Joining a "Team" at Merrill
What's the deal with this? Are there any DISADVANTAGES to becoming part of an already existing one? I understand that if you're new and you get to do this, they older FA's can float you PC's so you can keep your job... but what's in it for them? It can't be completely gratituitous? I'm guessing either they A.) make you do a lot of stuff that sucks... maybe that quarterly review for the pain-in-the-ass client who smells like fish, or B.) if you land a HUGE account, you have to give some of it up to the rest of your homies. Is any of that true? Is there something else? Or is it just 100% complete awesomeness, like being tapped into Skulls & Bones or some nonsense. Thoughts?
Every team is different and it all depends on the situation and the teaming agreement. Are you being offered to join a team or are you asking in general?
It varies and it is a definite trade-off unless the team is good old Dad.
Most of the time: They must see in you the ability to bring in substantial assets -existing relationships or friends/family. They would like their name to be on those assets in case you leave -voluntarily or not. In return, they will give you the accounts they don’t want or can’t use. The under-$250,000 accounts that they will ship off to Merrill Edge if you don’t work out. The small trust accounts that they can’t move out. The dead end clients with $10,000 left and no additional capturable assets. The list of 500 employees on a 401k plan they run. The prospects they’ve never found time to follow up on, the low hanging fruit. They will probably offer a 60:40 or 75:25 split. They likely get the lionshare, and on everything you bring in and on what they “give” you.
Sometimes they will give you pc’s but probably not for long or not many, because it is money out of their pocket. Occasionally a team will bring someone on who doesn’t produce, who is just meant to do portfolio management. In that case they will give them all the pc’s.
Interesting. Not sure how I’d feel about it… would probably LOVE watching PC’s show up on my screen that I didn’t have to really do much work for… but I’d hate to see some whale of a client with a $5,000,000 account wind up in someone else’s name.
I think if you bring the assets you keep the higher percentage but if they give you leads or prospects you would have to split it with the team and possibly be less than what you expect.
Unless they know you or see that you have great potential, they might think of you as an assistant not worthy of extra commission unless you prove yourself.
With that said, it’s not bad if you don’t have any experience in the industry and want to learn the ropes so you can branch out on your own in the future but take everything at face value.
Before I left mother Merrill, I remember a new FA/PMD team formation and I was a little skeptical of the FA’s intentions. I was on my was out to another firm and didn’t think of it much. I still stay in touch with some of the PMD’s that are still there(There are not many left). I recently heard that the PMD brought in a 3 million dollar prospect. The FA took the lead, closed the deal and put the account under their own FA number. The FA openly screwed the PMD out of the deal and management sided with FA since he was one of their bigger producers. I heard the PMD is teamed with another FA who I know and is a lot more ethical.
Basically, I wouldn’t look at anything that is less than 70/30, with 70 going to the PMD for the first 3 years and then down to 50/50 after graduation. Also, I wouldn’t work with a team or another FA who isn’t willing to keep you at the higher end of your goals during the PMD program.
Also, find out if they have a succesion plan. I know of another PMD who teamed up with an FA who was within 5 years of retirement. The PMD assumed that he was a part of the succession plan. The PMD didn’t know that the FA’s son was going to graduate college before the FA retired. The son came in and took over the entire book and sent the PMD packing. Teaming contracts are internal documents and the big producing FA’s will always get their way.