clients and have an infinitely superior lifestyle to anyone but a sucessful small business owner or VC partner.

The VAST MAJORITY of rookie brokers don't make it. MS lost about 66% of its training program to attrition in the last 5 years. 66%! This is basically true everywhere - no matter how swanky the firm is (and ML ain't that swanky), most of the rookie brokers fail out. It's a really tough career to make.

Most people who do manage to make it are driven insane. Arrogance, viciousness and chutzpah are commonplace. Few branch offices are happy places. Support staff are all paid poverty wages and are completely dependent on branch managers and brokers to provide them with bonuses.

Private banks (not bank brokerages - BIG differences) tend to be rather sedate sorts of places - there's plenty of business for everyone and people are all on salary plus bonus and most don't work terribly hard. Support staff are generally well paid (relative to wirehouse brokerages) and are generally competent. The cultural differences are striking. A FEW private bankers are paid over a million dollars a year -it generally pays as well as an attorney or doctor.

The average private banker (probably) makes more than the average broker, but brokers who make more than $1million a year are in the hundreds at a major national firm.

Thank you San Fran Broker for all of the information that you provided.  I guess that I’m still trying to understand the distinctions between a private bank and a wire house.  My desire is to be a Wealth Manager, not a broker.  I want to manage relationships and I understand that as people become more affluent that managing their finances becomes more complex.  I want to be there to help families successfully manage their finances to better meet their life goals.  While my main interest is investment planning, I am also interested in helping with estate, retirement, income tax and philanthropic planning.  I don’t want to necessarily be an expert in all of these areas.  I more so want to be able to take the planning at least 90% of the way and leverage off of the product specialists to take the planning the remainder of the way.

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I guess that I’m a little confused.  My understanding is that UBS is the largest private bank and the Merrill Lynch is the most profitable one.  From what I’m reading here it seems that Merrill Lynch is being classified as a wire house.  Can someone please help me draw the distinctions between the two types?

Thank you!

You are defintiely barking up the wrong tree by applyin to ML POA program if you want to do what you outlined above.

Everything you said you wanted to do could be done as an ML FA, but only if: 

A)  You have been a BROKER for twenty years and have ACQUIRED those clients, or

B)  You are part of a high performance team, and they see fit to let you do the cake work (planning) while they do the hard work (generating business and prospecting).  This is unlikely, because most would expect you to pull your weight and bring in new business (which would consume the VAST majority of your time).

While the ink might still be drying on your newly minted MBA, fact is unless you have a CFP, CFA, etc your career specific (financial planning) knowledge might be limited. 

If you really want to do what you said above, my suggestion would be to look at trust companies, either independent or bank-owned.  You might not make $80,000 right off, but it is low stress, planning oriented (as opposed to sales oriented), and stable. 

By the way, maybe I'm just confused...but who would go so far as to apply to somewhere like ML and NOT KNOW they are a wirehouse?????

Obviously UBS is a swiss bank, and ML has similar services on the INSTITUTIONAL level, but ML POA is the training program for the BROKERAGE SALES FORCE.  Nothing more, nothing less.

[quote=BankFC]

By the way, maybe I'm just confused...but who would go so far as to apply to somewhere like ML and NOT KNOW they are a wirehouse?????

Obviously UBS is a swiss bank, and ML has similar services on the INSTITUTIONAL level, but ML POA is the training program for the BROKERAGE SALES FORCE.  Nothing more, nothing less.

[/quote]

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I understand that the POA is for becoming a Financial Advisor in the Global Private Client division and that their responsibilities are to offer clients advice, guidance and services for financial planning.  I personally would never want to say that I’m a broker that works for a wire house.  Aren’t those terms from the past?  I don’t mean that just from the semantics viewpoint but hasn’t the market changed to where the consultative client centric wealth management approach is the path with the greatest chance for success? 

Doesn’t Merrill Lynch also have Private Wealth Management teams?  Don’t these teams go further than just investment advice but also help with estate planning, charitable trusts, endowments and other tax trappings of the rich?  I’m not saying that being part of a private wealth management team is where I want to be, but my understanding is that a GPC FA can certainly leverage the services that are offered.

Maybe my head is in the clouds and I am far from reality, but I saw Merrill Lynch as a great place to start a business.  I love how entrepreneurial it is.  They have a great depth of services in addition to embracing open architecture.  I feel that they give me more latitude than other places.  For example, if I choose to I would be able to pick up small 250K clients who I feel that have potential.  However, I’ve heard many complain about the $15M in 2-years.  Who would want to continue in the business if that is all that they are able to get in AUM in that period of time?  I just can’t see how anything under $25M would result in a paycheck that isn’t enough to warrant continuing.  Am I wrong?

Doesn’t Merrill Lynch also have Private Wealth Management teams?  Don’t these teams go further than just investment advice but also help with estate planning, charitable trusts, endowments and other tax trappings of the rich?  I’m not saying that being part of a private wealth management team is where I want to be, but my understanding is that a GPC FA can certainly leverage the services that are offered."

I am part of GPC, and our Private Wealth Dept is basically the same entity. The difference lies in the fact that PW goes after larger acoc**ts, and that they dont get paid on assets under 10M. All in all, the platform and product/service capabiltities are the same for GPC and PW. Of course, there are some PW advantages when it comes to access to institutional research, etc, but both groups provide comprehensive planning services....

From what I’m seeing, you do not want to be in sales.  If that is
the case, forget about Merrill Lynch and the “wealth management” aka
brokerage business altogether…

P.S.  Please do not waste an NYU MBA on being a FA/broker/wealth
manager…you obviously have exceptional intelligence and this
position requires no significant intelligence whatsoever.  You
would be wasting possibly your strongest asset.

"P.S.  Please do not waste an NYU MBA on being a FA/broker/wealth manager....you obviously have exceptional intelligence and this position requires no significant intelligence whatsoever.  You would be wasting possibly your strongest asset."

How does being a SUCCESSFUl FA require having no exceptional inteeligence? Grbated, it doesnt take a genius to pick up a phone and cold call for 8 hours/day. Nor does it take much for someone to be personable and socialable. However, when you are competing for a person's wealth and commitment, it does take intelligence in terms of strategy development, presentation, and execution. You have been involved with great organizations- do you think everyone is a brainless grunt???

Please share your thoughts... I will wait patiently as I rebalance a clients portfolio (a local trust attorney..) and run a proposal for a $4M prospect... God I love being dumb...

The one thing I agree is that an NYU MBA is something of accomplishment...

Blarm- By no means was I implying that brokers are DUMB.  You do
need to have at least average college level intelligence.  But
someone who got accepted and completed an MBA at NYU is probably in the
top 1% of the population in terms of intelligence, and that is an asset
that he can more greatly leverage in a different job capacity. 
I’m fresh out of college with a finance degree, and can honestly say
that I have yet to use one peice of knowledge I obtained at
college.  Meaning I could have come here straight out of high
school and been in the exact same place…except that the firm
requires a college degree for the only reason of perception of
competence by the public…

Yes, BUT--if you are intelligent in a field where intelligence is not a prerequisite, might it not be easier to compete?  I think once you get past the very difficult task of acquiring a client, having the intelligence to know how to best serve them speeds up the trust and confidence that engenders loyalty to the point of referrals.  In other words, it could be an advantage.  If you want to go get a job at Goldman or McKinsey, you're competing w/every other genius out there.  If you can make this career work, you can eventually work "smart" and not too terribly hard.  Not so much in i-banking or corp manager type work.

Scorp and Cow- agreed…

Wealth Manager,

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You are very fortunate to be receiving excellent advice in some of the posts in this thread.

A couple things:

Yes it does help to be smart and educated in this business.  I realize that there are examples of people that succeed without these traits, but education helps.  That does not mean that clients will be leaping at the opportunity to work with you, but anything that helps you establish credibility in the broader business community is a good thing.

I do think you are seriously underestimating one facet of this business.  Specifically, it is much harder to gather $15 M in two years than some of the comments in your posts might suggest.  It sure helps to know people with money, but that does not mean that they will immediately (or ever) become your clients.  In general, a client has to like you and be dissatisfied with their current broker.  I intentionally use the term broker because all of this stuff about wealth management is basically marketing fluff put out by the firms.  It is often a fatal flaw for brokers to smoke the same stuff that firms are trying to use as a hook for clients.

The other thing is that everybody and their brother is in the business in some form or other.  There are wirehouses, banks, insurance people, etc. all over that are looking for the same assets and clients.  Some of the competition are hacks, but the volume of people out there prospecting adds to the level of noise.  Some of the competition are young and hungry and will promise things that they cannot deliver (i.e., snakeoil / EIA vendors) and some of the competition will just pay attention to some of your clients that are feeling neglected while you are out prospecting.

Unless you are very lucky or well-connected, I think you will find that even the $250K clients you refer to are not that easy to find.

Bottom line – you can probably succeed in this business if you are realistic (and better yet, cynical) about what you are doing.  

Why is it that everyone wants to start in this business at the level
that took most of us 10 years to achieve?  When I started in the
business I was 24 and was so hungry to learn anything, open anything,
and basically tell everyone what I was doing and ask them to become a
client. 



Now we have college grads saying they want to come in and manage a pile
of assets and affluent relationships without paying any dues or taking
the time to learn the business…which is the best education of
all.  We should not discourage young people from getting into this
business, but rather educate them on the realities of it and the
wonderful benefits that await them a few years down the road. 



This is a noble and rewarding carreer, one in which you make lasting
effects on peoples lives by making their dreams and aspirations come
true.  You get total flexibility with your time, make more money
per hour than 99% of the attorneys and doctors out there, and go to
sleep every night knowing your clients rest easy because of the work
you do.  New advisors and those considering this fine career
should know it is front end loaded with challenges and hard work, but
so very worth it.

I agree with you and I don't mean to come across as overly negative in my post.  The failure rate for new folks is just so high and I think a lot of it is due to unrealistic expectations.

[quote=rightway]Why is it that everyone wants to start in this business at the level
that took most of us 10 years to achieve?  When I started in the
business I was 24 and was so hungry to learn anything, open anything,
and basically tell everyone what I was doing and ask them to become a
client. 



Now we have college grads saying they want to come in and manage a pile
of assets and affluent relationships without paying any dues or taking
the time to learn the business…which is the best education of
all.  We should not discourage young people from getting into this
business, but rather educate them on the realities of it and the
wonderful benefits that await them a few years down the road. 



This is a noble and rewarding carreer, one in which you make lasting
effects on peoples lives by making their dreams and aspirations come
true.  You get total flexibility with your time, make more money
per hour than 99% of the attorneys and doctors out there, and go to
sleep every night knowing your clients rest easy because of the work
you do.  New advisors and those considering this fine career
should know it is front end loaded with challenges and hard work, but
so very worth it.

[/quote]

This is pretty much what I was trying to say.  I definitely think you expect to walk in and start managing stacks of money, and it just doesn’t work that way.  ML does have great tools.  But the best tools in the world are useless if you have no clients to use them on.  A 250K client is hardly one to scoff at, one that “might have potential.”  If that was so, then why is that the (250K) the magic bogey HOUSEHOLD (aggregate) number ML has been pushing???  Because that is ML’s bread and butter.  Sure the million dollars liquid clients comes along from time to time, but not everyday.

I agree with Rightway.  If you want to go to ML great.  If you want to be entrepreneurial, fine.  I still say most folks couldn’t give a rats a** about an NYU MBA…you think your gonna impress the guy who has built a 10 million dollar business with a degree that anybody with a decent GMAT score and stayed awake in class could have done?

Not around here anyway.  I got into law school, so should I brag about that too???

I think the whole trainee business model at the firms is f’d up. 
My office has 30+ POAs, many of them kids, all of whom are crashing and
burning.  There are only about 5-7 POAs that are on track to make
it. 



A better business model is this - instead of sending 30 trainees to the
wolves, bring in about 5-10 new college grads to work directly with a
senior FA who wants a team member.  Their primary role would be to
help with planning and work the lower book.  Their secondary role
would be to integrate themselves in the community, with a long term
objective of gathering assets.  Then start their clock at say year
10, and if they don’t gather the assets that are expected put them in a
"penalty box" with a reduced payout or something until they bring it
up. 



That way, when their primary role switches over to prospecting (yr
~10), they will a) already know a ton of people because they have
integrated themselves in the community; b) be able to say "ive been at
merrill for 10 years…i.e credibility; c) actually know the business
and what to do with people’s money; d) be in their early 30s and
look/seem more responsible and trustworthy…

I would agree with that concept somewhat, but how about 2-3 years instead of 10… Mother would never pay for that long…

The program I run has over 80% success rate over the last 3
years.  I have seen POA’s team up with Sr FA’s, work together in
groups on seminars and networking, and go solo.  WHy do they
succeed?  Its because of themselves, far more than their
situation…but they don’t come in fresh with everything in
place.  We meet weekly for 1 1/2 hours covering prospecting,
product/planning, and business management. 



I breed a culture of acknowledging this career as much more than what
90% of these posts describe it as.  I encourage them to open any
account they can, regardless of size to get experience; as all ML FA’s
are paid on EVERYTHING for the first year and the cut-off for getting
no comp at all is $50,000, NOT $250,000.  Their marketing and
efforts should be directed at $100,000 plus however. 



How do they get clients?  They cold call, do seminars, network,
and specialize.  They do ALL of this every single day.  They
organize their day and track activities and success (all of which I
teach).  Then they focus more time on the activities they are
getting the most success.  I have seen them get published, get
asked to be guest speakers, open 5 mil plus relationships, and 1 get a
15 mil 401k.  Nearly all of the POA’s in my region have graduated,
are on track to graduate, and will continue to do so.  The ones
that don’t have the attitude displayed out here on so many of these
posts.  We hire right and work very hard to instill a culture that
is positive, exciting, fun, and disciplined.



You can succeed in this business at ML, a bank, Indy, or a
regional.  It really does not matter because in all rests on you,
not your firm.  You should just make sure your firms culture and
platform can fit the type of business you would like to build.

[quote=rightway]The program I run has over 80% success rate over the last 3 years.  I have seen POA's team up with Sr FA's, work together in groups on seminars and networking, and go solo.  WHy do they succeed?  Its because of themselves, far more than their situation...but they don't come in fresh with everything in place.  We meet weekly for 1 1/2 hours covering prospecting, product/planning, and business management. 

I breed a culture of acknowledging this career as much more than what 90% of these posts describe it as.  I encourage them to open any account they can, regardless of size to get experience; as all ML FA's are paid on EVERYTHING for the first year and the cut-off for getting no comp at all is $50,000, NOT $250,000.  Their marketing and efforts should be directed at $100,000 plus however. 

How do they get clients?  They cold call, do seminars, network, and specialize.  They do ALL of this every single day.  They organize their day and track activities and success (all of which I teach).  Then they focus more time on the activities they are getting the most success.  I have seen them get published, get asked to be guest speakers, open 5 mil plus relationships, and 1 get a 15 mil 401k.  Nearly all of the POA's in my region have graduated, are on track to graduate, and will continue to do so.  The ones that don't have the attitude displayed out here on so many of these posts.  We hire right and work very hard to instill a culture that is positive, exciting, fun, and disciplined.

You can succeed in this business at ML, a bank, Indy, or a regional.  It really does not matter because in all rests on you, not your firm.  You should just make sure your firms culture and platform can fit the type of business you would like to build.


[/quote]

this is a good post.  a lot has to do w/ the specific branch

Scorpio you have a very naive view of the way business works. Your desire to have someone mentor you and groom you for success is naive and foolish. If that is your desire, perhaps you should have signed on as an intern. Do you think that associates in Investment Banking or law have “senior bankers” hold their hand till they are experienced? No, they do grunt work and have to prove themselves. An NYU MBA is only going to provide you with the opportunity to work hard and prove yourself. There is a reason 60% of associates at top-law firms fail after three years (WSJ two weeks ago). It is the same as the reason 66% of rookie advisors fail. Laziness and a sense of entitlement. If your serious about being an advisor, stop complaining and work harder and smarter. Please don’t come on a message board after 90-120 days on the job and discuss a career you know absolutely nothing about. It’s disrespectful to everyone on the board that diligently works on their clients behalf.     

[quote=fired?]Scorpio you have a very naive view of the way business works. Your desire to have someone mentor you and groom you for success is naive and foolish. If that is your desire, perhaps you should have signed on as an intern. Do you think that associates in Investment Banking or law have "senior bankers" hold their hand till they are experienced? No, they do grunt work and have to prove themselves. An NYU MBA is only going to provide you with the opportunity to work hard and prove yourself. There is a reason 60% of associates at top-law firms fail after three years (WSJ two weeks ago). It is the same as the reason 66% of rookie advisors fail. Laziness and a sense of entitlement. If your serious about being an advisor, stop complaining and work harder and smarter. Please don't come on a message board after 90-120 days on the job and discuss a career you know absolutely nothing about. It's disrespectful to everyone on the board that diligently works on their clients behalf.     [/quote]

while his view is a little naive, this is a horrible comparison.  in fact there really is no comparison bw being a broker and being a lawyer. 60% of associates at top law firms do not fail after 3 yrs.  they quit for quality of life reasons and most of them continue practicing law for a smaller firm that doesnt require 80 hour work weeks.  failed brokers and those who quit dont migrate to wirehouses where the hours are better.

likewise, ibankers and associates may not have their hand held but they do have consistent work.  all they have to do is do it.  there is a lot more structure.  you cant simply expect to 'work hard' and bring in $40mm in 3yrs.

xmsbroker you are 100% incorrect. Lawyers and “brokers” careers are extremely similar. More so than you could ever imagine. You will never, ever, make partner at a prestiguous las firm without exhibiting an ability to bring in clients. NEVER. Failed brokers and those who quit don’t work at wirehouses because they can’t. Many of them leave for careers at Scottrade, Banks, or small independent shops. Again, very similar to a lawyer. Finally, lawyers that work at small law firms won’t make significant money unless their name is on the door or if their doing personal injury which most law school graduates claim they will never practice.



Investment banking associates will never get consistent work unless they prove themselves by crunching numbers that no-one will ever look. Many of them are expected to compute complicated IRR computations by hand when they can easily be done using an HP calculator. It is a horrible existence for the first few years. Do you think that IB associates walk in the first day and are given the keys to the google account? Get real.



The only difference is law firms and Invesment Banks are more reluctant to fire new hires after 12 months because of the higher salaries they are paid. They know who is going to be successful after 3-6 months, just like in retail.



What does a branch manager care about firing some disgruntled rookie making $25-30,000? Most of the kids on this board need to learn more about business before running your idiotic mouths.

[quote=rightway]The program I run has over 80% success rate over the last 3 years. 
[/quote]

Thank you for posting one of the most insightful replies that I have seen.  These forums seem to be filled with a fair deal of noise from people who I doubt will make it far in the business.  It’s the signal provided by people like you (and others) that makes it worthwhile to continue using these forums as a resource for information.

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I’m not an expert, but an 80% success rate seems extremely high.  What is the average success rate?  How much of the success do you attribute to screening before hire and how much do you attribute to the culture?  I would think that culture is the main driving force, but I could also see that filtering out the negative people ahead of time helps keep the momentum.

I’ve been putting more thought into how I will attract clients.  I feel that the majority will be though my network but I do plan to also focus on independent business owners.  Cold calling feels like a dirty term since I personally would never buy anything from someone who just calls me out of the blue.  I’m not saying that I wouldn’t use it as a tool, especially one to gain experience from and to try new approaches out on.  What types of resources are there for warm calling?  Are you allowed to prospect existing clients who are being handled only by the call center and may have additional funds to bring to ML?

 I didn’t mean to sound like a snob with the 250K client minimum.  I was actually using that to say how I enjoy the latitude that ML gives.  I’ve spoken to Goldman and JP Morgan.  Their minimums are $10 and $5 million.  It is interesting to hear that clients as low as $50K are allowed.  I though they anything under 100K would go to the call centers.

Thank you!

Wealth Manager-



I wish you good luck and I hope you make a great salesman. 

BTW, the “noise” as you call it on these forums is also worthwhile
information because its reality.  If it were absent from these
forums, you would be disillusioned.

[quote=fired?]xmsbroker you are 100% incorrect. Lawyers and "brokers" careers are extremely similar. More so than you could ever imagine. You will never, ever, make partner at a prestiguous las firm without exhibiting an ability to bring in clients. NEVER. Failed brokers and those who quit don't work at wirehouses because they can't. Many of them leave for careers at Scottrade, Banks, or small independent shops. Again, very similar to a lawyer. Finally, lawyers that work at small law firms won't make significant money unless their name is on the door or if their doing personal injury which most law school graduates claim they will never practice.

Investment banking associates will never get consistent work unless they prove themselves by crunching numbers that no-one will ever look. Many of them are expected to compute complicated IRR computations by hand when they can easily be done using an HP calculator. It is a horrible existence for the first few years. Do you think that IB associates walk in the first day and are given the keys to the google account? Get real.

The only difference is law firms and Invesment Banks are more reluctant to fire new hires after 12 months because of the higher salaries they are paid. They know who is going to be successful after 3-6 months, just like in retail.

What does a branch manager care about firing some disgruntled rookie making $25-30,000? Most of the kids on this board need to learn more about business before running your idiotic mouths. [/quote]

First of all, I'm not sure why youre so adamant about the 'similarities,' its okay for brokers to be different than dr.s, lawyers, and bankers.  Brokers enjoy more freedom and sacrifice some security.  As do most salesmen, brokers theoretically have unlimited upside but make far less at the mean and medians.  There is also a far greater barrier of entry in law and even IB.  

The definition of 'Lawyer' is too broad to compare to 'Broker.'  SOME lawyers do have similar careers to brokers.  However, not the ones you referenced w/ the WSJ article.  Personal injury, malpractice, dui, etc. lawyers that hang their own shingle share some similarities in that they have to scrap and build up clients.  Everyday they could find a good client and double their income or lose a client(s) and be hungry.   They are more in control of their paycheck and have the potential to get rich very quickly.  However, most do not and many struggle.

This is a world away from the corporate lawyers you originally refered to - those referenced by the WSJ who work 'Biglaw.'  The market salary for 1st yr law associates at the top firms is $145k + bonus.  Associates work very long hours and often do mundane work.  They do not bring in clients nor are they really even allowed to solicit (that distinction alone makes your comparison foolish).  Lawyers that leave these top firms rarely go from biglaw to personal injury.  There are thousands of firms in b/w who are dying to take associates w/ Watchell on their resume.  The hours are a lot better and the chances of partner much greater.  while the upside is less than Watchell, they still make a couple hundred grand.  Its laughable that you compare this to the transition of a failed ML broker -> Scottrade rep (making $26k).

Yes, you have to work hard in any profession.  No law is not easy or glamorous most of the time.  Obviously I know that IB analysts dont 'have the Google' account day one.  These are not revelations you have uncovered.  We all know work is tough and generally tougher in the beginning.  There is no need to draw blind comparisons bw different professions when there are plenty of other sales professions that are better examples.     

xmsbroker, you are flat-out wrong. A UMich and Yale educated lawyers recently worked in my office, and my significant other is also an attorney. They had associate positions at Reed-Smith and Houston Harbaugh. I conceded that the salary is much higher, but the mundane nature of the job is similar in the beginning. Everyone focuses on the sales aspect of the job. If you want to be a salesman please go sell shoes or become a drug rep. I’ve been able to raise $25 million in three years and I can’t sell anything. Make of that what you will.   

Last thing, the big firms don’t make you solicit at first, but you have to get a client if you want to make partner. Trust me.

[quote=fired?]xmsbroker, you are flat-out wrong. A UMich and Yale educated lawyers recently worked in my office, and my significant other is also an attorney. They had associate positions at Reed-Smith and Houston Harbaugh. I conceded that the salary is much higher, but If you want to be a salesman please go sell shoes or become a drug rep. I've been able to raise $25 million in three years and I can't sell anything. Make of that what you will.   [/quote]

I know full well what im talking about.  My dad and sister are lawyers for vault 50 firms and i was a broker for 4 years...

"the mundane nature of the job is similar in the beginning."

That is way too vague.   You could apply that statement to virtually any 2 jobs on the planet.  However, the differences b/w prospecting and working on documents are vast and generally suit different types of people.       

"Everyone focuses on the sales aspect of the job.  If you want to be a salesman please go sell shoes or become a drug rep."

Thats because it is a sales job.  Its okay to sell stuff.  You sound ashamed to be a salesmen.  Even most kool-aid drinkers acknowledge that 'FA' or 'wealth advisor' or whatever is sales position.  Why do you think this site is called Registered Rep?  Why are you measured on production (sales) rather than the alpha, beta, or rho of your clients' portfolios?  

[quote=fired?]Last thing, the big firms don't make you solicit at first, but you have to get a client if you want to make partner. Trust me.[/quote]

That is often (not always) true.  you certainly will have to at least inspire faith that you can soon bring in money, but that scenario is unlike being a broker and needing to put numbers up day 1.  By that point a lawyer has 3 yrs of industry schooling and 7+ years of work exp.  In fact, that scenario is similar to the 10 yr broker training plan that someone suggested but you were completely against.  I agree that a 10 yr broker grooming/training program is not going to happen

There are sales aspects to every job in business. Production, aka revenue, is relevent to every business. Advisors that only embrace the sales aspect of the job are not going to be successful in the business 10-15 years from now. Yes, you must generate revenue, but it shouldn’t come from trying to sell, sell, sell. It should come from thoughtful planning and implementation. Lawyers working on the minutia in a document and advisors working thru a cold-calling list aren’t similar? I beg to differ, they are both thankless jobs that do not yield results until much farther down the road. Estate planning attorney’s receive the majority of their trust documents from the National Assocation of Estate Planning Attorney’s. Any lawyer will tell the documents are the easy part. The difference between a lawyer and an advisor is in the barriers to entry. The big firms simply hire too many advisors. Most fail and come to these forums to disparage the industry.     

[quote=fired?] I've been able to raise $25 million in three years and I can't sell anything.    [/quote]

What are the key factors to your success?  What areas do you target?

[quote=fired?]There are sales aspects to every job in business. Production, aka revenue, is relevent to every business. Advisors that only embrace the sales aspect of the job are not going to be successful in the business 10-15 years from now. Yes, you must generate revenue, but it shouldn't come from trying to sell, sell, sell. It should come from thoughtful planning and implementation. Lawyers working on the minutia in a document and advisors working thru a cold-calling list aren't similar? I beg to differ, they are both thankless jobs that do not yield results until much farther down the road. Estate planning attorney's receive the majority of their trust documents from the National Assocation of Estate Planning Attorney's. Any lawyer will tell the documents are the easy part. The difference between a lawyer and an advisor is in the barriers to entry. The big firms simply hire too many advisors. Most fail and come to these forums to disparage the industry.     [/quote]

"I beg to differ, they are both thankless jobs that do not yield results until much farther down the road."

Wrong again.  As youve already agreed with, law associates at top firms get paid $145k+.  Id say thats a more than fair thanks.  And they arent scrounging to find the work.

I love my career.  

Wealth Advisor my clients are 85% physicians and the remainder are professionals in a variety of different fields. The largest client is $5 million. The top-5 clients account for approximately $10-12 million. My methods were networking, referrals, cold-calling, exceptional service and most importantly luck and hard work. The luck was a result of the hard work.



xmsbroker, only the top 1% of law school grads get jobs at top firms and 60% of them fail. Do the math, very few lawyers make $100k out of law school. The average is between $40-60k. You have no idea what you are talking about.

Associates don’t fail after 3 years, they are pushed out, to make room for a new associate freshly out of law school.  Law firm partners need worker bees, the type of people who will work 80 hours a week typing briefs and doing research, alone, for $60k a year.  After 3 years, you have too many miles on you, and you are starting to feel entitled to a raise.  Out you go.

[quote=fired?]
xmsbroker, only the top 1% of law school grads get jobs at top firms and 60% of them fail. Do the math, very few lawyers make $100k out of law school. The average is between $40-60k. You have no idea what you are talking about. [/quote]

WOW, I can't believe we have a debate on the starting salaries and working conditions of young lawyers, people on this board will argue about anything.

fired?, as an exlawyer I have to say that your views on the profession are not terribly accurate.  I graduated from a law school that has never cracked the top 25 (I think 26 was its best showing on the US News rankings, but it usually bounces around somwhere in the 30's) and everyone in the top third of my class, and a fair number of those in the top half, got jobs at top firms - and by "top" I mean those firms paying $125,000 plus to first years, the top of the market when I graduated. 

Also, your comparison of our job with that of lawyers is pretty far off base.  Partnership at most firms is a 7-10 year track.  During the first half of that, work is handed to you (or more accurately, forced on you).  No client development on your part is expected.  It isn't until you become a mid-level or senior associate (years 5+) that this becomes an issue.  And despite your assertions, there are plenty of partners that never bring in clients - they are called service partners.  Of course that is its own kind of hell, because without clients you have no job security. 

As a lawyer, you spend the first part of your career working on cases/deals sourced by others and learning the craft.  Only much later do you start to develop your own clients.  In this profession, it's just the opposite.  You are expected to bring in clients from day one or you are fired, and there is no such thing as a "service" broker that has no clients but makes the big bucks.

Good post Lawsucks. 



Just think about the autonomy you have in this profession compared to
what Lawsucks described.  If you can manage to get good at
bringing in clients, you make more money than 1-5 year lawers with
total freedom.  after that your income just goes up and up and
your flexibility with time gets bigger and bigger. 

[quote=lawsucks]

[quote=fired?]
xmsbroker, only the top 1% of law school grads get jobs at top firms and 60% of them fail. Do the math, very few lawyers make $100k out of law school. The average is between $40-60k. You have no idea what you are talking about. [/quote]

WOW, I can't believe we have a debate on the starting salaries and working conditions of young lawyers, people on this board will argue about anything.

fired?, as an exlawyer I have to say that your views on the profession are not terribly accurate.  I graduated from a law school that has never cracked the top 25 (I think 26 was its best showing on the US News rankings, but it usually bounces around somwhere in the 30's) and everyone in the top third of my class, and a fair number of those in the top half, got jobs at top firms - and by "top" I mean those firms paying $125,000 plus to first years, the top of the market when I graduated. 

Also, your comparison of our job with that of lawyers is pretty far off base.  Partnership at most firms is a 7-10 year track.  During the first half of that, work is handed to you (or more accurately, forced on you).  No client development on your part is expected.  It isn't until you become a mid-level or senior associate (years 5+) that this becomes an issue.  And despite your assertions, there are plenty of partners that never bring in clients - they are called service partners.  Of course that is its own kind of hell, because without clients you have no job security. 

As a lawyer, you spend the first part of your career working on cases/deals sourced by others and learning the craft.  Only much later do you start to develop your own clients.  In this profession, it's just the opposite.  You are expected to bring in clients from day one or you are fired, and there is no such thing as a "service" broker that has no clients but makes the big bucks.

[/quote]

thank you

[quote=rightway]Good post Lawsucks. 

Just think about the autonomy you have in this profession compared to what Lawsucks described.  If you can manage to get good at bringing in clients, you make more money than 1-5 year lawers with total freedom.  after that your income just goes up and up and your flexibility with time gets bigger and bigger. 
[/quote]

Exactly why I got out.  I didn't mind that there was a lot of grunt work in the early years - we all have to pay or dues.  But when I started noticing how many partners were siting next to me in that windowless conference room on a Saturday afternoon, I realised that there was no end to the treadmill. 

[quote=fired?]Wealth Advisor my clients are 85% physicians and the remainder are professionals in a variety of different fields. The largest client is $5 million. The top-5 clients account for approximately $10-12 million. My methods were networking, referrals, cold-calling, exceptional service and most importantly luck and hard work. The luck was a result of the hard work.

xmsbroker, only the top 1% of law school grads get jobs at top firms and 60% of them fail. Do the math, very few lawyers make $100k out of law school. The average is between $40-60k. You have no idea what you are talking about. [/quote]

Are you always this ornery or just when youre defensive and know youre talking out of your a$$? 

First of all,  far more than "1%" of all law school grads get jobs at top firms.  I love it when people throw out arbitrary percentages as fact.  Virtually everyone at the top 15 or so schools can have a 'top' job if they want it.  Those schools alone account for ~10-15% of all law grads.  So your 1% claim is automatically wrong by at least a factor of 10.  And as Lawsucks pointed out, the top 1/4 - 1/3 grads of schools in the top 30 or so can get these jobs.

Secondly, that assertion is really neither here nor there.  I never made any statements about ALL law grads.  You brought up the WSJ article which only applies to the top grads and the top firms.  Why are you suddenly making statements about all law school grads/firms?   This is irrelevant.  Obviously if someone goes to law school at Western New England College they are going to have a hard time getting a good job.

Courtesy of the US Department of Labor:



Earnings [About this section] Back to Top



In May 2004, the median annual earnings of all lawyers were $94,930. The middle half of the occupation earned between $64,620 and $143,620. Median annual earnings in the industries employing the largest numbers of lawyers in May 2004 were as follows:



Management of companies and enterprises $126,250

Federal Government 108,090

Legal services 99,580

Local government 73,410

State government 70,280



Median salaries of lawyers 9 months after graduation from law school in 2004 varied by type of work, as indicated in table 1.



Table 1. Median salaries of lawyers 9 months after graduation, 2004 Type of work Salary

All graduates

$55,000



   

Type of work

   

Private practice

80,000

Business/industry

60,000

Judicial clerkship and government

44,700

Academe

40,000



   

Source: National Association of Law Placement



Salaries of experienced attorneys vary widely according to the type, size, and location of their employer. Lawyers who own their own practices usually earn less than those who are partners in law firms. Lawyers starting their own practice may need to work part time in other occupations to supplement their income until their practice is well established.



Most salaried lawyers are provided health and life insurance, and contributions are made to retirement plans on their behalf. Lawyers who practice independently are covered only if they arrange and pay for such benefits themselves.

[quote=fired?]Courtesy of the US Department of Labor:

Earnings [About this section] Back to Top

In May 2004, the median annual earnings of all lawyers were $94,930. The middle half of the occupation earned between $64,620 and $143,620. Median annual earnings in the industries employing the largest numbers of lawyers in May 2004 were as follows:

Management of companies and enterprises $126,250
Federal Government 108,090
Legal services 99,580
Local government 73,410
State government 70,280

Median salaries of lawyers 9 months after graduation from law school in 2004 varied by type of work, as indicated in table 1.

Table 1. Median salaries of lawyers 9 months after graduation, 2004 Type of work Salary
All graduates
$55,000

   
Type of work
   
Private practice
80,000
Business/industry
60,000
Judicial clerkship and government
44,700
Academe
40,000

   
Source: National Association of Law Placement

Salaries of experienced attorneys vary widely according to the type, size, and location of their employer. Lawyers who own their own practices usually earn less than those who are partners in law firms. Lawyers starting their own practice may need to work part time in other occupations to supplement their income until their practice is well established.

Most salaried lawyers are provided health and life insurance, and contributions are made to retirement plans on their behalf. Lawyers who practice independently are covered only if they arrange and pay for such benefits themselves.

[/quote]

what is your point?

The point is it is very rare for an entry-level attorney to make six-figures plus. Fact is a number of law specialties are very similar to the career of a financial planner. Most of the posters on this site are simply brokers and salesmen, not financial planners. That is the final point. I will never post on this forum again.

Please forgive me if I try to steer this thread back onto the original topic.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Ok, I’m progressing in my interview process with ML.  I am now scheduled for a ½ day assessment/simulation.  Part of my job is to prepare a 15-minute presentation (without electronic presentation materials) to pitch an IRA geared towards small business owners.  Can anyone offer any insight or suggestions to this phase?

Partly (and thankfully) due to these forums I’m facing the grim reality that I will likely be taking a pay cut if I am to accept this position.  While that annoys me to no end, I’m not necessarily deterred from pursuing this career path.  What do the experienced players see as being the critical success factors?  How long should I expect to wait until I’m making the $140K per year that my peers are making?  (Assuming that I’m in the NY metropolitan area and that I am able to make the hurdels)

In these forums I’ve heard that the success rate for new FAs ranges from as low as 10% to as high as 80%.  What is everyone’s feeling as to the correct success ratio. 

I’m not overly concerned with the success ratio but my feeling is that the culture of the office plays a key role.  How big of a part is culture when compared to individual drive/determination?

Thank you!

[quote=WealthManager]

Please forgive me if I try to steer this thread back onto the original topic.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Ok, I’m progressing in my interview process with ML.  I am now scheduled for a ½ day assessment/simulation.  Part of my job is to prepare a 15-minute presentation (without electronic presentation materials) to pitch an IRA geared towards small business owners.  Can anyone offer any insight or suggestions to this phase?

Partly (and thankfully) due to these forums I’m facing the grim reality that I will likely be taking a pay cut if I am to accept this position.  While that annoys me to no end, I’m not necessarily deterred from pursuing this career path.  What do the experienced players see as being the critical success factors?  How long should I expect to wait until I’m making the $140K per year that my peers are making?  (Assuming that I’m in the NY metropolitan area and that I am able to make the hurdels)

In these forums I’ve heard that the success rate for new FAs ranges from as low as 10% to as high as 80%.  What is everyone’s feeling as to the correct success ratio. 

I’m not overly concerned with the success ratio but my feeling is that the culture of the office plays a key role.  How big of a part is culture when compared to individual drive/determination?

Thank you!

[/quote]

Good lawd, why do you feel the need to post in BOLD AND BIG LETTERS????

Bud Fox -

after re-reading your 1st post, this must be 'Wall Street' FLAME...  NYU mba -> retail brokerage??.  Either life imitates art, you suck interviewing, or nyu is a vastly overrated bschool...  why not get a fat paycheck and make some connections before throwing yourself to the retail wolves.  why would you spend $$ on nyu to be a broker??...

[quote=WealthManager]<p =“Msonormal” style=“margin: 0in 0in 0pt;”>Please forgive me if I try to steer this thread back onto the original topic.<o:p></o:p>

Ok, I’m progressing in my interview process with ML.  I am now scheduled for a ½ day assessment/simulation.  Part of my job is to prepare a 15-minute presentation (without electronic presentation materials) to pitch an IRA geared towards small business owners.  Can anyone offer any insight or suggestions to this phase?

Partly (and thankfully) due to these forums I’m facing the grim reality that I will likely be taking a pay cut if I am to accept this position.  While that annoys me to no end, I’m not necessarily deterred from pursuing this career path.  What do the experienced players see as being the critical success factors?  How long should I expect to wait until I’m making the $140K per year that my peers are making?  (Assuming that I’m in the NY metropolitan area and that I am able to make the hurdels)

In these forums I’ve heard that the success rate for new FAs ranges from as low as 10% to as high as 80%.  What is everyone’s feeling as to the correct success ratio. 

I’m not overly concerned with the success ratio but my feeling is that the culture of the office plays a key role.  How big of a part is culture when compared to individual drive/determination?

Thank you!

I’d estimate that you’ll need 40MM in assets to make 140k per
year.  If you’re gathering the 7.5 per year that ML wants, it will
take you 5.3 years.



40MM * .01 annual fee = 400,000 in production

400,000 * 35% payout estimate = $140,000



Thats IF you make it.  Flush your NYU MBA down the toilet along with everything you learned there…

[quote=fired?]The point is it is very rare for an entry-level attorney to make six-figures plus. Fact is a number of law specialties are very similar to the career of a financial planner. Most of the posters on this site are simply brokers and salesmen, not financial planners. That is the final point. I will never post on this forum again.[/quote]

What a tragedy....

[quote=WealthManager]

Please forgive me if I try to steer this thread back onto the original topic.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Ok, I’m progressing in my interview process with ML.  I am now scheduled for a ½ day assessment/simulation.  Part of my job is to prepare a 15-minute presentation (without electronic presentation materials) to pitch an IRA geared towards small business owners.  Can anyone offer any insight or suggestions to this phase?

Partly (and thankfully) due to these forums I’m facing the grim reality that I will likely be taking a pay cut if I am to accept this position.  While that annoys me to no end, I’m not necessarily deterred from pursuing this career path.  What do the experienced players see as being the critical success factors?  How long should I expect to wait until I’m making the $140K per year that my peers are making?  (Assuming that I’m in the NY metropolitan area and that I am able to make the hurdels)

In these forums I’ve heard that the success rate for new FAs ranges from as low as 10% to as high as 80%.  What is everyone’s feeling as to the correct success ratio. 

I’m not overly concerned with the success ratio but my feeling is that the culture of the office plays a key role.  How big of a part is culture when compared to individual drive/determination?

Thank you!

[/quote]

Wealth Manager,

I think that there are essentially a few questions that you are asking so, I will try to answer them with direct and brief responses:

1. Is there a fundamental difference in the ease of building a business at different firms?

- Yes. It is VERY easy to build a business and make a LOT of money almost immediately when you are working for the small private client business of an emerging growth investment bank andit is during a period in which the bank is underwriting several highly successful IPOs. I have met individuals whose intelligence is SO limited that it is amazing they don't forget to breathe who made north of $2 million in their first few years. Unfortunately, these positions don't currently exist as their aren't any firms that meet the definition. You will currently find that the firms that have the primary advantage to rookies are the wirehouses (Merrill, Smith Barney, UBS) because they have established names and non-investment products (loans particularly) to offer and in mediocre markets, these products are very helpful in establishing relationships. The only firm that has an absolutely splended name that actually helps get business is Goldman Sachs. All of the other firms are essentially lumped into the same bag by the affluent public as far as I can tell...

2. Will I find it hard to accumulate $15 million in 18 months, even with established connections and solid credentials?

- Yes, you will. Ultimately, the profession is overcrowded, you have no clients and you still don't know what you are doing. Ultimately, the only thing that really helps you build a business are raving fan clients who actively help you build your practice. The one exception is if you can successfully leverage your relationships to get your firm's retirement plan people or money management people together with a pension, foundation or 401k plan's people and they decide to do business together. (You "brokered" the business.) The client will not really care who you are, but rather what your firm's capabilities are and the relationship manager will probably not be you - you will, however, collect trailing revenues off the account and have a chance to learn as a bystander. Great business - if you can get it. Your degree will matter MUCH less than you would expect (you did get a lot out of it, though). In my office, now EVERY new trainee has an MBA from a name school. The only magic bullets for business school, I am sad to say, are Harvard and Stanford (not even Wharton seems to make a difference. It has to do with their alumni associations and their perception in the popular culture, not their ranking in US News.

3. What's the difference between ML PWM and global private client?

- Separate nicer branch offices, better access to research (like Thompson First Call) and all of the real brokers (team leaders or "Private Bankers") have several $10million + clients. You can move into this level after you have proven yourself at the branch level and brought in several $10 million relationships. There is still some doubt as to whether ML will continue this program, as they mainly recruited the mouth breathers from the small ibanks I described above and, by and large, they have not been particularly effective at penetrating the ultra-wealthy or keeping their existing clients. Most of these people have their relationships at SEVERAL firms and have a marked preference for small, boutique asset management shops (This is where the brokers or "wealth managers" or whatever term you use with Harvard MBAs tend to work.) Merrill really suffers from its retail and downmarket roots in the eyes of the ultra-wealthy or aspiring ultra-wealthy. I've floated the idea with clients before about moving to ML and I always get a negative response. I don't understand entirely why, but I think it has to do with that "Wall Street to Main Street" ad campaign of 1946-1999. Most of your clients (if you are successful) are going to be fairly young and want to feel like they've arrived...

4. How important is culture?

Every branch office of every firm is different. The branch manager and the top brokers in the office will set the culture.

Most of the high end firms (Goldman, Alex Brown, Credit Suisse, Lehman) tend to be investment oriented only and really tend to be essentially casinos for rich people - that's why they tend to use small wealth management boutiques when they get serious about their money. I was head hunted to a number of these firms in the last few years and always asked what the average production and assets where for the offices. Generally, the level of assets was slightly less than those of my wirehouse bretheren, but the revenue generation was much higher. My impression is that times are CURRENTLY very hard at these places. I'm sure it will get better when there are more IPOs in the future, however.

Choose wisely.

5. What's the success rate?

- No one in management anywhere seems to want to answer this question - anywhere. It seems to be a closely guarded secret and there seems to be issues with the data, as people are absorbed into established teams but still recognized as junior brokers, while allocated commissions which are effectively a salary and can be said to have "succeeded" when they really have become assistants who the firm cannot reasonably expect to grow much beyond what their former colleague, now boss chooses to pay them. Additionally, this gross revenue is just being reallocated, not generated from new sales. My guess is that the success rate nationally is totally irrelevent. The issue is the city / region in which you are located and the ratio of brokers to new money. How economically vibrant your area is will have SOOO much to do with the success rate.

6. How long until I get to $140k in income.

Probably 5 years. It's tough to say - so many factors. The average broker at a ML, SB or UBS makes $175 to $200k and has been doing this for 15 years, but that includes a lot of lazy idiots in less affluent places like Oklahoma and Arkansas who have 800 clients and lack the initiative to work more than 35 hours a week. If you work very hard, are in an area with a decent amount of new money and you are very charming, then you should be able to become a $1.5 million dollar producer after 10-15 years. Then you can either choose to coast or continue working. The main issue of how big you can be is how many clients you have. I believe that you cannot have more than 100 clients and do a decent job for them. A return on assets of about 0.75% is considered standard, so that would mean that you would need $200 million to make $1.5 million in production, which translates to a take home pay of about $700k a year and the average client would need to have $2 million with you.

7. So, where should I go?

My guess is that the choice largely rests between a large firm like UBS, SB or ML or going to an established small wealth management boutique firm in your area. I would plan to check out all of these different firms, but have a preference to starting at a small boutique. You will make more money initially than a wirehouse, but less down the road. If you so desire, you can move to a wirehouse after a few years. It is much harder if you go to a wirehouse, then fail and move to a boutique than the reverse. The stink of failure (deserved or not) is something that nobody likes.

Nice post, san fran.  Accurate and informative.

Same opinion here, good post san fran.

By the way, I hate your guts, since you're lucky enough to live and work in a great scenic area. However, if you ever get the hankerin' to see fields of cotton, corn, and peanuts, come to South Georgia! Yee-haw!

[quote=doberman]

By the way, I hate your guts, since you're lucky enough to live and work in a great scenic area. However, if you ever get the hankerin' to see fields of cotton, corn, and peanuts, come to South Georgia! Yee-haw!

[/quote]

I'm rather fond of the South and how business is conducted down there - reputations tend to reflect people's true worth and roots in the community run DEEP. 

Also, this place is so insanely "broker-ed out" that you need to constantly work to protect your existing relationships and steal clients from other firms.

Brokers STILL can't accept that the dot com thing is totally gone and there are countless idiots who were huge producers during that era because they were at a small ibank like Robbie Stephens or H&Q. They took a massive check to switch firms immediately after it hit the fan and they suck up enormous amounts of firm resources and do absolutely no real business, but act like they are still the s--t.

The Google thing was huge and it made some rookies into real brokers, but the reality is that the average level of professionalism strikes me as being VERY low, but then again, I've never worked in another market.

Greetings from Frankfurt where flights back home await tomorrow.

What a great response, even though it was dripping with negative attitude--"Idiots in Oklahoma" for example. 

I do not believe that idiots become successful--plain and simple, success requires lots of things and being an idiot is not on the list.

But then I don't know anything.  I've only been in the industry since the early 1970s and have had a career that featured ten years in retail production, a stint as a pit trader in Chicago, branch office management, regional staff and home office administration.

Nonetheless the piece above is well written and essentially accurate. 

What has amused me since I started reading this forum is how many people think that they are going to be God's gift to the brokerage industry and all they have to do is let some branch manager know that they're willing to be hired.

The reality is that the business is over populated, but it is still relatively difficult to be hired.  There are hundreds, often thousands, of resumes reviewed--meaning glanced at before discarding--for each job offer that is made.

It's foolhardy to even consider turning down an offer from (say) ML because you figure you're going to be hired by Smith Barney at the end of the week.

For my money the biggest mistake is not to accept an offer from any of the top tier firms--but instead it is to enter the business too young, and via a questionable firm.

In other words, if you're too young to get an offer at a national wirehouse do NOT figure that you'll go to work for Ameriprise and then jump ship later in life.

Moving from one wirehouse to another is commonplace and very easy to do--in baseball jargon you're a major leaguer already so you're very attractive to any major league team.

However, if you're not with one of the major league teams you are going to find it just as hard to make the transition as some guy who is playing in the minors is going to find it to hook on with the Yankees.

A better use of  your time, when you're under thirty, and don't offer anything of interest to a wirehouse is to sell something else.  Sell insurance, for example, for a few years then approach the wirehouses again.

You will not be a thirty two year old brokerage industry failure, you'll be an unknown entity--hopefully with a track record of success in whatever you've been doing so far.

This really is a business where being young and filled with exuberance is not an asset--being older and more mature will always trump being "wet behind the ears."

[quote=Big Easy Flood]

Greetings from Frankfurt where flights back home await tomorrow.

Yes we all missed you so much…sure you don’t want to stay a few more months?

What a great response, even though it was dripping with negative attitude--"Idiots in Oklahoma" for example.

Isn't it a little ironic for you to be talking about posts dripping with negative attitude?

I do not believe that idiots become successful--plain and simple, success requires lots of things and being an idiot is not on the list.

And yet you've managed to survive in the industry, that is if your claims are to be believed....

But then I don't know anything.  I've only been in the industry since the early 1970s and have had a career that featured ten years in retail production, a stint as a pit trader in Chicago, branch office management, regional staff and home office administration.

Nonetheless the piece above is well written and essentially accurate. 

What has amused me since I started reading this forum is how many people think that they are going to be God's gift to the brokerage industry and all they have to do is let some branch manager know that they're willing to be hired.

Especially since we all know that YOU are God's gift to the brokerage industry....thank you so much for gracing our humble little board with your pearls of wisdom.

The reality is that the business is over populated, but it is still relatively difficult to be hired.  There are hundreds, often thousands, of resumes reviewed--meaning glanced at before discarding--for each job offer that is made.

It's foolhardy to even consider turning down an offer from (say) ML because you figure you're going to be hired by Smith Barney at the end of the week.

For my money the biggest mistake is not to accept an offer from any of the top tier firms--but instead it is to enter the business too young, and via a questionable firm.

In other words, if you're too young to get an offer at a national wirehouse do NOT figure that you'll go to work for Ameriprise and then jump ship later in life.

My first-hand obeservation is that most branch managers are so desparate to find QUALIFIED hires with relevant experience that they'll hire someone with a clean U-4 and the proven ability to raise assets and produce, no matter how small a firm they hail from.  But of course, I'm sure you learned far more than I know about the retail business during your stint as a pit trader(er. Put Trader?) and your many years as Vice-President of Paperclip Purchasing.....

Moving from one wirehouse to another is commonplace and very easy to do--in baseball jargon you're a major leaguer already so you're very attractive to any major league team.

However, if you're not with one of the major league teams you are going to find it just as hard to make the transition as some guy who is playing in the minors is going to find it to hook on with the Yankees.

A better use of  your time, when you're under thirty, and don't offer anything of interest to a wirehouse is to sell something else.  Sell insurance, for example, for a few years then approach the wirehouses again.

You will not be a thirty two year old brokerage industry failure, you'll be an unknown entity--hopefully with a track record of success in whatever you've been doing so far.

This really is a business where being young and filled with exuberance is not an asset--being older and more mature will always trump being "wet behind the ears."

[quote=Big Easy Flood]

Greetings from Frankfurt where flights back home await tomorrow.

What a great response, even though it was dripping with negative attitude--"Idiots in Oklahoma" for example. 

I do not believe that idiots become successful--plain and simple, success requires lots of things and being an idiot is not on the list.

But then I don't know anything.  I've only been in the industry since the early 1970s and have had a career that featured ten years in retail production, a stint as a pit trader in Chicago, branch office management, regional staff and home office administration.

Nonetheless the piece above is well written and essentially accurate. 

What has amused me since I started reading this forum is how many people think that they are going to be God's gift to the brokerage industry and all they have to do is let some branch manager know that they're willing to be hired.

The reality is that the business is over populated, but it is still relatively difficult to be hired.  There are hundreds, often thousands, of resumes reviewed--meaning glanced at before discarding--for each job offer that is made.

It's foolhardy to even consider turning down an offer from (say) ML because you figure you're going to be hired by Smith Barney at the end of the week.

For my money the biggest mistake is not to accept an offer from any of the top tier firms--but instead it is to enter the business too young, and via a questionable firm.

In other words, if you're too young to get an offer at a national wirehouse do NOT figure that you'll go to work for Ameriprise and then jump ship later in life.

Moving from one wirehouse to another is commonplace and very easy to do--in baseball jargon you're a major leaguer already so you're very attractive to any major league team.

However, if you're not with one of the major league teams you are going to find it just as hard to make the transition as some guy who is playing in the minors is going to find it to hook on with the Yankees.

A better use of  your time, when you're under thirty, and don't offer anything of interest to a wirehouse is to sell something else.  Sell insurance, for example, for a few years then approach the wirehouses again.

You will not be a thirty two year old brokerage industry failure, you'll be an unknown entity--hopefully with a track record of success in whatever you've been doing so far.

This really is a business where being young and filled with exuberance is not an asset--being older and more mature will always trump being "wet behind the ears."

[/quote]

It amazes me how much people on this board overestimate the selectivity of major wirehouses.  I guess it depends on your background (i.e., if you got a GED and have been selling newspapers it may be an accomplishment to land a broker job), but anyone w/ a half decent education or mediocre professional success can get hired.  They will hire anyone who can carry on a conversation.  Some of you people act like its equivalent to walking into an assoc. position at Goldman or a major hedge fund.  

Branch managers make mistakes, which is why there are Ex Morgan Stanley brokers.

Another failure sneering that those of us who played the game well are somehow out of touch with reality.

i got offered a better job and didnt think twice.  another common misconception is that being a successful broker is the ultimate professional achievement.

My first-hand obeservation is that most branch managers are so desparate to find QUALIFIED hires with relevant experience that they'll hire someone with a clean U-4 and the proven ability to raise assets and produce, no matter how small a firm they hail from.  But of course, I'm sure you learned far more than I know about the retail business during your stint as a pit trader(er. Put Trader?) and your many years as Vice-President of Paperclip Purchasing.....

Good evening--or is it afternoon over there--Joe, nice to see you're doing nothing productive on a Sunday.

Perhaps you didn't read what I had to say about my career--which, while it includes a stint in the Chicago pits (actually just six months to learn how it's done) also includes ten years in retail production and about two decades of branch office management and administration at the regional and home office level.  Oh, and I hand calculated margin calls back in the early 1970s while waiting to be sent to New York for my initial training.

It would be fun to read about your stint in the pits, or when you were a branch manager, or when you were on a regional staff, or what years you spent at the home office.

There is so much more to this business than flogging mutual funds and trying to get retirees to buy variable annuities.

It is true that the brokers are key players in the game.  But those would be institutional brokers.

You retail guys are as useless as tits on a bull when it comes to what really matters.  Sooner or later you'll be replaced by somebody like Schwab coming along and offering a free lap top and a local class dealing with how to use it with a modest IRA roll over.

Transaction oriented brokers are a thing of the past.  What's going to keep the "financial advisor" in business when the Internet brokerage firms begin to explain trails and offer to return them to the client?

Why should you earn a trail for doing nothing?

[quote=xmsbroker]i got offered a better job and didnt think twice.  another common misconception is that being a successful broker is the ultimate professional achievement.[/quote]

How about knowing that the first letter of the first word in a sentence should be capitalized?  Is that something grown ups know about?

[quote=Big Easy Flood]

What a great response, even though it was dripping with negative attitude--"Idiots in Oklahoma" for example. 

I[/quote]

Fellow posters:

I apologize if I wasn't clear; I don't think that all brokers from Oklahoma are idiots.

I think that there are A LOT of imbiciles in the brokerage industry in general (they are, however, rapidly departing) AND that it is generally tougher to make big numbers in areas with low average net worths and which are not economically vibrant.

[quote=xmsbroker]

It amazes me how much people on this board overestimate the selectivity of major wirehouses.  I guess it depends on your background (i.e., if you got a GED and have been selling newspapers it may be an accomplishment to land a broker job), but anyone w/ a half decent education or mediocre professional success can get hired.  They will hire anyone who can carry on a conversation.  Some of you people act like its equivalent to walking into an assoc. position at Goldman or a major hedge fund.  

[/quote]

I think that it's highly regional. The impression that I get is that the standards are quite a bit higher in some places than in others. The quality of people coming through the door in the last few years of my office have amazing (frankly intimidating) resumes - ones that you would have expected to see from associates or even VP hires in IBanking a few years ago. I think that the lack of big payoffs associated with associate level positions on the institutional side has driven many to see retail as a relatively attractive opportunity.

Every time I go down to the institutional floor in my office, it seems like there are more empty cubes. My impression is that these guys just aren't making the big bucks and no one is hiring. My guess is that most of the new hires assume that their pedigrees and (presumed) superior intelligence will result in being at $1million in production in the next few years. This isn't how it's working out, though... (as far as I can tell - we don't post the numbers in my branch or anything...)

Institutional sales SEEMS to me to be a very easy job. I've never really gotten why these guys are so well paid - they don't even need to get clients. Some iBankers impress me, but the vast majority of the VP level I can't imagine EVER becoming rainmakers - too socially retarded. I have a friend that was a morgan stanley banker before he went to get both his JD and MBA from Chicago. Guy makes like $150k a year at 45 as a securities attorney. He's not a moron or jerk either. I think that there are very few financial jobs that pay really well right now and SUCCESSFUL retail broker is one of them.

Ultimately, I think that if you don't correct for survivorship bias, the position of post-rookie retail financial advisor at a decent firm is one of the best jobs out there.

[quote=san fran broker][quote=xmsbroker]

It amazes me how much people on this board overestimate the selectivity of major wirehouses.  I guess it depends on your background (i.e., if you got a GED and have been selling newspapers it may be an accomplishment to land a broker job), but anyone w/ a half decent education or mediocre professional success can get hired.  They will hire anyone who can carry on a conversation.  Some of you people act like its equivalent to walking into an assoc. position at Goldman or a major hedge fund.  

[/quote]

I think that it's highly regional. The impression that I get is that the standards are quite a bit higher in some places than in others. The quality of people coming through the door in the last few years of my office have amazing (frankly intimidating) resumes - ones that you would have expected to see from associates or even VP hires in IBanking a few years ago. I think that the lack of big payoffs associated with associate level positions on the institutional side has driven many to see retail as a relatively attractive opportunity.

Every time I go down to the institutional floor in my office, it seems like there are more empty cubes. My impression is that these guys just aren't making the big bucks and no one is hiring. My guess is that most of the new hires assume that their pedigrees and (presumed) superior intelligence will result in being at $1million in production in the next few years. This isn't how it's working out, though... (as far as I can tell - we don't post the numbers in my branch or anything...)

Institutional sales SEEMS to me to be a very easy job. I've never really gotten why these guys are so well paid - they don't even need to get clients. Some iBankers impress me, but the vast majority of the VP level I can't imagine EVER becoming rainmakers - too socially retarded. I have a friend that was a morgan stanley banker before he went to get both his JD and MBA from Chicago. Guy makes like $150k a year at 45 as a securities attorney. He's not a moron or jerk either. I think that there are very few financial jobs that pay really well right now and SUCCESSFUL retail broker is one of them.

Ultimately, I think that if you don't correct for survivorship bias, the position of post-rookie retail financial advisor at a decent firm is one of the best jobs out there.

[/quote]

I completely agree selectivity varies by region... However, youre way off base w/ your conclusion that bankers arent making good money these days.  Its been widely documented that they are doing exceptionally well recently

Likewise, the competition for IB/institutional jobs is far, far greater than for retail. 

[quote=xmsbroker][quote=san fran broker][quote=xmsbroker]

I completely agree selectivity varies by region... However, youre way off base w/ your conclusion that bankers arent making good money these days.  Its been widely documented that they are doing exceptionally well recently

[/quote]

You're basing that off Managing Director level pay. I get the impression that VP and Associate level pay is generally WAY down from where it was 5 years ago.

You get the impression?  What does that mean?

[quote=Big Easy Flood]

You get the impression?  What does that mean?

[/quote]

Based on the stated salaries and cash flows of the brokerage accounts of the IBD associate and VP level personnel of my bulge bracket investment bank who have their accounts with me. The stated incomes and bonus check deposits they get are smaller than they were in 2001, when I started working with the same level personnel.

I don't have any clients who are MDs, but I have read the same articles in the WSJ about the higher level of pay that everyone else has, and, assuming they are true; it would appear to me that VP and lower compensation has not similarly recovered in the last few years, at least at my firm.

Additionally, new equity issuance, particularly IPOs are still at relatively low levels since the late 90s and 2000 and this would similarly suggest that there is less bonus money flowing around.

That's what I mean by "I get the impression."

[quote=Big Easy Flood]

But then I don't know anything. 

[/quote]

Yes, I would agree that your insight is of limited value.

[quote=Big Easy Flood]

I've only been in the industry since the early 1970s and have had a career that featured ten years in retail production, a stint as a pit trader in Chicago, branch office management, regional staff and home office administration.

[/quote]

I see now! You're a MANAGER.... The fact that you are a manager explains so much, while it reveals how rotten the industry is in some dark corners...

Tell me, do you "motivate your troops" with the same sort of unnecessary and excessive beligerance that you bring to this forum?

You've been doing this for more than 30 years - which included the greatest bull market in history and you didn't make and save enough to retire? You're quite the role model.

No, wait... I'm sure you love reviewing patriot act documents and syndicate forms all day; that's why you stayed instead of retiring along with all of the other managers with more than 20 years in. No, wait.. you love to snoop through brokers' emails. That's it...

I truly feel sorry for those poor souls under you....

nicely done sf broker!

[quote=Big Easy Flood]

My first-hand obeservation is that most branch managers are so desparate to find QUALIFIED hires with relevant experience that they’ll hire someone with a clean U-4 and the proven ability to raise assets and produce, no matter how small a firm they hail from.  But of course, I’m sure you learned far more than I know about the retail business during your stint as a pit trader(er. Put Trader?) and your many years as Vice-President of Paperclip Purchasing…

Good evening--or is it afternoon over there--Joe, nice to see you're doing nothing productive on a Sunday.

Perhaps you didn't read what I had to say about my career--which, while it includes a stint in the Chicago pits (actually just six months to learn how it's done) also includes ten years in retail production and about two decades of branch office management and administration at the regional and home office level.  Oh, and I hand calculated margin calls back in the early 1970s while waiting to be sent to New York for my initial training.

It would be fun to read about your stint in the pits, or when you were a branch manager, or when you were on a regional staff, or what years you spent at the home office.

There is so much more to this business than flogging mutual funds and trying to get retirees to buy variable annuities.

It is true that the brokers are key players in the game.  But those would be institutional brokers.

You retail guys are as useless as tits on a bull when it comes to what really matters.  Sooner or later you'll be replaced by somebody like Schwab coming along and offering a free lap top and a local class dealing with how to use it with a modest IRA roll over.

Transaction oriented brokers are a thing of the past.  What's going to keep the "financial advisor" in business when the Internet brokerage firms begin to explain trails and offer to return them to the client?

Why should you earn a trail for doing nothing?

[quote=san fran broker][quote=Big Easy Flood]

You get the impression?  What does that mean?

[/quote]

Based on the stated salaries and cash flows of the brokerage accounts of the IBD associate and VP level personnel of my bulge bracket investment bank who have their accounts with me. The stated incomes and bonus check deposits they get are smaller than they were in 2001, when I started working with the same level personnel.

I don't have any clients who are MDs, but I have read the same articles in the WSJ about the higher level of pay that everyone else has, and, assuming they are true; it would appear to me that VP and lower compensation has not similarly recovered in the last few years, at least at my firm.

Additionally, new equity issuance, particularly IPOs are still at relatively low levels since the late 90s and 2000 and this would similarly suggest that there is less bonus money flowing around.

That's what I mean by "I get the impression."

[/quote]

Well, you have the wrong impression.  Its widely known and well documented that bankers are killing it and have been doing increasingly better over the past couple years.  Are they doing better than 2001?  Actually probably so.  1999, 2000, and 2003 were record years for bonuses.  2001 was not.

Even if some are earning less than a couple years ago does not mean they are not doing well.  Certainly the comp of associates pales in comparison to MDs, but people right out of bschool are getting 6 figure bonuses and college grads are getting a $60k+ bonus.   There arent open desks bc people are starving.  Im not sure if you dont work at a true BB IB or if your clients arent getting it done or what, but there is no doubt that both the anecdotal evidence and reputable reports show bankers are doing quite well for themselves.

http://newyorkmetro.com/nymetro/news/bizfinance/biz/features /15197/index.html

http://money.cnn.com/2005/11/29/news/economy/banker_bonuses/ index.htm

Xmsbroker enjoys message board confrontation. He has not offered insight on any subject thus far. He claims that his family is full of successful attorney’s who make terrific salaries yet he could not use these contacts to develop a legitimate book of business. Why is an ex-morgan staley broker posting on the registered rep forum anyway. He must be a wholesaler who hates advisors because he has to flatter them all day every day.

I greatly appreciate all of the input/suggestions that I have received in this thread.  I feel that it has been beneficial for me to hear the varying perspectives that exist.  I’d rather learn these things now than once in a program.  The most important deciding factor for me will be fit.  This includes both the position/company’s fit with me and my fit with the position/company.  I don’t have a fear that I won’t eventually be successful in this career, but rather I am concerned with how long it will take and how much my past experience and schooling will help me achieve my goals.  This concern has rightly been brought forward by the response in this thread.  <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Even though the program may not be everything that I was expecting or hoping for, I’m certainly going to keep my options open and will continue with the application process.  I am scheduled to start the Financial Advisor Assessment at ML.  The first step is a 3-1/2 hour day in the life of an FA.  This includes a 15-minute sales presentation for which I can not use and electronic media presentation devices.  Can anyone provide me some more information as what to expect?  Is this assessment setup entirely to assess me or is it intended to serve some additional purposes?  Am I permitted to bring in some non-electronic presentation materials? (i.e. handouts and overhead transparencies)

I am not only considering ML.  I have also been meeting with JP Morgan, US Trust, UBS, Goldman Sachs and other non-related companies about varying positions.  I am attracted to the opportunity at ML because of the latitude they give and entrepreneurial aspect of the position.  My mentors and professors describe me as a self starter with an incredible entrepreneurial spirit.  Some were surprised to hear that I would go work for another company rather than start my own venture.  It is my point of view that an FA position at ML can give you the rewards of running your own business while providing the resources and support of a large institution.  Does anyone feel to the contrary?

Thank you!

WM

[quote=WealthManager]

I am not only considering ML.  I have also been meeting with JP Morgan, US Trust, UBS, Goldman Sachs and other non-related companies about varying positions.  I am attracted to the opportunity at ML because of the latitude they give and entrepreneurial aspect of the position.  [/quote]

Real life translation:

They give you plenty enough rope to hang yourself. 

[quote=BankFC]

Real life translation:

They give you plenty enough rope to hang yourself. 

[/quote]

Yes, I agree 100%!  Fortunately hanging yourself is not the only possible outcome.

[quote=fired?]Xmsbroker enjoys message board confrontation. He has not offered insight on any subject thus far. He claims that his family is full of successful attorney's who make terrific salaries yet he could not use these contacts to develop a legitimate book of business. Why is an ex-morgan staley broker posting on the registered rep forum anyway. He must be a wholesaler who hates advisors because he has to flatter them all day every day. [/quote]

A) I had a legitimate book of business

B) I got offered a trading job that pays better and is less hours

C) I post bc I have a lot of downtime (interspersed w/ lots of stress).  I like to clear up false information, such as what you were spreading about lawyers and what this guy was spreading about bankers.

The information that I posted regarding lawyers was extremely accurate. The information from the Department of Labor supported my claim. You offered absolutely no facts to back up your nonsense. Additionally the links you provided to defend your stance on bankers pay did not support your claim. Associates recieved bonuses of approximately $70,000 on top of salaries of about $70,000, hardly Liar’s Poker type paydays. I would never let an ex anything trade with my money. If your book of business was legitimate let us have some details.

[quote=fired?]The information that I posted regarding lawyers was extremely accurate. The information from the Department of Labor supported my claim. You offered absolutely no facts to back up your nonsense. Additionally the links you provided to defend your stance on bankers pay did not support your claim. Associates recieved bonuses of approximately $70,000 on top of salaries of about $70,000, hardly Liar's Poker type paydays. I would never let an ex anything trade with my money. If your book of business was legitimate let us have some details.[/quote]

Fired? - Im not sure where your antagonism towards me comes from but I do enjoy msg board confrontation so Ill humor you.

As noted by a former lawyer earlier on this thread, you dont know what youre talking about.  The DOL numbers are AVERAGES.  We werent talking about the average lawyer.  There are ~180 law schools and many of them have poor placement.  Its not a random process where only 'the top 1% of all law school grads' get $100k as you claimed.  Grads of the top t15 or so schools get that much and more easily:

http://www.ilrg.com/rankings/law/median.php/1/desc/MSPrivate

(Keep in mind major market starting salaries went up to $145k this year which is not yet reflected)

Grads of the t50 or so are competitive for $100k if in the top 1/2-1/4 of the class with a few getting $145k.  The point being, getting $100k is not some mysterious process where only 1/100 law grads get it.  A lot is determined before they finish a semester.  Our discussion and the WSJ article only referenced grads from good schools, the bottom schools are irrelevant and drag down the averages.

As for bankers, ~ $140k total comp is for an ANALYST, not an associate.  Not big swinging d!ck type money but pretty damn good for a 23 yr old w/ just an undergrad degree.  Better than what the typical 23 yr old can make on the retail side.

"The firm’s undergraduate hires, or “analysts”—which is what I was in the early nineties—now make $70,000 a year, with the potential bonus of $75,000, according to the career Website vault.com. Recent M.B.A. graduates, or “associates,” tend to make $95,000 or more and also have a shot at an equal amount as a bonus. Those numbers are pretty much Streetwide—like airlines, investment banks tend to move in lockstep when it comes to paying their grunts."

xmsbroker, grads of the top-15 law schools are most probably in the top 1-5% of their national law school classmates. The majority of lawyers do not make $100k out of law school, this is a fact. It just doesn’t happen. The major markets you discuss skew the average. $140k in NYC is not great money. Associates make approximately $180k (if they recieve the best bonus) out of grad school in NYC, again not spectacular money. Lastly, the numbers from the Department of Labor offered median salaries which are not averages.       

[quote=fired?]xmsbroker, grads of the top-15 law schools are most probably in the top 1-5% of their national law school classmates.        [/quote]

Wrong, and grads outside of the top 15 schools get these jobs too. 

[quote=fired?]

The majority of lawyers do not make $100k out of law school, this is a fact. It just doesn't happen.     [/quote]

I never said nor implied they did.  However, the majority of grads from good schools do.

[quote=fired?]

$140k in NYC is not great money.    [/quote] 

Never said it was great.  But it does compare favorably to what 25 yr olds make in retail.   

[quote=fired?]

Lastly, the numbers from the Department of Labor offered median salaries which are not averages. 

[/quote] 

Lol, a broker of all people should know 'median' is a type of average.  Likewise, the median is dragged down 4th tier schools that keep popping up.  This isnt a concern for people at good schools.

The median is a much more accurate number than an average. Please do not test my knowledge of statistics, as you will most surely not win that argument. The median salary for a grad at a top 15 firm is $125,000, according to your numbers. However, that is only for lawyers at private firms. How many law school grads end up working at private firms? Finally, I am not a broker, I am an advisor.

[quote=WealthManager]

I am not only considering ML.  I have also been meeting with JP Morgan, US Trust, UBS, Goldman Sachs and other non-related companies about varying positions. ......It is my point of view that an FA position at ML can give you the rewards of running your own business while providing the resources and support of a large institution.  Does anyone feel to the contrary?

[/quote]

The platforms that you describe will deliver radically different experiences. ML and UBS are very similar in the essential business model - you eat what you kill.

From what I can gather, GS is a sort of hybrid between the wirehouse and private bank model in that the firm clearly has a model, plenty of opportunity, but you will still eat what you kill. But, you will have gobs of yummy syndicate to sell to hedge funds, though, so that you can survive until you build up a clientele of a few big whales.

US Trust or JPM Private Bank are basically relationship manager positions. You eat what is fed to you. Your clients are not, generally, your own, but you will be treated fairly well and paid a good salary. Expect to make $250k / year at maturity and only expect massive bonuses at JPM if you are a rainmaker extraordinare. And it will be hard for you to learn the skills in order to do that in the Private Bank environment.

I can't speak for JPM private client group.... I assume that they follow the wirehouse model.

[quote=fired?]The median is a much more accurate number than an average. Please do not test my knowledge of statistics, as you will most surely not win that argument.   [/quote]

http://www.m-w.com/dictionary/average

Average:

1 a : a single value (as a mean, mode, or median) that summarizes or represents the general significance of a set of unequal values

[quote=fired?] Finally, I am not a broker, I am an advisor. [/quote]

lol

Are you honestly suggesting that the mean and the median cannot meaningfully diverge? You simply do not see the big picture. Extrapolating one sentence from a paragraph, looking up a definition in a dictionary, and posting your findings does not win an argument. Here is an example: sample of three numbers 1, 2, 300. Average= 101, Median= 2. Technically these are both averages, but they are drastically different. The accuracy of the mean, and/or the median, depends on the data.



Lawyers do not only come from the top-50 schools, eliminating 2nd and 3rd tier schools is data-mining and does not give a true picture of the average starting salary of a lawyer.       

[quote=fired?]Are you honestly suggesting that the mean and the median cannot meaningfully diverge? You simply do not see the big picture. Extrapolating one sentence from a paragraph, looking up a definition in a dictionary, and posting your findings does not win an argument. Here is an example: sample of three numbers 1, 2, 300. Average= 101, Median= 2. Technically these are both averages, but they are drastically different. The accuracy of the mean, and/or the median, depends on the data. 

[/quote]

Of course mean and median are different.  But as you acknowledge they can both be used to express the 'average'  so your prior critique was nitpicky and incorrect

[quote=fired?]

Lawyers do not only come from the top-50 schools, eliminating 2nd and 3rd tier schools is data-mining and does not give a true picture of the average starting salary of a lawyer.    [/quote] 

For the 3rd time, we werent talking about average lawyers.   

I am discussing average lawyers. If we limit every conversation to the top-25% are observations will not be terribly accurate. Finally, you are delusional about the lawyer’s salaries, even at top-50 schools. Yes, I acknowledge more than 1/100 will make six-figures, but the number is much closer to 20-25/100 than 50/100.



The whole point is that a financial advisor can have a lucrative and rewarding career. The job is difficult at first and many colleagues are simply sleazy salesmen, but if one is an astute businessman and has an entrepreneurial spirit you can do well. Best of luck in your career as a trader. I’m sure you will do well.

[quote=fired?]
The whole point is that a financial advisor can have a lucrative and rewarding career. The job is difficult at first and many colleagues are simply sleazy salesmen, but if one is an astute businessman and has an entrepreneurial spirit you can do well.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

[/quote]

This is what I really like about becoming an FA.  Every successful FA has emphasized how rewarding the career is.  It is difficult to find a career that is both rewarding and lucrative.  Another thing that has been emphasized is how difficult it is to succeed, especially early in the career.  If it were not difficult then chances are it would not be nearly as rewarding.

I have my 4-hour assessment and sales presentation tomorrow for which I am currently preparing.  Should I be offered a position at ML I will have a difficult decision to make.  The initial pay will be an excruciating hard pill to swallow.  I'm a 32 year old married man who just finished an MBA that took two years and cost $120K.  If I am to accept a position at ML, I would be turning down offers for different positions that all pay at least 6-figures before signing and annual bonus.  I need to really sit down and determine the value of an FA position at ML.  When valuing my potential career paths how much weight should I give to future growth?  The more weight I give to growth the better the ML FA position is.  Then after figuring out the proper weighting for growth I need to factor in the risk.  I hear wildly varying success ratios.  The better I believe my chances for success, the better the ML position looks.  Next I need to consider the opportunity cost of a few years at such a low salary.  I feel like I'm an analyst valuing an equity.

Wealth Manager you are obviously in NYC. Take your geographic area into consideration when analyzing your offer. I don’t know what the revunue and AUM numbers are in huge metropolitan areas (my office is in a smaller metropolitan market). Based on data from Andre Cappon (http://www.thecbmgroup.com/company.asp) your growth rates should generally be 100% after Y1, 50% Y2, 25% Y3, etc. Your terminal growth rate will probably be around 10-15%%. An excellent advisor (top 5%) generates perhaps $100,000, in a large market, in revenue after 1 year. Base your calculations around that figure and use a 40-50% payout on your gross. Merrill also has a bonus structure that may add several thousand to your pay. Finally, use a higher discount rate to account for market fluctuations.       

I forgot to add variance. Cappon estimates that advisors have a 15% success rate after 4 years. Approximately 75% Y1, 35% Y2, 20% Y3, and 15% Y4. Good luck!

I started at the same time as 2 MBA’s 5 years ago.  Not sure what either is doing now.

Dear WM,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I think you are looking at it the right way so far and you have gotten good advice on this thread. 

I walked away from a job that paid about $100K six years ago to get into the business.  It wasn't until my fifth year that I made more than my old job and I am on track to easily beat it again this year.  I too have a master's degree, but it is in engineering and becoming a FA was a big change.  A MBA is probably as good a degree as any, but there is no academic program that I know of that really prepares you for this job.

A NPV analysis would indicate that, so far, I've made a mistake because I gave up quite a few dollars to make this career move.  This is particularly true if I use a discount rate that is commensurate with the risk of this career as suggested in an earlier post. 

This brings up a point that I think is critical: Is this what you want to do?   The money thing will take care of itself as long as you pick the career that you really want.

Another thing that is huge is whether your wife in on board with your working in this field.  You will give up money up front and she may not dig that after a couple years of grad school.  This business is tough enough with a supportive spouse and you are making a huge mistake if your wife does not fully support this move.

That said, I think you can do it.  I got into the business less than a year after a move to a city that I'd never lived in before.  I did not know a particularly large number of wealthy people and I got licensed just in time for the 2000 - 2002 markets.  By the way, the perceived strength of markets is a much larger success factor than I realized when I decided to get into the business.   I know this sounds dumb on my part, but you will quickly see that even wealthy folks are eager to buy high and sell low.

If you are ready to work harder for less money, more uncertainty, little respect from the general populace and your employer (at least until you eventually hit it big), then you will probably do just fine.

In return, you get what can be a fun job and the opportunity run your business as you see fit.  No firm will mess with you if you are doing sufficient quantity and quality of business.  It would be very tough for me to go back to the corporate gig.

WM.

If you have all of these other companies willing to pay you 6 figures plus incentives, why are you willing to do this. You don't seem to be sure that this is what you want to do. It seems as if you keep wanting someone to tell you your gonna make tons of money consulting with existing ML clients. This is hard-core sales with lots of cold calling. Take it or leave it.

As long as you consciously get into this knowing the risk and don’t look back once you hit the ground, it’s probably worth a shot.  Proton and Coag are on track above.  Oh, and I’d say this is like valuing a call option…or maybe a convertible.  You always have your underlying education and skills to generate income working for the man if this career doesn’t pan out.  You don’t want to be looking back, but at least you know worst case you won’t be destitute.

I have a few questions about Merrill's POA program, if you don't mind.  I was contacted by a headhunter/recruiting firm that has setup an initial interview with ML.  The recruiter is telling me that the salary in the POA program was NOT a draw, and that you can earn commissions on everything you sell, in addition to the salary.

I already have my 7, 66 and insurance licenses so I'd want to go into production ASAP.  Problem is, I can't live off of the salary alone (for too long), even on the high end of their range and need to have the potential to earn at least $150k the first year.

Based on the research that I've done on these forums, reading old posts in another thread like the one below, it seems to actually be a draw (which goes against what the recruiter is telling me):

[quote=moneyadvisor] PC's are production credits. Transactional credits generated on the sale of investments. For example....Because you would have to do enough business to cover 3 months of your salary, before you would get paid on production above and beyond your salary, there would be no reason for you to sell A or B share funds, or take the upfront commision on annuities. If your salary is $40,000/yr......that's $3,333 per month. At a 40% payout, you would need to do $8,300 gross per month, this is equal to putting $150,000 per month into A share funds. But, they look at this quarterly. SO, if your salary is $9,999 per quarter, before you could collect commissions above your salary, you would have to Gross over $25,000 in the quarter. The program has fee based assett goals, so that guys can annuitize, and hopefully come close to replacing there salary when they graduate.[/quote]

I need to make $12k/month to pay my bills (although they would be quite less working for a wire, compared to being indy where I foot the bill for all marketing expenses, so lets say $10k.

If I could get a $60k salary (not likely, although the recruiter said the average range is $40-80k), I would need to make another $5k month in commissions above the salary to get to $10k/month.  Is that even possible with this POA program?

I guess it would be, if the salary was not a draw...

As an example, someone in the POA program is bring in $750k in assets each month.  $500k is in fee-based accounts to annuitize his book, and $250k is in VA's, mutual funds, fixed annuities, REIT's, whatever transactional business he can round up to get "paid now".

Let's say that monthly transactional business of $250k averaged 6% commission for a GDC of $15k @ 40% payout = $6000 income to rep.  Would the rep's paycheck be $11k that month, or $6k that month ($5k salary and he only got to keep the $1000 extra that he generated over the salary, hence the "draw").

Again, this recruiter is telling me that you get all of the commissions, ON TOP OF the salary, but I don't believe it (after seeing moneyadvisors post and trusting that info as legit) and wanted to ask some people here that I know are either in the POA program, just out of it, or perhaps run it as manager.  I just don't want to waste this manager's time and will probably cancel the interview if it is indeed a draw and I have no chance at seeing 5-figure monthly income until I'm into my 3rd year and off of salary.

Thanks in advance.

[quote=STL Indy]

I have a few questions about Merrill's POA program, if you don't mind.  I was contacted by a headhunter/recruiting firm that has setup an initial interview with ML.  The recruiter is telling me that the salary in the POA program was NOT a draw, and that you can earn commissions on everything you sell, in addition to the salary.

I already have my 7, 66 and insurance licenses so I'd want to go into production ASAP.  Problem is, I can't live off of the salary alone (for too long), even on the high end of their range and need to have the potential to earn at least $150k the first year.

Based on the research that I've done on these forums, reading old posts in another thread like the one below, it seems to actually be a draw (which goes against what the recruiter is telling me):

[quote=moneyadvisor] PC's are production credits. Transactional credits generated on the sale of investments. For example....Because you would have to do enough business to cover 3 months of your salary, before you would get paid on production above and beyond your salary, there would be no reason for you to sell A or B share funds, or take the upfront commision on annuities. If your salary is $40,000/yr......that's $3,333 per month. At a 40% payout, you would need to do $8,300 gross per month, this is equal to putting $150,000 per month into A share funds. But, they look at this quarterly. SO, if your salary is $9,999 per quarter, before you could collect commissions above your salary, you would have to Gross over $25,000 in the quarter. The program has fee based assett goals, so that guys can annuitize, and hopefully come close to replacing there salary when they graduate.[/quote]

I need to make $12k/month to pay my bills (although they would be quite less working for a wire, compared to being indy where I foot the bill for all marketing expenses, so lets say $10k.

If I could get a $60k salary (not likely, although the recruiter said the average range is $40-80k), I would need to make another $5k month in commissions above the salary to get to $10k/month.  Is that even possible with this POA program?

I guess it would be, if the salary was not a draw...

As an example, someone in the POA program is bring in $750k in assets each month.  $500k is in fee-based accounts to annuitize his book, and $250k is in VA's, mutual funds, fixed annuities, REIT's, whatever transactional business he can round up to get "paid now".

Let's say that monthly transactional business of $250k averaged 6% commission for a GDC of $15k @ 40% payout = $6000 income to rep.  Would the rep's paycheck be $11k that month, or $6k that month ($5k salary and he only got to keep the $1000 extra that he generated over the salary, hence the "draw").

Again, this recruiter is telling me that you get all of the commissions, ON TOP OF the salary, but I don't believe it (after seeing moneyadvisors post and trusting that info as legit) and wanted to ask some people here that I know are either in the POA program, just out of it, or perhaps run it as manager.  I just don't want to waste this manager's time and will probably cancel the interview if it is indeed a draw and I have no chance at seeing 5-figure monthly income until I'm into my 3rd year and off of salary.

Thanks in advance.

[/quote]

Are you kidding me?  $12k a month in year 1?  Unless you are really hooked in with a lot of people who are going to give you money I'd say fat chance.  In order to do that, you would most likely have to focus on one time high commission investments like variable annuities (about $3.6 million a year into VA's roughly) to make that kind of cheese.  The problem is that you would not be building an annuitized business, which is the real beauty of this business.  I think the assumed payout and commission (40% and 6%) are high if Merrill is offerring a salary, I would be conservative and assume 30% payout and 5% commision at a wirehouse (and that's a VA) in addition to your salary. 

[quote=STL Indy]

I guess it would be, if the salary was not a draw…

As an example, someone in the POA program is bring in $750k in assets each month.  $500k is in fee-based accounts to annuitize his book, and $250k is in VA's, mutual funds, fixed annuities, REIT's, whatever transactional business he can round up to get "paid now".

Let's say that monthly transactional business of $250k averaged 6% commission for a GDC of $15k @ 40% payout = $6000 income to rep.  Would the rep's paycheck be $11k that month, or $6k that month ($5k salary and he only got to keep the $1000 extra that he generated over the salary, hence the "draw").

[Quote]

6k.  It is a draw.

I think the assumed payout and commission (40% and 6%) are high if Merrill is offerring a salary, I would be conservative and assume 30% payout and 5% commision at a wirehouse (and that’s a VA) in addition to your salary. 

30% payout grid?  That sounds like a bank broker's grid, and at least they give you warm leads and book to call on.  I thought ML gave ~40% on transactional stuff? 

5% on VA's?  WRL pays 7%, Hancock's VA is in that range too.  I was using 6% as a rough average for all transactional commission products though (VA's, A shares, etc), figuring that was fairly conservative.  So, ML would not give me the full commish on a 7% VA and even after that run it through a grid?  Wow.

I'm not terribly concerned with the 15m AUM requirement after 2yrs in the program, I just wanted to know how you get paid as a POA participant.

Just to run some numbers though, and where I'm having an issue with even wanting to goto this interview.  The successful POA grad will have 15mil AUM (10 of which is annuitized).  As an example:

10m AUM in 24months, all fee based stuff, figure 1% payout.

5m AUM in 24months, all transactional, figure 5% average commission.

In those 24 months of the program, you've brought in 250k GDC to the firm just on the 5 million transactional alone (assuming only an average 5% commission). The 10m would be bringing in 100k GDC, starting off the 3rd year, and since you would build up those funds over time in the 24 months, it might only be worth ~40k in combined GDC those first 2yrs depending on the timing of when you acquired the business.  Just for grins though, we'll use $40k of GDC for the fee based business that you brought in (10mil).

That's $290k GDC that you made for ML, but you only earned a $40-50k salary while doing it? (plus some small cash bonuses).  Seems like a win-win for Merrill from how I'm seeing it.  Then, for the guys that maybe don't quite make it and ultimately wash out (but did get ML some business), I'm sure that book will just get passed around the office while the wash out has no chance at ACAT'ing them over to his new BD (being a failed ML trainee), unless he can do some major spin control. 

[quote=Scorpio]6k.  It is a draw.
[/quote]

Ouch.  Thank you for confirming.  I guess this recruiter is just blowing smoke wanting me to go in this interview and have the manager "wow" me or something.  I think I'll call the ML manager to cancel the interview so I don't waste each other's time.  This headhunter is swearing up and down that it's not a draw though.

I doubt that headhunter even understands how a draw works.  Most of the POAs in my office don’t even understand it.

[quote=dude]I was using 6% as a rough average for all transactional commission products though (VA's, A shares, etc), figuring that was fairly conservative.  [/quote]

I think your view of the transactional side of this business is a little askew, see below:

This is a fairly typical breakdown of the commissions on a mutual fund at different dollar amounts (from American Funds website).

And this is a fairly typical breakdown of the commissions on a unit investment trust at different dollar amounts (from First Trust website).

Volume Discounts

The commissions on individual stocks and bonds very by firm and broker, but typically are even lower than the above (although some charge a fee going in and going out).

As you can see, if you are bringing in decent size clients, you will be averaging closer to 2-3% on new money.

[quote=Scorpio]I doubt that headhunter even understands how a draw works.  Most of the POAs in my office don't even understand it. [/quote]

Most likely.  I'm thinking that is the case here.

[quote=lawsucks]

I think your view of the transactional side of this business is a little askew, see below:[/quote]

Thanks.  Those numbers might be accurate for your primary market, and the products that you typically sell, but not in my case .  For the investors I market to, and the transactional products that I tend to use most often, it's more of a 5-6% average commission.

Has anyone here taken the 4-hour day in the life of a FA assessment at ML?  I took mine today.  It was a lot of fun.  If I could work four hours like that everyday and have it feel like only one hour then this is a career that I really need to consider.

<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

I can’t say that I nailed the assessment, but in reality I don’t think that it is even close to possible to do a perfect job.  What is everyone else’s opinion?

I’m happy to see that ML will put so much effort into assessing the potential employees.  I’m sure that this assessment program does not come cheap.  It is good to know that they will work hard in the early stages to weed out those who will not work out.

WM

[quote=STL Indy]

[quote=Scorpio]I doubt that headhunter even
understands how a draw works.  Most of the POAs in my office don’t
even understand it. [/quote]

Most likely.  I'm thinking that is the case here.

[quote=lawsucks]

I think your view of the transactional side of this business is a little askew, see below:[/quote]

Thanks.  Those numbers might be accurate for your primary market, and the products that you typically sell, but not in my case .  For the investors I market to, and the transactional products that I tend to use most often, it's more of a 5-6% average commission.

[quote=rightway]
5-6% a trade.  And we wonder about the regulation.
[/quote]

I know my clients, thank you very much, and have never had an issue with compliance.   Who are you to judge my product selection to my niche market?  You don't know me, who I work with, and what products I normally recommend.  I target specific types of clients with my marketing strategy.  Because of this, in most cases they have very similar circumstances to each other and require similar solutions.  I don't try and be all things to all people, I work with a specific type of client.

S-L-I-N-G those annuities boy..... Go get em..... Make sure to tell them about that 8-12 year surrender schedule.....

I am sure your 'targeted' clients all get a comprehensive wealth management analysis, retirement income projections, advice on estate planning, help with alternative cash management strategies, etc, etc...

Oh wait..... um.... no... they are probably just getting a bonused annuity.....

[quote=blarmston]

Oh wait..... um.... no... they are probably just getting a bonused annuity.....

[/quote]

I never sell bonus VA's, I do alot of non-bonus VA's and the income rider's are very popular with my niche market.  I'm not peddling crap EIA's with long surrenders, most of my VA's are 5-7yr.  

As for your other comments, yes, all of my clients get that when I put my series 66 hat on and take my series 7 hat off.

Anyway, you're going OT for this thread, my question was answered already (salary in the POA program is a draw), thanks anyway.

Help! Does anyone out there still have a 2006, 2007, and/or 2008 POA Handbook? I lost mine and desperately need a copy. I’ll pay for copying and FedEx.