Competing w/Fidelity

or Register to post new content in the forum

39 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jul 1, 2007 1:37 pm

Need some help, trying to pull in a Fidelity PAS account (little over a mill, all qualified). The client is happy w/Fido and I must admit the allocation and fund selection was impressive. My angle will be that it is a cookie cutter program, the fee's are a little high (1.25) and the client will always be dealing w/a new rep (the turnover there is ridiculous). Anyone have any luck pulling those PAS accounts or are there any former Fido guys out there that can point out some of the deficiencies in that program.TIA

Jul 1, 2007 1:48 pm
badmove?:

Need some help, trying to pull in a Fidelity PAS account (little over a mill, all qualified). The client is happy w/Fido and I must admit the allocation and fund selection was impressive. My angle will be that it is a cookie cutter program, the fee's are a little high (1.25) and the client will always be dealing w/a new rep (the turnover there is ridiculous). Anyone have any luck pulling those PAS accounts or are there any former Fido guys out there that can point out some of the deficiencies in that program.TIA


Read The Wedge and How to Get Your Competition Fired (without saying anything bad about them).


And yes, we pull these kinds of accounts from Fidelity and Schwab all day long.


Do NOT compete on PRICE!!!  In fact, you should find reasons to CHARGE MORE so that the client will VALUE YOU.


If you're competing on price, you're just like every other whore out there.  Find your value and get that account!

Jul 1, 2007 7:28 pm
skippy:

Read The Wedge and How to Get Your Competition Fired (without saying anything bad about them).


And yes, we pull these kinds of accounts from Fidelity and Schwab all day long.


Do NOT compete on PRICE!!!  In fact, you should find reasons to CHARGE MORE so that the client will VALUE YOU.


If you're competing on price, you're just like every other whore out there.  Find your value and get that account!



Good advice, however, I do have to comment about your statement that you "pull these kinds of accounts from Fidelity and Schwab all day long."  If that statement was true, then it wouldn't take very many days before you had ALL of the Fidelity and Schwab accounts.

Do you really want us to believe that it's just a matter of time before you have put them out of business?

Jul 1, 2007 8:02 pm
badmove?:

Need some help, trying to pull in a Fidelity PAS account (little over a mill, all qualified). The client is happy w/Fido and I must admit the allocation and fund selection was impressive. My angle will be that it is a cookie cutter program, the fee's are a little high (1.25) and the client will always be dealing w/a new rep (the turnover there is ridiculous). Anyone have any luck pulling those PAS accounts or are there any former Fido guys out there that can point out some of the deficiencies in that program.TIA


Leave the guy alone.  You're wasting your time. He's happy and they're taking good care of him. You screwed up by not uncovering any pain and logic doesn't bring business in the door.

Jul 1, 2007 9:21 pm

BH is correct that it is important to find the pain.  Sometimes prospective clients will mention that they are relatively happy with their current arrangements.  After further discussion, I directly ask them "why are we talking?" That usually gets a good look from them and they begin to open up a bit more about what is bothering them. 


My eyes light up when I see an account from Fido or Schwab.  Reason being is that the vast majority of all my new assets are from these firms.  Through various questions, I uncover the lack of experience, relatively no ongoing/proactive advice, and the unwillingness to look at the big picture.  Works wonders.  I don't even discuss fees.  I close almost every one of these, and could make a living simply on what I bring over from Fido on 401k rollovers.  And I feel no remorse whatsoever as I am not taking this from an indy/wirehouse rep that is counting on this client to provide revenue for them personally.  BTW the toughest firm (for me) to bring over is out of Valley Forge, PA. I find that all these customers focus on is fees, fees, and fees.  Regardless of performance, service, etc.  It's always been the most difficult and at my stage I ask them once and move on. 

Jul 2, 2007 3:56 am
The Judge:

BTW the toughest firm (for me) to bring over is
out of Valley Forge, PA. I find that all these customers focus on is
fees, fees, and fees.  Regardless of performance, service,
etc.  It's always been the most difficult and at my stage I ask
them once and move on. 





Funny you mention that, The Valley Forge organization is pulling down assets left and right from the rest of the industry.



The key thing when dealing with Fido/Discount brokerages is as you
said, find the pain/concern. Dealing with money is stressful and people
want affirmation that they are doing the right thing. On the internet
no one can hear you scream.



There are also some niches that VG does not do, and if you understand the gaps, you can add value there.



Since I use VG funds in my practice, I tell people the main area we add
value is in helping people stay the course, adding/managing
opportunities and ideas that VG doesn't offer and reducing the
day-to-day worries of investing.

Jul 2, 2007 9:08 am
AllREIT:



Since I use VG funds in my practice, I tell people the main area we add value is in helping people stay the course, adding/managing opportunities and ideas that VG doesn't offer and reducing the day-to-day worries of investing.



Sounds very exciting.

Jul 2, 2007 5:59 pm
AllREIT:
The Judge:

BTW the toughest firm (for me) to bring over is

out of Valley Forge, PA. I find that all these customers focus on is

fees, fees, and fees. Regardless of performance, service,

etc. It's always been the most difficult and at my stage I ask

them once and move on.




Funny you mention that, The Valley Forge organization is pulling down assets left and right from the rest of the industry.



The key thing when dealing with Fido/Discount brokerages is as you

said, find the pain/concern. Dealing with money is stressful and people

want affirmation that they are doing the right thing. On the internet

no one can hear you scream.



There are also some niches that VG does not do, and if you understand the gaps, you can add value there.



Since I use VG funds in my practice, I tell people the main area we add

value is in helping people stay the course, adding/managing

opportunities and ideas that VG doesn't offer and reducing the

day-to-day worries of investing.





Most VG funds do not pop up on my radar of good funds.

Jul 2, 2007 8:08 pm
AllREIT:



Since I use VG funds in my practice, I tell people the main area we add
value is in helping people stay the course, adding/managing
opportunities and ideas that VG doesn't offer and reducing the
day-to-day worries of investing.



I highlighted the word 'practice.'  I know that doctors and lawyers refer to their business/profession as a practice, but I have never heard of a Financial Advisor who referred to his/her business/profession as a practice.

Did I sleep through that part of training?


Jul 2, 2007 8:38 pm
ManagedMoney:
AllREIT:



Since I use VG funds in my practice, I tell people the main area we add
value is in helping people stay the course, adding/managing
opportunities and ideas that VG doesn't offer and reducing the
day-to-day worries of investing.



I
highlighted the word 'practice.'  I know that doctors and lawyers
refer to their business/profession as a practice, but I have never
heard of a Financial Advisor who referred to his/her
business/profession as a practice.

Did I sleep through that part of training?





http://www.google.com/search?hl=en&q=financial+advisory+ practice&btnG=Search



I like to think of myself as being a tad more professional. I guess I'm happy to know that some folks follow my every word. I'll rephrase my self so you can understand it.



"
Since I use VG funds in my business, "



I've heard of alot of stockbrokers who call themselves financial advisors when in reality they are  mere representatives who's advice is "solely incidental" to the sale of securities.

Jul 2, 2007 8:39 pm

Why wouldn't you use the phrase practice?

Jul 2, 2007 10:56 pm
gad12:

Why wouldn't you use the phrase practice?



It's a word, not a phrase.

Jul 3, 2007 3:47 pm
bankrep1:
AllREIT:
The Judge:

BTW the toughest firm (for me) to bring over is
out of Valley Forge, PA. I find that all these customers focus on is
fees, fees, and fees.  Regardless of performance, service,
etc.  It's always been the most difficult and at my stage I ask
them once and move on. 




Funny you mention that, The Valley Forge organization is pulling down assets left and right from the rest of the industry.

The key thing when dealing with Fido/Discount brokerages is as you
said, find the pain/concern. Dealing with money is stressful and people
want affirmation that they are doing the right thing. On the internet
no one can hear you scream.

There are also some niches that VG does not do, and if you understand the gaps, you can add value there.

Since I use VG funds in my practice, I tell people the main area we add
value is in helping people stay the course, adding/managing
opportunities and ideas that VG doesn't offer and reducing the
day-to-day worries of investing.



Most VG funds do not pop up on my radar of good funds.


Yes, our filters don't pop up any VG funds.  some folks are cheap, some are spendthrifts, and then there's those who I want to work with: folks who can discern "value". 


It's easy to sell something because it's "cheap" or inexpensive.  but is the cheapest product usually the best product?  not in my experience (neither is the most expensive product, of course).  Why would someone sell a VG index fund when they can buy an etf with typically lower internal expense? (I'm not saying that any of you are doing this).


When someone can't get past fee this, fee that, I suddenly realize that I don't have to work with this person, and I'll probably be happier that I didn't, long term.  Because it shows a myopia, and it peeves me when people can't shift their paradigms... or else I just put them in an etf wrap (low expense) and show them how they've underperformed my non-etf portfolios' real returns in follow-up meetings. 

Jul 3, 2007 4:39 pm
joedabrkr:
gad12:

Why wouldn't you use the phrase practice?




It's a word, not a phrase.


Ouch,  better think for more than 1 second before I post. Got me.

Jul 3, 2007 6:12 pm
Big Taco:

Yes, our filters don't pop up any VG
funds.  some folks are cheap, some are spendthrifts, and then
there's those who I want to work with: folks who can discern
"value". 


It's easy to sell something because it's "cheap" or
inexpensive.  but is the cheapest product usually the best
product?  not in my experience (neither is the most expensive
product, of course).  Why would someone sell a VG index fund when
they can buy an etf with typically lower internal expense? (I'm not
saying that any of you are doing this).


When someone can't get past fee this, fee that, I suddenly realize
that I don't have to work with this person, and I'll probably be
happier that I didn't, long term.  Because it shows a myopia, and
it peeves me when people can't shift their paradigms... or else I just
put them in an etf wrap (low expense) and show them how
they've underperformed my non-etf portfolios' real returns in
follow-up meetings. 





When it comes to investments, cheapest is almost always the best and usually close to it if it not the best.



What I tell clients is that the money they spend on an FA goes into two
buckets. Advice and Investments. Money spend on active investments is
odds on not valuable. Money spent on advice is possibly valuable.



As for VG funds vs ETFs, the main benefit is automatic
reinvestment/ease of rebalancing on the index funds, and cheap well
managed active funds.

Jul 3, 2007 6:30 pm
AllREIT:
Big Taco:

Yes, our filters don't pop up any VG funds.  some folks are cheap, some are spendthrifts, and then there's those who I want to work with: folks who can discern "value". 


It's easy to sell something because it's "cheap" or inexpensive.  but is the cheapest product usually the best product?  not in my experience (neither is the most expensive product, of course).  Why would someone sell a VG index fund when they can buy an etf with typically lower internal expense? (I'm not saying that any of you are doing this).


When someone can't get past fee this, fee that, I suddenly realize that I don't have to work with this person, and I'll probably be happier that I didn't, long term.  Because it shows a myopia, and it peeves me when people can't shift their paradigms... or else I just put them in an etf wrap (low expense) and show them how they've underperformed my non-etf portfolios' real returns in follow-up meetings. 




When it comes to investments, cheapest is almost always the best and usually close to it if it not the best.

What I tell clients is that the money they spend on an FA goes into two buckets. Advice and Investments. Money spend on active investments is odds on not valuable. Money spent on advice is possibly valuable.

As for VG funds vs ETFs, the main benefit is automatic reinvestment/ease of rebalancing on the index funds, and cheap well managed active funds.


If cheapest is almost always best, and vanguard has "well managed active funds", why don't they pop in my filters, and why do my actively managed wraps always beat my etf wraps both on real returns and lower std dev?


Trust me, I wish the etf's won on both counts, because it would be that much easier to compare costs ON TOP of the better returns and lower std. dev.  but they don't.  my actively managed wraps beat the etf wraps by several percentage points (on mod, mod aggr, and aggr model portfolios) with (slightly) less standard dev.  lower risk, much higher returns (including the fees).  which one would you choose? 

Jul 3, 2007 6:32 pm

Oh, yes, I call my business a "practice".  On my business card it says:
My Name, a financial advisory practice.

Jul 3, 2007 6:35 pm

Oops, I mean it's written:

My name, & Associates, a financial advisory practice.

Jul 3, 2007 7:00 pm
Big Taco:

If cheapest is almost always best, and vanguard has
"well managed active funds", why don't they pop in my filters, and why
do my actively managed wraps always beat my etf wraps both on real
returns and lower std dev?


Trust me, I wish the etf's won on both counts, because it would be
that much easier to compare costs ON TOP of the better returns and
lower std. dev.  but they don't.  my actively managed wraps
beat the etf wraps by several percentage points (on mod, mod aggr, and
aggr model portfolios) with (slightly) less standard dev.  lower
risk, much higher returns (including the fees).  which one would
you choose? 





1) I don't know what your filters are, so I don't know how they work. I
normally don't use any of the VG active funds, but some of them like
Wellington/Wellesley are nice, and number of the active funds (such as
Int Value) are as cheap or almost as cheap as ETFs.



2) As for myself, knowing about the non-persistance of manager alpha, I'd have to look closer. You might be one of those rare active stock/fund pickers who can beat the market, or you could be lucky.

Jul 3, 2007 9:45 pm
Big Taco:

Oops, I mean it's written:

My name, & Associates, a financial advisory practice.



Thanks.  I had never seen it before.