Product Mix

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Nov 25, 2008 2:19 pm

I see plenty of arguments on the board about various products and what not.  While I agree no (almost no) product is inherently bad, I believe anyone with a business model where 1 product makes up 90% of their business is likely doing something wrong.  I don't buy for a second this person prospects for people and waits until he or she finds a truly suitable fit.  I am curious as to some posters product mix.

 
mine:
20% insurance-term, ltc, whole life, gaul, di, fixed annuity
20% funds/uits/etfs
55% fee based-both broker platform and outside money managers
5% equities/bonds
Nov 25, 2008 2:48 pm

100% insurance products. 

Nov 25, 2008 3:31 pm

45% Mutual Funds


45% Annuities
 
10% Life Insurance
 
Just a comment, the two biggest producers that I personally know only do one thing.  One guy does 100% managed money and grosses about $3 million.  The other guy only does business with American Funds grosses about $900,000.  Neither of them do any type of planning, they simply gather assets.  What's my point?  I guess I don't really have one. I simply wanted to share that with the board.
Nov 25, 2008 3:59 pm
Mike Damone:

45% Mutual Funds

45% Annuities
 
10% Life Insurance
 
Just a comment, the two biggest producers that I personally know only do one thing.  One guy does 100% managed money and grosses about $3 million.  The other guy only does business with American Funds grosses about $900,000.  Neither of them do any type of planning, they simply gather assets.  What's my point?  I guess I don't really have one. I simply wanted to share that with the board.



That's why I only do one thing. Because it works better than trying to do everything.

Nov 25, 2008 5:43 pm
The world belongs to asset gatherers and specialists.
I guess I am an opportunistic asset gatherer, like most new people at EJ. I shake the tree and hope something falls out.
The insurance-annuity-estate planning model seems to me to be a great niche if you have the knowledge and gravitas to do it.
Guys I know who just do fixed income seem pretty happy doing that.
Like probably a lot of us, secretly I would like to be a stock picker/portfolio guy, but I only know a couple of guys who do that and they want off that hamster wheel.
 
 
 
Nov 25, 2008 5:49 pm

Horse:

 
Of those percentages regarding funds/uits/etfs and equities are those held outside of the fee based platform(not including outside money managers)
Nov 25, 2008 5:50 pm

My least favorite aspect of this business is stock picking. I just don't believe that I, or in-house analysts, can out-pick professional money managers. And I've about decided that professional money managers will usually deliver sub-par performance when compared to their respective benchmarks.

 
I'd love to do only fixed income, but what do you do when you get a 401(k) rollover? Build a portfolio of bonds? Is that feasible for someone who may live another 35 years?
Nov 25, 2008 5:55 pm
Borker Boy:

My least favorite aspect of this business is stock picking. I just don't believe that I, or in-house analysts, can out-pick professional money managers. And I've about decided that professional money managers will usually deliver sub-par performance when compared to their respective benchmarks.

 
I'd love to do only fixed income, but what do you do when you get a 401(k) rollover? Build a portfolio of bonds? Is that feasible for someone who may live another 35 years?



What you do is only take fixed income clients.

Nov 25, 2008 5:58 pm
Hank Moody:
Borker Boy:
 
I'd love to do only fixed income, but what do you do when you get a 401(k) rollover? Build a portfolio of bonds? Is that feasible for someone who may live another 35 years?



What you do is only take fixed income clients.

 
 That's funny.
Nov 26, 2008 7:57 am

Hank,

 
Since most of the folks I meet with are looking for my advice on what product mix they should use, would you recommend I prospect for purely fixed income clients, or instead focus on convincing everyone I come in contact with that my fixed income product is perfect for them, regardless of their age, risk tolerance, objectives, etc?
Nov 26, 2008 8:27 am
Borker Boy:

Hank,

 
Since most of the folks I meet with are looking for my advice on what product mix they should use, would you recommend I prospect for purely fixed income clients, or instead focus on convincing everyone I come in contact with that my fixed income product is perfect for them, regardless of their age, risk tolerance, objectives, etc?




I would suggest that you position yourself as the go-to guy for fixed income. If you hold your ground with laser focus, you will attract fixed income business. Some people want all of their money in fixed income and some want just a portion. Both of them would make good clients.

Nov 26, 2008 9:05 am

Product Mix:

 
20% Insurance(VAs,Life,LTC)
25% Alternative Investments (Private Reits etc.)
15% Equities(Select # individual stocks)
25% UITS
15% Mutal Funds
Nov 26, 2008 10:45 am

squash-who do you feel comfortable with on the reit side? my b/d has a ton, but i only feel comfortable at this point with wells and inland. have done next to nothing with either, but need to start and am just gun shy a bit.

Nov 26, 2008 11:26 am
Mike Damone:

45% Mutual Funds


45% Annuities
 
10% Life Insurance
 
Just a comment, the two biggest producers that I personally know only do one thing.  One guy does 100% managed money and grosses about $3 million.  The other guy only does business with American Funds grosses about $900,000.  Neither of them do any type of planning, they simply gather assets.  What's my point?  I guess I don't really have one. I simply wanted to share that with the board.
 
Mike, I think that is probably common in this industry among top producers.  They focus on one thing and do it very well.  Now, that "one thing" may be total wealth management for wealthy individuals, financial planning, or gathering as many assets as humanly possible, whatever.  But I have met very few top producers that are sort of jack-of-all-trades, blowing in the wind.  Even the big producers I know at Jones have their focus.  Most are either estate planning experts, financial planning experts, or the "gather as many assets as humanly possible" guys.
Nov 26, 2008 11:35 am

I used Inland(as does the rest of the world) and KBS(a little different strategy). I like both because they are private(no real market fluctuation) and they pay a decent dividend around 6%(monthly pay).  Plus the new offerings are relatively new and still adding assets, so they are picking up great deals on commercial real estate right now..

Nov 26, 2008 3:02 pm

B24,

 
What do you mean by "estate planning experts?" At Jones, estate planning is just a fancy term for selling people insurance.
 
Is there something I'm missing?
Nov 26, 2008 3:37 pm

Borker, that's because the insurance wholesalers that meet with you are taught to come down to your level.  You are viewing this from the eyes of a newbie.

 
There are estate planning experts, which are not the regular insurance wholesalers, that focus exclusively on advanced wealth transfer and estate planning techniques.  But insurance is just one part of it.
 
I'm not going to get into a pissing match about estate planning, but I am referring to advisors that align themselves with the top estate planning attorneys in their area.  When someone has a complex estate that needs to be managed, they are called upon.  Whether it be how to leverage assets into death benefits, avoid various estate taxes (income, transfer, gift, etc.), equalize inheritances among siblings where a family business is involved, develop and implement business succession planning strategies, protect adult children of previous marriages, protect adult children with slimy spouses, develop complex gifting strategies to avoid taxes and fulfill charitable wishes, creative IRA conversion strategies, timing and order of withdrawals among types of accounts (qualified, NQ, etc.), whatever.  These all involve cooperation among CPA's, financial advisors, and attorneys.  Sometimes, it means having enough knowledge and experience to know how to lead your clients down the right paths, and to the right experts (CPA, attorney, etc.).
 
Borker, if you spent more time researching these things, and less time with your whiny little head in the sand, you might have a clue.  Just because nobody in your area focuses on this does not mean it does not exist.  It requires a great deal of education and generally, years of experience.  This happens to be an area I am continuing to focus on.  Though I cannot yet claim to be an expert, ten years from now I will be known as one in my area.  It has nothing to do with Jones.  It has to do with me, or you, or whoever wants to focus on it just doing it.
Nov 26, 2008 3:42 pm

You start talking this upiddy stuff and the GP's will knock your ass back in line, B24. 

Nov 26, 2008 4:46 pm

All right, all right.

 
You have an estate problem?  American Funds.
 
Want to gross up your estate?  American Funds.  I never have to worry about it.
 
Want to convert your IRA to a ROTH?  Let's use American Funds.  Ever hear of Multiple...Portfolio....Counselors?  Yeah, well American's been doing it for 176 years.
 
Need Income? (screeeeeeech)  A nice.....30 year......syndicate.  Pays 6.75%!!!!
 
C'mon, I'm just sick of listening to Borker whine like a b1tch.  He has some serious issues. 
Nov 26, 2008 4:52 pm

30 year....wtf are you doing?