Ameriprise P1 to P2 transfer problem
Hello - I am a P1 advisor who recently tried to transition to P2, and was told no - just wondering if anyone else here has run into this roadblock and would be interested in talking about next steps…
Thanks!They changed the requirements last year. I don’t have the numbers in fron of me but I think it was anyone appointed after June 2006 has to have at least 78 service periods and min of $20 million book of business. They should give you a reason if they say no. Its pretty easy to find the info necessary to qualify for P2.
what is a service period?
Pay period. 2 weeks.
Wow - thanks for the quick replies! I’ve actually met the minimum of the “90 and 210k GDC” - and even was appointed prior to 2006, so am “grandfathered” into the old minimums. The reason that I was given is some awesome BS: that my “results” are not as closely correlated to my business plan, and does not show adequate growth. Anyone have knowledge of how to fight back?
quit, take your book and go indy. =)
But on a serious note, AMP is a joke. i drank the cool aid before as well… but there is life outside of ameriprise, the VUL’s, the RAVA-daba-du.
An Ameriprise guy, manager/recruiter, was telling me how friendly their platform was to various derivatives like options. Went on to tell me about margin requirements in house, beyond reg T and how competitive they were. In truth they were pretty good. Not anything like a warehouse but far better than most indies I’ve spoken with.
Just one problem; Compliance ... you are not allowed to solicit any option position beyond a covered cal he he he. A waste of his time and mine.That’s funny…we had a similar situation here. So I’ll give my commentary as I have previous P2 experience and was asked before my thoughts.
Unless you have $250K in rolling 12 month Total GDC, it is not profitable in the current environment to go on the franchise side. Now if you have a few AFA's underneath you, that can boost your production level but under the franchise scorecard system which is based on Total GDC and BOB value, its got to be a min of 250K and 35BOB with 55 Financial Plans(for the bonus payout). Just my 2 centsSounds like you really know exactly how it works, and I would agree with you on that number, with the exception of how the P1 world is changing - in the new “Point of Arrival” (in 2011), folks writing less than $100k get a 25% payout! Looking at the options that exist, independent seems like a no-brainer - unfortunately, I drank the kool-aid in the beginning, and still have stuff in the surrenders…what’s your opinion on the AFA thing? Anyone out there have a good contract they’d like to share please? Thanks again…
It is the state of the business where we no longer will be hiring novice advisors and so if you're a "producer" then it shouldn't be an issue to stay above the 100K mark. When you compare our production averages to other firms, we don't really come close. It is the evolution of the business where firms need high producers and they will be rewarded. As far as going to the Indy side as an AFA, you have to have the right partnership and the right compensation. If you have a high producing advisor (above 85% payout) than its possible to create a salary and bonus arrangement that could be like a 50%-60% payout but you have to produce in most cases above $125K in total production.Sounds like you really know exactly how it works, and I would agree with you on that number, with the exception of how the P1 world is changing - in the new “Point of Arrival” (in 2011), folks writing less than $100k get a 25% payout! Looking at the options that exist, independent seems like a no-brainer - unfortunately, I drank the kool-aid in the beginning, and still have stuff in the surrenders…what’s your opinion on the AFA thing? Anyone out there have a good contract they’d like to share please? Thanks again…
I feel your pain. Recently denied a franchise opportinity as well. Heres what I’ve been told/shown by an inside source. It’s currently a terrible environment in corporate and they are looking to squeez out/keep every revunue dollar on the books (not surprising since it’s getting close to year end). By letting P1’s go P2 they are losing valuable revenue dollars that may effect their bonus or job. In the past, you only had to meet the requiremnts (210 and 90) and get approval from p1 and p2 leaders to go. A few months ago they added a new layer called the Governance commitee that has the final word. Recently, the big bosses had a conference around this and directed the commitee to not even consider anyone who isn’t around 250k in production.
Where do we go from here: 1. It is my oppinion as well as my inside sources that theses requirements are likely to loosen up down the road. If that is the case, then hang in there and see what happens. Don't forgett that these decisions are made by people who quite frequently leave their posts especialy if those decisions are going to prove to be detrimental to the health of the company and new bosses come in and make up new rules. How long do you expect Fraud to be around? His history certainly suggests that it wont be more than a few years. 2. Go Indy. This seems to be a bit more tricky theses days. Most Broker Dealers have relatively high mins these days so unless you are at the 250ish range, they don't want you. However an opportunity does exist in joining an indy producer. This obviously carries significant risk to you practice. 3. Go AFA. Again, more tricky than in the past. You would have to find a p2 advisor willing to pony up a large sum for your clients as well as pay you when you get there with no guaranty that you will ever own your clients. Not sure if a legal contract can be put together to circumvent this issue. I did the calculation for what the p2 advisor would have to pay AMP to get my clients based on AMP's formula and it turned out to be around $100k. That pretty much means that the p2 advisor would have to be a significant producer to be able to afford that. Hope this helps a bit.[quote=Primetime]3. Go AFA. Again, more tricky than in the past. You would have to find a p2 advisor willing to pony up a large sum for your clients as well as pay you when you get there with no guaranty that you will ever own your clients. Not sure if a legal contract can be put together to circumvent this issue. I did the calculation for what the p2 advisor would have to pay AMP to get my clients based on AMP’s formula and it turned out to be around $100k. That pretty much means that the p2 advisor would have to be a significant producer to be able to afford that.
Hope this helps a bit. [/quote] There is no way someone would do that unless the advisor was assured that one day down the road they would be taking over that practice. A few of my friends within the business have done that, but an agreement was put in place to pay back the P2 advisor, or take a much lower payout for the 1st couple years until they recoup the cost of purchasing the clients. I did this a year and a half ago (P1 to AFA), although at the time the cost to the P2 advisor was only .25% of assets under management, where now I believe its 1.25%.Platform changes were supposedly coming this month. Anyone hear anything?
[quote=etj4588]
Platform changes were supposedly coming this month. Anyone hear anything?
[/quote] Just saw it today. Its criminal what the P1 system is doing w/transfer eligibility for those who want to go to P2. For those with less than 10 years in the business, not only do have to have at least $200,000 rolling 26 period GDC and $20 million under management, BUT you now have to take a 15% reduction on your payout for the first two years as a P2 "to account for the higher investment of resources and support in the employee channel." This is all effective December 2nd. I went to P2 an AFA last year and we were responsible for paying .25% of my assets under management at the time in order to make the transition. They are now raising that amount to 2% for anyone transitioning after Dec. 2nd. This makes it absolutely impossible for any P2 franchise to bring on an in-house AFA from the P1 side.[quote=3rdyrp2][quote=etj4588]
Platform changes were supposedly coming this month. Anyone hear anything?
[/quote] Just saw it today. Its criminal what the P1 system is doing w/transfer eligibility for those who want to go to P2. For those with less than 10 years in the business, not only do have to have at least $200,000 rolling 26 period GDC and $20 million under management, BUT you now have to take a 15% reduction on your payout for the first two years as a P2 "to account for the higher investment of resources and support in the employee channel." This is all effective December 2nd. I went to P2 an AFA last year and we were responsible for paying .25% of my assets under management at the time in order to make the transition. They are now raising that amount to 2% for anyone transitioning after Dec. 2nd. This makes it absolutely impossible for any P2 franchise to bring on an in-house AFA from the P1 side. [/quote] It's to keep us old HRBFA guys in P1.I Agree it is terrible what they are doing to the p1 side. The worst part about it is that deadline of Dec 2 is a lie. The true date was sometime this summer. Behind the scenes they started to reject all advisors from transfering that qualified to transfer. I heard some folks are looking into legal action against the company. Hate to resort to something like that, seems like going Indy is the way to go. Good luck to everyone who was adversly effected by this.
If the posts are true, and I assume they are, this is terrible news for the good P1 Advisors looking for a bit more flexibility and independence. An old colleague of mine used to always say, “the tightest grip is with an open palm.”
As far as the changing figure requirements, I would definitely ask for clarification and the exact reason why. Confirm their figures with your own if possible. As the old saying goes, "figures lie and liars figure."This is crazy. When I left p1, to go to p2 you needed 150k rolling. this was before plans became a requirement.
We don't even have P1 advisors in the area I am at. They all left or transfered to AFA's under a P2 or became P2 themselves. We thought AMP was phasing the P1s out until HRBFAs came along. Does anybody know if the HRBs can be P2s.
Here’s the cut and paste of the article from Compass:
Changes to platform transition policyDate : 11-06-2009
This article introduces changes to our platform transitions policy. These changes will best position advisors in both channels to be successful.
To: All field members From: Don Froude, President -- The Personal Advisors Group Re: Changes to platform transition policy
Over the past year, we have made great progress toward strengthening both our employee and franchise advisor groups. We are committed to offering you choice and flexibility in how you affiliate with Ameriprise, and we will continue to invest in programs to support both channels over the long term. To balance the interests of advisors, clients and shareholders, we have decided to change our platform transition policy. These changes will help ensure that advisors are positioned to be successful if they choose to transfer to the franchise channel during their careers. In addition, this will provide clarity and consistency to the transition decision-making process and will align with the guidelines for bringing experienced advisor recruits into the franchise channel.
What's changing?
Effective Dec. 2, any employee advisor who wishes to transition to the franchise advisor group must meet new criteria: $200,000 in trailing 26-service-period GDC $20 million in client-invested assetsAll employee advisors must meet the new requirements to be eligible to transition to a franchise advisor role. Employee advisors who choose to transition to the franchise advisor group may be subject to transition-related compensation adjustments to account for the higher investment of resources and support in the employee channel. Advisors who have less than 10 years of service with Ameriprise Financial (time with AASI and H&R Block Financial Advisors does not count toward the requirement) will be assessed a 15% payout rate reduction during their first 52 service periods in the franchise channel. Advisors with 10 or more years of service with Ameriprise Financial (time with AASI and H&R Block Financial Advisors does not count toward the requirement) will not be subject to a payout rate reduction upon transition. Employee advisors who are receiving experienced advisor recruiting transition compensation or H&R Block Financial Advisors retention awards will not be eligible to transfer to the franchise channel until the awards have fully vested. Employee advisors who do not qualify to be offered a franchise may transition to the franchise platform as an associate financial advisor (AFA). To do so, the employing/contracting franchise advisor must purchase the employee advisor's client base for a fee of 2% of the client-invested assets over a 24-month timeframe. Current branch managers, former FVPs, managers and branch office managers whose positions were eliminated in 2009 will not need to meet the minimum transition criteria prior to pursuing a franchise advisor role. For specific information, refer to Related Bulletins.
Timing
Employee advisors who wish to transition to the franchise advisor platform must meet the new criteria beginning Dec. 2. Advisors who are in the process of transitioning to the franchise platform and have been approved to move on the Nov. 18 appointment date will not be affected by the change.
Equity vesting: Employee advisors
We also are revising the equity vesting rules that we announced earlier this year to align with these requirements. Advisors with less than 10 years of service with Ameriprise Financial will forfeit all unvested annual equity awards upon transition to the franchise channel. Advisors with 10 or more years of service will have their annual equity awards continue to vest after they transition. These changes will apply to 2009 grants and to all grants moving forward.
[quote=Gaddock]An Ameriprise guy, manager/recruiter, was telling me how friendly their platform was to various derivatives like options. Went on to tell me about margin requirements in house, beyond reg T and how competitive they were. In truth they were pretty good. Not anything like a warehouse but far better than most indies I’ve spoken with.
Just one problem; Compliance ... you are not allowed to solicit any option position beyond a covered cal he he he. A waste of his time and mine.[/quote] sounds like you must have been talking to my VP - talks the talk, but really has no clue!It is the state of the business where we no longer will be hiring novice advisors and so if you're a "producer" then it shouldn't be an issue to stay above the 100K mark. When you compare our production averages to other firms, we don't really come close. It is the evolution of the business where firms need high producers and they will be rewarded. As far as going to the Indy side as an AFA, you have to have the right partnership and the right compensation. If you have a high producing advisor (above 85% payout) than its possible to create a salary and bonus arrangement that could be like a 50%-60% payout but you have to produce in most cases above $125K in total production.[/quote] Thanks for the info & update - you said "we" in your post - can I assume you are with Ameriprise P1 now?[quote=bigpoppa]Sounds like you really know exactly how it works, and I would agree with you on that number, with the exception of how the P1 world is changing - in the new “Point of Arrival” (in 2011), folks writing less than $100k get a 25% payout! Looking at the options that exist, independent seems like a no-brainer - unfortunately, I drank the kool-aid in the beginning, and still have stuff in the surrenders…what’s your opinion on the AFA thing? Anyone out there have a good contract they’d like to share please? Thanks again…
[quote=Primetime]I feel your pain. Recently denied a franchise opportinity as well. Heres what I’ve been told/shown by an inside source. It’s currently a terrible environment in corporate and they are looking to squeez out/keep every revunue dollar on the books (not surprising since it’s getting close to year end). By letting P1’s go P2 they are losing valuable revenue dollars that may effect their bonus or job. In the past, you only had to meet the requiremnts (210 and 90) and get approval from p1 and p2 leaders to go. A few months ago they added a new layer called the Governance commitee that has the final word. Recently, the big bosses had a conference around this and directed the commitee to not even consider anyone who isn’t around 250k in production.
Where do we go from here: 1. It is my oppinion as well as my inside sources that theses requirements are likely to loosen up down the road. If that is the case, then hang in there and see what happens. Don't forgett that these decisions are made by people who quite frequently leave their posts especialy if those decisions are going to prove to be detrimental to the health of the company and new bosses come in and make up new rules. How long do you expect Fraud to be around? His history certainly suggests that it wont be more than a few years. 2. Go Indy. This seems to be a bit more tricky theses days. Most Broker Dealers have relatively high mins these days so unless you are at the 250ish range, they don't want you. However an opportunity does exist in joining an indy producer. This obviously carries significant risk to you practice. 3. Go AFA. Again, more tricky than in the past. You would have to find a p2 advisor willing to pony up a large sum for your clients as well as pay you when you get there with no guaranty that you will ever own your clients. Not sure if a legal contract can be put together to circumvent this issue. I did the calculation for what the p2 advisor would have to pay AMP to get my clients based on AMP's formula and it turned out to be around $100k. That pretty much means that the p2 advisor would have to be a significant producer to be able to afford that. Hope this helps a bit. [/quote] Hey Primetime - this definitely does help! Thanks so much! I have actually gone downthe road of interviewing with other Independents near me, and, as I heard someone else say, the "is life outside of Amp P1"! [And although I cannot say for sure since I'm not there yet, the life sounds pretty darn good! Like planning fees that get a higher payout, insurances that do not hit the grid...I'm starting the believe that I've had my "horse blinders" on for too long, you know?] So, at the end of the day, I believe we at least owe it to ourselves and clients to explore everything that's out there - however, I am very interested in looking into those franchise denials, as I can imagine there are a few attorneys that would love to take a case like this as a class action deal. What reason did they give you for your denial? I'm assuming you already hit the "210 and 90"? Are you interested in moving forward with it?Fellas, as one who was drinking the same koolaid from the early 90’2 until 2006, it is the same corporate story. Once you feel as though you made the practice to the scorecard, it evolves once again and penalized you for your previous 2 years or your los changes, new catagory, and the hurdle changes at the same time.
210k production at AMP is 375 to 410 depending on your product mix. Corporations are not in business for you, they are in business for themselves. Back when CNL hotels/resorts was about to ramp up an IPO, the market as a whole was mixed. For me, and I suspect several, a situation exisited that would have blown the scorecard system apart. That is to say, if all the CNL got reinvested into new offerings at once, multiple people would have blown the metrix out of the water...thus jumping from a then 85% payout to 91%..two jumps at the time to the limit. Many would then qualify for other perks like no franchise fee as a result. Complete revamp of the hurdles, during a change in LOS metrix to 10+, they lowered Point values for gdc growth dramatically from previous rates for same LOS. CNL did not go public but the metrix hurdles imposed did. At the time, over 25% of the P2 were flipping to LOS band 10+, and it saved the firm billions. Smart stuff, but not for the advisor who didn't stack, sell VUL and FA like water. Then the name change to Ameriprise came. SOSDN. So the place works obviously for many, more power to them and all of you. Just remember the scorecard is a flexible tool used by management to control your behavior, practice behavior and the bottom line of the firm. Carrot and stick... mush ... mush! My point is if you plan for your clients, but cannot plan for yourself then WDYWFY? Old timers will remember WDYWFY, newer ones, ask who Lennick is.Source URL:https://www.wealthmanagement.com/forums/whats-firms/ameriprise-p1-p2-transfer-problem