Payouts At Firms
I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%.
I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90.
Anyone know?
[quote=Still@jones]I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%.
I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90.
Anyone know?
[/quote]
I think you should focus on getting a job or even opening 5 accounts.
How 'bout a div trip…when are they going to give me my div trip!!!
how hard are those trips to get?
Not very especially for new guys they give you credits…
Still, Keep in mind, you have to compare apples to apples. I know you know this, but you can't directly compare an indy payout to a wirehouse/regional payout, since indy advisors have to pay for everything themselves. Now, at the end of the day, higher producers will likely make more as an indy (your expenses don't grow sequentially with prodcution growth as an independant). And ignore LP as a form of compensation - it's an investment. You pay for it. Top producers are probably netting more like 55-60%. You should also add in what Jones gives as profit sharing. It's small as a % of gross, but it can add up to a few % points. And it's uncapped - once you exceed the IRS limit, they just add it in as a taxable bonus on your paycheck.I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%.
I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90.
Anyone know?
Still, Keep in mind, you have to compare apples to apples. I know you know this, but you can't directly compare an indy payout to a wirehouse/regional payout, since indy advisors have to pay for everything themselves. Now, at the end of the day, higher producers will likely make more as an indy (your expenses don't grow sequentially with prodcution growth as an independant). And ignore LP as a form of compensation - it's an investment. You pay for it. Top producers are probably netting more like 55-60%. You should also add in what Jones gives as profit sharing. It's small as a % of gross, but it can add up to a few % points. And it's uncapped - once you exceed the IRS limit, they just add it in as a taxable bonus on your paycheck. [/quote] I agree with much of what B24 says but would also add some important things to consider. All gross is not gross. For instance Dealer concession varies widely on different products. When I was at Jones, VA's B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%. If you look at an average ticket size of 100K, that is 1662.50 net at Jones as opposed to 5400 net being independent. The payout percentages don't always tell the whole story. You have to look at the dealer concession. This also applies to mutual fund business as well. Annuity business for me is less than 15% of my overall business but being independent I realize a significant difference as opposed to my prior life at Jones. I always assumed that I made 38.5% of all revenue that I made for Jones but I soon realized that I was not correct. You have to understand what is being trimmed off before you get compensated...... Different firms take differing amounts. You cannot take a percentage of payout alone and make that estimation without knowing the other factors at play. Good luck to you.[quote=Still@jones]I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%.
I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90.
Anyone know?
Once you hit Seg. 3 you should be getting 2 diversification trips a year without much thought about it.Not very especially for new guys they give you credits…
EDJ rebates 12b-1s back to customer. Also you can discount the fee at EDJ up to a certain point before it decreases your payout.
Jones platform is pretty decent as far as reps getting paid…40% on 1.25% on every dollar that goes into the program. There biggest problem are the choices and lack of discretion, but that fits the firm profile… Plus now people can do advisory and not take the haircut on C shares.
The new thing at jones that I have been hearing about is putting clients in A Shares(over 100K break point) for 2-3 years, then flipping over to advisory.
[quote=B24][quote=Still@jones]I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%. I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90. Anyone know?
Still,
Keep in mind, you have to compare apples to apples. I know you know this, but you can’t directly compare an indy payout to a wirehouse/regional payout, since indy advisors have to pay for everything themselves. Now, at the end of the day, higher producers will likely make more as an indy (your expenses don’t grow sequentially with prodcution growth as an independant).
And ignore LP as a form of compensation - it’s an investment. You pay for it. Top producers are probably netting more like 55-60%. You should also add in what Jones gives as profit sharing. It’s small as a % of gross, but it can add up to a few % points. And it’s uncapped - once you exceed the IRS limit, they just add it in as a taxable bonus on your paycheck. [/quote]
I agree with much of what B24 says but would also add some important things to consider. All gross is not gross. For instance Dealer concession varies widely on different products. When I was at Jones, VA’s B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%. If you look at an average ticket size of 100K, that is 1662.50 net at Jones as opposed to 5400 net being independent. The payout percentages don’t always tell the whole story. You have to look at the dealer concession. This also applies to mutual fund business as well. Annuity business for me is less than 15% of my overall business but being independent I realize a significant difference as opposed to my prior life at Jones. I always assumed that I made 38.5% of all revenue that I made for Jones but I soon realized that I was not correct. You have to understand what is being trimmed off before you get compensated…
Different firms take differing amounts.
You cannot take a percentage of payout alone and make that estimation without knowing the other factors at play.
Good luck to you. [/quote]
As an independent, what has been your overall increase (in percentages) after leaving EDJ?
[quote=iceco1d]Good point Noggin. But, lets put the shoe on the other foot.
CORRECT ME IF I'M WRONG, BUT: At EDJ, and at a wire, if you are using a fee-based platform, MF Wrap, etc., and you charge the client 1.5%, your GROSS is 1.5%, yes? No ticket charges, no "program fees," etc. At EVERY indy firm I've seen, there is ALMOST always a ticket charge (usually < $50 per trade on MF), AND/OR a PROGRAM FEE. Program fees can be hefty. At my firm, on a 1.5% wrap, the program fee is 50 bps! Granted, no mins, and no tickets, but a hefty fee no less! So, the 85% my OSJ gets, isn't necessarily 85%. I think LPL's program fees are on a sliding scale, based on account size (they cap @ like 25 bps?). Now there's also the question of 12b-1s in a wrap account. RIA custodians pocket them (usually). My b/d pays them out (hence the big program fee). I think LPL pays them in taxable accounts, and rebates them in retirement accounts. What does EDJ do? How about the wires? I'd like to see how this stuff adds up in an indy vs employee comparison. Mind you, there's also the question that some of the wires are pulling "you don't get paid anything on tickets of less than $XX, or you don't get paid on households under $XX,XXX." I'd love to see a study, comparing true payouts at different levels of production, at different types of firms. I'm sure it matters whether or not you are insurance or investment heavy, as well as do you have a ton of small/med clients, or a few HNW clients too. Interesting.[/quote] I would agree with you. You have to look at all the angles to make a good decision. I forgot to mention payout on insurance cases. I just submitted a couple of terms and a UL that as an independent my payout is 100% on. I know there is some additional comp there but at least I get 100% of the premium amount. Nice little 5K gross day. True payouts would be an interesting subject to get to the bottom of. I don't think anyone really knows.... You just hope that you are not being taken advantage of at the end of the day. On a managed acct scenario, really you are looking at cap of 20 bps for program costs at my firm. I have seen ticket charges being steadily reduced. I think that these are important considerations to make. 40% of 1.25% is 500 net on 100K acct yearly. 90% of 1.25% after taking off .20 for program and say another .25 for tickets is still 722.50 net if my math is correct. When the program costs are in the 50 bps range that makes it a totally different conversation.Otane, just remember, the net/net/net will vary widely as well, based on your office expenses. If you are a solo with an expensive office and assistant, that is much different than having a cheap office/share with other advisors/work out of your house. You really have to consider everything. My friend that left Jones to go indy can’t even THINK about getting an office until he increases his production. But I think he said his payout at his production level at Cambridge is like 65% (before ticket charges and other expenses). So he is netting slightly more than at Jones, but not by much. The variance will widen as his production grows.
Well, first you need to get a job. Then open an account. Then you need to make $1. It's like a treasure hunt. When you get the booty, then you can ask questions like that :). And feel free to wear a peg leg, giant hat, and wear a parrot on your shoulder.I’ve been looking at the 2009 payout grid for independent b/d on http://www.financial-planning.com and I’ve got to wonder, do reps at EJ, ML & MSSB even come close to this when they add up all their forms of compensation. I’m thinking a top producing EJ rep with LP is taking home about 65%.
I see several firms in the 50-90 payout range and I’m curious what production you need to climb to 60,70,80,90.
Anyone know?
Otane, just remember, the net/net/net will vary widely as well, based on your office expenses. If you are a solo with an expensive office and assistant, that is much different than having a cheap office/share with other advisors/work out of your house. You really have to consider everything. My friend that left Jones to go indy can’t even THINK about getting an office until he increases his production. But I think he said his payout at his production level at Cambridge is like 65% (before ticket charges and other expenses). So he is netting slightly more than at Jones, but not by much. The variance will widen as his production grows.
I guess there are pluses and minuses for both cases. I imagine that going indy gives you more freedom and free of the BS piranhas at the office.
FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
Depends on when he was there.
When I was there the payout on 100K and above for Hartford Leaders was 4.75% as I stated, that may have changed in the time since I have left and also at the time payouts for 100K or greater B share VA were reduced to 35%. Have they changed these policies? If not, begin your apology.FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
Some B share VAs pay at 4.75% - some pay 5%. Different companies pay different rates.
American Legacy does pay 35% over 100k -- guess I won't be using them. Let's get our facts straight.Exactly, thank you for clarifying Voltmoie.
I guess I will have to wait for an apology from Hey Kool Aid.
Worry about gaining new clients and creating production, then payouts. 90% of very little isn’t much differnet than 45% of very little.
actually, it is 100% more.
but, besides that, I’m just asking these questions to get a feel for what different firms offer and to try to figure out my next move…not because I’m planning my budget for 2017.
It may be 100% more, but it’s still very little.
When I was there the payout on 100K and above for Hartford Leaders was 4.75% as I stated, that may have changed in the time since I have left and also at the time payouts for 100K or greater B share VA were reduced to 35%. Have they changed these policies? If not, begin your apology.[/quote] No apology necessary, there may be different products that pay differently but as usual you "happen" to use the product which, at Jones has the lowest payout. Secondly, you are giving advice to a poster who is asking for current info, not from before you left! Now...here is your quote noggin: "When I was at Jones, VA's B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%". No where in that quote does it say "Hartford Leader's B share pays...etc..etc... but Protective's B share pays more.....you made a general comment using antiquated info to let a poster know how bad the payout is at Jones, while at the present time, is just not true! Again, I do understand that Indy payouts are better for the FA than wirehouse, Jones, etc...and we have seen all of the arguments for and against both, but you always have a way of turning it against EDJ....and the OP, or anyone interested in the same info should take your biased posts with a grain of salt![quote=Hey Kool-Aid]FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
When I was there the payout on 100K and above for Hartford Leaders was 4.75% as I stated, that may have changed in the time since I have left and also at the time payouts for 100K or greater B share VA were reduced to 35%. Have they changed these policies? If not, begin your apology.[/quote] No apology necessary, there may be different products that pay differently but as usual you "happen" to use the product which, at Jones has the lowest payout. Secondly, you are giving advice to a poster who is asking for current info, not from before you left! Now...here is your quote noggin: "When I was at Jones, VA's B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%". No where in that quote does it say "Hartford Leader's B share pays...etc..etc... but Protective's B share pays more.....you made a general comment using antiquated info to let a poster know how bad the payout is at Jones, while at the present time, is just not true! Again, I do understand that Indy payouts are better for the FA than wirehouse, Jones, etc...and we have seen all of the arguments for and against both, but you always have a way of turning it against EDJ....and the OP, or anyone interested in the same info should take your biased posts with a grain of salt! [/quote] When I was at Jones, I actually chose the product that was best for the client not what paid me the most. I assume that you run your business differently given your post. If you think that going from 4.75% to 5.00% on payout has drastically improved the payout from bad to good then I probably will not convince you of much. The whole purpose was not the payout percentage but actually the dealer concession. It is important once again to look at the whole picture not just the payout percentage. If you want to accuse me of only writing a comment to slam Jones then you are mistaken as that is not my intent. I was merely using an example to illustrate a point. The overiding point is that compensation involves a considerable amount more than just payout percentage. I am sure that you will find something in this answer that offends your sensibilities.[quote=noggin][quote=Hey Kool-Aid]FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
When I was there the payout on 100K and above for Hartford Leaders was 4.75% as I stated, that may have changed in the time since I have left and also at the time payouts for 100K or greater B share VA were reduced to 35%. Have they changed these policies? If not, begin your apology.[/quote] No apology necessary, there may be different products that pay differently but as usual you "happen" to use the product which, at Jones has the lowest payout. Secondly, you are giving advice to a poster who is asking for current info, not from before you left! Now...here is your quote noggin: "When I was at Jones, VA's B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%". No where in that quote does it say "Hartford Leader's B share pays...etc..etc... but Protective's B share pays more.....you made a general comment using antiquated info to let a poster know how bad the payout is at Jones, while at the present time, is just not true! Again, I do understand that Indy payouts are better for the FA than wirehouse, Jones, etc...and we have seen all of the arguments for and against both, but you always have a way of turning it against EDJ....and the OP, or anyone interested in the same info should take your biased posts with a grain of salt! [/quote] When I was at Jones, I actually chose the product that was best for the client not what paid me the most. I assume that you run your business differently given your post. If you think that going from 4.75% to 5.00% on payout has drastically improved the payout from bad to good then I probably will not convince you of much. The whole purpose was not the payout percentage but actually the dealer concession. It is important once again to look at the whole picture not just the payout percentage. If you want to accuse me of only writing a comment to slam Jones then you are mistaken as that is not my intent. I was merely using an example to illustrate a point. The overiding point is that compensation involves a considerable amount more than just payout percentage. I am sure that you will find something in this answer that offends your sensibilities. [/quote] Call me naive, but does anyone even sell B-share annuities at Jones? And if they do, why would they?[quote=Hey Kool-Aid][quote=noggin][quote=Hey Kool-Aid]FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
When I was there the payout on 100K and above for Hartford Leaders was 4.75% as I stated, that may have changed in the time since I have left and also at the time payouts for 100K or greater B share VA were reduced to 35%. Have they changed these policies? If not, begin your apology.[/quote] No apology necessary, there may be different products that pay differently but as usual you "happen" to use the product which, at Jones has the lowest payout. Secondly, you are giving advice to a poster who is asking for current info, not from before you left! Now...here is your quote noggin: "When I was at Jones, VA's B share version paid about 4.75% of which I would get 35%. Now that I am independent that same VA B share actually pays 6.00% of which I get 90%". No where in that quote does it say "Hartford Leader's B share pays...etc..etc... but Protective's B share pays more.....you made a general comment using antiquated info to let a poster know how bad the payout is at Jones, while at the present time, is just not true! Again, I do understand that Indy payouts are better for the FA than wirehouse, Jones, etc...and we have seen all of the arguments for and against both, but you always have a way of turning it against EDJ....and the OP, or anyone interested in the same info should take your biased posts with a grain of salt! [/quote] When I was at Jones, I actually chose the product that was best for the client not what paid me the most. I assume that you run your business differently given your post. If you think that going from 4.75% to 5.00% on payout has drastically improved the payout from bad to good then I probably will not convince you of much. The whole purpose was not the payout percentage but actually the dealer concession. It is important once again to look at the whole picture not just the payout percentage. If you want to accuse me of only writing a comment to slam Jones then you are mistaken as that is not my intent. I was merely using an example to illustrate a point. The overiding point is that compensation involves a considerable amount more than just payout percentage. I am sure that you will find something in this answer that offends your sensibilities. [/quote] Call me naive, but does anyone even sell B-share annuities at Jones? And if they do, why would they?[/quote] The B share when purchasing less than $250k to a client that absolutely doesn't need to access the money is a better product for the client. Noggin: wtf are you talking about, the whole discussion was started around the better payout at your current Firm, as opposed to what you got at Jones...then I comment on that and you acuse me of only worrying about payout????? Makes no sense. And an argument can be made to compare Hartford, whose writedowns were substantial and stock price was getting slammed...clients were concerned about using them, compared to a company like Protective that was barely in the news and has less than .2% of sub-prime mortgage exposure and refused any TARP money....yeah...that 25 bps that you saved them really was best for them![quote=noggin][quote=Hey Kool-Aid][quote=noggin][quote=Hey Kool-Aid]FYI noggin, the payout on a “B” share annuity at EDJ is 5% not 4.5% and you received 40% payout on it (or a minimum of 36% in the 5 states if you are a new broker)…not 35%…indy payouts are still higher than that but lets get the facts straight when making the comparison.
chief, Wouldn't it be impossible for it to "be a new thing" to flip clients after 2-3 years when the program itself is only 13 months old (in my Region anyway). I get your point that some may try in the future but pigs may fly in the future too. How about we wait until it is actually mathematically possible for this to happen then we can bash away. While you wait you can just bash the act of selling an A share then later bash the "flip". 2 for the price of 1.EDJ rebates 12b-1s back to customer. Also you can discount the fee at EDJ up to a certain point before it decreases your payout.
Jones platform is pretty decent as far as reps getting paid…40% on 1.25% on every dollar that goes into the program. There biggest problem are the choices and lack of discretion, but that fits the firm profile… Plus now people can do advisory and not take the haircut on C shares.
The new thing at jones that I have been hearing about is putting clients in A Shares(over 100K break point) for 2-3 years, then flipping over to advisory.
Although I haven’t heard the “flipping” thing, I have heard of a lot of advisors moving out of A shares into Advisory. Because of the way they credit back commissions, your year-over-year fees/commissions generally can’t exceed the 1.35 in Advisory Solutions. For example, you put someone in A shares this year at 3.5%, then flip them next year, they will credit the client back for the difference. So yes, it may give you the upfront pop, but at the price of not having the 1.35 for a year or two (all depends on how long held, etc.). Jones is in the process of addressing the “newbie goals” issue, which prevents newer FA’s from going into Advisory. It’s not rolled out yet, but I got confirmation from Lisa Pelican that it is being worked on. And once the program has been around for a few years, and people have enough in Advisory business, there will no longer be a need to “front load” like you suggest.
However, I have been watching the numbers. The performance has been better than a traditional Jones A-share portfolio, so I think the program is a very good buy-and-hold alternative to A shares. I don’t like the rigidness of it, but that’s another hurdle.
If the client is going to probably use the income rider B-shares are the only way to go. In my opinion. I’d sell C if they let me.
b24 … I’m new and have sold AS with no issues? Are you talking about the trade off between eating and starving?
I've heard they will have a "phantom" account that shows the first year in fees up front which will go towards the FA's expectations...the payout will remain monthly in arrears. Needs to be done as there is a huge conflict of interest for Seg N,1,2 and even some seg 3s.
[quote=B24]…and ignore LP as a form of compensation - it’s an investment. You pay for it. [/quote]
Good Point! Not only do they pay for it; but they also work for it! …suckers!
Not really - the payouts won't change, but they are looking at crediting you up front for assets put into AS, but only for your production screen purposes (goals). Look at it this way...my monthly minimum is about 13,000 gross. If I get someone that brings in 500K to me, and I want to put them in AS, that is exactly ZERO in production for me. If I put them into A shares, that would be more like 10-15K. If I am struggling and having a bad few months, which do you think I would choose (regardless of my personal income needs)?If the client is going to probably use the income rider B-shares are the only way to go. In my opinion. I’d sell C if they let me.
b24 … I’m new and have sold AS with no issues? Are you talking about the trade off between eating and starving?
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