How many clients will come w/ me?
Taking a serious look at leaving AGEWACHAFARGO. We are obviously very concerned about the number of clients we will take with us. Traditionally, the average conversion ratio seems to be around 80% in a normal market, and less in a bad one. However, I have averaged at least one client a week for the last 2 months that has asked me to leave WS because they are not happy. One of my largest clients told me straight out that he distrusts WS so much that he had started interviewing other advisors. We lost a newer client today (6 month relationship) because they didn’t like the hoops that WS is making them go through (details are too much to get into here). Point is, I am going to lose clients if I stay, and if I leave. I just want to get a feel for what to expect upon leaving.
So, what is everyone else seeing in thier branches when an advisor leaves? Is it 60%, 70%, 90%, or 30-40% like our Regional is trying to scare us with? Quick or slow? WS throwing the book at the advisor, or being nice?
As a side note, my senior partner thinks he is being followed by a PI. Have heard of WS doing it to other big producers. Makes you nervous…
There is no possible way anyone on here can offer you an answer with suitable accuracy. We don’t know you. We don’t know your relationships.
I took everything I wanted. No problem. Some surprises…but not many.
I was in your shoes and left within the last year. I would estimate I got 90%. I think it’s easier to move from where you are versus say a Merrill where the clients are more attached to the firm. You’ll do fine, it’s a big hassle to move, you’ll probably be glad you did…same story most fc’s have. Feel free to PM me with specific questions.
Why don’t you use some common sense, CommonSense?
More than anything else, how many you take with you is gonna
depend on the following question? Are your clients more
attached to you or to your firm?
I left in Jan, and I have 80-90% of assets over at this time…it was much easier than I had expected it to be with the market etc. Only 3 A clients didnt move and 2 of those are due to health issues that cropped up after my move, so in time they will move.
Alot depends on your relationships and of course where you move…if you gor from WS to BAC/ML or MC/SB I wouldn’t expect the skeptical ones to move…if you go to a regional or Indy I think you will have more follow, your reasoning for moving makes alot more sense in teh latter case.
This is ridiculous. Why would clients leave you and the relationship they've built with you because they don't trust the firm? What impact does the firm have with the client that would overpower the relationship you've built with the client? Do they get their monthly statements 3 days later each month than they would prefer?One of my largest clients told me straight out that he distrusts WS so much that he had started interviewing other advisors.
I don't know, I would think that AIG falls into a different category of public opinion than Wells Fargo. Theres a sector (probably the majority) of the population that views AIG and their employees as felons. I don't think people have that same view of many other financial companies, WFC and WB included.
This is ridiculous. Why would clients leave you and the relationship they've built with you because they don't trust the firm? What impact does the firm have with the client that would overpower the relationship you've built with the client? Do they get their monthly statements 3 days later each month than they would prefer? [/quote][quote=CommonSense]One of my largest clients told me straight out that he distrusts WS so much that he had started interviewing other advisors.
TO the MOST loyal of clients that may be true but to a greater majority they may still love you but be concerened over the direction of the firm...which we as FA's have no control, other than leaving. I have had several clients transfer additional asset to me since I moved to Stifel that they flat out told me they would not have given to Wachovia/Wells. I also gained a client back that transferred out last year at the height of teh Wachovia debacle
[quote=iceco1d]nor did I pull the “why would you trust your hard-earned money with a company that can’t even manage its own!” bit…totally initiated by the client).
[/quote]
Dang Ice, that almost sounded rehearsed
I went from AGE to Merrill. 2 WAY different firms. 90% of who I wanted came along. Even now, almost 2 years later and the news about ML and BAC, I am still getting transfers.
It is about you, not the firm.I think Merrill is the hardest to leave and retain large persentages. Wells Fargo is a trainwreck in most clients’ eyes if they were originally AGE clients (there was that intermediate stop at Wachovia) so that might be the easiest move in the history of moves.
Nestegg, I have not lost a client yet because of the AGE/WAC/C/WFC media circus. From the start, my clients have always done business with me, not the firm. I always tell them that they should never be concerned if the name on the sign changes - only if the name on the desk changes. I receive referrals all of the time - and just last week brought in two households with combined assets of over $16mm. Had nothing to do with the name of the firm. They were both referrals from a CPA who knows me. It doesn't sound to me like you gained back a 'client' by moving to Stifel. What happens when Stifel has a run of negative press? He leaves again? I cannot believe that your service level, or investment advice, has improved dramatically because you changed the name of the sign out front. I would contend that the reason you picked up additional assets from existing clients, during or after your move, is because you increased the level of contact with them. As you needed to get documents signed. Over the past year - I have looked at other firms as well. But, I have not seen any distinctive advantage to my clients to make a change. It would seem that the only change worth taking would be to go Indy - or Profit Formula, which is what I plan to do next summer.
TO the MOST loyal of clients that may be true but to a greater majority they may still love you but be concerened over the direction of the firm…which we as FA’s have no control, other than leaving. I have had several clients transfer additional asset to me since I moved to Stifel that they flat out told me they would not have given to Wachovia/Wells. I also gained a client back that transferred out last year at the height of teh Wachovia debacle
Nestegg, I have not lost a client yet because of the AGE/WAC/C/WFC media circus. From the start, my clients have always done business with me, not the firm. I always tell them that they should never be concerned if the name on the sign changes - only if the name on the desk changes. I receive referrals all of the time - and just last week brought in two households with combined assets of over $16mm. Had nothing to do with the name of the firm. They were both referrals from a CPA who knows me. It doesn't sound to me like you gained back a 'client' by moving to Stifel. What happens when Stifel has a run of negative press? He leaves again? I cannot believe that your service level, or investment advice, has improved dramatically because you changed the name of the sign out front. I would contend that the reason you picked up additional assets from existing clients, during or after your move, is because you increased the level of contact with them. As you needed to get documents signed. Over the past year - I have looked at other firms as well. But, I have not seen any distinctive advantage to my clients to make a change. It would seem that the only change worth taking would be to go Indy - or Profit Formula, which is what I plan to do next summer.[quote=nestegg]
TO the MOST loyal of clients that may be true but to a greater majority they may still love you but be concerened over the direction of the firm…which we as FA’s have no control, other than leaving. I have had several clients transfer additional asset to me since I moved to Stifel that they flat out told me they would not have given to Wachovia/Wells. I also gained a client back that transferred out last year at the height of teh Wachovia debacle
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I am not talking about negative press, every firm will ahve something at some point, but there is a difference in negative press and the debacle of teh AGE to Wachovia to Citi for a week to WFC merger, and the fact out parent company was bailed out so we didngt get taken over by teh FDIC...even if the latter didn't happen the whole thing was a cluster, and caused multiple issues on many many levels.
I appreciate your opionion, but when you are told to your face that...here are additonal assets and accounts becasue you are no longer 'there' you kinda have to take it at face value! Your best clients will typically stay with you through thick and thin which mine did, but they certainly were not happy about it when the firm esentially was out of business. No matter how good of a guy you are if the company goes out of biz...you can't stop it and clients know this! I also have opened up accounts with propects that wouldn't come over while at WS...they were at other wires, like me but had uneasiness about the firm, I ahve closed several in the few months at SF...they were unhappy where they were but were not sold on the WS/WFC mess, and told me so.
As far as service level...yes it has improved...I left some clients that were time consuming behind, and I have a bettter staffed office and MUCH better back office than what we had at WS. Investment advice..no I have'nt gotten any smarter in 3-4 months lol. But I am much more competitive and gettign better advice on things like Bonds now than at WS...I have never doen so much bond biz in my life! The differences of not being constrained to bonddesk are staggering!
I think you are doing the right thing looking at Indy, it wasn;t right for me, but I would definitely separate yourself from the mess! If your relationships are as strong as you say you will have no problems, and be surprised at the additional business you didn't think was available to you! Good luck!
[quote=iceco1d]
[quote=Chazzy]
[quote=iceco1d]nor did I pull the “why would you trust your hard-earned money with a company that can’t even manage its own!” bit…totally initiated by the client).
[/quote]Dang Ice, that almost sounded rehearsed[/quote]Nope. I don’t use the line, but it has been suggested on several threads here (but yes, I have CONSIDERED using it, but then decided against it). As to everyone who says, “you must have poor relationships with your clients if they care about what firm you are at…” Some of you have sorely inflated egos. Certainly, clients are/should be with us for the most part because of US, and not the sign on the door. But if you think clients at the likes of AIG, Wachovia, Bear Stearns, and the like, aren’t at least considering the fact that the firm is not in the best shape, you are mistaken. Now, is this the case for everyone? Of course not. But Wells will lose some Wachovia/AGE clients because of the b.s., and it will NOT be the fault of the broker, nor could that attrition likely be averted by the broker. Likewise, there will be some clients that will follow their broker into the gates of hell if need be, for whatever reason.And then there will be the overwhelming majority of clients that will follow their broker through a lot, and refer business - but will at times consider how much of the firm’s nonsense and drama they will accept, as well as at times wonder if the “grass is greener” with another firm & broker.It’s different for everyone, but to think that every client in your book would eternally sit still for an AIG-style meltdown, or an AGE/WS/C/WFC volley is moronic. [/quote]
I moved to Janney from Wachovia Securities two months ago. I currently have 80% of my premove assets in house. By mid summer I should be at 90%. If you have good relationships with your clients and give them a good reason to leave, they will go with you. It is less of a change for them to stay with you than for your clients to go with a new advisor whom they have never met.
One piece of advice, consider going to a regional. Don't know why more advisors don't do it. Personal access to the chief investment strategist, any and all equity analysts, as well as upper management, higher payout, less red tape, and higher morale.It is different for everyone. I wouldn't expect a client to sit 'eternally' still, nor would I expect a broker to sit 'eternally' still. However, the point I was (not so eloquenlty) trying to make is that - the grass may appear greener on the other side of the fence, but it still has to be mowed. Your closing sentence would have been just fine if you would have ended it as I started the above paragraph.
It’s different for everyone, but to think that every client in your book would eternally sit still for an AIG-style meltdown, or an AGE/WS/C/WFC volley is moronic.
Ryedog, did the brokers from your old office hammer your book? I don't agree with brokers who aggressively push themselves on a departed broker's' book. I also agree with the regional comment.
Would you guys who feel going to a regional is a positive, say the same thing about going to a Regional on their indie platform?
[quote=Sportsfreakbob]Would you guys who feel going to a regional is a positive, say the same thing about going to a Regional on their indie platform?
[/quote]
Yes
I left a firm earlier this year with my team from a firm that was imploding as well. I am currently at 80% of assets transferred and 70% of households. I am still chasing the paper around so it seems I will get to 85% of assets and around 72-73% of households. Believe me that after 15 years at one firm I was very hesitant to make a move, but in the end it was definately the right move. It’s a great deal of work, but if you truly have deep relationships with your clients you will be surprised on the upside of what will come. I had 8 households that completely shocked me that didn’t come, but in the end still well worth the efforts.
[quote=Gordon Gekko]
Ryedog, did the brokers from your old office hammer your book? I don't agree with brokers who aggressively push themselves on a departed broker's' book. I also agree with the regional comment.
[/quote] Yes they did. Some were brutal (i.e. temp slashing advisory fees, brokers insinuating that I was fired, comments of disbelief of my poor investment approaches, etc.) but some were and are class acts. It is ironic that the class brokers from my prior office are the only ones who kept any of my clients. Regarding the benefits of being with a regional, I just think it's great to be large enough to have our own inhouse strategists and analysts, but small enough to have personal access to them with our clients.Yes. IMO, any place is better than a large wirehouse.Would you guys who feel going to a regional is a positive, say the same thing about going to a Regional on their indie platform?
Ryedog, I agree - if they were smart (and decent people) they’d take the high road and not do what they did to you. In my case it wasn’t what was said, it was the frequency of the broker contacting my clients that infuriated me. They ended up coming to me anyway, the guy just blew up any chance of us remaining friendly.
[quote=HAAIC]Why don’t you use some common sense, CommonSense?
[/quote]
I am a little confused by this. I am simply trying to get a rough idea of what guys in the trenches are seeing in their WS branches when an advisor leaves. I would think that looking before you leap is using common sense, but what do I know.
[quote=nestegg]
I left in Jan, and I have 80-90% of assets over at this time…it was much easier than I had expected it to be with the market etc. Only 3 A clients didnt move and 2 of those are due to health issues that cropped up after my move, so in time they will move.
Alot depends on your relationships and of course where you move…if you gor from WS to BAC/ML or MC/SB I wouldn’t expect the skeptical ones to move…if you go to a regional or Indy I think you will have more follow, your reasoning for moving makes alot more sense in teh latter case.
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Thanks for the quality response. This is the kind of info I am looking for. Our two top choices are 1) Stifel, and 2) Indy.
[quote=Gordon Gekko]I think Merrill is the hardest to leave and retain large persentages. Wells Fargo is a trainwreck in most clients’ eyes if they were originally AGE clients (there was that intermediate stop at Wachovia) so that might be the easiest move in the history of moves. [/quote]
From your lips to Gods ears…
Alright, so some of you have given good feedback that you have taken 70-90% of your assets w/in a few months. That is about what I would expect. I realize that it is based on your relationship w/ your clients and I think that we are in good shape there (although you never know until you pull the trigger).
So, what about the people who are too ashamed to brag about their success on the forums? Has anyone seen the 30-40% client conversion train wreck? Has anyone seen an advisor leave to a protocol firm and get sued or slapped w/ a TRO? My partner is our manager, so we have to be extra careful to avoid ‘branch raiding’ problems. Any horror stories?
You will of course have a surprise or two but overall your clients will follow. You should also view this as an opportunity to leave behind the clients that drain you financially and emotionally.
I have seen Merrill as the toughest to leave because of their clients’ attachment to the firm. Also, if you left and your partner stayd behind, that might be bad and a tro might be coming. If you both leave, problem solved.
There are a number of factors regarding your success conversion when you leave. The #1 reason is “you”. If you have taken care of your clients, serviced them, and made decisions based by putting their needs first, you will move most of your assets. If you have a high return on assets, pressure people into making decisions, and have been only taking incoming calls in this crappy market, you may be in for a reality check when you hit the bricks.
Next factor is where and why you are moving. You need to answer the "what's in it for me?" that clients will ask you. The better the response, the more success you will have. If you go to another wirehouse for a check, there's no benefit to the customer unless you are upgrading firms. If you go to an independent platform, you will need to communicate the unique benefits of the firm you join and why it is good for the customer. It could be pricing flexibility, research, better money markets, no product pressure, or freedom to make all decisions based exclusively on what you think is best for the customer as examples. On the independent side, make sure you have a solid clearing firm to utilize as that is where accounts will be carried and people want to know that their money is safe because clients will be making their checks payable to the clearing firm. Third, who is left behind to take over your book of business? Have you seen other reps leave your branch? What happened to their book? Merrill has done a great job of putting reps into teams and it is part of the reason they have higher retention rates than most firms when reps leave. They sell the total Merrill concept and make the rep more invisible if they were to go because the products are mostly Merrill products. Prior to being bought by Bank of America, they bragged about 60% plus retentions. I sincerely doubt those numbers still apply. Fourth. What do you have for products and services when you get to your new destination? Is it better or worse than what you have now? If you decide to make the move, make sure you provide exceptional service to every client you want to come with you for a few months prior to resigning. I would get the book Going Independent at www.cantella.com if you are considering a switch regardless of where you are going. Best of luck to you.broker in our region left and and went to mother merrill (before the bac thing). Only took about 20 percent of his book. He’d been w/EDJ for over 10 years. OOPS ! Didn’t last long at ML after his book didn’t come with him.
What are thoughts on the dollar value of assets that need to transfer to be successful at an independent, with a 90% payout?
Too many variables. You can buy an office building in some parts of the country for $75,000, while in other parts of the country $3,000 a month is going rent for a decent office. The other big factor is sales assistants as it may be your biggest expense. What is your return on assets? Some people generate under 1% while others are stock traders. You need to work backwards to get to your answer. First; how much do you need to pay your bills for living expenses? Then establish a reasonable budget for your business expenses. Look at your current return on assets to get to your needed asset number.
Here's an example. Take a $400,000 producer with a wirehouse. Payout might average, say 35%, or $140,000 a year and their book is $40 million. If they went independent and hired an assistant at say $30,000 per year, running an office could be anywhere from $60,000 to $80,000. You will have transaction fees as an independent, so bump your 90% down to 83% (ballpark). Therefore, you would need to move over about $24 million, to keep your same pay check if you have $60,000 in office expenses or $26.5 million at $80,000 in expenses. If you worked out of your house and had no sales assistant, you might only have $20,000 in annual expenses and you would only need to move $20 million. That's an extremely oversimplified formula. You may now be paying health insurance as an example on the negative side for independence and on the plus side all of those expenses are now deductible on your taxes, so it is not truly a dollar spent is a dollar gone as you would be in the 28% federal bracket plus state taxes make two thirds of your business expenses a closer estimate of your true cost. A good independent firm will be able to help you with this calculation. Give them your production run, your cost of living to pay your bills, run through estimated costs for the type of office you are planning to build and let them give you a more accurate number. Good luck.In terms of client retention, there's a lot of bravado but very little hard statistics quoted in the forum. We kept fairly detailed notes and here is where we are after leaving ML this past fall:
Top 1/3rd of clients - we kept 92% of the relationships. Middle 1/3rd - we kept 80%. Bottom 1/3 - we kept 52%. Overall - we kept 73% of the total relationships, but some 90% of the fee-based assets and fees. Although I was pleased, I sense in a better market we would have done even better. Several top clients, for example, used our departure from the wirehouse to simply go to cash and move their $ to a bank. Likely when the dust settles they will come back to us. The poor retention with the "C" clients didn't really bother us. In this category were mostly inherited, transactional accounts. It is a ton of work to move, so please don't consider it unless you are ready to work like a rookie again. And it goes without saying that your relationships with your best clients should be more than solid.I work for a bank program and when the guys leave, it has been between 15% and 50
% of assets that transferred. I assume I would be able to take about $7-11million(25%-35%) in assets as a mid range guess if I use these numbers. Around $3m-$4m would be at 1% fee based. The bank makes the clients a little more sticky. I feel I have a good relation with my top clients, but this market has shaken the confidence they have. Since the downturn began in October 2007, I have been extremely aggressive in working my top clients and reducing the equity exposure during 2008, resulting in no "A" clients lost during the market downturn. But I still anticipate losing some of these clients. I have looked at it multiple ways and at $300,000 in production you would make the same as $105,000(no I do not want to do only $105,000 in production) as an independent, even factoring all the expenses on both sides. Additionally, you would have to bring in fewer assets due to huge haircuts and referral fees from the bankers. I looked at $10m(3%) vs. $2.1m(5%) in new assets, not including recurring revenue. So, my conclusion would be that even after losing 2/3 of my book due to bank stickiness, I would be better off independent. I just want to see if I am missing something here. I know that I will have to go back to my ML days when I first got in the business and work my tail off to rebuild, but am prepared for that.There are only a handful of ML advisors in each office who aggressively go after a departing advisor's clients. No one is going to turn away business, but most advisors try to handle the process pretty professionally. I do believe that ML does still have very strong retention rates, and it has very little to do with proprietary products. I would say a very strong advisor could get 70-75% of assets from ML, but I've never seen any more than that. I don't care about % of households b/c it's the % of ASSETS that matters. I've seen a team take the vast majority of households, but could not bring a $63M relationship with them. That household alone was 30% of their production, and that's going to take a long time for any advisor to replace.
lol at several comments…
1. assets only matter because the recruiting deals are based on you bringing them over…if there were no asset hurdles, just production, then you would care more about bringing over a % of your production, which would leave behind many non-paying assets that many of us don’t care about
2. the ML office near me has lost 30 - 40% of the office advisors. A large group of us managing nearly $2billion in assets total left ML last year, and believe me, clients were ready to exit. Each of us had two asset hurdles to meet, 50 and 75%, and each of us has met them both
3. sounds like every ML office is the same. there were advisors who were POS’s that made the same slanderous claims as referenced above, and ultimately looked desperate, unprofessional, and sleazy trying too hard to retain accounts…now we’re laughing at them and telling the tales of their lines of B.S. through the area - to the point where it has reached the ears of enough people that it has impacted their reputations. Others were very professional, and if I ever get the chance to act the same way toward them, I will - good solid guys who called the clients, said “so and so left the firm, your account was reassigned to me. I would like to meet if your inclined to do so, please let me know what I can do to help” and left it at that…
4. I don’t know if there were any advisors that left in our area to other firms who didn’t say “i’m not taking that client on purpose”…so we all leave behind some assets that we are ok with
5. Ultimately, nearly every book is 80/20 or even more like 90/10…most of the production comes from a few. The losing firm says they are “retaining the majority of the assets”, but even if they retain 1/2 they usually are watching a lot of revenue walk out the door
6. ML has stated for years that people that leave only take 30 - 40% of their clientele with them. I know at least 30 advisors who have left ML throughout the country, and none - ZERO have taken less than half…and most have taken 75 - 90%.
Not all deals are asset deals, mine had no asset requirements. Upfront was based on TT, and backend on production once at the firm.This enabled me to leave all my problems behind and also non producing accts
JoeNatlanta: With all due respect, I say bullsh**. You are so filled with Merrill hate and man-love for UBS that I can't honestly believe anything you say.
I left a large BD about 3 years ago, the problem i had with them is they were more geared to selling annuities and i was fee based. That’s when i decided to go with an independent RIA firm. I was able to bring over 90%+, the only ones i lost were some of the annuities. I think if you meet with each client, give them your honest reasons for leaving, don’t bad mouth the other firm and give them something tangible. .10% off fees or something. This will give you better odds.
Hope this helps, good luck!Source URL:https://www.wealthmanagement.com/forums/whats-firms/how-many-clients-will-come-w-me