Merrill versus Jones

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Aug 13, 2008 1:27 pm

I have narrowed down the firms in my area to the two above. For all practical purposes lets assume I have an offer from both. I would like to tell you a little about myself and hopefully I will get some ideas and input that I wouldn't otherwise.

I will be working in a market that is a short 30 min. commute from my house. This area is a wonderful retirement community in a beautiful part of the country. The area is growing at a faster rate than surrounding cities, towns.

I like ML b/c of the reputation of the training and the power and confidence that this knowledge will give me.
The BOM is professional, smart, family oriented and frank. We have a good dynamic with our few meetings upto now. Their are aprox. 11 other brokers in this office which services this town. City has a population of 12k. The  county has a population of 99K, with the county seat being where the office is located.
I like the fact that the initial salary meets or exceeds my current income.

I am unsure of my abilities to perform at 100k within a 12 month period with each client. I am new to the industry and I don't know what to expect with my production.
I am quite possibly more comfortable in an office with fewer personalities. I haven't worked a day in the office but I wonder if that will be a distraction or enabling factor for my focus and drive.

I like Jones for its small office, I could be wrong but my first thought is that working in an office with fewer personalities will allow me to feel like I am in more control over what is happening. I can only guess how the differences in environment will effect me if at all. How do you see the different offices playing a role in shaping a new advisor?
I am not intimidated by Jones's new account commision req., in that the min. requirments allow me to sell  / prospect a larger demographic than ML. On first thought the task of selling a 100k to a client( to keep commissions for ML) seems like a daunting task. Should this be weighed into my decision?
I don't like the initial salary that I will be my only income until I can sell. I have known about this and made changes accordingly. I do consider this important in my decision b/c it could impact my family if it takes me a while to start making commisions to offeset the difference of my current salary. I can make it a 5-8 months on a family of 4 on $25k with current savings and my spouse will have a part-time job starting in Sep. which should help bridge the gap. In other words I can make it financialy EJ but it will require focus and attention. I don't want to be distracted significantly from my new career! Any thoughts..
I am also concered about being charged for expenses from EJ in this time frame. From my current understanding I won't accrue "qualified expenses" at ML.
More positive attributes for Jones, the RL is one of the top 5 producers in the country, I do have the posibility of a GK and better chance of a legacy.
Either way I looking forward to beginning! I want to make the decision that is best for me and my family and that gives me the best oppurtunity to suceed, in saying that I think I will be successfull with either choice but would enjoy your input!

Aug 13, 2008 1:41 pm

Is there a door number 3? 

Aug 13, 2008 1:46 pm

not at this time, interviewed over the phone with others but only looking at these two at the moment. Option 3 is stay where I'm at, which wouldn't be terrible. Just couldn't live with my decision years down the road for not going for it..

Aug 13, 2008 2:22 pm

You also have to weigh hwo easy it would be to make it either place.  Merrill's hurdles are much higher, and the 100K floor is tough in a market with 100K people (not sure how a "city" could have 12,000 people??  are you talking households?).

 
This seems like a very suburban area.  Jones might work better for you.  However, if you make it at either place, you will come out ahead financially at Merrill.  Don't worry about teh "expenses" at Jones.  Those are overblown, and wires don't apy for much more tahn what Jones does (marketing, etc.).  Yes, you will have some office "startup costs" (pictures, plants, etc.), but I spent maybe $500 total on everything (many spend less, many spend more).
 
If you are starting from scratch, you will have a better chance of making it at Jones (you may also get a GK or Legacy, which ups the chances).
 
Tough call.
Aug 13, 2008 4:48 pm

Merrill does not have a $100k minimum. That's a myth that has added to ML's reputation as being a serious wealth management firm.

 
I can't give you advice about where to go, but I can tell you that I have numerous clients who will not give me a shot at their ML account. They consider it to be an honor to work with ML, and most folks look at Jones as being the "Junior Varsity" of the brokerage industry.
 
That's not to say you can't make a ton of money with your 1600 accounts at Jones ten years down the road, but comparing Jones to ML just isn't apples to apples.
Aug 13, 2008 6:12 pm

Borker, not to say your wrong, but the BOM stated you will be be assessed a chargeback if you don't obtain 100k in assets in a 12 month period. Could be blowing smoke but I tend to think not.
How realistic is it to meet these benchmarks..

Aug 13, 2008 6:27 pm

I could be wrong. A ML BOM told me that the 100k minimum is a myth; that's not to say that there aren't different requirements for newbies when opening accounts/gathering assets.

Aug 13, 2008 6:52 pm

any word on the repayment requirements for training if you leave ML?
Jones is free and clear after 3 years.  $75k if you leave after passing examinations but before meeting 3 years, or possibly less if you get an attorney.

Aug 13, 2008 7:37 pm
prometheus.grp:

Borker, not to say your wrong, but the BOM stated you will be be assessed a chargeback if you don't obtain 100k in assets in a 12 month period. Could be blowing smoke but I tend to think not.
How realistic is it to meet these benchmarks..

 
Are you trying to say the minimum account size is 100k or you need to do 100k in production within 12 months?
 
Based on what you have shared it sounds like you have already talked yourself into working with EJ so just accept their offer.
Aug 13, 2008 7:47 pm

my apologies, min. account size must be 100k within the first 12 months of production to avoid chargebacks.

Aug 13, 2008 9:53 pm
prometheus.grp:

my apologies, min. account size must be 100k within the first 12 months of production to avoid chargebacks.

 
I must have missed that memo.
Aug 13, 2008 10:18 pm

Hmm. Tough call. I agree w/ the others re: ML seems to be 'THE' place. I've been @ Jones for 4 years, inherited $9 million, and am grossing about $260k right now. Not killing it, but earning over $100k/year and a trip or two each year (which are awesome). I have never worked for Merrill. Couple of things: being the only Advisor in the Jones office is good and bad. You know why it's good, but it's bad because oftentimes you can get ideas from your peers; plus, the loneliness really creeped up on me. So if you go to Jones, I recommend that AFTER you do the work (make the contacts) try to visit or talk with other Jones guys or wholesalers about strategies & ideas. I've seen many instances of the 'new' guy getting a 5 or 10 million dollar office & he stops networking & making new contacts. That will kill your career. Having others in the office might help drive you a little more. Having said that, I really like the Jones gig. It has led to me buying my own office & having Jones as a tenant (and a very good one at that.) I too am in a small town; I always wear a long-sleeve dress shirt, but I do not wear a suit or tie. That's what I choose to do and it works for me in this community. Jones people, in my opinion, are really good, down-to-earth people. ML seems to flashy for me, but that's my 2 cents. I'll throw this out - see if the Jones RL can get you 5 or 10 million to start, but DON'T NEGLECT DOING THE WORK. That will definitely make it easier. Best of luck in your decision.

Aug 13, 2008 11:23 pm
You must be in a High net worth area for ML to have an office in a town of 12k.
Plus many retired people means that most people should have over 100k.
 
ML offered me over double the starting salary that you were offered at Jones.
If its a coin flip, I'll take the 40k more a year everytime.
 
Ml offered to pay 50% of my education (MBA).
 
I feel that ML looks better on a resume and gives me more opportunity for advancement if i decide to move to investment banking.
 
Many may argue, but i believe ML has the best training program.
 
I think that i can attract larger clients and make more money with ML.
 
I enjoy the competitiveness of working in a major wirehouse.
 
I like cold calling more than door knocking
 
 
If i lived in small town usa and planned on making a career out of the company i chose, i would take jones for the autonomy.
Aug 13, 2008 11:55 pm

interestingly enough just over 30% of the population is 65 over older, the national average is 12.4%.
What does the average retiree have to invest?

What is your preferred method of meeting a retiree prospect?

Aug 15, 2008 12:44 pm

 New thoughts:


Salary
EJ may be a good starting place, but the level of initial income could distract from becoming an awesome FA.

ML does carry a little more risk (higher standards) and they are compensating for that with a higher salary for a longer period of time.

Training
EJ has good solid training, high pass rate on series 7, 66. What about after that, I get the feeling that you aren't even supposed to worry about learning various products until you run into it or a prospective client asks about it.
ML gives me the idea that you will learn more about the various products, solutions from the beginning. I would quite possibly be better armed for the 500 day war with ML than EJ..

Environment / Attitude
EJ laidback, not to a negative degree but more so than most
ML exact opposite. The closest to working on wall street w/o doing it.

EJ not exactly trying to make millions, there are exceptions but for the whole this is the impression I get.
ML knows there the best and tries to act like it. FA's here have a desire to make more money more often.


Loyalty / Ethics
EJ portrays an honest always putting the clients interests first. Not only do they say that but my understanding is that is big part of what EJ is.
ML deffinately wants to do whats best for the client, but is more aggressive in sales. I get the idea that a conflict of interest could arise more often at ML than EJ.

These are my observations from interviews, conversations, research and a very limited knowledge in the industry. Some opinions may be exagerated to make clarifications..

Aug 15, 2008 1:07 pm
prometheus.grp:

 New thoughts:


Salary
EJ may be a good starting place, but the level of initial income could distract from becoming an awesome FA.

ML does carry a little more risk (higher standards) and they are compensating for that with a higher salary for a longer period of time.

Training
EJ has good solid training, high pass rate on series 7, 66. What about after that, I get the feeling that you aren't even supposed to worry about learning various products until you run into it or a prospective client asks about it.
ML gives me the idea that you will learn more about the various products, solutions from the beginning. I would quite possibly be better armed for the 500 day war with ML than EJ..

Environment / Attitude
EJ laidback, not to a negative degree but more so than most
ML exact opposite. The closest to working on wall street w/o doing it.

EJ not exactly trying to make millions, there are exceptions but for the whole this is the impression I get.
ML knows there the best and tries to act like it. FA's here have a desire to make more money more often.


Loyalty / Ethics
EJ portrays an honest always putting the clients interests first. Not only do they say that but my understanding is that is big part of what EJ is.
ML deffinately wants to do whats best for the client, but is more aggressive in sales. I get the idea that a conflict of interest could arise more often at ML than EJ.

These are my observations from interviews, conversations, research and a very limited knowledge in the industry. Some opinions may be exagerated to make clarifications..

 
I think your impressions of both firms are fairly accurate. Regarding the conflict of interest issue, that's something that's inherent in any business that pays people only when they make a sale, and when different products pay different levels of commissions. 
 
I was talking about the conflict of interest issue today with my BOA. I had just had a client leave who wants to put about $40k into his SEP and wants it to go into CDs, since his mutual funds are "going down."
 
Here's the dilemma:
 
If I were to ladder 4 CDs for $10k each, I would net about $50 bucks.
If I invested his money into mutual funds, I could net about $800.
 
Now we all know that CDs are a ridiculous vehicle for a 36 year old, so this example is really kind of silly; however, you can see how inclined an advisor can be to put people in investments that may not be appropriate simply because the advisor has to generate enough commissions to feed his/her family.
 
This is an area where I can see fee based management helping to mitigate this type of conflict of interest, and that's the type of business Merrill focuses on.
 
 
 
 
Aug 15, 2008 2:05 pm

How is Merrill's technology compared to Jones (now)?  I just trained a transfer from Merrill (the basic office stuff), and he said our platform is far better, easier, and more integrated than at Merrill.

Aug 15, 2008 4:37 pm

this is a No Brainer. go to merrill. much better reputaion, training, and pay.

 
good luck!
Aug 15, 2008 5:32 pm

The ML I work for is the whole floor of a high rise dowtown.


There's a local EDJ near me that is in a strip mall next to a check cashing joint.
 
Which one do you think i would go to if I had 2 million to invest?
 
Which one would i go to if i wanted to start a roth with $4500?
Aug 15, 2008 6:42 pm

The Jones guy might win on both counts.  How many people know where your office is located?  Would they notice it if they were just driving around town?  Would they want to go in a building like that and make the trek up the elevator to your fancy office? 

 


I'll bet everyone in your area knows where that Jones office is.  You might get some people calling you simply because you are ML, but it's not because you have a fancy office in a high rise building downtown.  The average millionaire next door can't stand "downtown" and won't go down there on a bet.