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Dec 17, 2006 8:07 pm

For those of you who have recently gone indy in the last year or two, is there any Indy firms that will pay any upfront money to help facilitate a switch to Indy.  I am obviosly contemplating a change... OK, the decision has been made, it is just a matter of when and with whom.


I am trying to make it as financially easy as possible for me and my family.  I have talked to LPL and a couple other smaller Indy firms,  but I am wondering if there is any negotiation that can be done on this front.


FYI- I currently manage 20mil, and have a trailing 12 of 160m.


Any suggestions or insight would be appreciated.

Dec 17, 2006 9:46 pm

I'm gussing that LPL will offer you a 2% blotter credit ($3,200) and up to 10% in the form of a loan.  Don't know what the smaller firms are offering.  Indy deals aren't generally that big, but they can get you through the first few months when you're transferring assets and not producing as much.  I'd encourage you to read Bob Fragasso's book about running your own firm before you make the leap...it will prevent a lot of mistakes on your part...

Dec 17, 2006 9:57 pm

LPL gave me a little over 1% of my trailing 12. However, I used about 1.5 times that reimbursing clients for their transfer fees (Jones charged $40 to transfer out IRAs and another $30 if they had not paid their annual fee for the year).  You don't have to reimburse clients for that, but it made getting the ACAT signature MUCH easier. 

Dec 18, 2006 10:13 am

DON'T... You don't have the gross yet. You'll die as an Indy.


Mr. A

Dec 18, 2006 10:57 am
mranonymous2u:

DON'T... You don't have the gross yet. You'll die as an Indy.


Mr. A



That was exactly my reaction, and I've gone through the transition only recently.

Dec 18, 2006 1:37 pm

I appreciate the posts everyone. I have already made the decision about going Indy, and will be able to control my monthly expenses. The math works out, it is just the transitional stuff that I am concerned about right now and if there is a way to get some of that taken care of then it will definatly allow more time and resources to focus on the business to get it up and profitable.


Furthermore, I could easily die where I am at too.  I am technically a employee and if Mr. Ed decided to cut me loose, then where would I be?...  I may be up a creek going Indy, but at least I will have a paddle.


Dec 18, 2006 1:49 pm

I admire your ballz!


As opposed to others who whine and wimper.


Best of luck! I know Finet says they won't give you upfront dough unless you're doing $250 t12 min.


Try calling them all. Just ask them one question "Will you lend me up front costs if I bring my $160,000 book to you?


No? Thank you very much, good bye.


Yes? Great, let's talk! "


Mr. A 

Dec 18, 2006 4:05 pm

DWJ- have you factored in that 30% of your book may not go with you? Would that affect your decision to go Indy? If you have some doubts, I would stay put until that number increases a bit. Just a thought.

Dec 18, 2006 4:06 pm
now_indy:

LPL gave me a little over 1% of my trailing 12.
However, I used about 1.5 times that reimbursing clients for their
transfer fees (Jones charged $40 to transfer out IRAs and another $30
if they had not paid their annual fee for the year).  You don't
have to reimburse clients for that, but it made getting the ACAT
signature MUCH easier. 





You always want to make transitions painless. Really go out of your way
to do so. (I.e take a whole bunch of ACAT forms with you, offer to fill
them out etc)



The people who follow you are your real loyal fans, make sure to service these gold star customers.

Dec 18, 2006 4:44 pm

If you are growing organically I would think you can survive long enough to eventually prosper.  But you are wise to keep a close eye on your expenses until you are established on your own and it is clear that'll you be OK.

Dec 18, 2006 5:22 pm

Keep in mind that when you're Indy, most of the trails that you now get monthly will switch to quarterly (American pays this month, hooray!). However, Van Kampen seems to be paying monthly.  So, you'll probably have a nice hit whenever your #1 fund family pays out trails, and then two months of lean trails.


Another tip before you switch:


If you're sure you're leaving, only buy new funds AT the fund company from now on, do not put new clients into funds held at Jones.  You may even want to recommend to existing clients that they move their Jones IRAs to the fund company (it will save them money).  Why?  Changing broker of record is QUICK, EASY and FREE compared to an ACAT.

Dec 18, 2006 5:35 pm

Another reason to have funds at the fund family instead of in a Jones brokerage account is that Jones doesn't keep cost basis information for your clients if they switch.  I'm not sure they keep it for the clients in the brokerage account either even while at Jones.


The funds in each individual's accounts are held as if they are all one gigantic fund and the fund family will have no information about the clients if you ever switch out.   I just had to do an extensive reconstruction of an account with the client's CPA to determine long term capitial gains and losses for year end tax planning.

Dec 18, 2006 5:55 pm
babbling looney:

Another reason to have funds at the fund family instead of in a Jones brokerage account is that Jones doesn't keep cost basis information for your clients if they switch.  I'm not sure they keep it for the clients in the brokerage account either even while at Jones.

The funds in each individual's accounts are held as if they are all one gigantic fund and the fund family will have no information about the clients if you ever switch out.   I just had to do an extensive reconstruction of an account with the client's CPA to determine long term capitial gains and losses for year end tax planning.


After some hard lessons, I've made it a point to educate transferring clients about the importance of establishing good cost basis RIGHT THEN.  The longer you wait to retrieve the information, the more difficult it gets. In addition, the transferring firm (or at least my prior firm) can be very uncooperative about providing this information after the fact.  Some firms, LPL included, are set up to transfer cost basis with the assets, but many of the smaller wannabe B/Ds act like petulant little children after a client leaves them.