EJ sunset program

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Apr 19, 2012 5:18 pm

How does a sunset program with EJ work?

I've found very little in the way of reliable information online, and I didn't see anything on EJ's website.

I've been asked by an older gentleman nearing retirement with EJ, since he knows I have an undergrade and MS in finance, and feels I would have the aptitude for this business.

I'd appreciate feedback from those who have participated in this program.

Thanks,

Apr 19, 2012 9:31 pm

It hasn't been called the "sunset program" for a while, they refer to it as the "succession plan" now. I've not personally participated in it, but this is the way I understand it works. If you and the vet FA decide to do a succesion program, you would start working in his office after training, working with him on his book of business/building your own book. the first year, he's in the office about full time, and the two of you split any commisions on his book of business something like 80/20. That time is mostly just him endorsing you to his own clients, and them getting comfortable with you. The next year he works less, you work his book more, and you split net commisions something like 60/40. By year three, he doesn't come in much, except to talk to the clients he actually wants to see, and you split commsions ~30/70. the fourth year, he doesn't have his liscense, but EJ pays him ~15% of his previous pay to be a "consultant", which I take it means he holds the hands of his really old clients that want to get his input before they make any decisions. And I believe they get the Div trips during those 4 yrs. 

Not done it myself personally, but I've looked into a fair bit. But they also say it'll be changing soon, supposedly to keep the old vets from selling their books right before retirement. 

Apr 19, 2012 11:53 pm

Mongoose, thanks for the reply.

Is this program formally structured by EJ, or are the terms agreed upon by the individual parties apart from any oversight from the company? Based on what you provied and a search for the terms, it seems the succession plan is an excellent model for retiring FAs and the newcomer.

I'm relieved the transition period lasts several years. While a ten year head start with a book like what this FA works with is certainly a boon for a newcomer like myself, I'm concerned about the enormous task of identifying with the existing clients while being expected to continue to develop new business. It seems that concern is unfounded.

What kind of production would a $75 million book generate?  I recognize that depends entirely on the type of products offered, but a reasonable range would be helpful in understanding the value of this program. He's luring me away from a very lucrative government position, and I want to ensure I have a thorough understanding of this succession plan.

Thanks,

Apr 22, 2012 6:11 pm

[quote=frwicuiv]

Is this program formally structured by EJ, or are the terms agreed upon by the individual parties apart from any oversight from the company?

What kind of production would a $75 million book generate?  I recognize that depends entirely on the type of products offered, but a reasonable range would be helpful in understanding the value of this program.[/quote]

The program is pretty formally structured as far as who gets paid what, and when. As far as when he comes in, how much work he does, what he expects from you, that is figured out between the two parties, but it's in his financial best interest for you to succeed. 

As far as the amount of production a $75 million book would generate, the answer is pretty close to zero, a book on it's own can't produce anything, YOU have to do the work. That being said, I don't think it's unreasonable to be able to gross 150,000-300,000 if his clients trust you and you work hard every day. but that being said, I have no idea what that would net out to with the new compensation structure as far as commision splits, and the different payout ratios for vets vs new FA's. But that is something they can tell you, ask for him to get in touch with a "productivity consultant" in the asset sharing dept. 

There are a lot of variables, the most important of which is YOU, but this is a situation most new FA's would jump on in a second. Do the work, follow the formula, you could net 100k the first year, maybe more. If you want to be a financial advisor, I'd say don't think another second about it. But if you always dreamed of working in that lucrative government position, maybe you should think more about what you want in a job. This business isn't for everyone.