ML interview - business plan help!

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Apr 3, 2007 11:30 am

I have a second interview at Merrill Lynch and have been asked to develop a business plan involving how I plan to build a client base - who I will target, how I'll reach them and convince them to become ML clients, etc.


I've been brainstorming on this business plan for a few days now, and was wondering if it's important to keep it only to targeting hnw people - for example, there's a huge (and continually renewing) population of college students in the town where I'm aplying who should absolutely begin to think about investing and saving for retirement etc, but the majority won't have very much money to invest (some would be able to get money from parents, and I knew several while at Cornell who had started their own businesses and were doing very well financially already).  Since I am relatively young, I feel like it's a niche I could really connect with, but I'm not sure if it would be frowned upon as a buisness plan because it won't be bringing in hnw individuals (although one could argue that if you get them started early with Merrill, they'll stay a Merrill customer for life as they go out and get jobs and become wealthier).


If I should focus only on finding hnw people to target, does anyone have any helpful strategies to go about reaching these people when I have to overcome both my age and the fact that I'm a woman?

Apr 3, 2007 12:07 pm

Kap, You know this answer. 


I am 100% certain you will will starve going after college students.  It's not about being comfortable, this is a job of asking uncomfortable questions (in the beginning) to people you hardly know. But learning to communicate to those that make you uncomfortable will bring you wealth in this business.


So ask all your college student friends to name their parents and their parents broker. Did it say Morgan Stanley, Merrill Lynch, Wachovia, or any thing financial. If you don't go after the HNW at Merrill, that guy or gal that seemed extremely nice to you when the toured the ML office will be taking any decent account you've left behind.


Ask the interviewer how much you are expected to bring over. Not as a 40 year old CPA, but as a college graduate fresh to the financial services world. Whatever that number is add 10%-20% and you will be setting the pace in you training group.


Apr 3, 2007 12:08 pm
kap39:

I have a second interview at Merrill Lynch and have been asked to develop a business plan involving how I plan to build a client base - who I will target, how I'll reach them and convince them to become ML clients, etc.


I've been brainstorming on this business plan for a few days now, and was wondering if it's important to keep it only to targeting hnw people - for example, there's a huge (and continually renewing) population of college students in the town where I'm aplying who should absolutely begin to think about investing and saving for retirement etc, but the majority won't have very much money to invest (some would be able to get money from parents, and I knew several while at Cornell who had started their own businesses and were doing very well financially already).  Since I am relatively young, I feel like it's a niche I could really connect with, but I'm not sure if it would be frowned upon as a buisness plan because it won't be bringing in hnw individuals (although one could argue that if you get them started early with Merrill, they'll stay a Merrill customer for life as they go out and get jobs and become wealthier).


If I should focus only on finding hnw people to target, does anyone have any helpful strategies to go about reaching these people when I have to overcome both my age and the fact that I'm a woman?



Short answer is focus on HNW individuals.  You joined Merrill Lynch.  They have all but put it on their sign that they only wish to deal with accounts above $100,000 and really only households with $250,000 and up.  It's not good or bad, it just how they have decided to do business.  By joining them it is how you have decided to do business, or else you won't be doing business with ML very long.


This will just about eliminate the folks your talking about (even the successful entrepreneurs...either they're money is tied up in the business, or else it should be if its doing so well) so you might as well think about those folks as pro bono.  If you want to help them, fine.  Just don't try to build your business from it.

Apr 3, 2007 1:31 pm

You're right, I knew this answer...maybe was holding out hope that it would work


I guess my next question would be - how do I judge which people are potentially HNW and which aren't? Local business owners came to mind as potential prospects, but not all of them are profitable; same with university professors or real estate agents I know.  Is it simply that I can present these groups as potentially HNW even if everyone in them isn't?

Apr 3, 2007 2:43 pm

That is the nature of prospecting. Once you find one, you will find many. This is typical of relationships, we want to be friends with people like us. This is why so many of us work to get referrals.


Bankfc is correct, you have skipped college to go to the NBA. Your funnel at ML eliminates what would be a HNW for an Edward Jones newbie. If you get hired ask some of the successful FA's to send you some of the accounts that they no longer want to service. You can pass them along later, but you might find a gem. As our my old RL at Jones use to say, "Every Dud knows a Stud" 

Apr 3, 2007 3:05 pm
kap39:

You're right, I knew this answer...maybe was holding out hope that it would work


I guess my next question would be - how do I judge which people are
potentially HNW and which aren't? Local business owners came to mind as
potential prospects, but not all of them are profitable; same with
university professors or real estate agents I know.  Is it simply
that I can present these groups as potentially HNW even if everyone in
them isn't?





Kap, you should seriously think about if ML is right for you.



$15M 2nd year target == 60 $250K Accounts == 3.3 New accounts per month
(Assuming 18 live months). Opening 3.3 accounts per month isn't hard,
but getting 3.3 accounts of the type that ML wants is indeed hard.



If you fail, the odds are you will have very little to show for it.



The odds are very strong that you won't make it. ML is a take a pot of
spaghetti, toss it against the wall, and see what sticks, kind of shop.



 

Apr 3, 2007 3:36 pm

From the research I've been doing, I really like ML.  The advisor I've been interviewing with is very friendly, and the branch atmosphere is more "we want to help you succeed" than "sink or swim".


I saw this question somewhere else but don't think it was ever really answered - are the AUM targets adjusted branch by branch? This branch is located in a smaller community with a lower median income...does this change anything?

Apr 3, 2007 3:39 pm
kap39:

I have a second interview at Merrill Lynch and have been asked to develop a business plan involving how I plan to build a client base - who I will target, how I'll reach them and convince them to become ML clients, etc.


I've been brainstorming on this business plan for a few days now, and was wondering if it's important to keep it only to targeting hnw people - for example, there's a huge (and continually renewing) population of college students in the town where I'm aplying who should absolutely begin to think about investing and saving for retirement etc, but the majority won't have very much money to invest (some would be able to get money from parents, and I knew several while at Cornell who had started their own businesses and were doing very well financially already).  Since I am relatively young, I feel like it's a niche I could really connect with, but I'm not sure if it would be frowned upon as a buisness plan because it won't be bringing in hnw individuals (although one could argue that if you get them started early with Merrill, they'll stay a Merrill customer for life as they go out and get jobs and become wealthier).


If I should focus only on finding hnw people to target, does anyone have any helpful strategies to go about reaching these people when I have to overcome both my age and the fact that I'm a woman?



You can take them if you want them, but remember, ML won't even pay you on revenue generated on accounts under $50K

Apr 3, 2007 5:22 pm
kap39:

From the research I've been doing, I really like ML.  The advisor I've been interviewing with is very friendly, and the branch atmosphere is more "we want to help you succeed" than "sink or swim".


I saw this question somewhere else but don't think it was ever really answered - are the AUM targets adjusted branch by branch? This branch is located in a smaller community with a lower median income...does this change anything?


Remember that these folks practice being friendly. If you don't meet production goals, they stop being friendly.  


They have every reason to give you a shot, since when you get fired for non-production the office keeps the scraps.


AUM is $15M by the end of 2 years or you get canned. And given the fairly low payouts, $15M won't generate more than $40,000 in yearly payout. So you really need much more. Figure you want to have at least $25M by year 3.

Apr 3, 2007 5:50 pm
AllREIT:
kap39:

From the research I've been doing, I really like ML.  The advisor I've been interviewing with is very friendly, and the branch atmosphere is more "we want to help you succeed" than "sink or swim".


I saw this question somewhere else but don't think it was ever really answered - are the AUM targets adjusted branch by branch? This branch is located in a smaller community with a lower median income...does this change anything?


Remember that these folks practice being friendly. If you don't meet production goals, they stop being friendly.  


They have every reason to give you a shot, since when you get fired for non-production the office keeps the scraps.


AUM is $15M by the end of 2 years or you get canned. And given the fairly low payouts, $15M won't generate more than $40,000 in yearly payout. So you really need much more. Figure you want to have at least $25M by year 3.



A slight exaggeration on the payout.  $15MM will pay rougly 50-60, assuming it's annuitized (at least $10MM has to be), or at the very least, aren't dead assets.

Apr 3, 2007 9:38 pm
entrylevelFA:

A slight exaggeration on the payout. 
$15MM will pay rougly 50-60, assuming it's annuitized (at least $10MM
has to be), or at the very least, aren't dead assets.





Ok, I was assuming 40bp payout, still even for all that work, you have
very little to show for it. And if you don't catch the brass ring, you
have nothing to show for it.

Apr 4, 2007 12:25 am

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.

Apr 4, 2007 12:45 am
BullBroker:

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.



You have no clue.

A 90% payout leaves me a lot of money to pay attorneys, assuming I ever get haulted into arbitration.  Oh, and by the way we have E&O insurance.

Enjoy your paycheck, your ignorance, and your weekly sales meetings.

You sound like me about 10 years ago, but I never had such poor spelling.

So if it is such a certainty, why hasn't it happened yet?

Apr 4, 2007 2:52 am
BullBroker:

I can absolutely not wait til I start seeing all
these indy's wiping out.  We'll be reading in the newspaper 85
year old widow woman sues Regular Joe Indy, wins suit Indy out of
business.  When the clients start figuring out how little
liability protection all these indy's have they will swarm like
vulchers.  Then all the little indy's who come on here saying how
great life is will be crawling to the front door of the local wirehouse
beggin for a paycheck.  It's not a question of will it happen just
when will it happen.





If I could, I would go short on every single ML POA for a 3 year period. 90%+ won't make it. And those who do make it, have little to show for themselves.



Now if you take a class of new indy's, these are commited people who
haven't washed out yet, and who want to continue in this buisness under
less restrictive circumstances. If you think about it, with a 85%
payout you have less incentive to cut corners.



OTH you have an POA with only $14M and 2 months to go .....



Again, as Joe said, you have no clue what you are talking about. ML has its own sort of kool-aid.



ML isn't exactly dying to go to bat for you in NASD Arbitration. If
you get cocked in Arbitration, ML pays a settlement (probably a
fraction of your salary), you get a dirty U-5 and your book gets split
up among the vultures in the office.



It is really in everyone elses best interest that you be tossed out so your estate can be passed on to more deserving people.



BTW: You've probably never seen this photo of me (nee Miguel Abellan) taking on an overconfident ML POA?



http://www.nypost.com/news/2006photos/photo79.htm



BullBroker, you are mighty similar to this character: as your head is also stuck in the sand.



Apr 4, 2007 7:23 am
AllREIT:
BullBroker:

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.



If I could, I would go short on every single ML POA for a 3 year period. 90%+ won't make it. And those who do make it, have little to show for themselves.

Now if you take a class of new indy's, these are commited people who haven't washed out yet, and who want to continue in this buisness under less restrictive circumstances. If you think about it, with a 85% payout you have less incentive to cut corners.

OTH you have an POA with only $14M and 2 months to go .....

Again, as Joe said, you have no clue what you are talking about. ML has its own sort of kool-aid.

ML isn't exactly dying to go to bat for you in NASD Arbitration. If you get cocked in Arbitration, ML pays a settlement (probably a fraction of your salary), you get a dirty U-5 and your book gets split up among the vultures in the office.

It is really in everyone elses best interest that you be tossed out so your estate can be passed on to more deserving people.

BTW: You've probably never seen this photo of me (nee Miguel Abellan) taking on an overconfident ML POA?

http://www.nypost.com/news/2006photos/photo79.htm

BullBroker, you are mighty similar to this character: as your head is also stuck in the sand.


What I have to show for it is I was able to raise $15MM in my first two years in the business.  What do you have to show for it as an indy besides a bigger paycheck and no sales meetings?

Apr 4, 2007 8:56 am
BullBroker:

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.



You should learn to open your ears and shut your mouth. There is a lot of valuable information and constructive criticism on this forum. It seems like your thin skin is a constant issue for you. My suggestion would be to eat as many of those free wholesaler lunches you were talking about in a previous post. That way when you get fired you will have a little extra weight on you to help you survive on the streets.

Apr 4, 2007 10:43 am
12345:
BullBroker:

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.


You should learn to open your ears and shut your mouth. There is a lot of valuable information and constructive criticism on this forum. It seems like your thin skin is a constant issue for you. My suggestion would be to eat as many of those free wholesaler lunches you were talking about in a previous post. That way when you get fired you will have a little extra weight on you to help you survive on the streets.





Exactly.  He gets upset when the truth contradicts his preferences...

Apr 4, 2007 11:24 am
BullBroker:

I can absolutely not wait til I start seeing all these indy's wiping out.  We'll be reading in the newspaper 85 year old widow woman sues Regular Joe Indy, wins suit Indy out of business.  When the clients start figuring out how little liability protection all these indy's have they will swarm like vulchers.  Then all the little indy's who come on here saying how great life is will be crawling to the front door of the local wirehouse beggin for a paycheck.  It's not a question of will it happen just when will it happen.


...you've just proven that Jones hasn't cornered the Kool-Aid market.  You need to quit believing everything you're told and learn to think for yourself.  Indy vs. wirehouse has little bearing on whether an advisor stays in business...it's mostly a function of the advisor's competence, ambition, and ethics.  I survived and even significantly grew my business between 2000 and 2002.  How'd you do in that market?


You've got a lot to learn about this business and you'll be better off if you don't try to learn all of it at the feet of your branch manager.

Apr 4, 2007 11:47 am
Indyone:

I survived and even significantly grew my business between 2000 and 2002.  How'd you do in that market?



I think he was still in high school back then....

Apr 4, 2007 2:02 pm

time-out for another newbie question: In terms of markets to look for prospective clients in a relatively small town, connections through a real estate agency came to mind - their clients who are just moving into the area, who would be likely to switch advisors simply because of the relocation seem like a great target. 


Is this a good idea or am I way off track?