Leaving Smith Barney
I’ve had enough. The new grid is killing me. Over 80% of my commissions are fee based. Did about $365k last year but fees are down over 30% mostly due to the contraction in the markets which means my payout will go to 20%. Just received an offer from RBC, 75% of trailing 12. Looks like payout will just about double.
Also looking at Raymond James and Commonwealth. Any input from you all would be greatly appreciated.Look at SF also before making a decision.
Sorry, not familiar with SF. Full name please.
Stifel Nicolaus.
BF
Del Marva - Check your inbox
Del Marva, you need to look closer at your fee based business to determine which platform will work best for you. If you are primarily in separately managed accounts with outside money managers you need to find a competitive program that is attractively priced with similar managers to avoid losing clients. JP Morgan has a new program where the rep can still keep the bulk of the pie, but there are only so many managers available.
Fee based accounts where you manage the accounts whether it is in mutual funds or individual accounts almost always end up being a huge percentage pay raise if you decide to go the independent route. You can also find attractively priced fee based solutions with funds and ETF's. I would get a copy of the book that Cantella offers before making the jump because it addresses a number of the pitfalls, such as the one mentioned above, that you might not think of. Before committing to a firm, I would have them complete an analysis of your book of business and show you what your pay check would be with them. Best of luck to you. The independents are getting some great wirehouse producers that truly care about their clients and the regionals are growing as well.Del, I left SB on December 30. I was almost fully-fee based, and did a lot of work looking into different indy channels.
Feel free to email me privately if you’d like to talk. Good luck.
[quote=Delmarva]I’ve had enough. The new grid is killing me. Over 80% of my commissions are fee based. Did about $365k last year but fees are down over 30% mostly due to the contraction in the markets which means my payout will go to 20%. Just received an offer from RBC, 75% of trailing 12. Looks like payout will just about double.
Also looking at Raymond James and Commonwealth. Any input from you all would be greatly appreciated.[/quote] Your smart to leave, and call b.s on these places. To have a penalty box or whatever now is a joke. Especially when the firms are to a certain degree the ones who contributed to the whole market blowing up. Laugh when I do the math, a guy who was doing 400K can easily be staring at 200-250K this year and get a 20% payout.[quote=Delmarva]I’ve had enough. The new grid is killing me. Over 80% of my commissions are fee based. Did about $365k last year but fees are down over 30% mostly due to the contraction in the markets which means my payout will go to 20%. Just received an offer from RBC, 75% of trailing 12. Looks like payout will just about double.
Also looking at Raymond James and Commonwealth. Any input from you all would be greatly appreciated.[/quote]Delmarva:
You are good to think about leaving. But I would add consider going completely independent, especially since most of your assets are fee based. You can get your payout now, or wait till retirement when you have more assets. I have helped advisors with $200K upto $2.5 million in revenue go independent. They have never been happier, even with the downturn. If you want to learn more write to me or call me.
ash
[email protected]
609-945-7100 x 101
www.FAfreedom.com - The Breakaway Experts
I am interested in learning more. Thank you
Please see my responses in RED
[quote=Independent]Del Marva, you need to look closer at your fee based business to determine which platform will work best for you. If you are primarily in separately managed accounts with outside money managers you need to find a competitive program that is attractively priced with similar managers to avoid losing clients. JP Morgan has a new program where the rep can still keep the bulk of the pie, but there are only so many managers available.
Most of my"fee" based business is in "C" share mutual funds although I just started transitioning some of the smaller accounts into ETFs using the Smith Barney Advisor platform. Fee based accounts where you manage the accounts whether it is in mutual funds or individual accounts almost always end up being a huge percentage pay raise if you decide to go the independent route. You can also find attractively priced fee based solutions with funds and ETF's. I would get a copy of the book that Cantella offers before making the jump because it addresses a number of the pitfalls, such as the one mentioned above, that you might not think of. Before committing to a firm, I would have them complete an analysis of your book of business and show you what your pay check would be with them. Best of luck to you. The independents are getting some great wirehouse producers that truly care about their clients and the regionals are growing as well.[/quote] Thank you.[quote=fritz][quote=Delmarva]I’ve had enough. The new grid is killing me. Over 80% of my commissions are fee based. Did about $365k last year but fees are down over 30% mostly due to the contraction in the markets which means my payout will go to 20%. Just received an offer from RBC, 75% of trailing 12. Looks like payout will just about double.
Also looking at Raymond James and Commonwealth. Any input from you all would be greatly appreciated.[/quote] Your smart to leave, and call b.s on these places. To have a penalty box or whatever now is a joke. Especially when the firms are to a certain degree the ones who contributed to the whole market blowing up. Laugh when I do the math, a guy who was doing 400K can easily be staring at 200-250K this year and get a 20% payout. [/quote] You're right. Every single FA in my office is affected. I'd like to see a mutiny.[quote=Delmarva]I am interested in learning more. Thank you[/quote]
Delmarva:
I assume you were speaking to me when you wanted to learn more. I suggest you call me when you get a chance and we can speak further. There is just too much information for me to answer in a forum. I just want to point out I am not a recruiter!! Most people will call me after the market close or wait till they get home. I am available during the evening hours if you need.
thanks,
ash
609-945-7100 x 101
cell: 609-462-5756
Name change Citi-Morg
I hear a lot of people say “good decision” on people leaving, I don’t understand all the love for going independent. My team looked at a couple of independent platform (like the one that has a banner on this very forum, and honestly, we are not making anymore going to independents if you consider ALL compensation you get, and that does not even consider the variability of expenses going independent. I have to laugh at all the wirehouse haters, I do think it is what they call **** envy maybe
[quote=thunderkwb]I hear a lot of people say “good decision” on people leaving, I don’t understand all the love for going independent. My team looked at a couple of independent platform (like the one that has a banner on this very forum, and honestly, we are not making anymore going to independents if you consider ALL compensation you get, and that does not even consider the variability of expenses going independent. I have to laugh at all the wirehouse haters, I do think it is what they call **** envy maybe [/quote]
I do not know how you are getting your numbers. There are two ways to go independent:
1. Join another independent RIA/BD. Here you are probably correct… more of the same with almost the same payout.
2. Start your own firm. Here you are in complete control and typically advisors will make 60-70 percent payout. With more assets I have seen 75%.
I have worked with a lot of advisors from wirehouses that have gone independent. VERY happy even with the downturn. I do not think the independent model is for everyone. So maybe independence is really not the correct model for your team.
ash
Del,
If you are considering a move to the independent platform, I work for a privately held, self clearing independent firm. We offer transition packages as well. Let me know if you would like some more information.
[quote=thunderkwb]I hear a lot of people say “good decision” on people leaving, I don’t understand all the love for going independent. My team looked at a couple of independent platform (like the one that has a banner on this very forum, and honestly, we are not making anymore going to independents if you consider ALL compensation you get, and that does not even consider the variability of expenses going independent. I have to laugh at all the wirehouse haters, I do think it is what they call **** envy maybe [/quote]
If the wirehouse model works for you and you are happy with the compensation (and even think of it as your ****), good for you (Except for the **** part. Sorry about that.). But please don’t try to spin that your wire pays higher total compensation than any good indy platform. Too many of us here know the truth about that (first hand) to buy the oft-repeated (by wirehouse foks) lie that “total compensation” (for producers like you - HUGE, I’m sure) is actually higher at a wire than at indies with their “variable overhead”. It’s a joke. Go back to happily doing your job for your current compensation and consider yourself blessed.
[quote=YHWY]
[quote=thunderkwb]I hear a lot of people say “good decision” on people leaving, I don’t understand all the love for going independent. My team looked at a couple of independent platform (like the one that has a banner on this very forum, and honestly, we are not making anymore going to independents if you consider ALL compensation you get, and that does not even consider the variability of expenses going independent. I have to laugh at all the wirehouse haters, I do think it is what they call **** envy maybe [/quote]
If the wirehouse model works for you and you are happy with the compensation (and even think of it as your ****), good for you (Except for the **** part. Sorry about that.). But please don’t try to spin that your wire pays higher total compensation than any good indy platform. Too many of us here know the truth about that (first hand) to buy the oft-repeated (by wirehouse foks) lie that “total compensation” (for producers like you - HUGE, I’m sure) is actually higher at a wire than at indies with their “variable overhead”. It’s a joke. Go back to happily doing your job for your current compensation and consider yourself blessed.
[/quote]
I recently read in RR that an advisor team that had a $1 billion in assets decided to go indepenedent by joining a independent firm. He created the models and found that he could not make the numbers work if he formed his own firm. WOW What a mistake!! If an independent firm can figure out how to make money out of his $1 billion, why could he not? I often find that advisors do not understand the numbers and what is acutally available. I am certain the model that thunderkwb created does not work. But bad information always leads to POOR decisions. I have made the independent model work with $500 K in revenue, so thunderkwb think again about what you are doing WRONG with your model. If you need help write back. Bottom line is independents do make more money and are better able to serve their clients.
ash
[email protected]
Because a large percentage of your business is in C shares, you will experience a significant pay raise in all likelihood in the independent world. I know our firm pays 90% and ticket charges will not be much of an issue as you would pay a small amount the first time you buy a C share, but then keep a pure 90% of all trails going forward. Get that book Going Independent at www.cantella.com and start crunching your numbers to find the right independent firm for your business.
Just requested the book at the web site. Thank you.
Just received an offer from RBC. Giving me 75% of t-12, six year note. Includes a minimum 40% payout for about 12 months. My concern is the firm changes their grid and I am back in the same boat except with a five year loan hanging around my neck.
Also met with the Ray Jay manager. Their home office ran a pro forma for me. Looks like a 64% payout. Looks pretty good.
Comments please.Delmarva,
I would stay away from any long term deals that lock you in for six years. Who is to say RBC won’t drop you below 40% a few months after you sign the deal.
You’ll be sorry…talk to anyone who is stuck in a deal on this forum.
The 40% payout is for one year but your point is well taken. Thanks.
Del, we can run a comp for independent vs wire model for you. We’re privately held and self clearing as well. If you would like to more info. you can check out our website or you can PM me.www.sterneagee.com
Smith Barney has rescinded the “penalty box” for the month of April. Losing too many brokers?
Consider RJ seriously, you can join the employee side and go independent later without changing firms. Good transition if you ask me. PM me for details if you want them.
20% payout at a wire for over 200-250k in production? Wow that is brutal.
Del,
Yeah, BofA/Merrill did the same thing. Apparently they (management) had no idea brokers with a t-12 of 350K would not be happy with a 20% payout. Lots of brokers left so they tweaked the comp.
Ron, if you are doing 250K with an LOS over 5, you are at 15%.
Del - Would you please clarify your comment about SB rescinding the penalty box for April? Haven’t heard anything along those lines from my mgr., was curious about what you’d heard.
Last year I did about $368k with LOS of 15. My payout so far this year is at 34%. Because I am annualizing around 250k as of the end of March, my payout is scheduled to drop to 20%. My manager told me (and several others in the branch), my old payout of 34% is good for the month of April. After that, who knows?
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