Interviewing with SB

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Jan 2, 2007 6:48 pm

All, 



I just accepted an interview at SB.  I have been researching becoming an FA for several months and would like some input. 


As background:  Former Army officer.  Built my own business, sold it and was retained in management.  Not really challenged anymore.  I am a good marketer and I have lots of experience giving seminars.  I built my business to a point that I was doing better than 90% of my peers. 


Here are my questions:


1.  What expenses will I be expected to cover and how much will it generally run?


2.  Is any out of town travel required for conventions and fund manager meetings?


3.  SB seems to want 5-7M AUM after 12 months on the street.  Is it reasonable?


4.  I am told that I need north of 125 clients to become successful.  Does this sound reasonable and how many should I capture per year as I build up?


5.  Are seminars as effective in this industry as they are in Real Estate?


6.  What drew me to SB was what appears to be a really good outlook on customer service.  I am looking for a place that does not snub young recent college grads and start up entrepreneurs that are trying to get a good financial foundation built.  I was surprised how many firms seem uninterested in clients with less than 100K to invest.  While I understand the efficiency of larger investors, I realize that as I start all sincere clients will help me improve my game and these younger people need good advise.  I was lucky when I was young and I feel drawn to pay it forward.  Am I off?


I am sure that I should be asking lots of better questions, however, that is it for now.  Please feel free to answer any question that you think I should have asked. 


redleg

Jan 2, 2007 8:16 pm
redleg1:

3.  SB seems to want 5-7M AUM after 12 months on the street.  Is it reasonable?


No, not really. It is more reasonable than ML's 15 in two years.




4.  I am told that I need north of 125 clients to become
successful.  Does this sound reasonable and how many should I
capture per year as I build up?


That sounds about right. If you can do one per week, you should be ok.

5.  Are seminars as effective in this industry as they are in Real Estate?


Are they effective in real estate?

Jan 2, 2007 10:28 pm

Seminars are effective in Real Estate, but the effect is slow.  You might give a couple of seminars before you get a listing or it might take 6 months for someone to decide to list after a seminar. 


Assuming an FA seminar is properly targeted at the right clients and I give a good talk to 20 or 25 investors, what are the typical results?


Thanks,


redleg

Jan 2, 2007 10:32 pm

Oops, I forgot.  If 5-7M AUM is a bit high, what is typical in a first year?  If I only do 4.5 are they going to show me the door?


Thanks.


redleg

Jan 3, 2007 9:15 am

The truth is that most places will FIRE you for missing your Revenue target much faster than for missing your Asset target.  And the old brokers in the office will be more than happy to pawn off dead Assets to you as quickly as you will take them.


Assets that don't generate Revenue (like someone who just wants to hold a bunch of stocks) do nothing for you or for your clients.


Don't enter this biz unless you have warm leads on people who will value your advice . . .and pay for it.


Jan 3, 2007 12:18 pm

Right, revenue is much more important than assets. But they are correlated.



I think this is semi-flawed business model, as IMHO first you get the assets,

then you get the revenues. That's why I focus on opening accounts, then

gathering assets into the accounts, -and ultimately converting into wrap

accounts with annuitised business.



If you become an annuity shark, most places won't complain at all. (But as an

annuity shark you can do much better working for an insurance company)

Jan 3, 2007 1:00 pm
redleg1:

All, 



I just accepted an interview at SB.  I have been researching becoming an FA for several months and would like some input. 


Are you ready for the interview? 


As background:  Former Army officer.  Built my own business, sold it and was retained in management.  Not really challenged anymore.  I am a good marketer and I have lots of experience giving seminars.  I built my business to a point that I was doing better than 90% of my peers. 


Here are my questions:


1.  What expenses will I be expected to cover and how much will it generally run?


SB will cover all your registration, licensing and office expenses. They will also cover reasonable marketing expenses. To put it another way, you will have zero out of pocket expenses.


2.  Is any out of town travel required for conventions and fund manager meetings?


You'll have to spend about three weeks at SB's training center which was located in Hartford Conn. It may still be there, not sure if they've moved it. Hartford's not a bad town if you don't mind the "On the Beach" look of downtown after 6pm. Once through training you won't be required to travel, with rare exceptions. Fund wholesalers will come to you. If your office is big enough you may be in for free lunches several times a week. As a trainee, you'll be required to attend, and your biggest problem will be finding time to work off the extra calories. 


3.  SB seems to want 5-7M AUM after 12 months on the street.  Is it reasonable?


Yep, totally and completely reasonable. Along with totally and completely doable.


4.  I am told that I need north of 125 clients to become successful.  Does this sound reasonable and how many should I capture per year as I build up?


There are too many variables to put an exact number on the number of clients necessary to meet your goal. Let's leave at more is better than less. As a trainee you've got 70 to 80 hours a week to fill with nothing but opening new accounts. Use that time wisely and you'll blow past their goals.


5.  Are seminars as effective in this industry as they are in Real Estate?


Seminars are effective if done properly. Are real estate seminars effective? One point: Seminars done right are VERY expensive. It is unlikely that SB will cover the cost of a seminar program done right. Figure on spending about $3000/month to do it right.


6.  What drew me to SB was what appears to be a really good outlook on customer service.  I am looking for a place that does not snub young recent college grads and start up entrepreneurs that are trying to get a good financial foundation built.  I was surprised how many firms seem uninterested in clients with less than 100K to invest.  While I understand the efficiency of larger investors, I realize that as I start all sincere clients will help me improve my game and these younger people need good advise.  I was lucky when I was young and I feel drawn to pay it forward.  Am I off?


The SB I know of is not looking for sub 100K accounts anymore than the other majors. There is nothing wrong with spending time with future wealthy professionals, but don't bank your career on this market. Simply put, if you do, you won't be around to reap the benefits of that smart marketing years from now when it finally pays off. If you need $7,000,000 to meet goal year one, that's 70 clients with $100,000. Achieving that in itself will be enough to keep you exausted from week to week. Lowering the bar to say $10,000, or even $25,000 and you are setting yourself up to fail. There's nothing wrong with poor people, we just can't help them, but they could hurt you. Focusing on the "To be rich"  young professional or businessperson sounds like a good year three project. Get yourself on solid footing first.


I am sure that I should be asking lots of better questions, however, that is it for now.  Please feel free to answer any question that you think I should have asked. 


redleg

Jan 3, 2007 1:22 pm

BondGuy


Thanks for the input.  Meaty stuff.  You sound like you've been there, done that.  What were your top three daily activities in building a book when you started?  In my current career, I see people fail for lack of focus.  I do four things really well to grow my business.  Seminars and work product quality are the two that immediately translate to the FA world.  What are your top three?


redleg

Jan 3, 2007 1:38 pm
redleg1:

BondGuy


Thanks for the input.  Meaty stuff.  You sound like you've been there, done that.  What were your top three daily activities in building a book when you started?  In my current career, I see people fail for lack of focus.  I do four things really well to grow my business.  Seminars and work product quality are the two that immediately translate to the FA world.  What are your top three?


redleg



One daily activity; dialing the phone. That's it, that's the big secret to success in this biz.


Develope a plan to maximize daily contacts.


My plan, when stating out was very simple: Cold call with tax free bonds. Contact 100 people a day, everyday, and ask them to buy a TF bond. Few bought bonds on that first call, but many eventually bought bonds or other investments.


There are at least a dozen variations of this very simple, very effective prospecting technique. All work.


As for cold calling not working, DNC, referrals, networking, seminars...OK, all comments are valid, yet it worked for me. Today, in our office we have a second year trainee who is doing only cold calling using tax free bonds. She is consistantly doing over $20,000 a month in production and opens 8 to 15 new accounts/month. So, low tech/no tech still works.

Jan 3, 2007 3:06 pm

I recently got hired by SB and I am starting next week.


-their trainning period, which requires passing all of the required license tests, last 4 months from what I understand.  I was offered a base salary, plus commission once I am ceritfied.  This is followed by 2 weeks of trainning in somewhere in NJ.


-I am being teammed up with two current advisors, to help them with their book, as well, to help their book grow.  Have not discussed my quotas yet.  This team setup is something that SB is trying to do, according to the hiring manager in my area, he stated that they have had a lot of success in these situations. 


If you have any other questions regarding the interview process, I will try to respond to them.


mooose


-

Jan 3, 2007 3:19 pm
BondGuy:

My plan, when stating out was very simple: Cold call with tax free bonds. Contact 100 people a day, everyday, and ask them to buy a TF bond. Few bought bonds on that first call, but many eventually bought bonds or other investments.



I'll put a word in for cold calling with CD's if the local banks are offering low rates. One of the key things that you have, that no one else does is the ability to sell securities.

You also have acess to slick inhouse research and so forth, use it to your advantage.  For example if someone seems interested in muni bonds, put them on your muni-drip list and mail them a term sheet/market letter each month.

Direct mail can work well, as can seminars, to be honest, I think networking is the real road to riches.

Jan 3, 2007 4:26 pm

About Seminars... IIRC, YOU won't be doing any.


You MIGHT be allowed to bring in a wholesaler or someone to do one once in a while.


The Business Prevention Unit is not about to let a Newbie get up in front of people and talk! Your presentation needs to be scripted and approved up front (and they HATE to approve what someone else has written!) . You'll spend so many hours writing and rewriting and then there are the invites and the time it takes "your" SA to follow up and make sure people are coming... Your BOM will probably discourage this sort of behavior.


Everyone would love to be a seminar star, I have even met some people who claim to be one. Every BOM would love to have a seminar star in his office, but they're rarer then hen's teeth.  


I'm not saying it can't be done, but....  Be aware Wirehose Brokerage is not like any other business you've ever been in (including the military). The Legal Department has their own sort of Hipocratic Oath: First, do US no harm!


Mr. A

Jan 4, 2007 1:48 am

FYI - SB just changed the requirements for new hires.  The old "tier 1" goal used to be 7 mil. and 70K gross in your first 12 months.  For 2007 "tier 1" is 11 mil. and 100K gross.  Years 2-5 have been bumped up also.  They are now asking you to have around 25 mil by the end of 2 years.  Ouch. 


Keep in mind, they are not going to fire you if you don't reach these goals (probably).  BUT, the bar has been raised.

Jan 4, 2007 10:38 am
xfjoker:

FYI - SB just changed the requirements for new hires.  The old "tier 1" goal used to be 7 mil. and 70K gross in your first 12 months.  For 2007 "tier 1" is 11 mil. and 100K gross.  Years 2-5 have been bumped up also.  They are now asking you to have around 25 mil by the end of 2 years.  Ouch. 


Keep in mind, they are not going to fire you if you don't reach these goals (probably).  BUT, the bar has been raised.



Surely these are not minimums are they? The 25mil must be some kind of advanced achievement/reward level. I have known only 1 newby to have reached $25mil in 2 years.


Jan 7, 2007 1:43 am
BondGuy:
redleg1:

BondGuy


Thanks for the input.  Meaty stuff.  You sound like you've been there, done that.  What were your top three daily activities in building a book when you started?  In my current career, I see people fail for lack of focus.  I do four things really well to grow my business.  Seminars and work product quality are the two that immediately translate to the FA world.  What are your top three?


redleg



One daily activity; dialing the phone. That's it, that's the big secret to success in this biz.


Develope a plan to maximize daily contacts.


My plan, when stating out was very simple: Cold call with tax free bonds. Contact 100 people a day, everyday, and ask them to buy a TF bond. Few bought bonds on that first call, but many eventually bought bonds or other investments.


There are at least a dozen variations of this very simple, very effective prospecting technique. All work.


As for cold calling not working, DNC, referrals, networking, seminars...OK, all comments are valid, yet it worked for me. Today, in our office we have a second year trainee who is doing only cold calling using tax free bonds. She is consistantly doing over $20,000 a month in production and opens 8 to 15 new accounts/month. So, low tech/no tech still works.



Bond Guy,


    That sounds exactly what Im required to do.  I work at a small firm that specializes in fixed income investments, particularly muni bonds, but our business is full service.  All they really want me to do is sell munis and cold call, but do you think that these are ingredients to success in the biz?  In other words, are you saying that if I REALLY focus to do nothing but cold call and open accounts that will suffice into building a good book of business?


    Im sure you know that most people in the market for muni bonds are retired grandmas and grandpops or people looking for tax shelters.  I just can't see that this market will help in stabilizing business for me.  Is specializing in this one area enough to really enough to generate income for myself?  Management ususally tell me that once we get an account open there's always room to bridge into different investments.  Lets just say Im primarily dealing with seniors liquid for 20-40k in bonds, but even if they open an account would you even consider this a good relationship?  At least if I get a client into an open or closed end fund I can call them when other oppurtunities arrive relative to the fluctuation in the share price to sell or buy something else. 


  My managers have clients they can call to buy 100k in munis at one time, but all these clients were one's they've had for 10+ years.  Now with the DNC I feel like Im not getting high net worth prospects.  What am I doing wrong or what can I be doing better?  I'll be honest, I probably am not calling as much as I should be.  In my office there have been 6 newbies that have been let go as a result of poor productivity, but all those guys I feel weren't putting ANY effort at all in calling and weren't using textbook strategy in their calls.  If someone said they weren't interested, these guys would just say "okay, thanks for your time" and not even attempt to interrogate and ask more questions.  Im considered rather good in calling and am meeting my goals (very low goals may I add), but I can't help to think that these small 10-40k accounts of bonds won't be any use to me once my salary is expired.


What is it exactly that that lady in your office is doing in order to produce so well a month?  Does she visit those people she calls and try to close them in person?  Furthermore, when you call someone semi interested and they tell you to call back in a month or several months do you wait 2 or 3 weeks instead?  Im just trying to have a system so that I can follow what works for others and hopefully see results in my change of habit.  Any response to these questions will be appreciated.  Thanks


Jan 8, 2007 12:07 pm


Bond Guy,


    That sounds exactly what Im required to do.  I work at a small firm that specializes in fixed income investments, particularly muni bonds, but our business is full service.  All they really want me to do is sell munis and cold call, but do you think that these are ingredients to success in the biz?  In other words, are you saying that if I REALLY focus to do nothing but cold call and open accounts that will suffice into building a good book of business?


Yes! It takes total focus. And your managers are right. Opening accounts is the key to this business. Once they are opened you can build a relationship with these new clients to capture more assets or obtain referrals. But you need to walk before you can run. Don't concentrate on penatration yet. Focus soley on opening accounts.


    Im sure you know that most people in the market for muni bonds are retired grandmas and grandpops or people looking for tax shelters.  I just can't see that this market will help in stabilizing business for me.  Is specializing in this one area enough to really enough to generate income for myself?  Management ususally tell me that once we get an account open there's always room to bridge into different investments.  Lets just say Im primarily dealing with seniors liquid for 20-40k in bonds, but even if they open an account would you even consider this a good relationship?  At least if I get a client into an open or closed end fund I can call them when other oppurtunities arrive relative to the fluctuation in the share price to sell or buy something else. 


Most people in the market are retired grandmas and grandpops? Where did you get that? And even if it were true, so what? Most of my muni clients are business owners. But I love my retired grandma and grandpa clients as well.


I'll open an account for as little as 10K, but not if it's that person's last 10K.


Why are you limiting yourself to those who are in the market for munis? Munis are good for everyone...well, almost everyone.


Take a good look at this board. We have people here who are clueless when it comes to munis or fixed income. Their first move is to stick the client's money into a fund. To be sure, there are some good funds out there, but for those with enough liquidity, why pay someone a significant percentage of  income to manage an investment that doesn't need to be managed? Funds are the easy way out for the advisor, but not always the best alternative for the client. A muni/fixed income specialist can make a big difference here. No one is teaching this stuff anymore. The majors want the money fee'd up. Using Merrill and company for fixed income is like going to Applebee's for steak. It's OK, but.. well, it's just OK. You, on the other hand, are Smith and Wollensky. You are exclusive and bring a top quality product to your clients. You have a huge competitve advantage in this area. Use it!


  My managers have clients they can call to buy 100k in munis at one time, but all these clients were one's they've had for 10+ years.  Now with the DNC I feel like Im not getting high net worth prospects.  What am I doing wrong or what can I be doing better?  I'll be honest, I probably am not calling as much as I should be.  In my office there have been 6 newbies that have been let go as a result of poor productivity, but all those guys I feel weren't putting ANY effort at all in calling and weren't using textbook strategy in their calls.  If someone said they weren't interested, these guys would just say "okay, thanks for your time" and not even attempt to interrogate and ask more questions.  Im considered rather good in calling and am meeting my goals (very low goals may I add), but I can't help to think that these small 10-40k accounts of bonds won't be any use to me once my salary is expired.


You need higher net worth clients. Kill two birds with one stone, HNC and DNC, by prospecting business owners. I always close for at least $100k on the first trade. I then back it down, if need be, to whatever amt the prospect is comfortable with.


You need to be on the phone from 8am to 9pm five days a week. Take one hour lunch and dinner breaks. Each hour of calling should yield 8 to 12 contacts, calling businesses. After dinner switch to home numbers in affluent areas. Your contact rate should go above 15/hour and maybe significantly. Track your results.


Do this and within a year you'll be the one who can call clients to invest 100k into whatever.


What is it exactly that that lady in your office is doing in order to produce so well a month?  Does she visit those people she calls and try to close them in person?  Furthermore, when you call someone semi interested and they tell you to call back in a month or several months do you wait 2 or 3 weeks instead?  Im just trying to have a system so that I can follow what works for others and hopefully see results in my change of habit.  Any response to these questions will be appreciated.  Thanks


The woman in my office is doing exactly what I've outlined above. She works her ass off.


Very few appointments. Mostly all over the phone, over the course of several calls.


The vets in the office open new accounts too. Here's a recent success story: FA cold calls a prospect. Prospect indicates heavy interest, saying ML is not giving him what he wants. First trade 1/2 million tax free bond trade w/2pts. That was in November. The propect, now client , has added 3 or 4 million since then. Client now says he wants to move another 15 million to the FA. For this they will finally meet. You can make this biz as hard or as easy as you'd like.


Within your approach you should have a time, usually the second call, where ypu take some time to really hard qualify the prospect. Use this info to gage when the next call should be placed. Every prospect is different. Some are as simple as call me whenever there is somthing that fits, to those who won't have money due for some time. Use this time to build a relationship with the prospect through monthly contacts giving them info on something in which they may have an interest. Mail works here as well.


The purose of your original call is to find the money. The more calls you make, the more money you'll uncover.


The success rate in our business is very low. Most trainees are like those that you've seen. They aren't willing to make the committment to do what they have to do to succeed. The question is are you? If not, there is no shame in that. Better to find out sooner rather than later.


[/quote]
Jan 9, 2007 12:47 am
Registered Rep:
xfjoker:

FYI - SB just changed the requirements for new hires.  The old "tier 1" goal used to be 7 mil. and 70K gross in your first 12 months.  For 2007 "tier 1" is 11 mil. and 100K gross.  Years 2-5 have been bumped up also.  They are now asking you to have around 25 mil by the end of 2 years.  Ouch. 


Keep in mind, they are not going to fire you if you don't reach these goals (probably).  BUT, the bar has been raised.



Surely these are not minimums are they? The 25mil must be some kind of advanced achievement/reward level. I have known only 1 newby to have reached $25mil in 2 years.


No, not minimums, just tier 1.


And yes, to answer the earlier question, training is now 2-weeks in Warren, NJ.

Jan 10, 2007 10:39 pm

Bond Guy,


   Thanks very much for the thorough response.  Every word is very appreciated and most of all, helpful.  I haven't been able to respond as quickly because I've been listening to your advice.  Actually, I just started doing what I already knew I was told to do...call call call and try to open up accounts.


 I guess the only thing I haven't done yet is diversify my bets and start calling businesses.  What would you suggest?  Open a yellow book?  If so, do you pick random mom and pop stores like jewlery or a liquor mart?  I wouldn't know where to start as far as choosing who to call.  I think just calling residential is much more efficient because you move from one number to the very next number.  Whereas in the yellow pages you stop, flip a couple of pages, skim a few lines, and finally you make the call. Takes too much time and thinking. How would you approach this tactic?


I can absolutely understand the competitive advantage of specialization.  Heck, even on Registered Rep they have a recent article promoting specialization rather than trying to be everything to everyone.  But somehow people I have contacted and branded myself as a fixed income specialist don't seem to value that.  I normally tell them that my business practice is centered on those who are in retirement, bridging into retirement, or families looking for income... so many of my products are attractive those people who fit those categories.


Anyway, my daily regimine is that I get into work at 8AM and start calling at 9AM.  I take a noon lunch for an hour and come back to call.  In the meantime I have to say that not 100% of that time im at my cube I am calling.  Sometimes reseaching investments or doing mailers.  But did you really do the calls 8AM to 9PM straight minus 1 hr of lunch and dinner?  If so, how many years did you do that for?  If not, are you saying this type of routine is something I would need to do nowadays for my first 2-3 years in order to "make it"?  Thanks so much.  Your opinion is appreciated.



Jan 10, 2007 11:20 pm

Bondguy.... This 20 million dollar client did not even want to meet the advisor?



A seminar on real estate over past 5 years was easy... BUY! Now lets see how seminars do.. Sell!



25 million in two years, WOW! So thats only 100 clients at 250k. GOOD LUCK!

Jan 12, 2007 12:59 pm
tsaem:

Bond Guy,


   Thanks very much for the thorough response.  Every word is very appreciated and most of all, helpful.  I haven't been able to respond as quickly because I've been listening to your advice.  Actually, I just started doing what I already knew I was told to do...call call call and try to open up accounts.


 I guess the only thing I haven't done yet is diversify my bets and start calling businesses.  What would you suggest?  Open a yellow book?  If so, do you pick random mom and pop stores like jewlery or a liquor mart?  I wouldn't know where to start as far as choosing who to call.  I think just calling residential is much more efficient because you move from one number to the very next number.  Whereas in the yellow pages you stop, flip a couple of pages, skim a few lines, and finally you make the call. Takes too much time and thinking. How would you approach this tactic?


For businesses use D&B or a local business directory. In my are we have something known as Daltons business directory. i've opened hundreds of accounts out this directory.


I can absolutely understand the competitive advantage of specialization.  Heck, even on Registered Rep they have a recent article promoting specialization rather than trying to be everything to everyone.  But somehow people I have contacted and branded myself as a fixed income specialist don't seem to value that.  I normally tell them that my business practice is centered on those who are in retirement, bridging into retirement, or families looking for income... so many of my products are attractive those people who fit those categories.


Pitch them a product not a service. Try something like this:


Mr jones my name is tsaem and the reason for my call is that we are seeing preferred stocks coming to market with yields approaching 7%. Ihave nothing today, but next time I see one would you like to hear about it?"


There about 8000 variations on this simple approach. Play with it until it sounds the way you like it.


Anyway, my daily regimine is that I get into work at 8AM and start calling at 9AM.  I take a noon lunch for an hour and come back to call.  In the meantime I have to say that not 100% of that time im at my cube I am calling.  Sometimes reseaching investments or doing mailers.  But did you really do the calls 8AM to 9PM straight minus 1 hr of lunch and dinner?  If so, how many years did you do that for?  If not, are you saying this type of routine is something I would need to do nowadays for my first 2-3 years in order to "make it"?  Thanks so much.  Your opinion is appreciated.


Yes I really did that. Not every day was straight calling. I had appointments in there(rarely) but also research etc. I did this for seven years before slowing down. I only slowed down because i almost lost one of my kids. Made me wake up that I was pursuing the wrong goal. Still, my early work ethic brought my family a lot of good things.


I had a daily contest with another trainee. Most contacts before lunch and most contacts all day. Automatic loser if less than 25 cold call contacts before lunch. Loser paid winner a dollar. Added to if arrive at office later than 8am owed $5 to a pool. The pool went to pay for lunches for a small group of trainees. No cry babies, no whiners. If you're one second late pay up.


The longer you do it, the more successful you're going to be. And the faster you are going to get there. Believe me I know how tough it is to come back to the office while the rest of the trainees are still down at the sports bar where we went to dinner. Most of them didn't come back. I did, as did a few others. Today our production from that early group ranges from a low of just over $800K to a high of 2.5 million. Most of those who didn't come back and work are long gone.


One note, you don't have to work until 9pm every night. If you concentrate on business owners and highly focus on calling them everyday working until 6pm every night will get it done. Focus on larger numbers. Five and ten k trades isn't going to get it done unless u do a lot of them. I don't see that as possible these days.