ML Financial Advisor and POA

or Register to post new content in the forum

112 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
May 16, 2006 5:40 pm

I just took the aptitude tests for entering the Paths of Achievement training program for Financial Advisor in Global Private Client group.  The tests were no big deal.   I’m sure that everything is fine with them.


<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


I have not yet been briefed on the next steps.  My guess is that they would want to know how I plan on bringing in business.  I saw something around about a “business plan”.  Can someone give me information on what they are looking for?  While I have a strong desire to enter Wealth Management, I don’t have any experience in the field.  Fortunately I have a fairly large network and I know a number of wealthy individuals.  Would a plan on leveraging my social network be appropriate or do I need something additional?  Another area I planned on concentrating on was independent business owners.  I feel that I have a leg up in that area since I once ran my own business and I still have access to groups of business owners.



An area that I’m concerned about is the initial compensation.  I am in the NY/NJ metropolitan area.  I’m a recent MBA graduate from a top business school.  According to the school’s placement survey, last year’s graduates entering Private Client Services had a base salary of $100K with a $20K signing bonus and a $40K guaranteed year-end bonus.  I understand that the first two years in the POA program are salary based and that the salary is negotiated with the branch manager.  What is the likelihood that I can negotiate a salary in line with my graduating peers?  It would be difficult to justify much less considering that I left a cushy $80K job to go back for my MBA.  Am I looking at the wrong company?  I'm also talking with JP Morgan, U.S. Trust and UBS but I am attracted to the entrepreneurial aspects of ML.


 



Thank you!

May 16, 2006 9:08 pm

You forgot the BMW Lease for the first 2 years you get...Black with a Bull front license plate.

May 16, 2006 9:15 pm
rightway:

You forgot the BMW Lease for the first 2 years you get...Black with a Bull front license plate.


HA!  That would be interesting...but not the way that things work.  Besides, why would I get rid of my current car for a BMW?


Another great thing about ML is that I live about 2-miles from their huge Hopewell complex.  That allows for a slightly lower pay than the NYC firms but not much of one.

May 16, 2006 10:01 pm

As I've said here before, you do NOT want a high salary in the POA program.  

May 16, 2006 10:39 pm
WealthManager:

According to the school’s placement survey, last year’s graduates entering Private Client Services had a base salary of $100K with a $20K signing bonus and a $40K guaranteed year-end bonus. 




Those people are largely becoming salaried private bankers, not commission-paid brokers. The private banks and independent asset management (wealth management) boutiques pay rookies considerably more and their job is largely to service existing clients or develop relationships from well-established sources. Their lifestyle and experience is considerably more corporate and better when they are just starting out.


At ML or any of the enormous wirehouses, you will be given substantially less pay and will be expected to get clients. Your life will be miserable and degrading for a few years, as you desperately try to build a book of clients and avoid getting fired for failing to meet your fairly lofty, firm-determined  goals. You will, however, be given the chance to earn significantly more than a private banker or a junior partner in a boutique wealth management shop, and after 7 plus years of busting your ass - cold calling, begging for money, you will OWN your own clients and have an infinitely superior lifestyle to anyone but a sucessful small business owner or VC partner.


The VAST MAJORITY of rookie brokers don't make it. MS lost about 66% of its training program to attrition in the last 5 years. 66%! This is basically true everywhere - no matter how swanky the firm is (and ML ain't that swanky), most of the rookie brokers fail out. It's a really tough career to make.


Most people who do manage to make it are driven insane. Arrogance, viciousness and chutzpah are commonplace. Few branch offices are happy places. Support staff are all paid poverty wages and are completely dependent on branch managers and brokers to provide them with bonuses.


Private banks (not bank brokerages - BIG differences) tend to be rather sedate sorts of places - there's plenty of business for everyone and people are all on salary plus bonus and most don't work terribly hard. Support staff are generally well paid (relative to wirehouse brokerages) and are generally competent. The cultural differences are striking. A FEW private bankers are paid over a million dollars a year -it generally pays as well as an attorney or doctor.


The average private banker (probably) makes more than the average broker, but brokers who make more than $1million a year are in the hundreds at a major national firm.

May 17, 2006 8:54 am

Thank you San Fran Broker for all of the information that you provided.  I guess that I’m still trying to understand the distinctions between a private bank and a wire house.  My desire is to be a Wealth Manager, not a broker.  I want to manage relationships and I understand that as people become more affluent that managing their finances becomes more complex.  I want to be there to help families successfully manage their finances to better meet their life goals.  While my main interest is investment planning, I am also interested in helping with estate, retirement, income tax and philanthropic planning.  I don’t want to necessarily be an expert in all of these areas.  I more so want to be able to take the planning at least 90% of the way and leverage off of the product specialists to take the planning the remainder of the way.


<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


I guess that I’m a little confused.  My understanding is that UBS is the largest private bank and the Merrill Lynch is the most profitable one.  From what I’m reading here it seems that Merrill Lynch is being classified as a wire house.  Can someone please help me draw the distinctions between the two types?



Thank you!

May 17, 2006 11:10 am

You are defintiely barking up the wrong tree by applyin to ML POA program if you want to do what you outlined above.


Everything you said you wanted to do could be done as an ML FA, but only if: 


A)  You have been a BROKER for twenty years and have ACQUIRED those clients, or


B)  You are part of a high performance team, and they see fit to let you do the cake work (planning) while they do the hard work (generating business and prospecting).  This is unlikely, because most would expect you to pull your weight and bring in new business (which would consume the VAST majority of your time).


While the ink might still be drying on your newly minted MBA, fact is unless you have a CFP, CFA, etc your career specific (financial planning) knowledge might be limited. 


If you really want to do what you said above, my suggestion would be to look at trust companies, either independent or bank-owned.  You might not make $80,000 right off, but it is low stress, planning oriented (as opposed to sales oriented), and stable. 

May 17, 2006 11:14 am

By the way, maybe I'm just confused...but who would go so far as to apply to somewhere like ML and NOT KNOW they are a wirehouse?????


Obviously UBS is a swiss bank, and ML has similar services on the INSTITUTIONAL level, but ML POA is the training program for the BROKERAGE SALES FORCE.  Nothing more, nothing less.

May 17, 2006 2:17 pm
BankFC:

By the way, maybe I'm just confused...but who would go so far as to apply to somewhere like ML and NOT KNOW they are a wirehouse?????


Obviously UBS is a swiss bank, and ML has similar services on the INSTITUTIONAL level, but ML POA is the training program for the BROKERAGE SALES FORCE.  Nothing more, nothing less.



<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


I understand that the POA is for becoming a Financial Advisor in the Global Private Client division and that their responsibilities are to offer clients advice, guidance and services for financial planning.  I personally would never want to say that I’m a broker that works for a wire house.  Aren’t those terms from the past?  I don’t mean that just from the semantics viewpoint but hasn’t the market changed to where the consultative client centric wealth management approach is the path with the greatest chance for success? 


 


Doesn’t Merrill Lynch also have Private Wealth Management teams?  Don’t these teams go further than just investment advice but also help with estate planning, charitable trusts, endowments and other tax trappings of the rich?  I’m not saying that being part of a private wealth management team is where I want to be, but my understanding is that a GPC FA can certainly leverage the services that are offered.


 


Maybe my head is in the clouds and I am far from reality, but I saw Merrill Lynch as a great place to start a business.  I love how entrepreneurial it is.  They have a great depth of services in addition to embracing open architecture.  I feel that they give me more latitude than other places.  For example, if I choose to I would be able to pick up small 250K clients who I feel that have potential.  However, I’ve heard many complain about the $15M in 2-years.  Who would want to continue in the business if that is all that they are able to get in AUM in that period of time?  I just can’t see how anything under $25M would result in a paycheck that isn’t enough to warrant continuing.  Am I wrong?



May 17, 2006 3:06 pm

Doesn’t Merrill Lynch also have Private Wealth Management teams?  Don’t these teams go further than just investment advice but also help with estate planning, charitable trusts, endowments and other tax trappings of the rich?  I’m not saying that being part of a private wealth management team is where I want to be, but my understanding is that a GPC FA can certainly leverage the services that are offered."


 


I am part of GPC, and our Private Wealth Dept is basically the same entity. The difference lies in the fact that PW goes after larger acoc**ts, and that they dont get paid on assets under 10M. All in all, the platform and product/service capabiltities are the same for GPC and PW. Of course, there are some PW advantages when it comes to access to institutional research, etc, but both groups provide comprehensive planning services....

May 17, 2006 5:17 pm

From what I'm seeing, you do not want to be in sales.  If that is
the case, forget about Merrill Lynch and the "wealth management" aka
brokerage business altogether....

May 17, 2006 5:21 pm

P.S.  Please do not waste an NYU MBA on being a FA/broker/wealth
manager....you obviously have exceptional intelligence and this
position requires no significant intelligence whatsoever.  You
would be wasting possibly your strongest asset.

May 17, 2006 7:01 pm

"P.S.  Please do not waste an NYU MBA on being a FA/broker/wealth manager....you obviously have exceptional intelligence and this position requires no significant intelligence whatsoever.  You would be wasting possibly your strongest asset."


How does being a SUCCESSFUl FA require having no exceptional inteeligence? Grbated, it doesnt take a genius to pick up a phone and cold call for 8 hours/day. Nor does it take much for someone to be personable and socialable. However, when you are competing for a person's wealth and commitment, it does take intelligence in terms of strategy development, presentation, and execution. You have been involved with great organizations- do you think everyone is a brainless grunt???


Please share your thoughts... I will wait patiently as I rebalance a clients portfolio (a local trust attorney..) and run a proposal for a $4M prospect... God I love being dumb...


The one thing I agree is that an NYU MBA is something of accomplishment...

May 17, 2006 8:15 pm

Blarm- By no means was I implying that brokers are DUMB.  You do
need to have at least average college level intelligence.  But
someone who got accepted and completed an MBA at NYU is probably in the
top 1% of the population in terms of intelligence, and that is an asset
that he can more greatly leverage in a different job capacity. 
I'm fresh out of college with a finance degree, and can honestly say
that I have yet to use one peice of knowledge I obtained at
college.  Meaning I could have come here straight out of high
school and been in the exact same place....except that the firm
requires a college degree for the only reason of perception of
competence by the public....

May 17, 2006 8:34 pm

Yes, BUT--if you are intelligent in a field where intelligence is not a prerequisite, might it not be easier to compete?  I think once you get past the very difficult task of acquiring a client, having the intelligence to know how to best serve them speeds up the trust and confidence that engenders loyalty to the point of referrals.  In other words, it could be an advantage.  If you want to go get a job at Goldman or McKinsey, you're competing w/every other genius out there.  If you can make this career work, you can eventually work "smart" and not too terribly hard.  Not so much in i-banking or corp manager type work.

May 17, 2006 8:47 pm

Scorp and Cow- agreed...

May 17, 2006 9:33 pm

Wealth Manager,


<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


You are very fortunate to be receiving excellent advice in some of the posts in this thread.



A couple things:



Yes it does help to be smart and educated in this business.  I realize that there are examples of people that succeed without these traits, but education helps.  That does not mean that clients will be leaping at the opportunity to work with you, but anything that helps you establish credibility in the broader business community is a good thing.



I do think you are seriously underestimating one facet of this business.  Specifically, it is much harder to gather $15 M in two years than some of the comments in your posts might suggest.  It sure helps to know people with money, but that does not mean that they will immediately (or ever) become your clients.  In general, a client has to like you and be dissatisfied with their current broker.  I intentionally use the term broker because all of this stuff about wealth management is basically marketing fluff put out by the firms.  It is often a fatal flaw for brokers to smoke the same stuff that firms are trying to use as a hook for clients.



The other thing is that everybody and their brother is in the business in some form or other.  There are wirehouses, banks, insurance people, etc. all over that are looking for the same assets and clients.  Some of the competition are hacks, but the volume of people out there prospecting adds to the level of noise.  Some of the competition are young and hungry and will promise things that they cannot deliver (i.e., snakeoil / EIA vendors) and some of the competition will just pay attention to some of your clients that are feeling neglected while you are out prospecting.



Unless you are very lucky or well-connected, I think you will find that even the $250K clients you refer to are not that easy to find.



Bottom line – you can probably succeed in this business if you are realistic (and better yet, cynical) about what you are doing.  

May 17, 2006 9:51 pm

Why is it that everyone wants to start in this business at the level
that took most of us 10 years to achieve?  When I started in the
business I was 24 and was so hungry to learn anything, open anything,
and basically tell everyone what I was doing and ask them to become a
client. 



Now we have college grads saying they want to come in and manage a pile
of assets and affluent relationships without paying any dues or taking
the time to learn the business...which is the best education of
all.  We should not discourage young people from getting into this
business, but rather educate them on the realities of it and the
wonderful benefits that await them a few years down the road. 



This is a noble and rewarding carreer, one in which you make lasting
effects on peoples lives by making their dreams and aspirations come
true.  You get total flexibility with your time, make more money
per hour than 99% of the attorneys and doctors out there, and go to
sleep every night knowing your clients rest easy because of the work
you do.  New advisors and those considering this fine career
should know it is front end loaded with challenges and hard work, but
so very worth it.

May 17, 2006 9:59 pm

I agree with you and I don't mean to come across as overly negative in my post.  The failure rate for new folks is just so high and I think a lot of it is due to unrealistic expectations.


May 17, 2006 10:27 pm
rightway:

Why is it that everyone wants to start in this business at the level
that took most of us 10 years to achieve?  When I started in the
business I was 24 and was so hungry to learn anything, open anything,
and basically tell everyone what I was doing and ask them to become a
client. 



Now we have college grads saying they want to come in and manage a pile
of assets and affluent relationships without paying any dues or taking
the time to learn the business...which is the best education of
all.  We should not discourage young people from getting into this
business, but rather educate them on the realities of it and the
wonderful benefits that await them a few years down the road. 



This is a noble and rewarding carreer, one in which you make lasting
effects on peoples lives by making their dreams and aspirations come
true.  You get total flexibility with your time, make more money
per hour than 99% of the attorneys and doctors out there, and go to
sleep every night knowing your clients rest easy because of the work
you do.  New advisors and those considering this fine career
should know it is front end loaded with challenges and hard work, but
so very worth it.



This is pretty much what I was trying to say.  I definitely think you expect to walk in and start managing stacks of money, and it just doesn't work that way.  ML does have great tools.  But the best tools in the world are useless if you have no clients to use them on.  A 250K client is hardly one to scoff at, one that "might have potential."  If that was so, then why is that the (250K) the magic bogey HOUSEHOLD (aggregate) number ML has been pushing???  Because that is ML's bread and butter.  Sure the million dollars liquid clients comes along from time to time, but not everyday.

I agree with Rightway.  If you want to go to ML great.  If you want to be entrepreneurial, fine.  I still say most folks couldn't give a rats a** about an NYU MBA...you think your gonna impress the guy who has built a 10 million dollar business with a degree that anybody with a decent GMAT score and stayed awake in class could have done?

Not around here anyway.  I got into law school, so should I brag about that too???