Account Minimums

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Dec 16, 2006 8:04 am

What are some of you doing regarding account minimums. Over the years I have accumulated too many small accounts. What do you do with those accounts that you can no longer service?

Dec 16, 2006 3:46 pm

As of 1/1/07, my new account minimum goes to $250K.  Anything less I can write, but most, if not all servicing will henceforth be done by a licensed assistant.

Dec 16, 2006 5:20 pm

What is your current minimum? Is $250,000 the minimum for an account or a household?

Dec 17, 2006 12:26 am

I do not currently have one, so for the first 17 months of independence, I've taken most of what came through the doors.  However, I'm now just over $30 million AUM and am averaging about $20K/month gross, which nets me about $14-15K/month.  That's enough for me to live on, so I'm transitioning to building the business the way I want to, which means curbing, or at least reassigning, the smaller accounts.  Thus, the new year's rule for me...nothing under $10K, and anything new under $250K is subject to reassignment to my future jr. associate.


...and the $250K is a household measure for me.

Dec 17, 2006 9:41 pm
gatorfan:

What are some of you doing regarding account minimums.
Over the years I have accumulated too many small accounts. What do you
do with those accounts that you can no longer service?





In the first place, you determine if there is some future to the
account. I have no problem with having small accounts for younger folks
who are going to earn more and need more services in the future.



You want to structure accounts so that they will be easy to service in
the long run. Thus I am a big fan of target date funds etc.



One thing people forget is that 5 100K accounts is five people to get referrals from vs 1 500K account.

Dec 17, 2006 10:32 pm

I have several accounts exceeding 250K that blossomed out of a Roth IRA I opened for 3 or 4K

Dec 21, 2006 8:34 am

Come on guys. How are minimums working for you?


Thanks.

Jan 14, 2007 2:32 pm

I do not have a dollar minimum exactly.  I know that my top 100
clients generate about 95% of my income.  If I take on a new
account that does not have the potential to be in the top 100 in a
reasonable period of time then there needs to be another reason to have
the account.  I do make room for friends, family and referral
sources that are smaller.  But, I strictly limit my book to 200
households.  I cannot give first class service to any more than
that.


Jan 14, 2007 3:11 pm
illinoisrep:

I do not have a dollar minimum exactly. I know that my top 100

clients generate about 95% of my income. If I take on a new

account that does not have the potential to be in the top 100 in a

reasonable period of time then there needs to be another reason to have

the account. I do make room for friends, family and referral

sources that are smaller. But, I strictly limit my book to 200

households. I cannot give first class service to any more than

that.











With all do respect, unless your average account is 1 million dollars I would plan on servicing more households and hiring some help

Jan 14, 2007 7:53 pm

With all do respect, unless your average account is 1 million dollars I would

plan on servicing more households and hiring some help



-----------



Why? I guess it depends on what your goals are...but if your 200 hh only

average, say, $300k, then you're at $60m AUM. That's going to generate at

least 400-500k in gross revenue. Even if you're at a wirehouse you're

keeping 160 to 200k (+ def comp, 401k match, etc) with a pretty high QOL.

I think this is why plenty of 500k producers at wirehouses stay put: they

could certainly make more money, but they don't have any problems once

they get to that point.