How do non-Jones new FA's get started?

Huh? Cold calling?! With brands like ML and SB?!  You didn’t know that at ML and SB new FAs are handed a $25 MM book to start, and they get all their new clients from walk-ins begging them to please manage their money? 

Gross generalization:

One big difference is that many wirehouse advisors join teams, and aer "handed" a portion of the book.  Like a Jones Goodknight plan, they are often the samller, neglected accounts that the team no longer has time to service, but if they want you to stay, they will generally give you enough assets in order for you to clear your probationary "hurdles".

Here we go again…“Jones sucks”.  “I wanted one of them there brokerage jobs that gave you clients”  “This is America.”  “Where is my free money”.  “How do them there other firms give away free clients, especially in times like this?”  Jezzzusss Renter, remove your head from a lower part of your body.  Read your own question.  Dumb eh?  You could have been working while you were typing.  I know this is harsh but these are, to quote just about everyone, “unprecedented times”.  Those of us who survive this will be the incredibly hard workers.  All others will fail.  We will reap huge rewards.  Enough of these stupid questions and go back to work.  People are scared shitless and they need you.  This forum does not need more stupid questions.  It has enough without you.  Ok, I have pissed off enough members for tonight.  Sorry, just telling the truth.

Hey ytrewq, you dumb prick, I thought I made it clear that I didn’t need any negative rhetoric, but let me make it clearer: I have 500 households, I don’t want for much. I have numerous residential rental properties and 1 commercial property. I have a successful business; one that has won several customer sat. awards. As I said, I don’t want for much. I know you’re gonna laugh & say “customer sat. doesn’t mean anything, blah blah blah” but to me, it means a lot. I’m well into 6 figures a year, in an area whose average household income is under $50k a year. I’m under 40 years old & my home is almost paid for. I’ve done this work for 11 years, so I think I’m going to be okay. I’m well aware that people need me, and have already proactively contacted my clients during this debacle & hear “thank you so much for calling.” I not only read my question, I wrote it, you dumb prick, and it’s not a dumb question. The phrase “I’m just curious . . . how other firms do it” should have clued you in. I could have been working while I was typing? It was 11pm you dumb prick, I don’t work at 11pm. In the future, please don’t respond to my posts, you dumb prick, unless you can do it in a somewhat decent way. I’d be happy to get along, but it seems you have issues to work out first.

I didn’t mean to make you this mad.  I know I was pretty blunt.  I was really commenting on the “Yes, I think new FA’s should get a starting book” comment you made.  I was not attacking your success as a person.  I guess the point was in this environment where is that book gonna come from?  Who is the person to give it up?  I am sure you realize that it was a human being that built it from scratch.  Why would they give it up to someone else?  Why would they not expect someone else to build their own?  I know I was a “blunt prick” for sure.  “Dumb prick”.  I don’t think so.  Somebody that gave you their hard work for no reason would be the “dumb prick”.  With 500 households you do not need anyone’s hand me downs.  I sincerely apologize for coming across as hard as I did.  I did not mean my post as an attack.  No excuse but work has been a bit harder than usual, as I am sure you realize.  Once again I apologize for offending you.  I hope you can take it as I mean it.

Renter,
Let me be a bit more clear.  I am sorry for being a jerk.  No excuses.  My tone was not necessary.  I am sorry.

ytrewq, apology accepted, thank you for admitting to it. Let’s let bygones be bygones. See, you’re right - work has been tough on not just us, but also on one of my trainees. He’s a new/new, and very good guy who’s also very capable in this business (doing right by the customers, etc.). He just doesn’t seem to be doing as well at landing new clients to hit the commissions. Yes he doorknocks, he’s involved in the community. I even told him I’d go doorknocking with him again to help. My thoughts were that I wonder how many truly good people we lose because of the new/new startups. Frustrates me to see him struggle with a wife & 3 kids. He’s pulling money from his IRA now to stay afloat (under age 45). I’d happily give some clients to him, but I’m too far away. So my wondering was: if the other wirehouses give something to get someone started, I’d be all for it here, too. I also know that you know how hard it is starting new/new. Thanks for listening.

The bottom line is that most firms do not prepare new/new’s for the tough road.  Even at Jones, with all of their warnings, they still paint too rosey a picture.

Renter - at wirehouses, unless someone is hired to join an existing team or to be a junior broker under someone (partnership arrangement), they start out just the way your new-new does - no book, no clients.  The wire doesn’t care how they get their clients, but are mainly taught and encouraged to cold call.  They can cold walk.  They can also conduct seminars (but the wirehouse & wholesalers generally won’t help with these costs and most news don’t have the funds to pay for their own).  The washout rate at Jones I would guess is basically the same as the rest of the industry.  I agree it is idiotic. 

As OldLady said: Wirehouses are still strongly encouraged to cold call.  You can reach out to meet the most people this way, however, actually talking to someone is a whole different story. 

I have found networking with business owners, CPA’s, and doing seminars/teaching to be most effective. You can’t get in front of the most people, but it is a faster way to the referral business. The problem with cold-calling, is that it takes much longer to start generating referrals this way.

I don’t believe that new brokers should be handed books.  That would be too easy.

I am sorry for being a jerk.

glass man, let me respectfully disagree.  I turned 23 years old nearly 20 years ago when I started.  I got the end of the S&L Crisis.  Memories of '87 crash fresh in everyone’s mind.  CD rates were so high people would have been nuts to invest with me.  We had no “stock market” tv channel.  We had no internet trading or advertising.  Mutual Funds?  Nobody bought mutual funds.

You could argue that tv, the internet, and investment advertising today are competition.  Let me give you a perspective of someone that went through it.

These things have created more “awareness” and more “potential customers” than a lifetime of door knocking or cold calling could ever do.  If I had a time machine and I could get rid of all the online do it yourself crap I would not do it in a million years.  I may have to work harder to get the client with all the competition but atleast I have a shot.

The easiest time to start is always when SOMEONE else did.  The hardest time is always when WE did.  We are humans.  We always feel our own pain.  The current pain is always worse than the pain we felt in the past.  It does not matter if it is true or not because we are humans and we feel it now.

Old Spice, I know I can be a jerk.  My dog weighs 6 pounds and I can’t kick him after a bad day so I come here and argue for no reason.  I feel bad later.  I apologize.  My dog is smarter than me.

Jones just doesn’t prepare new/new’s for the job.  I know they say they have the best training in the industry, but realized that is for the series 7.  I didn’t “get” what needed to be done until about 6 months out, and now it might just be too late for me.

Azure you are partially right.

Jones does a fine job. It’s just that most new FA’s don’t want to do the work that it takes. It doesn’t matter how well you are trained, YOU have to do the work. Your BD can’t do it for you. When people claim the “training” is bad at their BD, what they really mean is “my BD didn’t give me an clients or assets to start with.” Therefore their training sucks. It’s the truth. If you joined a team, did a Goodknight, inherited an office or a book, you think everything is rosey. If you are new/new from scratch, you’re going to have a bitch of a time growing your book no matter how much they teach you.



Let me ask this…there are offices and brokers all over this country. How can a BD tailor their training to adapt to every market, every region, every area, every personality (of FA), etc.?? They can’t. They give you as many of the basic tools as possible, then you have to figure it out. Jones didn’t teach me how to communicate effectively with CPA’s. They gave me tons of tools, and advice, and training. But it doesn’t change the fact that I, ME, has to meet with the CPA’s. I AM THE ONE that has to develop the relationship properly, not my damn broker/dealer. And that goes the same for interacting with clients.



Too many people come on here bitching and whining about their lack of something from their BD. Well you know what, that’s life. Some get lucky, some don’t. But some people also know how to play the game of life and the game of business. Some don’t. Generally, younger people don’t quite have it figured out yet. That’s why older people tend to do better in this business. It’s life experience. No broker/dealer can teach that.



If people spent half as much time researching new opportunities in their market as they do crying on this forum, they might just be a little more successful.

As far as any bitching in my post...there wasn't any.  I merely stated that there is a lack of sales training.  I never knew anything about what would be tested on the Series 7, but passed because I was trained.  I never would have been successful at doorknocking but I was because I was trained.  I never knew anything about sales....get the picture?

You have to be cunning and know you wont get a thing from anybody. I’ve not been given one account and made over 25,000 cold calls well over 50k calls in total. It takes that, luck and when you have a chance TAKE IT THEN!  Age training was supposed to be great. You learn to be a cold caller and a managed money drone.

Jones is great at training, but only if you count studying for the Series 7. They have the best study material, and half the questions on the test were verbatim what was in the training material from Jones.



However this is where they stop, 3 wasted trips to St Louis to learn absolutely nothing from terrible trainers(all theory, no substance, because they have never been in the field)…No product training (Sorry jones people but giving out the Investment Company of America Chart doesn’t count).

I do agree with the fact that edj has no "real" training. If you are given assests you have never done a first appointment, let alone a second appointment with clients that may have several accounts, and varied investments. You come out of eval/grad and have never even opened an account, seen a portfolio or understand what may be a "good" stock buy other then bac or jnj.  They do not help you at all....ask any BOA that has had several brocker changes how trained they are after the "three" trips to stl.  You walk in knowing nothing, people are upset they have another "new" know nothing broker. You know you are in way over your head (if you have any sense to admit this!!!) and no one will help you....they are way too busy building there own business...( this is the other BIG lie from Jones there is no real carring culture, most of them are way too self centered to help) last but not least they market conditions are crazy!!!   You  are making very little money calling exhisting clients that you are the one who will be staying in the office..(same promise again) and they will be fine, the bull is right around the corner hiding in the bushes...Keep what you own...(even if I do not understand why you should)...lots of fun!! being  a new new first, now getting an office the 5th FA in about 7 years!!! The region acts like you are so blessed to get an office and a boa. The BOA is burned out with another broker.....the clients are very upset with EDJ and the market...TGIF

And it’s all roses and tulips everywhere else…

Yes and no, monopoly and squash.
Considering they hire people like me – no sales experience or financial services experience – and give you eight weeks of training before you’re live, I think they do OK.
KYC was a good class – intense and fast-paced. Eval Grad teaches you how to make a phone call, which is the hardest skill, imo. Unfortunately, we were taught to call on product, which most people don’t seem to do, and I think they’ve moved away from that to more ‘lead with the need, rather than the investment’ calling.
I thought the individual instructors were quite good, but the big hall presentations so-so and by your third trip to St. Louis you were tired of hearing from the veteran FA who once sold a bond to Calvin Coolidge.
The in-field training is mixed. If you have a good trainer or mentor or get started in a legacy branch, you are fortunate. If not, you are all alone.
I’ve seen a lot of good people wash out or go broke in years 2 and 3 and get replaced by newbies. That seems counterproductive to me.
Sorry for the ramble – time to make some calls, set a couple of appointments and leave with a good feeling.

Getting started is hard at every firm.  I definitely agree with that.

"The job changes when you don’t have to worry about losing your seat every day.

The job also changes when your own financial situation is secure."



This is very, very true. I have found it difficult to focus on service to clients, while I am still focusing on building the business. But anyone that has started from scratch runs into this.

“The job changes when you don’t have to worry about losing your seat every day.
The job also changes when your own financial situation is secure.”

This is very, very true. I have found it difficult to focus on service to clients, while I am still focusing on building the business. But anyone that has started from scratch runs into this.

The training model is broken, it doesn't matter if you door knock, cold call or hammer friends and family for referrals.  When less than 10% of new producers succeed, and the average age of FA's across the board is 56....something is not working.

Because they don’t know any other way to do it. I mean, think about it - how exactly do hire someone you don’t know, and then expect all of them to be able to bring in investable assets. This is not selling widgits. This is trying to extract people’s life savings. There is so much mroe trust involved. And I do not think any firm has cracked the “code.” Most of the wires are now just trying to do it by buying established brokers - that just becomes a game of musical chairs and 7-year deals (think MLB free-agency). Jones is trying to do it by “Goodknighting” newbie brokers - that has been somewhat successful, but not widespread or deep enough to make a substantial difference in retention. They still hire thousands every year.



So I am not sure any firm really has the “edge” in growth/retention/development. Each firm is just doing their thing. I will say, there is going to be much more success in the established “ensemble” independant advisory firms going forward. Say a team of established advisors from a wire (maybe 4 or 5 guys) break out on their own. They build a nice 500mm firm. They don;'t need to hire TONS of new FA’s every year. They can hire one or two per year that they KNOW are going to make it, and put them through an extended training and development program. The reality is this…this business should really have a much more extended development or “apprentice” period than it does - where there are no production goals, no commissions, etc. I would say three years of solid training on everything - including working directly with clients. But as long as there is that financial burden for the firm and the FA every month, the FA will continue to struggle, the retention will be low, and burn out and turnover will be high. It’s a broken model, that was never really right to begin with.



Think about it, how many CPA’s pass their test then go off and start running audits and doing tax returns the next week? How many lawyers go to trial the month after the Bar? THAT is why we are not a profession, but rather just a career field.

We agree the model is broken.  I think even the wires should adopt a program like you suggested.  They would need to be very selective in their hiring process, but give the new FA 100 households or $10mm in AUM to start, with a small salary....enough to make a decent living, get client experience, get investment experience.

The cost to do so is too high. You say they need to be “very selective” how do you define that in terms of hiring a new FA? Experience(doesn’t count because we are talking about new hires) So what do you base the selectivity on.



The current model is not broken. The reason for the age of the average advisor going up is because instead of choosing the financial industry, people were choosing, the internet or some other medium.



This model works, hire as many people as your budget handles and see who wants it bad enough to stay. Everyone else can find something else to do, this job should be more selective than others because your are shaping people’s lives.

[quote=bjacobus]

We agree the model is broken.  I think even the wires should adopt a program like you suggested.  They would need to be very selective in their hiring process, but give the new FA 100 households or $10mm in AUM to start, with a small salary…enough to make a decent living, get client experience, get investment experience.

Morphius,
One of the best posts I’ve seen on this site!  You hit the nail on the head with a sledgehammer.  To add to your final quote “…everyone would do it.”  and we would all be paid less.  Personally I hope this job never gets ANY easier.  I hope I just keep working harder than the next guy.

A couple thoughts.  You can't deny that there are some flaws when the success rates in our industry are so low...Every client a rookie brings in is a guinea pig, so if the office ponies up 100 households, what is the difference? 

[quote=bjacobus]Every client a rookie brings in is a guinea pig, so if the office ponies up 100 households, what is the difference?  [/quote]
The difference is in one case the client chooses to work with a given FA; in your alternative universe the client is assigned to a new FA for the FA’s benefit.  Ask the client if they notice any difference.

BJ- A system similar to what you decribe already exists…It is called Edward Jones.  Of course they tell all the new folks that everybody starts out working from home etc etc, the new FA goes out gets clients and eventually opens an office.  Establishing a Jones beach-head if you will.  The FA thinks things will get easier at this point (which doesn’t happen) and then subsequently washes out.   That is okay with Jones because recruiting someone to take over an existing office is not too hard.  FA #2, blessed of course by a few experienced vets, then comes along, inherits those learner “guinea pig” accounts and runs the office for a couple of years.  FA #2 moves the chains so to speak a couple of times until, he runs out of money or his wife threatens to leave him.  At this point FA #3 steps in, again blessed by vets and possibly a relative or close friend of a RL, slides into the established office, assumes a decent book, and punches it in from the one yard line.  FA#3 then spends his free time on div trips and lecturing the new news at regional meetings on the finer points of his sales presentation and time management practices. 

DB- I'd be happy to shed my worst 10-15 households....If the clients aren't paying me 1% or doing an equal amount of commission business...again, what is the point of having them as clients?  Does it make sense to have a client who ACATed in his/her $45k in American Funds and wont consider any ideas?

Morph- We can agree to disagree, I think the answer lies somewhere in the middle of our two opinions.  Considering the failure rate, the veterans have surely picked up assets from the branch when rookies fail.  So to ask them to pony up some households shouldn't be too much of a problem.....especially if they are small accounts.  Just my opinion.

Lastly, Morph, I don't think thousands of people struggle with the hiring process.  I think like you, they think they should just hire anyone who shows interest and there will be a diamond in the rough.  Someone on this thread said "hire as many as your budget will allow".....that doesnt sound like a system where the hiring managers are struggling with selectivity.

[quote=bjacobus]Lastly, Morph, I don’t think thousands of people struggle with the hiring process.  I think like you, they think they should just hire anyone who shows interest and there will be a diamond in the rough. Someone on this thread said “hire as many as your budget will
allow”…that doesnt sound like a system where the hiring managers
are struggling with selectivity.[/quote]

You impute to me an opinion I never expressed.  At no time did I ever say that people “should just hire anyone who shows interest.”   I simply pointed out that your proposed cure would be worse than the illness, as it is based on two faulty assumptions:

1. That “experts” from the training department could dramatically improve the success rates of new hires by establishing new “metrics”; and,

2. That it is possible to systematically “give” a pre-existing client base to all inexperienced new hires. 

Neither of these assumptions are valid, so it should be of little surprise that suggestions based on these assumptions will not be helpful.  And the fact that “someone” may have posted something about “hiring as many as your budget will allow” can hardly be considered worthwhile evidence of anything about the current system.

Because I think your solution is unwise and unworkable does not mean
that I do not see inherent problems with the existing system.  But what you propose would be unworkable and would be worse than the current system, flawed though it is.  It’s not enough to know what we are running away from.  We must know exactly what we are running to.

OK Morph…enough said.