[quote=BankFC]

Real life translation:

They give you plenty enough rope to hang yourself. 

[/quote]

Yes, I agree 100%!  Fortunately hanging yourself is not the only possible outcome.

[quote=fired?]Xmsbroker enjoys message board confrontation. He has not offered insight on any subject thus far. He claims that his family is full of successful attorney's who make terrific salaries yet he could not use these contacts to develop a legitimate book of business. Why is an ex-morgan staley broker posting on the registered rep forum anyway. He must be a wholesaler who hates advisors because he has to flatter them all day every day. [/quote]

A) I had a legitimate book of business

B) I got offered a trading job that pays better and is less hours

C) I post bc I have a lot of downtime (interspersed w/ lots of stress).  I like to clear up false information, such as what you were spreading about lawyers and what this guy was spreading about bankers.

The information that I posted regarding lawyers was extremely accurate. The information from the Department of Labor supported my claim. You offered absolutely no facts to back up your nonsense. Additionally the links you provided to defend your stance on bankers pay did not support your claim. Associates recieved bonuses of approximately $70,000 on top of salaries of about $70,000, hardly Liar’s Poker type paydays. I would never let an ex anything trade with my money. If your book of business was legitimate let us have some details.

[quote=fired?]The information that I posted regarding lawyers was extremely accurate. The information from the Department of Labor supported my claim. You offered absolutely no facts to back up your nonsense. Additionally the links you provided to defend your stance on bankers pay did not support your claim. Associates recieved bonuses of approximately $70,000 on top of salaries of about $70,000, hardly Liar's Poker type paydays. I would never let an ex anything trade with my money. If your book of business was legitimate let us have some details.[/quote]

Fired? - Im not sure where your antagonism towards me comes from but I do enjoy msg board confrontation so Ill humor you.

As noted by a former lawyer earlier on this thread, you dont know what youre talking about.  The DOL numbers are AVERAGES.  We werent talking about the average lawyer.  There are ~180 law schools and many of them have poor placement.  Its not a random process where only 'the top 1% of all law school grads' get $100k as you claimed.  Grads of the top t15 or so schools get that much and more easily:

http://www.ilrg.com/rankings/law/median.php/1/desc/MSPrivate

(Keep in mind major market starting salaries went up to $145k this year which is not yet reflected)

Grads of the t50 or so are competitive for $100k if in the top 1/2-1/4 of the class with a few getting $145k.  The point being, getting $100k is not some mysterious process where only 1/100 law grads get it.  A lot is determined before they finish a semester.  Our discussion and the WSJ article only referenced grads from good schools, the bottom schools are irrelevant and drag down the averages.

As for bankers, ~ $140k total comp is for an ANALYST, not an associate.  Not big swinging d!ck type money but pretty damn good for a 23 yr old w/ just an undergrad degree.  Better than what the typical 23 yr old can make on the retail side.

"The firm’s undergraduate hires, or “analysts”—which is what I was in the early nineties—now make $70,000 a year, with the potential bonus of $75,000, according to the career Website vault.com. Recent M.B.A. graduates, or “associates,” tend to make $95,000 or more and also have a shot at an equal amount as a bonus. Those numbers are pretty much Streetwide—like airlines, investment banks tend to move in lockstep when it comes to paying their grunts."

xmsbroker, grads of the top-15 law schools are most probably in the top 1-5% of their national law school classmates. The majority of lawyers do not make $100k out of law school, this is a fact. It just doesn’t happen. The major markets you discuss skew the average. $140k in NYC is not great money. Associates make approximately $180k (if they recieve the best bonus) out of grad school in NYC, again not spectacular money. Lastly, the numbers from the Department of Labor offered median salaries which are not averages.       

[quote=fired?]xmsbroker, grads of the top-15 law schools are most probably in the top 1-5% of their national law school classmates.        [/quote]

Wrong, and grads outside of the top 15 schools get these jobs too. 

[quote=fired?]

The majority of lawyers do not make $100k out of law school, this is a fact. It just doesn't happen.     [/quote]

I never said nor implied they did.  However, the majority of grads from good schools do.

[quote=fired?]

$140k in NYC is not great money.    [/quote] 

Never said it was great.  But it does compare favorably to what 25 yr olds make in retail.   

[quote=fired?]

Lastly, the numbers from the Department of Labor offered median salaries which are not averages. 

[/quote] 

Lol, a broker of all people should know 'median' is a type of average.  Likewise, the median is dragged down 4th tier schools that keep popping up.  This isnt a concern for people at good schools.

The median is a much more accurate number than an average. Please do not test my knowledge of statistics, as you will most surely not win that argument. The median salary for a grad at a top 15 firm is $125,000, according to your numbers. However, that is only for lawyers at private firms. How many law school grads end up working at private firms? Finally, I am not a broker, I am an advisor.

[quote=WealthManager]

I am not only considering ML.  I have also been meeting with JP Morgan, US Trust, UBS, Goldman Sachs and other non-related companies about varying positions. ......It is my point of view that an FA position at ML can give you the rewards of running your own business while providing the resources and support of a large institution.  Does anyone feel to the contrary?

[/quote]

The platforms that you describe will deliver radically different experiences. ML and UBS are very similar in the essential business model - you eat what you kill.

From what I can gather, GS is a sort of hybrid between the wirehouse and private bank model in that the firm clearly has a model, plenty of opportunity, but you will still eat what you kill. But, you will have gobs of yummy syndicate to sell to hedge funds, though, so that you can survive until you build up a clientele of a few big whales.

US Trust or JPM Private Bank are basically relationship manager positions. You eat what is fed to you. Your clients are not, generally, your own, but you will be treated fairly well and paid a good salary. Expect to make $250k / year at maturity and only expect massive bonuses at JPM if you are a rainmaker extraordinare. And it will be hard for you to learn the skills in order to do that in the Private Bank environment.

I can't speak for JPM private client group.... I assume that they follow the wirehouse model.

[quote=fired?]The median is a much more accurate number than an average. Please do not test my knowledge of statistics, as you will most surely not win that argument.   [/quote]

http://www.m-w.com/dictionary/average

Average:

1 a : a single value (as a mean, mode, or median) that summarizes or represents the general significance of a set of unequal values

[quote=fired?] Finally, I am not a broker, I am an advisor. [/quote]

lol

Are you honestly suggesting that the mean and the median cannot meaningfully diverge? You simply do not see the big picture. Extrapolating one sentence from a paragraph, looking up a definition in a dictionary, and posting your findings does not win an argument. Here is an example: sample of three numbers 1, 2, 300. Average= 101, Median= 2. Technically these are both averages, but they are drastically different. The accuracy of the mean, and/or the median, depends on the data.



Lawyers do not only come from the top-50 schools, eliminating 2nd and 3rd tier schools is data-mining and does not give a true picture of the average starting salary of a lawyer.       

[quote=fired?]Are you honestly suggesting that the mean and the median cannot meaningfully diverge? You simply do not see the big picture. Extrapolating one sentence from a paragraph, looking up a definition in a dictionary, and posting your findings does not win an argument. Here is an example: sample of three numbers 1, 2, 300. Average= 101, Median= 2. Technically these are both averages, but they are drastically different. The accuracy of the mean, and/or the median, depends on the data. 

[/quote]

Of course mean and median are different.  But as you acknowledge they can both be used to express the 'average'  so your prior critique was nitpicky and incorrect

[quote=fired?]

Lawyers do not only come from the top-50 schools, eliminating 2nd and 3rd tier schools is data-mining and does not give a true picture of the average starting salary of a lawyer.    [/quote] 

For the 3rd time, we werent talking about average lawyers.   

I am discussing average lawyers. If we limit every conversation to the top-25% are observations will not be terribly accurate. Finally, you are delusional about the lawyer’s salaries, even at top-50 schools. Yes, I acknowledge more than 1/100 will make six-figures, but the number is much closer to 20-25/100 than 50/100.



The whole point is that a financial advisor can have a lucrative and rewarding career. The job is difficult at first and many colleagues are simply sleazy salesmen, but if one is an astute businessman and has an entrepreneurial spirit you can do well. Best of luck in your career as a trader. I’m sure you will do well.

[quote=fired?]
The whole point is that a financial advisor can have a lucrative and rewarding career. The job is difficult at first and many colleagues are simply sleazy salesmen, but if one is an astute businessman and has an entrepreneurial spirit you can do well.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

[/quote]

This is what I really like about becoming an FA.  Every successful FA has emphasized how rewarding the career is.  It is difficult to find a career that is both rewarding and lucrative.  Another thing that has been emphasized is how difficult it is to succeed, especially early in the career.  If it were not difficult then chances are it would not be nearly as rewarding.

I have my 4-hour assessment and sales presentation tomorrow for which I am currently preparing.  Should I be offered a position at ML I will have a difficult decision to make.  The initial pay will be an excruciating hard pill to swallow.  I'm a 32 year old married man who just finished an MBA that took two years and cost $120K.  If I am to accept a position at ML, I would be turning down offers for different positions that all pay at least 6-figures before signing and annual bonus.  I need to really sit down and determine the value of an FA position at ML.  When valuing my potential career paths how much weight should I give to future growth?  The more weight I give to growth the better the ML FA position is.  Then after figuring out the proper weighting for growth I need to factor in the risk.  I hear wildly varying success ratios.  The better I believe my chances for success, the better the ML position looks.  Next I need to consider the opportunity cost of a few years at such a low salary.  I feel like I'm an analyst valuing an equity.

Wealth Manager you are obviously in NYC. Take your geographic area into consideration when analyzing your offer. I don’t know what the revunue and AUM numbers are in huge metropolitan areas (my office is in a smaller metropolitan market). Based on data from Andre Cappon (http://www.thecbmgroup.com/company.asp) your growth rates should generally be 100% after Y1, 50% Y2, 25% Y3, etc. Your terminal growth rate will probably be around 10-15%%. An excellent advisor (top 5%) generates perhaps $100,000, in a large market, in revenue after 1 year. Base your calculations around that figure and use a 40-50% payout on your gross. Merrill also has a bonus structure that may add several thousand to your pay. Finally, use a higher discount rate to account for market fluctuations.       

I forgot to add variance. Cappon estimates that advisors have a 15% success rate after 4 years. Approximately 75% Y1, 35% Y2, 20% Y3, and 15% Y4. Good luck!

I started at the same time as 2 MBA’s 5 years ago.  Not sure what either is doing now.

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

I think you are looking at it the right way so far and you have gotten good advice on this thread. 

I walked away from a job that paid about $100K six years ago to get into the business.  It wasn't until my fifth year that I made more than my old job and I am on track to easily beat it again this year.  I too have a master's degree, but it is in engineering and becoming a FA was a big change.  A MBA is probably as good a degree as any, but there is no academic program that I know of that really prepares you for this job.

A NPV analysis would indicate that, so far, I've made a mistake because I gave up quite a few dollars to make this career move.  This is particularly true if I use a discount rate that is commensurate with the risk of this career as suggested in an earlier post. 

This brings up a point that I think is critical: Is this what you want to do?   The money thing will take care of itself as long as you pick the career that you really want.

Another thing that is huge is whether your wife in on board with your working in this field.  You will give up money up front and she may not dig that after a couple years of grad school.  This business is tough enough with a supportive spouse and you are making a huge mistake if your wife does not fully support this move.

That said, I think you can do it.  I got into the business less than a year after a move to a city that I'd never lived in before.  I did not know a particularly large number of wealthy people and I got licensed just in time for the 2000 - 2002 markets.  By the way, the perceived strength of markets is a much larger success factor than I realized when I decided to get into the business.   I know this sounds dumb on my part, but you will quickly see that even wealthy folks are eager to buy high and sell low.

If you are ready to work harder for less money, more uncertainty, little respect from the general populace and your employer (at least until you eventually hit it big), then you will probably do just fine.

In return, you get what can be a fun job and the opportunity run your business as you see fit.  No firm will mess with you if you are doing sufficient quantity and quality of business.  It would be very tough for me to go back to the corporate gig.

WM.

If you have all of these other companies willing to pay you 6 figures plus incentives, why are you willing to do this. You don't seem to be sure that this is what you want to do. It seems as if you keep wanting someone to tell you your gonna make tons of money consulting with existing ML clients. This is hard-core sales with lots of cold calling. Take it or leave it.

As long as you consciously get into this knowing the risk and don’t look back once you hit the ground, it’s probably worth a shot.  Proton and Coag are on track above.  Oh, and I’d say this is like valuing a call option…or maybe a convertible.  You always have your underlying education and skills to generate income working for the man if this career doesn’t pan out.  You don’t want to be looking back, but at least you know worst case you won’t be destitute.

I have a few questions about Merrill's POA program, if you don't mind.  I was contacted by a headhunter/recruiting firm that has setup an initial interview with ML.  The recruiter is telling me that the salary in the POA program was NOT a draw, and that you can earn commissions on everything you sell, in addition to the salary.

I already have my 7, 66 and insurance licenses so I'd want to go into production ASAP.  Problem is, I can't live off of the salary alone (for too long), even on the high end of their range and need to have the potential to earn at least $150k the first year.

Based on the research that I've done on these forums, reading old posts in another thread like the one below, it seems to actually be a draw (which goes against what the recruiter is telling me):

[quote=moneyadvisor] PC's are production credits. Transactional credits generated on the sale of investments. For example....Because you would have to do enough business to cover 3 months of your salary, before you would get paid on production above and beyond your salary, there would be no reason for you to sell A or B share funds, or take the upfront commision on annuities. If your salary is $40,000/yr......that's $3,333 per month. At a 40% payout, you would need to do $8,300 gross per month, this is equal to putting $150,000 per month into A share funds. But, they look at this quarterly. SO, if your salary is $9,999 per quarter, before you could collect commissions above your salary, you would have to Gross over $25,000 in the quarter. The program has fee based assett goals, so that guys can annuitize, and hopefully come close to replacing there salary when they graduate.[/quote]

I need to make $12k/month to pay my bills (although they would be quite less working for a wire, compared to being indy where I foot the bill for all marketing expenses, so lets say $10k.

If I could get a $60k salary (not likely, although the recruiter said the average range is $40-80k), I would need to make another $5k month in commissions above the salary to get to $10k/month.  Is that even possible with this POA program?

I guess it would be, if the salary was not a draw...

As an example, someone in the POA program is bring in $750k in assets each month.  $500k is in fee-based accounts to annuitize his book, and $250k is in VA's, mutual funds, fixed annuities, REIT's, whatever transactional business he can round up to get "paid now".

Let's say that monthly transactional business of $250k averaged 6% commission for a GDC of $15k @ 40% payout = $6000 income to rep.  Would the rep's paycheck be $11k that month, or $6k that month ($5k salary and he only got to keep the $1000 extra that he generated over the salary, hence the "draw").

Again, this recruiter is telling me that you get all of the commissions, ON TOP OF the salary, but I don't believe it (after seeing moneyadvisors post and trusting that info as legit) and wanted to ask some people here that I know are either in the POA program, just out of it, or perhaps run it as manager.  I just don't want to waste this manager's time and will probably cancel the interview if it is indeed a draw and I have no chance at seeing 5-figure monthly income until I'm into my 3rd year and off of salary.

Thanks in advance.