One year anniversary

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Sep 30, 2006 8:56 am

I, and two others and our assistant, left MS on year ago today for Ferris Baker Watts. Here are our final stats.


1. Assets brought over  70%.  10% left me/us and MS altogether. The other 20% are still there. Some are worthless, others were good accounts that I am still working on. I do not think I will get many if any of them. I talked to many of my clients before I left and one of the other guys did not. We brought over the same  % of assets. I also know of a few brokers that went to other firms and the numbers are similar unless you had a lot of friends and family accounts, then it was higher.


2. production   75%. Most of the key accounts came right away. Some took a little longer. Because of the higher payout and 10% bonus for year one and two, I will make the same income, the other two will make more.


3. Mistakes I made.  Selling all my MS stock at 61.


4. positives. I have more product to work with, a better office, better people in the office, no corporate BS, minimal account fees(this saved clients probably tens of thousands),no changes in comp or fees in a year(this happened daily at MS),10.625% of w-2 income in ferris ESOP stock. I can deal with who I want to deal with, not just certain types of accounts. I can still open a small account, which could be a future IRA rollover or inheritance.  I do not have to read negative press about my company daily. I do not have to defend account fees or policy daily. The main headquarters speaks English. Everyone is happy and helpful. The client, broker,firm mentality is the focus. And lastly, I was able to stick it to MS. Oh and a massive check.


Negatives. Legg mason,macdonald, piper jaffrey, advest were bought out by bigger companies. I was the syndicate cordinator at MS so I get less syndicate here. (this also can be a positive considering the performance of the MS deals)


Other notes. I looked at AGE. A great company but the best they offered was 100% payout for a year. Davenport was another good regional company, but ferris Baker had a better deal. Dain Raucher was interesting but they were not in the area. Wachovia, the bank side was interesting, BAC showed me nothing and Wachovia Securites, Merrill, Smith Barney, UBS all were the same BS different day.


I sure i made some spelling errors, ect. sorry

Sep 30, 2006 1:51 pm

Sounds like you made a good move for yourself (and team) and clients.


It's nice to hear stories like that once in a while, about someone bailing a large wirehouse for a smaller firm and doing well for not just himself/herself but for the clients who left, too.


Hats off to you and your team, Aldo!

Oct 2, 2006 7:11 am
aldo63:

4. positives. I have more product to work with,


Could you tell us what you have now that you didn't have? Also, what sort of UMA do you have there?

Oct 2, 2006 10:26 am

1. I have been exposed to every mutual fund company, not just the preferred list. one example, I never heard of the Henderson funds until I got here. Great International fund company. also 1031 real estate exhange funds. if we had this at MS, no one told me


2. UIT's I can now do all of First Trust and Claymore products also AAM. We were limited to van kampen products and only a few First trust and claymore. (they did not want any competition for MS owned VK)


3. Annuities. I am not a big annuity man, but we can do pretty much anyone out there if we get appointed with the annuity company. we were limited to three or four at MS. They are very had to transfer.


4. Money market. We can buy the vangaurd money market if we choose to. we have a basic sweep money market that is similar to ms but there are options to buy any mm. Then again MS now does bank deposits that pay 1/2 of the MM rate


What we do not have is Mutual fund Wrap . I never really did them anyway. I do C share funds. We do not have mortgages yet. I farmed a lot of that out at MS to clients in the mortgage business because they did business with me and they got paid more to do it.


UMA? do you mean cash mangement account? They have the same thing without the 150 fee.


Oct 2, 2006 12:03 pm

good story.  you have guts.  hope you do well.

Oct 2, 2006 12:06 pm

UIT's are cool. I've made a career on them.

Oct 2, 2006 12:32 pm

Aldo, no offense, I hope you’re happy, but you post left me with a few

questions. I’m as much curious how where you were varies from my

experience where I am as anything else, since it seems that’s what really

sets the office tone.

aldo63:

no changes in comp or fees in a year(this happened daily

at MS),


A teensy exaggeration, perhaps? It’s once a year.



Aldo63:

10.625% of w-2 income in ferris ESOP stock.




How's that stock performing? Miss the discount on MS stock on the ESPP?



Aldo63:

I can deal with who I want to deal with, not just certain

types of accounts.


How's that different? Who could you not deal with?



Aldo63:

I can still open a small account, which could be a future

IRA rollover or inheritance.


Come on, now, MS never stopped you from opening small accounts,

especially when there was an event like the above planned. What you

couldn't do was have small households, and why would you want them?]



Aldo63:

I do not have to read negative press about my company

daily.


Granted, a smaller, lower profile firm is going to get less attention, but

that doesn’t mean zero attention;

Aug 9th, 2006 (very small fine)

link redacted



June 19th, 2006 Two guys indicted, RICO statues involved…

http://www.securities.state.oh.us/Bulletin/documents/BUL062_

000.pdf#search=%22%22FERRIS%2C%20BAKER%20WATTS%22%2B%20fined

%22



Aldo63:

I do not have to defend account fees or policy daily. [/

quote]

I don't know what policies you had a problem with, exactly (not to say

there aren't problem policies anywhere) but the zero account fees is nice.

The funny thing is I never find myself having to defend them.



Aldo63:

The client, broker,firm mentality is the focus.


And that differs in what way?

[quote=Aldo63]And lastly, I was able to stick it to MS. [/quote]

You figure they see it that way?

[quote=Aldo63]Oh and a massive check.[/quote]

I'll bite, just what are seven state regionals paying?

[quote=Aldo63] I was the syndicate cordinator at MS so I get less

syndicate here. (this also can be a positive considering the performance

of the MS deals)


Yeah, the Google they were in on really sucked, eh? Were there specific

deals you were disappointed in? Have you done any of “Blank Check”

offerings?

Oct 2, 2006 12:45 pm

Again, Aldo, I don’t feel a need to defend MS, and I hope you’re happy where you are, there are different stokes for different folks, but I am curious about a couple of things…<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


 


aldo63:

1. I have been exposed to every mutual fund company, not just the preferred list. one example, I never heard of the <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Henderson funds until I got here. Great International fund company. also 1031 real estate exhange funds. if we had this at MS, no one told me


Henderson funds are offered, there's no "preferred list”….


aldo63:
UIT's I can now do all of First Trust and Claymore products also AAM. We were limited to van kampen products and only a few First trust and claymore. (they did not want any competition for MS owned VK)

I’ve done Claymore and First Trust UITs,haven’t heard any wholesalers from them mention that they’re restricted with us,  don’t know anything about AAM.


aldo63:

 


3. Annuities. I am not a big annuity man, but we can do pretty much anyone out there if we get appointed with the annuity company. we were limited to three or four at MS. They are very had to transfer.


There are better than a dozen annuity providers and you wouldn’t need to “transfer”, just do a change of broker and they should appear on your client statements there so long as you have a sales agreement with the carrier.


aldo63:

4. Money market. We can buy the vangaurd money market if we choose to. we have a basic sweep money market that is similar to ms but there are options to buy any mm. Then again MS now does bank deposits that pay 1/2 of the MM rate.



The BD rates is 3.3%, if you know of any MM paying twice that, let me know. The other available MMs are paying 4.5%+. You can, if you like, buy any mutual fund MM, American Funds MM seems popular. OTOH, I use auction rate securities for a better rate still.



aldo63:

What we do not have is Mutual fund Wrap . I never really did them anyway. I do C share funds. We do not have mortgages yet. I farmed a lot of that out at MS to clients in the mortgage business because they did business with me and they got paid more to do it.



I don’t use any fund wrap program either. Do you have SMAs?  Do you have any lending programs at all, aside from mortgages which you mentioned?


 


aldo63:

UMA? do you mean cash mangement account? They have the same thing without the 150 fee.



A UMA is a asset based fee account that lets you combine SMAs, UITs, ETFs, individual stocks, bonds, etc., under a single account number. The cash management account is the AAA, checking, etc., and you say there’s no account fee there for one? That’s pretty unique in the entire business.

Oct 2, 2006 1:40 pm

"I use auction rate securities for a better rate still."  Mike, I assume that you're talking about auction rate preferreds there...$25K min...good rates and 7-day liquidity?

Oct 2, 2006 2:15 pm
Indyone:

"I use auction rate securities for a better rate still."  Mike, I assume that you're talking about auction rate preferreds there...$25K min...good rates and 7-day liquidity?



I usually use the Muni version, issued by the municipalities themselves. Everyday liquidity, maturities from 7 to 180 days. Sometimes the mins are 25K, more often 50k or above. PITA to ticket, but clients love you for it…<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Oct 2, 2006 2:22 pm

1. there was a preferred list for years until they paid a massive fine


2. go to the claymore and first trust pages. you cannot do all the trust on that page. that is a fact


3. I know you need to just do a change of dealer. that is not the point. try doing some pacific life,met life or non hartford, allstate, . you know what i mean


4. that 3.3% is for 500k household and above. 100k account get 1%. i never in my 17 years  at MS was able to buy an american funds money market over the system. as for arp's, they are a good alternative if clients have enough money to do it.



5. no we do not have lending programs. Yes we have SMA accounts. I never did a business loan over there in 17 years. I did try, but they would not loan to construction projects last year. that probably save MS a lot of money.


We can exclude investments from wrap fees but still have to keep the SMA account separate. Can you do that now? they always talked about it but never got around to it.


. Our "AAA" has no account fee but there is a 30 fee for internet access

Oct 2, 2006 2:23 pm

Yes they do...BTW, you make anything on those?  I don't believe I do on this platform, but not sure to be honest...

Oct 2, 2006 2:55 pm

If I recall correctly, a broker gets paid 15 basis points for selling preferred rate auction securities at Morgan Stanley.

Oct 2, 2006 3:12 pm
aldo63:

1. there was a preferred list for years until they paid a massive fine


That was well before you left, one year ago...


aldo63:
go to the claymore and first trust pages. you cannot do all the trust on that page. that is a fact

You could be right about that, although there are dozens of each listed (Claymore and FT) listed on the UIT page. I'll ask a wholesaler next time I see one.


aldo63:
I know you need to just do a change of dealer. that is not the point. try doing some pacific life,met life or non hartford, allstate, . you know what i mean

There's no doubt we (and I doubt anyone else) has sales agreements with everyone. OTOH, we do carry Metlife and at least 9 others besides Hartford and Allstate.


aldo63:
that 3.3% is for 500k household and above. 100k account get 1%. [/qupte]

I didn't know this before I just looked it up to answer your question, but 3.3% is for HH above $100k (below get 1.45%) over 1MM get 4.35.


aldo63:

i never in my 17 years  at MS was able to buy an american funds money market over the system.


I just had an MS account swing to me from Ohio that bought America Funds C shr MM over five years ago.


[quote=aldo63]as for arp's, they are a good alternative if clients have enough money to do it. [/quote]


Agreed, but accounts with less than 20K aren't ones I'm looking for anyway...


[quote=aldo63]We can exclude investments from wrap fees but still have to keep the SMA account separate. Can you do that now? they always talked about it but never got around to it. [/quote]


They can all be lumped into a single account number now.


[quote=aldo63]


. Our "AAA" has no account fee but there is a 30 fee for internet access



No fee for an account with checking and debit card, etc.? That's not a bad deal.

Oct 2, 2006 3:14 pm
dude:

If I recall correctly, a broker gets paid 15 basis points for selling preferred rate auction securities at Morgan Stanley.


Again, I just had to look it up, but that's the correct rate.

Oct 2, 2006 3:15 pm

opps  #3 should say "There's no doubt we DON'T..."

Oct 2, 2006 3:29 pm
mikebutler222:
dude:

If I recall correctly, a broker gets paid 15 basis points for selling preferred rate auction securities at Morgan Stanley.


Again, I just had to look it up, but that's the correct rate.


Thanks guys...I'll have to check for sure, but I know I get no trail on money markets here...it's small change generally, but nice if you can get it...


I guess there has to be some downside to going indy...