Teams VS Individual

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Oct 17, 2007 2:42 am

I just posed this question to Indyone as a PM but after thinking it through I would like to hear what everyone has to say on the subject.  We have all read the stats in Finanical Planning magazine or whatever about what the top Rainmakers do in revenue and at what firm.  For a long term career in this business though is it better to be part of a team ala wirehouse style.  Or can the super individual really do it all and then go Indy with his book.  As a indy currently who is under a two person team and enjoys a great payout becasue of it I am curious about this topic.  After all the white shoe firms aka Goldman, Lehman almost always operate in teams to my knowledge.  So lets get some threads going gentleman.

 
 
DDP
Oct 17, 2007 8:38 am

at jones, we are all solo. I am curious: what are the pros/cons of teams? How do you operate & split revenue etc?  

Oct 17, 2007 9:00 am
I'm in a wirehouse and in the process of teaming up with someone.  We're still in the initial phase of determining if we're a good fit together.  In my mind, the pros are that some clients like it when you're on a team, you can be out of the office more often and someone will be there to cover, and often times a team will be more productive than the individual advisors were.  The biggest producers in my branch are all on teams, and by that I mean their split of the team's gross is more than any solo advisors in the office.
 
The cons, and I've seen this in my own branch, are that if you want to leave the team, it gets really ugly.  Also, sometimes people don't pull their own weight on a team.  I saw a team "demote" a senior team member down to a salaried position because he wasn't bringing in any clients.
 
Revenue splits are determined by the individual team and agreed to up front.  Most teams have signed agreements for this, but I know a few teams who don't, but they trust each other entirely.  The split can be any way the team wants, 50/50, 60/40, 40/40/20, etc.
 
newnew:

at jones, we are all solo. I am curious: what are the pros/cons of teams? How do you operate & split revenue etc?  

Oct 17, 2007 7:17 pm

thanks

Oct 18, 2007 5:29 pm

I recently joined a team and I think it is beneficial to all parties involved as long as all of the team members have the same goals and work habits.  With the expanded list of products available, it is impossible to be very knowledgable in all areas.  "It is better to be a master of ONE trade than a Jack of all trades!" that is my point of view and being on a team allows the team to have experts in certain areas.  The biggest problem I am having right now is defining my role and responsibilities and trying to figure out how get the most out of everybody, to get more from the sum of all parts than the individual parts themselves.  Alot of times senior members get "stuck in their ways" and I think joining a team can create a spark and be beneficial to everyone.  Starting out as a rookie is hard enough, so all the support one can get can be nothing but a bonus!  Just my two cents

Oct 18, 2007 8:02 pm

what areas?--like someone only does CPA stuff? or more like one person is the stock or annuity guy

Oct 19, 2007 11:49 am

More like, one partner can focus on retirement and estate planning, while another focuses on small business solutions and insurance products.   Having a relationship or a "strategic partnership" with a CPA and/or an attorney is a little different.

 
I'm also in the process of figuring out a teaming relationship with a more senior advisor.  For me, this is beneficial becaue I get help bringing in clients, and the ability to say "I'm on a team that has over 20 years of experience" when people feel uneasy with my lack of experience.  For him, this means someone to cover for him when he's out of the office so that his clients have another advisor to talk to, rather than an assistant, as well as getting partial credit for my net new households which helps his book.  The split we've been talking about is 70/30, since it doesn't apply to any previous clients of his, and is mainly for him helping me build my book.
 
Anyone else in a different arrangement? Thoughts on details to discuss before you enter into the partnership that one may overlook? (ie. obviously discuss split and responsibilities and put them in writing, but anything you experienced along the way and thought 'should have worked this out earlier")
Oct 19, 2007 1:41 pm

Some excellent points have been made here and I don't really disagree with any of them.  The biggest issue for me when I considered such an arrangement was the possibility of a very ulgy divorce if things didn't work out.  Also, if I wanted to leave and a partner didn't, I would think that my partner's retention rate would be high unless he/she was an asshole.  Clients have naturally high inertia and if they are familiar with other team members and are assured that nothing will change because I am leaving, that will make all but the most loyal client think twice about jumping with a defector.

 
For that reason, firms LOVE partnerships and teams.  They are a very effective employee (and client) retention tool and they really cost the firm nothing.  It sure beats paying 100-200% of trailing twelve.  As I told DDP in my PM, probably the biggest concern my clients have with me right now, is what happens if something happens to me.  For that reason, I will hire two more series seven staffers in the next five years.  They will be employees for awhile.  If everything goes well, someday, I may offer partnership.  Obviously, a team approach alleviates client concerns about what happens if I'm out of the picture.
 
If you intend to enter a partnership or join a team, you'd better be happy with your firm and the people you work with and hope and pray that doesn't change.
Oct 20, 2007 4:05 am

Can anyone explain to me the idea of being on a team from a rookie view?  Perhaps I should be posting this topic in the rookies board if it is more appropriate.  But my situation is that I am in a wirehouse environment where it seems that a majority of producers are on teams than solo. 

 
I read on here that for a rookie it would be great to learn the business and have senior advisors back you up.  I absolutely see the value, but my problem is that no one ever talks about how you get invited on the team.  Do I have to "prove" myself first, get noticed, and then the tap on the shoulder for the invite comes afterwards?  Or should I be a suck up and kissass like this other younger guy in my office who schmoozes with the older guys on a regular basis? (he's buddy buddy w/ one senior FA already and handling some of his accts)
 
So far in my infant stages of my career at this reputable wirehouse, people have noticed that I put in the hours.  I am there at 6:30AM and Im the last one there ALL the time.  Almost 95% of the office is out by 4:00pm and I am there until 7 or 8pm dialing my butt off (I have no network.) 
 
So how would you guys go about trying to get the invite with a senior FA?  Obviously I am not a horrible communicator which is why I have made it this far, but the demographics in this branch is so different from the chop shop that I was at before that I don't really connect with too many people.  Median age is 55 or so and I am in my late twenties.  Not too much common ground and I hate sucking up.  I don't mind rolling up my sleeves and being blue collar, but I can't stand that one rook who by the way has NO real life work experience.  This is his first job and he is just a smooth talker plus kissass.  I need help!
Oct 22, 2007 11:33 am

Young Gun,

in my situation I was brought on as team member from the date of hire, which from what I have heard is becoming very common these days at the wires.  In your situation I would keep doing what you are doing and not worrying about "buddying up with a senior" until a couple of years, once you get established and show your work ethic, at that point they will be coming to you to team up, rather than you going to them. Which is good, you just have to be careful of the motives of anyone wanting to team up and make sure it is beneficial to both of you.  From what I have heard, it is not uncommon for a senior advisor to ignore an rookie for a couple of years, see him producing and then try to be his best friend all of a sudden when it looks like it could be beneficial to themsleves, gotta make sure you are aware of what you are getting in to, 
just my thoughts from my brief experience, mooose
Oct 22, 2007 2:13 pm

I formed a team 3 1/2 years ago after being in the business for about 7 years.  It has worked exceptionally well.  At the time, I had about 35% of our combined assets and T12 production and so that is the split we started with.  I wrote a contract that specified how we would split assets if either of us wanted out and what would cause my split% to increase.  My parter is much better at getting new clients and dealing with older clients than I am and so that is what he does.  I am much better at servicing existing clients and keeping them happy so that is what I do.  Our clients like the team idea and each of us is doing more of what we like and less of what we dislike about the business.  Its not for everyone, but it has worked well for me.

Oct 30, 2007 11:39 pm
young_gun:

Can anyone explain to me the idea of being on a team from a rookie view?  Perhaps I should be posting this topic in the rookies board if it is more appropriate.  But my situation is that I am in a wirehouse environment where it seems that a majority of producers are on teams than solo. 

 
I read on here that for a rookie it would be great to learn the business and have senior advisors back you up.  I absolutely see the value, but my problem is that no one ever talks about how you get invited on the team.  Do I have to "prove" myself first, get noticed, and then the tap on the shoulder for the invite comes afterwards?  Or should I be a suck up and kissass like this other younger guy in my office who schmoozes with the older guys on a regular basis? (he's buddy buddy w/ one senior FA already and handling some of his accts)
 
So far in my infant stages of my career at this reputable wirehouse, people have noticed that I put in the hours.  I am there at 6:30AM and Im the last one there ALL the time.  Almost 95% of the office is out by 4:00pm and I am there until 7 or 8pm dialing my butt off (I have no network.) 
 
So how would you guys go about trying to get the invite with a senior FA?  Obviously I am not a horrible communicator which is why I have made it this far, but the demographics in this branch is so different from the chop shop that I was at before that I don't really connect with too many people.  Median age is 55 or so and I am in my late twenties.  Not too much common ground and I hate sucking up.  I don't mind rolling up my sleeves and being blue collar, but I can't stand that one rook who by the way has NO real life work experience.  This is his first job and he is just a smooth talker plus kissass.  I need help!
 
Unless someone is activly looking or being encouraged to bring in a junior team member - it's going to be tuff getting an invite.  You may be better off letting the older advisors know that you are interested without applying any pressure and they'll let you know their stance.
 
When I started there was a rook who had a rather wealthy family but was lazy as hell who joined a 3 person team doing well over $1mm in gdc.  He lasted about a year and the partners canned him after getting all of his family dough.  So don't be discouraged if others get asked and you don't.
 
For me, after two years I joined a team with two other advisors and it was a train wreck.  Within 1 year I was outproducing both of them and only getting 1/3 of the net.  I let this go another 12 months expecting them to notice what was going on and eventually had to leave on go back solo.  So if you plan on continuing your work ethic for years I'm not sure I'd even suggest a partnership.
 
Good luck nonetheless.