Building your book for the future

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Jul 2, 2009 12:27 am

My goal has always been to throw myself into Jones for three years and then make a decision to stay or go. However, my dream has always been to start my own firm so as I work to building my book with Jones any pointers on how to structure my business in the event I decide to leave and go at it alone?

Right now here is what I'm doing:

Placing the majority of my IRAs in the fund company's IRA - Not Jones.
Doing as much advisory solutions as possible without fee discounts
Holding off on life ins. (mostly because I have no product knowledge)
Never talk up EDJ processes - they are my own
Not selling EDJ banking services


Anything else or is all of this just damn pointless?

Jul 2, 2009 8:13 am

Stay away from annuities until you're sure you're staying. They won't be moveable for a good 5+ years if you leave after year 3 or so.

Jul 2, 2009 8:23 am
3rdyrp2:

Stay away from annuities until you're sure you're staying. They won't be moveable for a good 5+ years if you leave after year 3 or so.



Does Jones sell VA's exclusive to Jones?  All it's ever taken for us to take over annuities is a signed letter of instruction from the client asking that we be their rep.

Jul 2, 2009 8:24 am

All annuities at EJ? Can you change broker of record?

Jul 2, 2009 8:55 am

Well I stand corrected then.  I'm too used to my company's comical offering of annuities.  Although this fall they are letting us use one more firm, thereby doubling our selection.

Jul 2, 2009 10:20 am
voltmoie:

My goal has always been to throw myself into Jones for three years and then make a decision to stay or go. However, my dream has always been to start my own firm so as I work to building my book with Jones any pointers on how to structure my business in the event I decide to leave and go at it alone?

Right now here is what I'm doing:

Placing the majority of my IRAs in the fund company's IRA - Not Jones.
Doing as much advisory solutions as possible without fee discounts
Holding off on life ins. (mostly because I have no product knowledge)
Never talk up EDJ processes - they are my own
Not selling EDJ banking services


Anything else or is all of this just damn pointless?

 
It's just pointless.  Why would  you work your butt off just to build your little empire at Jones (which in just three years isn't going to be a very big empire, more like a village) then up and move in three years?  People don't like change.  You may not have heard it enough yet, but they don't like their advisors jumping around either.  You may build up a $20 MM book, just to see it shrink to $12-15MM when you leave.  Nothing like throwing a years worth of work out the window because you want to start your own firm. 
 
How are you selling Advisory Solutions without selling the Jones processes?  The whole thing is one big Jones process.  Why are you limiting your clients, unless you are opening really small accounts and then it's a moot point, to only one fund family?  Opening up IRAs at the fund family is fine, as long as you only want to use that one fund family.  But you better make sure it's a good one that can cover everything you need to cover in a portfolio.  Which leaves out American, Lord Abbett, and probably a couple of others. 
 
If you don't want to have people get the EDJ credit card, no sweat.  But MMKT, checkwriting, debit cards, mortgages, etc are all not only good for your branch, but great things to use to create sticky clients.  And if you're transferring those clients from big companies like Merrill or Smith Barney, they had those things there and they like them.  People like convenience and Jones, along with a lot of other places, gives them the ability to have a lot of conveniences. 
 
You may not personally be selling EDJ to your clients, but you better believe Jones is.  Every statement, letter, invitation, commercial, portfolio review, etc just reinforces that they work with you AND EDJ.  Most of them will think of you first, but they will certainly not discount EDJ.  It's a well known, trusted brand and they like that.  And there's nothing you can do to supress that.  And you better know that if you leave there will be a new guy, just like you are now, sitting in your chair within 24 hours calling all those clients that you want to take with you.  He'll be telling them that they're going to be missing out on some wonderful things if they leave EDJ and that he'll give them better service than you ever did.  He'll sell them on staying with EDJ while you're busy figuring out how to set up your new phone lines at your new place. 
 
It's your career, do with it what you wish.  If it were me, I'd not want to put a lot of work in somewhere just to leave in a little while.  Especially if that's what I was planning on the whole time. 
 
Jul 2, 2009 10:37 am

volt -

I have an idea for whichever direction you choose. Do the right thing for each client regardless. In none of your bullet points did you mention what was good for the client. If you focus on what's good or easier down the road for YOU, you're missing the real satisfaction this career can give you regardless of the name on the door.

Jul 2, 2009 10:43 am

Propaganda at its best. Thanks Spiff.  Volt, I won't try to convince you to stay or go, only you can decide what is best for you and your family.  I will say once again, it was the best thing I have ever done.  It't a totally different feeling to be building YOUR business, not someone else's. 

I love all the threats Spffy puts out there.  No one wants to go with you, all you clients love Jones.  You'll spend all your time hooking up phone lines, payroll etc.  They'll have some superstar in your office 10 minutes after you've gone and spewing lies about you.  You should feel lucky to keep 36% of what you produce, blah blah blah.
Let me say this, if you work as you are now and continue to do so, you will be more successful than you can imagine.  Freedom, pride, wealth.  Freedom to come and go, to set your own production goals, set your office up the way you want.  Pride of knowing you are trully working the American dream of true ownership. Pride of knowing every new asset and client that you bring in is because of YOU, not some facade facilitated by the marketing dept in St Louis.  You will build your personal wealth in such an accelerated fashion, it will blow your mind. 
As I've said before, I never believed I could build the wealth I wanted by being an employee for someone else in this industry.  I now know, THE SKY IS THE LIMIT. 
I will hedge all of what I have put here, IF YOU DON"T CONTINUE TO WORK.  I'm living proof that all the threats put out there from Jones has no impact on your success, only you do. Good luck.
Jul 2, 2009 11:10 am

Volt, I would say focus on building your business that way you would for any client, at any firm.  To build it in such a way that "makes it easy to move" seems a little pointless.  After all, are you really going to cpature serious clients by putting them into American Funds or FT IRA's?  Unless you plan on building an American Funds or FT business after Jones (or whatever fund family you choose), why would you do that?  Just because it will be easy to move them?  Hmmmmm.

 
I don't "sell" many of the banking services.  I suggest services that are a good fit for the clients needs - checkwriting, MMKT, debit cards if they want them.  So I don't think you need to utilize all the services to be successful.  But if you are NOT going to sell insurance JUST because you plan on moving, well that's a little short-sighted.  What if the client should have it NOW?
 
Worry about building your business at Jones today.  Worry about moving later.  The business is hard enough to make work without worrying about 3 years from now.  Once you have stabilized your business and "made it", then worry about structuring clients for a move.  In the meantime, do whatever you can to grow your business.
 
FWIW, few people in my area are familiar with Jones.  We have maybe 60 FA's in my region, which covers most of two states.  They have more than that in Spiff's neighborhood.  I do NOT sell Jones as a brand.  The only thing I do is talk about being a private employee-owned partnership vs. the big public corporation.  I can do this because I know that I will never go the wirehouse route (and people like hearing this).  But I NEVER sell Jones.  I don't have all the pictures and plaques and signs, etc.  I DO sell our process for the Advisory services, but I don't make a big deal about it being a "Jones" thing - more of a "we" thing.  I like Jones, but there's no way to know what's going to happen down the road, and my clients are MY clients.  They need to know that if I left, the knucklehead that replaces me can't, well,......replace me.
 
Bottom line, sell yourself, leverage Jones however you can to your advantage, and work for today, and worry about tomorrow, tomorrow.
Jul 2, 2009 12:10 pm

Good post B24...

 
Volt- Clients that are worth keeping will transfer with you. But, what good is building your book if you hate where you are building it?  Figure out where you want to be and how you want to do business and then just do it. If you want this bad enough you will find a way to make it work. Don't let a contract put fear into you and make you miserable for three years. The sooner you find job satisfaction the sooner you will find out how great this industry really is.
Jul 2, 2009 2:47 pm
bspears:

Propaganda at its best. Thanks Spiff.  Volt, I won't try to convince you to stay or go, only you can decide what is best for you and your family.  I will say once again, it was the best thing I have ever done.  It't a totally different feeling to be building YOUR business, not someone else's. 

I love all the threats Spffy puts out there.  No one wants to go with you, all you clients love Jones.  You'll spend all your time hooking up phone lines, payroll etc.  They'll have some superstar in your office 10 minutes after you've gone and spewing lies about you.  You should feel lucky to keep 36% of what you produce, blah blah blah.
Let me say this, if you work as you are now and continue to do so, you will be more successful than you can imagine.  Freedom, pride, wealth.  Freedom to come and go, to set your own production goals, set your office up the way you want.  Pride of knowing you are trully working the American dream of true ownership. Pride of knowing every new asset and client that you bring in is because of YOU, not some facade facilitated by the marketing dept in St Louis.  You will build your personal wealth in such an accelerated fashion, it will blow your mind. 
As I've said before, I never believed I could build the wealth I wanted by being an employee for someone else in this industry.  I now know, THE SKY IS THE LIMIT. 
I will hedge all of what I have put here, IF YOU DON"T CONTINUE TO WORK.  I'm living proof that all the threats put out there from Jones has no impact on your success, only you do. Good luck.

I didn't think I was putting too much propaganda in there.  I could have.  I simply asked some pointed questions to volt to hopefully get him thinking about the futility of working someplace like (insert your favorite regional/wire/bank here) for a few years if what you really want to do is open your own shop.  To me that seems stupid.  If you want to move to Los Angeles from Manhattan, why move to some goober town in Indiana for three years before you move to LA.  It just doesn't make sense.  And everything I said was true.  With the exception of maybe the guy sitting in his chair within 24 hours after he leaves.  They might assign his office to an OIT or a PASS Program guy to start making phone calls ASAP.   Whichever way it will be a mad dash to see who can keep the client - Jones or volt.  He'll win some and he'll lose some.
 
If I were in his shoes, I'd leave today.  He'll make more money if he were to find a local LPL guy to be his OSJ, and just run things the way he is now with an eye towards his own shop ASAP.  The only reason I might consider staying is for the guaranteed salary and the bonus possibilities.  But if you're any good at your job, then the salary is a moot point and the bonus money won't make up for a bigger payout. 
 
You'll notice I didn't tell him Jones was the best place ever.  It is, BTW.  (That's a joke, don't get your panties in a wad.)  And you put more "threats" out there than I did.  He will lose assets.  As far as I know there hasn't been a guy who has left Jones who took 100% of his book with him.  As for the American dream...that dream comes in lots of different varieties.  Make it happen so it makes you happy. 
Jul 2, 2009 8:13 pm
Spaceman Spiff:
 
It's just pointless.  Why would  you work your butt off just to build your little empire at Jones (which in just three years isn't going to be a very big empire, more like a village) then up and move in three years?  People don't like change.  You may not have heard it enough yet, but they don't like their advisors jumping around either.  You may build up a $20 MM book, just to see it shrink to $12-15MM when you leave.  Nothing like throwing a years worth of work out the window because you want to start your own firm.

For the most part the 8 million I'd lose I've already been paid on since we pump A shares like a coke dealer.  What's the net loss except for a nifty number I can brag about?

 
How are you selling Advisory Solutions without selling the Jones processes?  The whole thing is one big Jones process.  Why are you limiting your clients, unless you are opening really small accounts and then it's a moot point, to only one fund family?  Opening up IRAs at the fund family is fine, as long as you only want to use that one fund family.  But you better make sure it's a good one that can cover everything you need to cover in a portfolio.  Which leaves out American, Lord Abbett, and probably a couple of others.

Mr. Client, you can choose to invest with ME two ways:

1. Commission based  .. I go over the pros / cons

I close with: Commission based does not mean we will never change and one of the biggest questions people have when working with a advisor is "is he recommending this idea because it will make him money or me"  The next option takes that question out of the equation.  It's a fee based account.

2. Advisory Solutions .. I go over the pros / cons 

EDJ does not even come into the conversation.  Why should it?  If they lose money who are they going to call?  As for IRA - Under 50k they get pushed into Franklin.  The IRA fee is less and their performance seems good enough.  As I grow my business I'll learn about other companies.

 
If you don't want to have people get the EDJ credit card, no sweat.  But MMKT, checkwriting, debit cards, mortgages, etc are all not only good for your branch, but great things to use to create sticky clients.  And if you're transferring those clients from big companies like Merrill or Smith Barney, they had those things there and they like them.  People like convenience and Jones, along with a lot of other places, gives them the ability to have a lot of conveniences. 
 
You may not personally be selling EDJ to your clients, but you better believe Jones is.  Every statement, letter, invitation, commercial, portfolio review, etc just reinforces that they work with you AND EDJ.  Most of them will think of you first, but they will certainly not discount EDJ.  It's a well known, trusted brand and they like that.  And there's nothing you can do to supress that.  And you better know that if you leave there will be a new guy, just like you are now, sitting in your chair within 24 hours calling all those clients that you want to take with you.  He'll be telling them that they're going to be missing out on some wonderful things if they leave EDJ and that he'll give them better service than you ever did.  He'll sell them on staying with EDJ while you're busy figuring out how to set up your new phone lines at your new place.

I think you are selling yourself short - they are your clients.  Jones is the platform by which you serve them.  As for a guy jumping into my seat .. Maybe, maybe not but who cares.  My biggest clients will be locked and loaded well before.  If I ever leave rest assured my ducks will be in a row.

 
It's your career, do with it what you wish.  If it were me, I'd not want to put a lot of work in somewhere just to leave in a little while.  Especially if that's what I was planning on the whole time.

Not planning to leave but I want to be a true business owner.  Leave something to my kids, family.  EDJ is a starting point - maybe it will suck me in, maybe not but I'm not going to limit myself to one place.

I have and will always act in the best interest of my clients.  I think this can be achived while keeping in mind I might have to move them to a place I can serve them better at some point.

 
Jul 3, 2009 8:55 am
iceco1d:

Volt, what's your LOS?



Forgive me but what's LOS?

Jul 3, 2009 9:14 am

Length of service

Jul 3, 2009 9:18 am

lol .. I've been selling 10 - 15 weeks now.  Please call me a vet. 

Jul 3, 2009 9:33 am

ICE, there is really nothing proprietary or non-portable at Jones.  Not sure how insurance works, but we use major carriers.  There may be an issue with annuities inside IRA's - not sure.  Besides that, can't you just do a  B/D change?

Jul 3, 2009 11:48 am

As someone who has left EDJ, it really doesn't matter what you use. Like B24 said, sell yourself and not the firm and people will come with you.



I had two accounts that I expected to come with me not come with me. I had two accounts that I didn't expect to come, come with me.



ACAT should be easy. Volt - when you get close (in a few years) PM me and I'll try to help. Just keep making sure that they are volt's clients.



Spiff, I think it is perfectly valid for him to work some place with the intention of leaving. You have to gain your experience somewhere. And if he's making a living, Jones is getting their money out of him.

Jul 3, 2009 12:00 pm

I don't completely disagree.  Like I said, if it is a salary/bonus issue, then maybe it makes sense.  If that's not it, then am I wrong in thinking the payout on the gross would be better at an indy firm? 

 
I guess I've just never understood the mindset of going into something knowing you are going to be leaving.  It's not like a corporate job where you just move your crap from one cube to another. 
 
volt - do what makes you happy.  Jones is a great place to be.  I hear indy world is also. 
Jul 3, 2009 6:37 pm

Take really good care of your clients, treat each one of the, as thought hey were your only client, and make sure they know you will always put their interests ahead of your own.

If you do that, your move may be stressful (they always are), but it will be bulletproof, and no matter how much your clients dont like change, they will be your clients no matter where you go. Its that simple!
Jul 3, 2009 7:00 pm
Spaceman Spiff:

I don't completely disagree.  Like I said, if it is a salary/bonus issue, then maybe it makes sense.  If that's not it, then am I wrong in thinking the payout on the gross would be better at an indy firm? 

 
I guess I've just never understood the mindset of going into something knowing you are going to be leaving.  It's not like a corporate job where you just move your crap from one cube to another. 
 
volt - do what makes you happy.  Jones is a great place to be.  I hear indy world is also. 



Spiff, I kinda agree with you. After all, Jones got us into the business, trained us, gave us an office -- I think you owe them some kind of loyalty back. At least try to make it work with Jones first.
On the other hand, in this country today we see that corporations don't take care of their employees (I've had clients work 20 years someplace and then get axed by some asshat so the company's bottom line could look good next quarter), so we should think of ourselves first and game the system.