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Feb 25, 2010 6:14 pm

I've got to eat a little crow.  I always thought you guys where full of crap about Jones regional meetings ... when they parade a guy out that got a HUGE head start to talk about his "fast start" and what's working for him.  At my winter meeting a few weeks ago I saw it first hand.  Laughed for days.  

Feb 25, 2010 6:42 pm

I got to see if first hand from day 1.  My former RL inherited a $100mm book 25 years ago.  It's still about $100MM.  You'd think that over 25 years he could at least double a book like that.  I always thought it was funny when he talked about what he did to become successful. 

Feb 25, 2010 7:33 pm
Spaceman Spiff:

I got to see if first hand from day 1.  My former RL inherited a $100mm book 25 years ago.  It's still about $100MM.  You'd think that over 25 years he could at least double a book like that.  I always thought it was funny when he talked about what he did to become successful. 



 
To play Devils Advocate here, you also have to keep in mind that I've seen someone inherit an 80 Million dollar book, and 3 years later now its worth 25 Million. If someone inherits a book and 25 years later they are still greatly successful, they probably deserve it some credit.
Feb 25, 2010 7:40 pm

Has the prodigal son returned?

Feb 25, 2010 9:22 pm

Doesn't take much to manage and grow a big book.  Takes discipline, good organization skills, good management skills.  I suppose if you're a total tool you could fukc it up.  But with $100mm, that is just TOO easy.  You also don't have the secondary worry of feeding your family and hitting your numbers and prospecting (I guess these are primary for most of us).  All you have to worry about is calling your clients and asking how the weather is.

Feb 26, 2010 1:24 am

Hey Volt,

A vet in my region told me about 6 months ago I should go talk to some superstar to "see what was working for him."  I couldn't believe it.

He started with a legacy, got a huge goodknight, and then ended up taking over a very large office because the old FA died.  He's been out 2 years and he has over 400 households.

I asked him what he did to be successful and he said, "I just keep contacting people and asking them for the order.  Just making contacts."

Almost like the two huge legs up didn't have anything to do with it.

Some people.

Feb 26, 2010 3:18 am
Ronnie Dobbs:
Spaceman Spiff:

I got to see if first hand from day 1.  My former RL inherited a $100mm book 25 years ago.  It's still about $100MM.  You'd think that over 25 years he could at least double a book like that.  I always thought it was funny when he talked about what he did to become successful. 



 
To play Devils Advocate here, you also have to keep in mind that I've seen someone inherit an 80 Million dollar book, and 3 years later now its worth 25 Million. If someone inherits a book and 25 years later they are still greatly successful, they probably deserve it some credit.
 
Zero growth for 25 years?  Even considering the last 10 years, that's pathetic.
Feb 26, 2010 3:54 am
Ronnie Dobbs:
Spaceman Spiff:

I got to see if first hand from day 1.  My former RL inherited a $100mm book 25 years ago.  It's still about $100MM.  You'd think that over 25 years he could at least double a book like that.  I always thought it was funny when he talked about what he did to become successful. 



 
To play Devils Advocate here, you also have to keep in mind that I've seen someone inherit an 80 Million dollar book, and 3 years later now its worth 25 Million. If someone inherits a book and 25 years later they are still greatly successful, they probably deserve it some credit.
 
25 years of zero asset growth is not "greatly successful"
Feb 26, 2010 8:14 am
Ron 14:
Ronnie Dobbs:

[quote=Spaceman Spiff]I got to see if first hand from day 1. My former RL inherited a $100mm book 25 years ago. It's still about $100MM. You'd think that over 25 years he could at least double a book like that. I always thought it was funny when he talked about what he did to become successful.



To play Devils Advocate here, you also have to keep in mind that I've seen someone inherit an 80 Million dollar book, and 3 years later now its worth 25 Million. If someone inherits a book and 25 years later they are still greatly successful, they probably deserve it some credit.25 years of zero asset growth is not "greatly successful"





I would say he's not a successful FA; but he is a successful business person (or better, employee). I believe most business executives could take over a $100MM book and keep it alive for 25 years. There's no real rejection or endless prospecting in that job. Just stay on top of financial matters and talk to clients and they will probably stay.



What we can be sure of is that, with those results, if he lost his book - he probably could not build it back.

Feb 26, 2010 9:08 am

One thing I will say about the $100mm book, which there's no way for us to know.....

 
More than likely, it was a typical "Jones" book....$100mm AUM and like 1500 clients.  If this guy was smart, he probably just Goodknighted away all the small accounts over the years, and kept the bigger accounts.  I would much rather have $100mm and 350 clients than $125mm and 1500 clients.
Also, if the book was inherited 25 years ago and had $100mm at the time, it means the original broker was already in business 10-15+ years.  So many clients have been clients for 20-40 years.  So obviously many have died.
Feb 26, 2010 10:18 am

This was exactly the case.  The man he inherited the book from was broker number 10 or 12 with EDJ. 

 
I think he's done an OK job of servicing his clients, keeping them happy, and at least retaining the majority of the assets as the original clients died.  I know he's done three GKNs.  The first two were GKN1's and the third is a super-GKN. 
 
With that said, I would think that if you took over a big book like that just natural growth, especially in the 1990's, would have driven the book up to the $200MM mark or more.  And  he was the only FA in the county for many, many years.  He's lived like a king, but is really just a prince who grew up with a silver spoon in his mouth and was handed the keys to his daddy's kingdom when he died. 
 
The point being, I don't need a guy like that telling me how to go out and doorknock or who I should or shouldn't be looking for as a new FA.    
Feb 26, 2010 12:04 pm

Spiff - That is just the point. I have been with the firm since 2003 so I don't get angry (still a little jealous) when a newbie takes over huge assets...

 
But I absolutely go insane when these same people are paraded as the SuperStars in the region.
 
It is so anti logic but the real vets who have been around for 25 years don't seem to acknowledge it, home office doesn't acknowledge it, the region doesn't acknowledge it, everyone in the firm just ACTS like the FA is a stud, when we all know the reality. I feel like I am taking crazy pills when I hear someone speak about how they built their business when the never actually did.
 
I asked a supervet for advice like a year ago, he pointed me out to a newbie who took over 58 million from his retiring aunt. Never was in the business before, etc. All the things that drive people nuts. This guy was out producing me within 6 months and they want me to seek his advice? Makes me want to be independent.
Feb 26, 2010 12:13 pm

Come on over my brother.

Feb 26, 2010 12:41 pm
Spaceman Spiff:
 
The point being, I don't need a guy like that telling me how to go out and doorknock or who I should or shouldn't be looking for as a new FA.    
 
That I COMPLETELY agree with. I will however say, i've seen some guys take over books and you can learn a bit from some of them. Some of them just know how to run an office and get referrals.
 
Also I think the office you take over makes a big difference. If it's 10 Million or less, it doesn't make a huge impact, Having the office is a mental plus, but you gotta have some skill to do anything with the assets and/or bring in more. Most of the assets in a 10 million or less office have been goodknighted 4 times anyway and aren't usually happy to hear from you.....
Feb 26, 2010 12:42 pm

Is it at all possible that Regional have to stroke the egos of these "studs."  I guess one my get butt hurt if they are a supposed "stud" and Regional parades around someone who made it from scratch (that currently has lower gross/aum than them).

Mar 2, 2010 8:56 am

Ice, right on the money.  At $10 mil, not only do you have warm leads (Albeit probably more than a few disgruntled customers upset that their last guy stopped calling them 5 years ago) but the trails are great.  At $10 mil say 50% are A shares at 25 bps and 30% are C shares at 100 bps, 10% are indy bonds and 10% is cash.  That's $30k a yr in C shares already coming in and $12,500 in A share trails.  Nothin wrong w/having $42,500 already coming in plus $1,000,000 of cash to make calls on. 

Mar 2, 2010 9:58 am

Ice, right on the money.  At $10 mil, not only do you have warm leads (Albeit probably more than a few disgruntled customers upset that their last guy stopped calling them 5 years ago) but the trails are great.  At $10 mil say 50% are A shares at 25 bps and 30% are C shares at 100 bps, 10% are indy bonds and 10% is cash.  That's $30k a yr in C shares already coming in and $12,500 in A share trails.  Nothin wrong w/having $42,500 already coming in plus $1,000,000 of cash to make calls on. 

 
 
At Jones, it would be very unlikely that they have 30% in C shares but the point is still valid. More likely at 10 mill to be 60% A shares , 10 % C shares at most and 20% individual bonds and 10% cash. It is a great start for a person starting out. Here is where you have to watch out because it is a slippery slope, 10 Mil gives you a head start but what I have seen is that people don't prospect and start mining that book and then 1-2 years later are gone because they aren't generating revenue. The Jones office that I left almost 2 years ago put a broker in and he doesn't prospect and won't be with them very much longer because of it...  Word of warning.....

Mar 2, 2010 10:02 am

$10 Mil at Jones would be more like $5-6Mil in A shares(25bps a year), $300K in cash (just sitting there without a snowball's chance of ever really getting invested), some 30 year munis, some financial bonds from our now defunct structured inventory, and some other misc crap that nobody really wants to handle.  You probably have about 150 households.  20 of them are worth having.  50 of them you should just cut checks and send them packing, and the rest are just going to fill your day with whining, complaining, and a sporadic $25k rollover or IRA contribution just to make you think they're worth keeping.  That book might generate $20-25K a year in trails and other stuff, but no way is it going to generate $42K.   
That was my book when I took it over.  Because I thought it was really more of a big deal than it was, I spent a bunch of time working that book rather than building on it.  I'm not complaining, I'm thankful that I didn't have to start from zero working out of my kitchen.  But, I do tell any of my former home office buddies that want to leave the HQ and go into production that they either need to wait for a really nice office of $25mil+ or start from zero.  That $10-15Mil office will make an FA just confident enough that they won't work as hard building it.   That "head start" makes them lazy and over confident.  They forget in about 6 months that they didn't have anything at all to do with building that book.