Am I just not good at this?
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This is the best thread on the entire board. Even after the bad months scrim is always cheery and upbeat and clearly loves what he does. It’s easy to see why clients enjoy working with him.
[quote=iceco1d] Volt–Wrap accounts vary by firm (not by channel). Some payout 12b-1 fees to reps (mine does). Some firms just pocket them. Other firms rebate them to the client.-Wrap account fees NEVER include the expense ratio of the fund, ETF, CEF, ETF, etc. or whatever the underlying investment is. The “wrap fee” is exclusively the fee charged by the advisor.-Discounting and the prudence of the practice varies. My firm doesn’t allow it, so it doesn’t matter. Most FAs will say not to compete on price (which I agree). But when you are new, and you need the assets, I’d be inclined to say, “whatever it takes.” When you get $50MM under management, you can tell your discounted clients that you are raising their fee (for whatever reason). If they don’t like it, they are free to move. In the meantime, losing a client over 10 or 20 bps doens’t make sense IMO.
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ice - I think volt knew this. But that’s what he tells the prospects.
volt - you have to start telling prospects that you’re going to be charging them over 2%. That way when a smart client figures it out, you won’t have to backpeddle.
Charging more than 1.25% to wrap funds is a rip off… you aren’t doing anything but rebalancing…
Morean was right there is no value on just fundsScrim we’re due for an update.
After all we've seen, I can't help but echo the virtues of VA's, especially for IRA money - money that won't be distriubted in lump sums (more than likely) so guaranteed income basis' which VA's provide are invaluable after seeing cash values plummet this last year.Spiff, aer you talking WRAP fee or SMA platform, or something else? I rarely see MFD wrap programs over 1.5%. I see SMA's in the 2's a lot (mostly from Merrill and the former Smith Barney), but never a fund wrap program. Even the RIA's in my area (they're very small) only charge about 1% to wrap funds. I can only imagine charging over 1.5% if you are using low cost index/etf's and/or doing something unique that provides more value to the client than just due diligence and auto-rebalancing. For example, I think Jones' platform should start at 1.25, and be able to discount to 1% with no haircut. Our program is a pretty typical fund wrap program with a few bells and whistles. Our index/etf platform is pretty cost-effective. It's about 1.50 all-in (without discounting).That’s not actually that high compared to most mutual fund wrap account programs I’ve run into. I’ve spoken with some prospects that said their wrap fee is north of 1.5%. One, who is now a client, said his was 1.75%.
Most that I see are traditional wrap accounts. Mostly funds with some CEFs and maybe some ETFs thrown in for good measure. Most of the time it's 1.5% or more.
I think that if the ONLY thing I was doing for my Advisory Solutions clients was throwing their money into the program and meeting with them the mandatory once a year, then the 1.35% would be way overpriced. In my office the Advisory clients are the ones that I spend the most time with. We spend a lot of time working with them the way an advisor is supposed to. We look beyond the diversification bar chart and into FAST, estate planning, etc. I can't wait to get to the point where I have enough clients in Advisory that I can treat all of my clients that way, without feeling like I don't have the time, because I have to hit a certain production goal this month to pay my bills and keep Jones happy.3rd quarter is over and i’m at 134 and 9.0M
Most of my clients are around 10% below their high water mark in October of 2007 which isn't a bad thing in my opinion. Another valuable lesson learned this quarter when one my perceived best clients transferred her accounts to her other advisor because she said I didn't contact her often enough. The irony is that this is one client I felt I gave much attention to and was by far the client I most often visited in their home. However, perception is reality so lesson learned :) I still have never written a VA and if the past two years haven't swayed my opinion I imagine nothing will. This will be the first year since I started in 2004 where my revenue will decrease year over year. I will be off about 30% but I imagine there are others in my boat. On a more positive note I just acquired Tom Brady and Roy Williams for Larry Fitzgerald and Jason Witten in my fantasy football league. I have won 12 straight regular season games dating back to last year of which I'm quite proud!! scrimI just got a steal yesterday myself.
I got Adrian Peterson, Chester Taylor, & Antwaan Randle-El for Darren McFadden, Reggie Bush & Reggie Wayne[quote=OkieGolfer24]I just got a steal yesterday myself.
I got Adrian Peterson, Chester Taylor, & Antwaan Randle-El for Darren McFadden, Reggie Bush & Reggie Wayne[/quote] Who the hell would do that? They should just quit playing fantasy football...[quote=scrim67]I still have never written a VA and if the past two years haven’t swayed my opinion I imagine nothing will.
[/quote] How come you don't like annuities? I realize over the long term the market will always end up positive, but for those people looking for income soon, a guaranteed living benefit rider wouldn't be something you'd propose to a client? I understand if someone thinks some of the internal fees are high, but I think there are a ton of people out there who still have 25% less money than they did at the beginning of '07 that would love to be able to draw income off of their original investment, not its current value, and wouldn't mind paying a small pittance to have that guarantee. The market always ends up positive in the end, but some people can't afford to wait that long before needing the income. Just my two cents. I'm not a huge advocate for annuities, but if they have a guaranteed income or living benefit rider attached then in the right situation I'll definitely push it.I mainly don’t sell them because they are complex and have too many moving parts. My mantra has always been, if my client can’t fully understand what they are buying I won’t sell it to them. Now, I’m not THE smartest guy in the world however my IQ is above 100 and even I cannot understand much of the mumbo jumbo mirrors and smoke in the contracts.
It just doesn't pass my smell text. scrimHmmm…I’d study up on them. Not saying they are essential for any portfolio, but if I was a client and an annuity was something that would help me accomplish my goals as a complement to a wrap account or SMA strategy I’d be disappointed if it wasn’t at least provided as an option. You appear to be running your practice quite well, but I just thought I’d throw that in there as an idea.
I try and run a clean practice here...VA's in my opinion are too shady. I think there is a better chance ending up in arbitration involving VA's as compared to mutual funds and fixed annuities, CD's etc..
Just my .02 scrim[quote=scrim67]
I try and run a clean practice here...VA's in my opinion are too shady. I think there is a better chance ending up in arbitration involving VA's as compared to mutual funds and fixed annuities, CD's etc..
Just my .02 scrim[/quote][quote=scrim67]
I try and run a clean practice here...VA's in my opinion are too shady. I think there is a better chance ending up in arbitration involving VA's as compared to mutual funds and fixed annuities, CD's etc..
Just my .02 scrim[/quote] I'm still relatively a rookie but VA's have awesome benefits if you used properly. When someone wants a GUARANTEED income stream, a VA would be an awesome tool. For example, Nationwide has a VA that'll give the a client a 10% income rollup (can't remember if it's 10% compounded or simple) for 10 years, then allow them to withdraw 5% guaranteed for life. So for example, a client started with a 100K, ten years later it's at $259,374 with compounded or $200K simple (again, forgot which one they use) and now they can withdraw 5% for life (13K a year or 10K a year). Yes they can seen complicated but have are awesome tools if used properly.[quote=army13A][quote=scrim67]
I try and run a clean practice here...VA's in my opinion are too shady. I think there is a better chance ending up in arbitration involving VA's as compared to mutual funds and fixed annuities, CD's etc..
Just my .02 scrim[/quote] I'm still relatively a rookie but VA's have awesome benefits if you used properly. When someone wants a GUARANTEED income stream, a VA would be an awesome tool. For example, Nationwide has a VA that'll give the a client a 10% income rollup (can't remember if it's 10% compounded or simple) for 10 years, then allow them to withdraw 5% guaranteed for life. So for example, a client started with a 100K, ten years later it's at $259,374 with compounded or $200K simple (again, forgot which one they use) and now they can withdraw 5% for life (13K a year or 10K a year). Yes they can seen complicated but have are awesome tools if used properly. [/quote] I think this is a great topic, and rather than hijack this thread which is great in its own merit I'll start another just to gather other advisors thoughts behind their usage of annuities and those who think they're good or bad.2009 is now behind us thank goodness.
134 for 9.1M My overall revenue was down about 30% YOY. It was the first time in my five years in my practice where I experienced a downturn. Lots of lessons learned in 2009 but just like I tell my clients; If I made it through the past two years I'll make it thru almost anything else!!! Have a great 2010!!! J-E-T-S JETS! JETS! JETS! scrim67I should have clarified.
Everyone's portfolio was up in 2009 but since much of my business was annuitized my YOY shrank between some client's pulling money out and the damage to their portfolios from the year prior. scrimScrim, Thanks for the update. This is definitely the most inspirational thread on this board as you explained first-hand the problems we all have as our careers progress and how you fought through it and came out smelling like roses.
Good luck to you in 2010!