Starting your FA business at EJ

I think you should start with a minimum of $1 million.

Faca,

You’ll starve if you set those types of minimums getting started. I suspect you’ve not even passed your series 7 yet since you’ve asked that?  Talk to your field trainer and he’ll give you the details. But here is the long and the short of it … you’ll take anything that moves.  10k rollover? YEP! $250 Roth? YEP!  Jones wants to see activity.  Good luck!

voltmoie is exactly right, you take anything you can get in the beginning! 

thanks guy.

Faca,

Good luck FACA!! Knock 'em dead.

I disagree. I know you have to open a certain amount of accounts with jones and do a small amount of gross to make it to each level. Skip the people who don’t have money. Starting off I would qualify for at least $10K, but realistically look for $25K minimums.

Squash, I would agree that you don’t want to bring on dead wood.  But (1) sometimes there are clients that don’t have a lot to invest now, but will be great clients to build with down the line (i.e. high earners, everything in their 401K - why not keep them in your back pocket??), and (2) more clients means more referral opportunities - even from clients that don’t have much.   I just think early on that (regardless of the Jones requirements), you should develop as many relationships as possible.  Now, I would not suggest doing the trailer-trash circuit, but in the early stages of your career, there is probably more risk in opening too FEW accounts than too MANY.  You can always prune them down the line if necessary.

I still disagree, lots of books have been written that people with like attitudes and morals and ideals hang out. So yeah I may get the every now and then referral from a crap client, but chances are that it will be someone similar to them. I want referrals from my larger clients because chances are they have friends with similar accounts. I also think you set a precedent by saying no to people who don’t have to your minimum qualifications. And by starting out that way you don’t have to piss people off when there account isn’t big enough 3 years later.



I refer all my prospects with less than $50K to invest to a local guy down the street who will take anything(and it shows). I simply tell them that for me to be effective the minimum here is $50K, but ideally $100K to fully implement my plan. I also tell them that I could take their account but I would have to charge more and that wouldn’t be fair to them since I am not actually doing the strategies i need to do but instead substituting and charging more. But I tell them when you get to that point and want to hear what my strategies are, then come back… You would be surprised to see the number of people who come back(because the local guy who takes everything gives crappy service and follow up)…

Squash, I don’t totally disagree with what you are saying.  In fact, at some point (though there are some people that run there business taking anyone forever), I think you HAVE TO implement a minimum, or your book will be unmanageable.  But we are talking about someone brand new to the business, not someone with an established book, or a warm network to start pulling from.  If you have the forsight and ability (or luck) to be able to tap into a lucrative niche right away, then that’s great, you can start with minimums right away.  But otherwise, I can’t imagine telling someone “yeah, I only have 3 clients, but you don’t meet my minimums”.

Potential is one thing, guaranteed is another. Doctors, Dentists etc, is a case where they will have plenty of money in 3-5 years (depending on how they form their practice) and you are right the referrals from them are gold.



But some guy working a corporate job who will have his money stored in his 401k until he retires but wants to do $400/month in a roth, is a waste of time until he meets a certain minimum.



Typically i don’t prospect anyone under 45. To me it’s a waste of time.

Chief has a point. But will take independent professionals all day regardless of age and income(because these people are small business owners that end up having a great income and assets by the time they set up their office). I have a dentist client who was working for another dentist, but then purchased an existing practice from a retiring dentist and now has an income of $200-300K just 2 years after purchasing the practice.



Small business owners i will take regardless of age, but i think chief has a point most average corp people have all their money inside their 401K, and that money is not accessible til they retire.

First of all not with EDJ. Second if someone was DCAing $400/month then I would put him in C shares. Third. seriously 403Bs? Fourth; I think we run our business differently. The way i build portfolios requires a little more than 8K in a roth. also some of the solutions i use have minimum income/networth requirements.

Crumbs are nice in the beginning, but don’t waste all your time ACTIVELY prospecting on them. Don’t use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you’ve given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you’ve been calling the other guy the whole time. You just never know.

[quote=MJ]Crumbs are nice in the beginning, but don’t waste all your time ACTIVELY prospecting on them. Don’t use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you’ve given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you’ve been calling the other guy the whole time. You just never know.

I’m only 3+ yrs in and there are handfuls of clients I acquired in my 1st year that gave me anywhere between $5,000-$20,000 that also DCA’d money every month and now have about $35,000-$60,000+ with me per household.  With 8-10 clients like that I can now flip that $500,000 total into managed money accounts and now those 10 clients are giving me $5,000+ GDC/year at 1%.  Instead of making $100-$200/year of the bank authorizations like before, now I’ll be at $500 per avg. client.  It’s pennies when you look at the whole grand scheme, but when you think about how these guys would have been turned away by any reputable wirehouse or independent a couple years ago and now they’ll be responsible for $2,500 (at 50% payout) of my income next year?  Thats not bad considering their 401(k)'s and TSP’s are still in the long term pipeline.

Crumbs are nice in the beginning, but don’t waste all your time ACTIVELY prospecting on them. Don’t use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you’ve given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you’ve been calling the other guy the whole time. You just never know.

I’ve decided to change my business plan.  I am now limiting my prospects to those with 100million or more.  I only need one.

Unless you call 2 people a day, your response doesn’t make sense. Your going to talk alot of them throughout the day, but qualify or disqualify them quickly. I’m simply stating not to ACTIVELY pursue  people with less than $50,000. If they automatically want to do business, by all means. If they call you later on, by all means. If they want to start DCA 25 bucks, by all means, but don’t put them on your repeat call list and spend time doorknocking/prospecting them.  Spend that time looking for Qualified business.

I agree with MJ - I would not spend too much valuable time prospecting people without a lot right now, because yo will fail out/run out of money.  But the point is, when tehy drop in your lap, you consider them.

Would I be safe in assuming that not too many people, even those just starting out, ACTIVELY prospect people with $20,000 or so assets?  I don't know too many people that put in semi-daily/weekly phone calls to the guy with a couple extra bucks to invest out of his ING account.  I think most of the time we get clients with a little less than exciting assets they are usually those asking for help and kinda fall in our lap.

[quote=3rdyrp2]

Would I be safe in assuming that not too many people, even those just starting out, ACTIVELY prospect people with $20,000 or so assets?  I don't know too many people that put in semi-daily/weekly phone calls to the guy with a couple extra bucks to invest out of his ING account.  I think most of the time we get clients with a little less than exciting assets they are usually those asking for help and kinda fall in our lap.

[quote=voltmoie] I think it’s great you guys can turn down business but if it has a pulse and some money to invest I’m going after it right now.



I’ve learned my lesson, it took 12 weeks, but will not turn down business.

[/quote]



Not according to Volt. He’ll chase $50

Dummy … I wrote that. I do think Jones brainwashes you to chase anything that moves when you start.  Took me a few weeks to realize it was not the best use of my time. 

There is however a MILF with a 2k rollover that I’m going to work very hard to secure an appt. with!!!

[quote=SometimesNowhere] [quote=MJ]Crumbs are nice in the beginning, but don’t waste all your time ACTIVELY prospecting on them. Don’t use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you’ve given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you’ve been calling the other guy the whole time. You just never know.

Reg Rep has a great article called the The C Client Time Suck in this month’s issue. The consensus among the consultants is that an advisor should not have more than 150 clients. (“If you’re getting beyond 150 clients, I wouldn’t call those clients, I would call them customers,” agrees Dan Inveen of FA Insight.)

That was my point for the question a read the book  the million dollar  financial services practice and he recommend no more then 100 to 150 but with minimum investable asset of 100k and  that you don’t increase your AUM by more client  like 1600 clients  but with more big client of 100 k in asset.

So my question is ,the model of EJ is it better for alot of small client or you  can concentrate on big asset client ?

.

I’m trying to get 1600 $100,000 clients…maybe 2000.
Maybe I should read that book.
  

One Jones model is to open as many accounts as you can and then service the hell out of them because some of the 5k bond buyers will eventually move all their money over. The theory is that it’s easier to get their big stuff after you have made them a client. But to do that and survive in the early days you have to open many, many, many accounts. And I think that mind set is changing.
—
B24 has said something like this before, but our current sweet spot is the 55-year-old soon-to-be retiree who will have 500k to a million when he stops working. Maybe a small business owner or a mid-level exec who took advantage of his 401k, maybe got an inheritance.

[quote=Borker Boy] Reg Rep has a great article called the The C Client Time Suck in this month’s issue. The consensus among the consultants is that an advisor should not have more than 150 clients. (“If you’re getting beyond 150 clients, I wouldn’t call those clients, I would call them customers,” agrees Dan Inveen of FA Insight.)

[quote=faca]That was my point for the question a read the book  the million dollar  financial services practice and he recommend no more then 100 to 150 but with minimum investable asset of 100k and  that you don’t increase your AUM by more client  like 1600 clients  but with more big client of 100 k in asset.

So my question is ,the model of EJ is it better for alot of small client or you  can concentrate on big asset client ?

.
[/quote]

You can focus on whatever you want.  You’ll hear over and over how it’s your business.  Jones will expect you to open 27 (or 23?) accounts in the first 17 weeks to qualify for PDP.  If you can find 27 100k accounts while not having an office please let me know how you did it.  In my opinion it would next to impossible. Pop those first required accounts to get that monkey off your back and then figure out how you want to build your business.

You guys complaining about a 35 year old guy with $400/mo to dump into a roth need to learn to uncover insurance needs.

$75/mo DI policy on him
$40/mo DI policy on wife

$150/mo $150,000 UL on him with a $500,000 20yr term rider
$75/mo $100,000 UL on wife with a $250,000 20yr term rider

$15/mo 50,000 UL on his kid


Does he need these things I outlined above?  Other than coverage on his kid and he can decide that part of it, he absolutely does need a program like this.

This is a $2000 insurance ticket and I’ll take the $400/mo for each him and his wife into their roths and $100/mo for the kid into a 529.  I’ll collect the $380 per year in commission on the roths and 529 and the $100 per year renewals on the insurance coverage, plus when his wife quits her job when she has child #2 I’ll take her $60,000 401k into managed money for them.

I’ll also be glad to take a referral to help her parents plan for their retirement when they sell their small 160 acre farm for $500,000.

BB, the problem is that if they’re at EDJ or a wire, the commission is going to have to go through the grid.  They’ll starve serving those clients just like they’ll starve while focusing their efforts on a $400/month Roth contribution.

[quote=deekay]BB, the problem is that if they’re at EDJ or a wire, the commission is going to have to go through the grid.  They’ll starve serving those clients just like they’ll starve while focusing their efforts on a $400/month Roth contribution.[/quote]

What does your payout look like on insurance products at Jones?

For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You’re telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?

[quote=BerkshireBull]

[quote=deekay]BB, the problem is that if they’re at EDJ or a wire, the commission is going to have to go through the grid.  They’ll starve serving those clients just like they’ll starve while focusing their efforts on a $400/month Roth contribution.[/quote]

What does your payout look like on insurance products at Jones?

For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You’re telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?
[/quote]

Correct, but a touch lower than that.

I seem unable to turn anyone away that is serious about getting help with their financial needs. Could you have an intern and/or a registered assistant to serve the B and C clients depending on the need. Clients get great service from employees climbing the ladder and wanting to move from salary/hourly to comish and build their own book one day.

[quote=BerkshireBull] [quote=deekay]BB, the problem is that if they’re at EDJ or a wire, the commission is going to have to go through the grid.  They’ll starve serving those clients just like they’ll starve while focusing their efforts on a $400/month Roth contribution.[/quote]

What does your payout look like on insurance products at Jones?

For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You’re telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?
[/quote]

You’re getting fukt on the insurance.

only take someone over 45???   most of my business is 401k rollovers as someone changes jobs or leaves employment (starts family)----most of the women who leave their jobs to start a family are under 45.  Many people under 45 who change jobs and roll a 401k have well over 50k and often over 100k in those 401ks.