My broker sez
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[quote=Morphius]
[quote=fastcar]doesn’t the dismantling of ML, BS, Goldman, MS…all the investment banks give you an indicate that an FA should polish up their resume??? get a clue.[/quote]
I have no idea which post you are even responding to, but regardless let me ask you this: what in your opinion is the significance of investment banking’s demise on financial advisors that should lead them all to polish up their resumes?
[/quote]
I dont know which post he is referring to either. But the operative word is “all” . Thats where his statement strays from reality. The lower end FA;s and the commission based FA;s (most of them) and the ones that lived off of syndicate, pfds, closed ends, clearly need to go find something else to do. The FA;s who are top half to 60% of their firm and take a consultative approach (by this i DO NOT necessarily mean managed money alone, but a holistic approach to their clients needs) will not only not need to “polish up their resume”, they will thrivein the new world that is coming.
Bottom line - PEOPLE STILL NEED PROFESSIONAL, UNBIASED ADVICE - MORE THAN EVER.
Seems to me a client would want more – well, stock brokering.
The age-old talking points from the world traveler with a fondness for pictures of dogs in sweaters….
Smokescreen Agent -
You bring up some good points
However, i think the Advisor - the FA who truly takes an advisory approach, and loves his work, will more than survive. People need advice. Yes the younger generation knows how to access information - but do they know what to do with it? Do they know how to position themselves to prevent emotional decisions? Do they know how to figure out what they really need, based on their assumptions about lifespan, inflation, asset class returns?
Regarding your comment about fees on top of MF expenses, etc. and auto rebalancing - i agree to a large extent. Thats why i prefer an Advisory Relationship on a fee basis - separately managed accounts - with ME managing the money. I get to educate the client, run the money according to the expectations i;ve set up with the client, and i can be tactical in tough times, and talk to the client when appropriate about decisions I;VE made. And more and more, it seems to me ETF’s make sense in MOST (not all) situations for most of the portfolio, and sometimes individual stocks. Using these instead of MF;s with 1% asset based fee for accts of $1MM or more, makes sense as long as you are bringing value.
[quote=iceco1d]Smokescreen,
No offense, but it's pretty clear that's the reason you aren't in the business anymore. Your struggle to find value in what an "advisor" does is the problem. Others will tell you - I'm the first one to jump in the fray regarding costs, etc. That is such a small part of what an advisor does. I disagree that the younger generation knows more about investments than the older generations...I have plenty of 20 & 30 year old clients (that is my age range, and I have plenty of peers in this demographic), they are just as grateful for quality advice (and equally clueless on their own) as the older generations. But even if they were strikingly sharp regarding asset allocation funds from T. Rowe Price and Vanguard...where should they put them? 401K? Should they go with the traditional or ROTH account? If times get tough, should they take a loan from their 401k/403b? What are the risks? What are the consequences? When they get closer to retirement, what will they add to their Asset Allocation & Target Date fund portfolios to help them cope with bear markets? Will they buy annuities? Will they buy negatively correlated securities? Both? Neither? How much of each? When should they take Social Security? Will they even HAVE Social Security? What are their insurance needs? What if they get hurt and cannot work? How much money will they need to put in those Asset Allocation funds each month to have enough money to retire at age 60? Once they retire, how much money can they take out each year for their paycheck? Do they know how to improve their credit score? How about create, and stick to, a household budget? Will they have the fortitude to stay invested during times like these? Will they bail to CDs tomorrow? Do they know they can start a Spousal IRA for their homemaker spouse? Do they know about age 50 catch-up contribution limits? Do they know about ROTH conversions? Should I keep going? I think we provide a heck of a lot of value for our 1% fee. [/quote] VER VERY VERY WELL PUT...All I have to do is look around my town to concur with you on this thought process, Vin. Read this interesting article on the Great Depression…
http://www.nytimes.com/2008/10/01/business/economy/01leonhardt.html?_r=1&hp&oref=slogin[quote=iceco1d]Smokescreen,
What are their insurance needs? What if they get hurt and cannot work? [/quote] AFLAC!Since fastcar won't respond to my question, I'll clarify my point in asking. You need to better understand the diffferent sectors within the financial services industry, fastcar. Registered reps, or FAs in the more common parlance of this RR forum in which you offer your blinding insight, are not employees of investment banks. They work for broker/dealers, which may be under common corporate ownership with an investment bank but brokerage firms are most certainly not investment banks. Hence the notion that FAs should polish their resumes simply because investment banks have been "dismantled" is just nonsense. Moreover, the relevant information any potetnial new b/d would be interested in from an experienced FA is certainly NOT a resume. It is their production details and a clean U 4. I'm not saying FAs at any of the firms you mention or anywhere shouldn't be preparing for a possible change of firm, but not for the reason you state.[quote=fastcar]doesn’t the dismantling of ML, BS, Goldman, MS…all the investment banks give you an indicate that an FA should polish up their resume??? get a clue.[/quote]
I have no idea which post you are even responding to, but regardless let me ask you this: what in your opinion is the significance of investment banking’s demise on financial advisors that should lead them all to polish up their resumes?
Morph, good points. I think less experienced advisors don’t quite get it. RReps are actually ASSETS of their firms (even if they can’t be quantified on a balance sheet). B/D’s are bought and sold purely on the level, consistency, and reliability of the income streams generated by their FA’s. If anything, FA’s should polish up their T-12 records to show to prospective new employers so they can talk about retention packages or moving-day checks. FA’s are basically “mini-businesses”, not unlike today’s MLB baseball players, that come with track records and proof of bottom-line results.