EDJ vs Insurance?

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Mar 17, 2008 3:17 pm

I am a college student graduating in may and I have recently accepted a position with EDJ. Since I have accepted the offer I have had other offers from places like Shelter Insurance and American Family Insurance. I was just curious if anyone had any thoughts on the differences among the 3 companies. Income potential also varies, which is understandable. Any advice/thoughts would be appreciated. Thanks.

Mar 17, 2008 3:19 pm

you wanna sell p&c insurance or investments?  shelter/am fam are not even close to a firm like jones if you want to do investments.

Mar 17, 2008 3:48 pm

Well, that is kind of a toss up. I currently work at a bank and I have been follow the market very closely. With things such as numerous "emergency" cuts and Bear Stearns, I didn't know if a financial advisor role would be the best spot to get in as a newbie. Investments are a great thing to work with and it is an area I enjoy, but who knows what will happen in the next 3-6 months even.

 
The same thing could be said about insurance as well. I am under the impression that both roles are that of selling yourself first and product second. That could be wrong. I am motivated where I am going to put in whatever to do well, but I just want to make sure I also choose the area that is best.
Mar 17, 2008 3:55 pm

I think a tough market is the best time for a new broker to start.  You can look at their portfolio that isn't doing well and say, "Isn't it time for a change?"  Its dirty pool, but it is effective.

Mar 17, 2008 7:53 pm

current market conditions? who cares! what matters is: what do you want to do for many years? P/C insurance is all about PRICE, no matter what they tell you at AmfAm. Boring!

Mar 18, 2008 7:52 am

Where is it that you want to work?  Have you aggressively tried to get a job there?

Mar 18, 2008 7:59 am

I want to work in the St. Louis area. As far as what specific job I do it is up in the air. I feel that there would be more money with the role of an FA, but the likelihood of success also goes down. I am not afraid to fail so I am leaning towards sticking with EJ, but I have heard if you have a back up plan then at the first sign of trouble you will go with it.

 
I did aggressively try to get a job with EJ. I also may be soon interviewing with ML. Both positions are very good spots to be in coming out of college. I didn't try very hard to get on with American Family or Shelter, however both have recruited fairly hard. I guess I should just stop whining and pick a place, but I am just trying to be as sure as possible.
 
Thank you all for your help!!
Mar 18, 2008 9:05 am

I would go with EDJ or ML before I would go with those other two.  But I would caution you about having rose colored glasses and working for Jones in STL.  There are lots of offices there already (like one on every corner).  Unless you are taking over a sizable office, I wouldn't want to build a practice there.  In my area, you're talking one office in one out of maybe every 4 or 5 towns.  Big difference.

Mar 18, 2008 9:49 am
Golf_101:

I want to work in the St. Louis area. As far as what specific job I do it is up in the air. I feel that there would be more money with the role of an FA, but the likelihood of success also goes down.


You're going to make a career decision based on what you feel?  Or is there some specific data that has led you to that conclusion?

Mar 18, 2008 11:02 am

As far as specific data goes:


From what I have gathered. Edward Jones takes 1/10 applicants. Of that, 20% make it passed 2 years (could have been 3 I don't remember). First year training is 20K salaray. Average rep makes 45-55K during their first year when they are selling. Obviously there are some higher and some lowers. I have heard of everything from 100k to 2mil+ annual earnings. Both FAs that I personally know both make 150-175K. Neither would give me a specific, but that was what they said a branch their size could expect.
 
As far as insurance I have 3 family friends who all make between 120-150. They are experienced and have good businesses, however they will never increase those numbers. These are just three circumstances that I know about, I'm sure they are different for others. One of the insurance companies offered a two year salary of 26,000+com. After that I would take over an established branch. This would be must more "for sure" money, but then again it wouldn't be relationships that I earned.
 
I guess I'm just confused. Both are good opportunities.
Mar 18, 2008 4:37 pm

Would it be better for a young guy right out of college such as himself to start at EJ or ML, if he had such options?  I know it depends on a million factors but I'm talking in GENERAL.

I hear on this board how difficult it is to start out all the time and that it depends on the individual and not the firm, BUT as new people we know nothing!  We hear about lack of sophistication/products at Jones, but we don't get specifics on how that all plays out. 

I hear so much jones bashing on this board it is sometimes discouraging.  At the same time I hear on the board that it is a great place to start with THE BEST training.

Guys/gals with more than one year in the biz: If you were to do it over today, where would you start?  Past mistakes and experiences are the best we newbies can learn.

Mar 31, 2008 1:06 am

I graduated college about 2 years ago and your questions and concerns sound identical to mine. I was almost certain I would choose the FA route but I chose insurance. This wasn't all by choice, I just had a contact on the insurance side and didn't get any response for FA positions I had applied for. The company I work for also offers some investments (mutual funds, IRA's, ect.) We use P/C insurance to gain clients and then cross sell the investment products. It's not a bad sales process. It is difficult to gain trust with clients when you are young. After I provide home and auto insurance to a client and they get to know me, I have a better chance of also providing investment advice. With that being said, I'm still not sure if I will stay in insurance or take a FA position. I may have a chance to get in with EJ's new PASS program. It's a tough decision, I know exactly where you're coming from. I could talk about this topic for days but will save some for further posts. 

Mar 31, 2008 1:16 am
newnew:

current market conditions? who cares! what matters is: what do you want to do for many years? P/C insurance is all about PRICE, no matter what they tell you at AmfAm. Boring!

 
As someone who sells insurance I can't argue with you there. The "price" factor can be frustrating at times. You get a lot of people who only look at the bottom line and don't realize that the product can be very different from one policy to the next. It's kind of ironic, most people in insurance, such as myself, never thought that they would ever be in the industry. If my firm didn't offer investment products, I would have never taken the position.
Mar 31, 2008 8:28 am

Financial advising and selling property and casualty insurance are two very different careers.  We might as be talking about whether you should be a carpenter or a copier salesman.

 
On the other hand, if someone is talking about working at ML vs. Eddie Jones vs. New York Life, it is all the same career with, typically, just a different way to go about doing the job.
Mar 31, 2008 9:48 am
Broker24:

I would go with EDJ or ML before I would go with those other two.  But I would caution you about having rose colored glasses and working for Jones in STL.  There are lots of offices there already (like one on every corner).  Unless you are taking over a sizable office, I wouldn't want to build a practice there.  In my area, you're talking one office in one out of maybe every 4 or 5 towns.  Big difference.

 
I'm in the St. Louis area.   It is definitely not the easiest thing to start an office from scratch in the STL area.  At the same time, you probably won't be starting an office from scratch.  Goodknight programs, sunset plans, open offices, etc all pop up while you are studying and soon after your CSD and could potentially get offered to a new FA working hard and hitting his goals.  The possibilities of getting an offer like that in an area with hundreds of successful FAs is greater than if you were in an area like B24's with one or two guys within half an hour.  It might come up, but you may end up moving somewhere that you really don't want to live. 
 
PM me if you want to talk about it more.
 
 
Mar 31, 2008 9:26 pm
anonymous:

Financial advising and selling property and casualty insurance are two very different careers.  We might as be talking about whether you should be a carpenter or a copier salesman.

 
On the other hand, if someone is talking about working at ML vs. Eddie Jones vs. New York Life, it is all the same career with, typically, just a different way to go about doing the job.
 
I would agree with that to some extent. It really depends on the insurance company that you work for. If you are talking about a company like State Farm (large P/C books), I can see where you are coming from. However, there are many companies out there that are building books of business that have a pretty good balance of insurance and investment products. I think what happened is the insurance companies wanted to get their hands in the investment cookie jar because they saw how lucrative the business can be. Has anyone else noticed the number of companies that have recently changed their name from "Jimmy and Joe's Insurance" to "Jimmy and Joe's Financial." That is just my opinion. Would you agree?
Mar 31, 2008 9:35 pm
stl.rep:
anonymous:

Financial advising and selling property and casualty insurance are two very different careers.  We might as be talking about whether you should be a carpenter or a copier salesman.

 
On the other hand, if someone is talking about working at ML vs. Eddie Jones vs. New York Life, it is all the same career with, typically, just a different way to go about doing the job.
 
I would agree with that to some extent. It really depends on the insurance company that you work for. If you are talking about a company like State Farm (large P/C books), I can see where you are coming from. However, there are many companies out there that are building books of business that have a pretty good balance of insurance and investment products. I think what happened is the insurance companies wanted to get their hands in the investment cookie jar because they saw how lucrative the business can be. Has anyone else noticed the number of companies that have recently changed their name from "Jimmy and Joe's Insurance" to "Jimmy and Joe's Financial." That is just my opinion. Would you agree?
 
I for one would disagree.  Top insurance producers make much more than top investment producers.  Being able to offer both, for most advisors, is allowing another revenue stream into the firm.  What's interesting though, is after all the increased regulation in the securities world, alot of the old mutuals are de-emphasizing their B/D side.   It's funny though, I seem to get alot of AUM as an insurance-based rep just by being there.  However, I have never heard of a client or prospect going to their investment rep with questions on insurance. 
Mar 31, 2008 10:47 pm
iceco1d:
deekay:
stl.rep:
anonymous:

Financial advising and selling property and casualty insurance are two very different careers.  We might as be talking about whether you should be a carpenter or a copier salesman.

 
On the other hand, if someone is talking about working at ML vs. Eddie Jones vs. New York Life, it is all the same career with, typically, just a different way to go about doing the job.
 
I would agree with that to some extent. It really depends on the insurance company that you work for. If you are talking about a company like State Farm (large P/C books), I can see where you are coming from. However, there are many companies out there that are building books of business that have a pretty good balance of insurance and investment products. I think what happened is the insurance companies wanted to get their hands in the investment cookie jar because they saw how lucrative the business can be. Has anyone else noticed the number of companies that have recently changed their name from "Jimmy and Joe's Insurance" to "Jimmy and Joe's Financial." That is just my opinion. Would you agree?
 
I for one would disagree.  Top insurance producers make much more than top investment producers.  Being able to offer both, for most advisors, is allowing another revenue stream into the firm.  What's interesting though, is after all the increased regulation in the securities world, alot of the old mutuals are de-emphasizing their B/D side.   It's funny though, I seem to get alot of AUM as an insurance-based rep just by being there.  However, I have never heard of a client or prospect going to their investment rep with questions on insurance. 
 
No offense...but what are you smoking?!  There is an RR article about that very subject.  It's something like the top 10% of (strictly) insurance producers make roughly what the median (strictly securities) broker makes. 
 
I'd Google the article and post the link, but I'm too lazy. 
 
Iceco1d, I agree with you on that. I'm not going to go out and find an article and post it to prove this point and the reason is that you could find several articles that could prove either side is right. The Department of Labor has a good website that shows average incomes. Probably a trustworthy source and it also makes you realize how much people like to exaggerate their income.
Mar 31, 2008 10:56 pm

However, there are many companies out there that are building books of business that have a pretty good balance of insurance and investment products.






 
Stl rep, I've been doing this for a long time and I've never seen someone who had a decent property and casualty book also have a good life insurance practice or investment practice.
 
iceco1d, what deekay is smoking is correct.  I don't know what article you are talking about, but I guarantee it doesn't say what you think it says.   The only thing that I can think of is that it is saying something along the lines that the top 10% of insurance company reg reps make roughly what the median wirehouse reps make on business that goes through their B/D. 
 
Keep in mind that wirehouse reps put everything through the grid.  The insurance guys stay away from the grid as much as possible.
 
I'm in a successful office, but it is not atypical.  We'll have close to 15 guys this year make $500,000 or more.   This is not GDC  B.S., but money in their pocket.   They'll be 20-25 or so at the $250,000 level.    The top guy is making in the neighborhood of $5,000,000.  The wirehouse guys smoke his production.  Why?  He always does less than $100,000 in GDC.   He also does less than $100,000 of business with his primary life insurance company.   He does a few hundred thousand with a bunch of other companies.  However, he does millions in group health.
 
Another guy routinely does less than $25,000 in GDC.   He also writes less than 10 lives a year, but they are often big enough that he must place the business with more than one company.   He had a monster case last year or the year before where he made about $500,000 with his primary company, but most of it went elsewhere and he earned about $3,000,000 total.
 
More typical are the guys who have practices that are more balanced.  They'll do $300,000 of GDC (mediocre numbers for a wirehouse rep, but they'll get 80% of that), $200,000 of life/di/annuity commissions from their primary carrier, $75,000 from other carriers, and then another $150,000 from renewal commissions, + various bonuses.  Make the numbers smaller or bigger and you'll see how most of the guys make $250,000 to $1,000,000 just by seeing the people.
 
The insurance company guys have it good because they have a much better grid which means half the GDC equals the same income and then they make about 4x as much on an insurance sale.  Additionally, virtually everyone is a half way decent prospect in terms of making money for the rep. 
 
The top insurance guys are making tens of millions. 
 
I can tell you that it is a heck of a lot easier to make $500,000 with an insurance company than it is with a wirehouse.   Personally, I would have failed in a wirehouse environment if I would have started there.  If I would have gone there later when I had offers, I would have worked harder to have made less.
Mar 31, 2008 10:59 pm

By the way, if you talk average income, the wirehouses will blow away the insurance companies.  The insurance companies will hire almost anyone.  This isn't true for the wires.  The wires guarantee salaries while the insurance companies have lots of people making less than $20,000.