Liquidate and transfer forms

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Jun 9, 2006 12:02 am

I couldn't find the thread where this form was being ripped on. I have used it a number of times to transfer in $100k'ish accounts where they own 30-40 stocks. It doesn't cost them a dime to sell them out, where I would have to charge them 50 bucks a pop. Could they have held a few of the stocks, sure. But if I'm going to handle their investments, I would set them up my way, and I deserve to paid for investing it that way. Have a good weekend folks.

Jun 9, 2006 12:09 am
Incredible Hulk:

I couldn't find the thread where this form was being ripped on. I have used it a number of times to transfer in $100k'ish accounts where they own 30-40 stocks. It doesn't cost them a dime to sell them out, where I would have to charge them 50 bucks a pop. Could they have held a few of the stocks, sure. But if I'm going to handle their investments, I would set them up my way, and I deserve to paid for investing it that way. Have a good weekend folks.


That's actually a good strategy, particularly for a broker who doesn't know what he/she's doing, yet wants a high payout at the clients' expense.

Jun 9, 2006 12:13 am

How does it NOT cost to LIQUIDATE the securities before the "CASH" is transferred? The only reason this form is used is to give jones compliance/sales contest/whatever the H reason the FALSE impression that the funds coming in is "NEW" money. Pretty intellectually dishonest to preach buy and hold and be the ONLY FIRM ON THE STREET to use Liq.& Trf. forms. Furthermore, the use of that tactic exposes the client to MARKET RISK. (out of the market for days or a couple of weeks while transfer is completed.) An ACAT doesn't create a "timing" situation (but then wouldn't show up as "new" cash and screw up your div. trip.) This is one of the sleaziest practices out there. 

Jun 9, 2006 12:52 am

Hulk,


Did you have a lobotomy? Of course it costs to liquidate.  A lot!!!  I can personally attest that I give absolute zero discount to sell if I receive a L&T request.  Full boat, to say the least.



Jun 9, 2006 9:02 am

Hulk had a frontal lobotomy. I'd rather have a bottle in front of me.

Jun 9, 2006 1:08 pm
Incredible Hulk:

I couldn't find the thread where this form was being ripped on. I have used it a number of times to transfer in $100k'ish accounts where they own 30-40 stocks. It doesn't cost them a dime to sell them out, where I would have to charge them 50 bucks a pop. Could they have held a few of the stocks, sure. But if I'm going to handle their investments, I would set them up my way, and I deserve to paid for investing it that way. Have a good weekend folks.


What's going on here? Aren't you Incredible Hulk with an 'i'???!! Aren't you a Joneser??!! When you get cut, don't you bleed GREEN??!!


If this same post came from Spikedkoolaid (OH WAIT- IT DID)


what an outcry would be heard from Guest1, Rankstocks and Bill Faakkland- UNETHICAL / NOT RIGHT FOR THE CLIENT / DISHONEST/ MORON / GLAD YOU ARE NOT AT JONES / NOT DOING WHAT IS RIGHT / GREEDY /


Have you lost your mind or were you drunk when you wrote this?

Jun 9, 2006 2:20 pm

Mr, Incredible Hulk (with an I),


I think I was talking mostly Liquidate and Transfer Forms with Mutual Funds.  If I saw a stock position, I always transferred in-kind so I could sell them at EDJ for full-boat.  I remember once I sold 1200 shares of IBM and the client paid $720 in commission.  We DCA'd out of IBM (so we did that 5 times $720x5=$3600 Gross Commission) then I put him into Funds (3.5%), Annuities (4.5%), Tax-Frees (3.0), CMO's (3.0).  I made sure to only hit the 100k breakpoint on the funds.  I think my payout on the whole $1,000,000 was somewhere around 3.5 to 4% when it was all said and done. 


So I did what was right, right? I diversified his highly concentrated position.  I moved his money into good diversified investments and I got paid a boatload of commissions up front in one shot.


Wrong?  The way you should do it at Jones, is sell the IBM in the MAP for free (if you don't know how to do this contact Susan McBee) and diversify the client amongst the different Separately Managed Accounts (21 to be exact).  You could then charge him a fee to manage the assets somewhere between 1.25 and 1.75%.   This would be the most appropriate and cheapest for the client.   

Jun 9, 2006 4:03 pm

I'll be more specific for you. I've had success taking "smaller" 100k'ish accounts from the local SB office. They were wrap accounts. They're paying 1% for unlimited trades. When I do the liquidate and transfer, they are selling the stocks for NO COST. If you would charge a "full boat" commission inside this wrap account, I would have the client call your BM.



Just so there is no further misunderstanding, the client liquidates the account inside the wrap account (i.e. 30 positions of 10-50 shares of stock) for no additional cost. If I transferred these in kind and sold them out at full commission, they'd pay in upwards of 4-5% on the sells alone. We then transfer the cash into EDJ. They pay our standard commission on the buys, whether it's funds, stocks or bonds.



I prefer to keep our clients cost at a minimum, but again, I deserve to paid for PROPERLY allocating an account.

Jun 9, 2006 4:20 pm
Incredible Hulk:

I'll be more specific for you. I've had success taking "smaller" 100k'ish accounts from the local SB office. They were wrap accounts. They're paying 1% for unlimited trades. When I do the liquidate and transfer, they are selling the stocks for NO COST. If you would charge a "full boat" commission inside this wrap account, I would have the client call your BM.

Just so there is no further misunderstanding, the client liquidates the account inside the wrap account (i.e. 30 positions of 10-50 shares of stock) for no additional cost. If I transferred these in kind and sold them out at full commission, they'd pay in upwards of 4-5% on the sells alone. We then transfer the cash into EDJ. They pay our standard commission on the buys, whether it's funds, stocks or bonds.

I prefer to keep our clients cost at a minimum, but again, I deserve to paid for PROPERLY allocating an account.


I absolutely agree, green man...

Jun 9, 2006 4:47 pm
Indyone:
Incredible Hulk:

I'll be more specific for you. I've had success taking "smaller" 100k'ish accounts from the local SB office. They were wrap accounts. They're paying 1% for unlimited trades. When I do the liquidate and transfer, they are selling the stocks for NO COST. If you would charge a "full boat" commission inside this wrap account, I would have the client call your BM.

Just so there is no further misunderstanding, the client liquidates the account inside the wrap account (i.e. 30 positions of 10-50 shares of stock) for no additional cost. If I transferred these in kind and sold them out at full commission, they'd pay in upwards of 4-5% on the sells alone. We then transfer the cash into EDJ. They pay our standard commission on the buys, whether it's funds, stocks or bonds.

I prefer to keep our clients cost at a minimum, but again, I deserve to paid for PROPERLY allocating an account.


I absolutely agree, green man...

Tell me what the PROPER allocation is then.

Jun 9, 2006 4:48 pm
Revealer:
Indyone:
Incredible Hulk:

I'll be more specific for you. I've had success taking "smaller" 100k'ish accounts from the local SB office. They were wrap accounts. They're paying 1% for unlimited trades. When I do the liquidate and transfer, they are selling the stocks for NO COST. If you would charge a "full boat" commission inside this wrap account, I would have the client call your BM. Just so there is no further misunderstanding, the client liquidates the account inside the wrap account (i.e. 30 positions of 10-50 shares of stock) for no additional cost. If I transferred these in kind and sold them out at full commission, they'd pay in upwards of 4-5% on the sells alone. We then transfer the cash into EDJ. They pay our standard commission on the buys, whether it's funds, stocks or bonds. I prefer to keep our clients cost at a minimum, but again, I deserve to paid for PROPERLY allocating an account.



I absolutely agree, green man...

Tell me what the PROPER allocation is then.



Depends on the client.....

Jun 9, 2006 5:16 pm

I THINK I LOST MY MIND.  I AM A MORON IN A S&K SUIT!


I AM EMBARRASSED TO BE THE HULK. 


Incredible with an "I", you are embarrassing us.

Jun 9, 2006 5:38 pm

You can have the $100,000 accounts all day.  Add a Zero and then you can put them into the Managed Account Program and start looking like a professional.  If Jones wants to be the Wal-Mart on WallStreet, I'd much rather be the Nordstrom of WallStreet.  Thank you very much. 


Until you embrace the fee based business you will continue to have a $10k Net month and nothing more. 

Jun 10, 2006 1:46 pm

spiked



So the only professionals in this business use SMAs exclusively?