Recruiting by Brokerage Firm

or Register to post new content in the forum

23 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.
Mar 16, 2007 9:47 pm

All,


I'm a 45 year old former telecom exec - that needs to stay in Chicago.  I've been doing contract work, but the likelyhood of returning to a job in my field is slim in this area.  I've got young kids + good lifestyle - so I need to earn.


So time to consider changing businesses....


Got a call from a recruiter from a brokerage - they like my sales background and that I live in a prosperous Chicago suburb (the appeal is my personal and professional connections, I guess).


I got the pitch - training, salary for awhile, "how much do you need to make while you build your business?," etc. 


Actually, sounds kind of interesting, but I'd like to get perspective from people who have done it - or hired guys like me.


Any thoughts?


Many thanks,


M


Mar 16, 2007 11:11 pm

All,


I'm a 45 year old former telecom exec - that needs to stay in Chicago.  I've been doing contract work, but the likelyhood of returning to a job in my field is slim in this area.  I've got young kids + good lifestyle - so I need to earn.


Does this mean you are currently unemployed?


So time to consider changing businesses....


Got a call from a recruiter from a brokerage - they like my sales background and that I live in a prosperous Chicago suburb (the appeal is my personal and professional connections, I guess).


Your age and sales experience are a great advantage. It's great to know professionals, but turning them into clients is another ballgame.


I got the pitch - training, salary for awhile, "how much do you need to make while you build your business?," etc. 


They can talk salary, but we will all tell you this is a commission business. You had better have 1-2 years of savings you will be able to burn. How much will you make is hard to tell. The longer you are able to keep it up, easier it becomes. In 5 years you could be making 150 to 250. But from my experience only about 10 -15 % of us make it that far.


Actually, sounds kind of interesting, but I'd like to get perspective from people who have done it - or hired guys like me.


Any thoughts?


Talk in person with brokers from different firms, there are different cultures in each one. Once you narrow it down, let us know which firm, someone here works or did work with that firm.


Many thanks,


M


Mar 16, 2007 11:55 pm

Which suburb are you in?

Mar 17, 2007 7:45 am

top 20% will make 85K in the first year of production.

Mar 17, 2007 8:30 am

I have been involved with the hiring and training of many people just
like you.  I have found the culture shift to be very difficult for
them in that they are required to do things that they certainly did not
have to do in there prior work:

***Required weekly meetings with punishment if late or not there

***Work nights

***Sitting in cube in the middle of the office

***Being a "rookie"

***Having the same status as the 22 year old grad that was just hired

***Constantly being told how to do everything

***Having many of the contacts you have reject your sales advaces...much to your surprise

***Knocking on the door of a prospects home for which they agreed to
meet at 7:30pm an hour away from your house, and not getting any answer.

***The general lack of respect you get when you initially contact people.

***The frustration of seeing people your age or younger making 7X what
you are making because they chose to go through what you are many years
ago.



All in all its abot the attitude and long term vision.  The short
term stinks plain and simple.  For that reason, many just pack it
in and move on to something else (or get asked to).







***

Mar 17, 2007 2:09 pm

very good description.


Mar 17, 2007 8:43 pm

Very well put rightway.


MMM: Similiar to you, I started at age 48, out of a completely different industry, but with contacts and a long background in sales. I can tell you that Rightway, hit the nail on the head. I have experienced every on of the items he listed, without exception. It aint fun! But if you have the wherewithall to stick it out, this can be the best job in America. Build you business, enjoy it, monetize it, work in your later years a few days a week (if you build it right) and make 3-4-500k)


Different firms different cultures. I would only start out with a National Wirehouse, i.e. Merrill, Smith Barney, etc, but I'm sure some here would disagree. I think the structure of their training programs and the power of their brands are invaluable to someone new in the business.


Once you start production, its all about playing in traffic. How many people you talk to or see each day, how you represent the value you offer, will make you or break you.


If you're a people person, have the capital to get through the first few years (whatever you think you need, add 10-20%, and however long you think it will take you to get to the $$ you need to make, add a year or two), and have some affinity for the markets, investing, personal finance, then I encourage the move.


Since you are in a similiar position as I was when I started, you might have specific questions, feel free to PM me.


Mar 18, 2007 7:34 am

All,


My goodness - thanks for your gracious replies - and candid feedback.


To Bamzor (and all) - no, not currently unemployed - but doing contract work in telecom - made just shy of 200K last year (1099).  No benefits, retirement, stock options, 401K, etc.  Like I said, not a long term solution....


    >  That's what's forcing the change.


To Bobby Hull:  Lake Forest - been there more than 10 years.  Deeply embedded in the community - but not the blue blood part of it.


To Rightway:  Yes - definitely agree that short term would suck.  But my old industry no longer offers the prosperity and stabiliy - so I'm sort of forced to have the humility and attitude to start over - got young kids, after all.


Few more questions - for your wise and informed commentary:


1)  I'm told that I need to collect $50M of investor capital to get back to $200K income - sound about right?


2)  I've spoken to acquaintences & friends I know at Morgan Stanley, AG Edwards, USB Wealth Management and Wayne Hummer (a small one in Lake Forest).  Any specific comments on these firms?


Many thanks,


Matthew



Mar 18, 2007 9:29 am

That sounds about right, M.



Figure about 1% of assets under management (AUM), and if you're gettting a

60/40 split, that would give you $200K pretax.

Mar 18, 2007 11:01 am

To expand on Philo's reply, at Smith Barney, (only frame of reference I have, I'm sure the other wirehouses are similiar), the average Return on Assets, firmwide is about .55. Fee based business is somewhat higher, so those doing, say, 70% fee based, might see an ROA overall of about .80. $50,000,000 in assets at .80 =$400,000 gross commissions, at 40% brings you to about $160k to you.


As far as the frims you mention, A.G. Edwards has a great reputation, I am not familiar with their training program, so I cant comment on whether it would be a wise first step. The local firm? I would stay away, for now, and look for a solid structured training program, where they spend the money on helping you get all the knowledge you need.


I am sure Morgans program, is as good as any other National Wirehouse, i.e. Merrill, SB, Wachovia.


The point is, I think if you do decide to make this move, what you should focus on is the training you'll recieve. The training salary is less important, because in your situation, whether you get a salary for two years of $45k, or 75K doesnt matter, its going to suck either way, and after taxes, it wont affect you longer term. The training program WILL.


jmho


Mar 18, 2007 11:09 am
pratoman:

To expand on Philo's reply, at Smith Barney, (only frame of reference I have, I'm sure the other wirehouses are similiar), the average Return on Assets, firmwide is about .55. Fee based business is somewhat higher, so those doing, say, 70% fee based, might see an ROA overall of about .80. $50,000,000 in assets at .80 =$400,000 gross commissions, at 40% brings you to about $160k to you.


As far as the frims you mention, A.G. Edwards has a great reputation, I am not familiar with their training program, so I cant comment on whether it would be a wise first step. The local firm? I would stay away, for now, and look for a solid structured training program, where they spend the money on helping you get all the knowledge you need.


I am sure Morgans program, is as good as any other National Wirehouse, i.e. Merrill, SB, Wachovia.


The point is, I think if you do decide to make this move, what you should focus on is the training you'll recieve. The training salary is less important, because in your situation, whether you get a salary for two years of $45k, or 75K doesnt matter, its going to suck either way, and after taxes, it wont affect you longer term. The training program WILL.


jmho




You're at SB? That explains everything. You hate EIA's because you can't sell them. Sucks to be you.

Mar 18, 2007 2:49 pm

M, I've been with Edward Jones for 14 years just shy of 100m AUM.  I will be going Indy in about 45 days--I will tell you that all these "professionals" are right!  On these post when everyone agrees that rare.


The first 2 years are hell on you and the family.  We are talking about nights 2 to 4 per week and some Saturdays to get up and rolling.  Money is tight.


The next three are a blur and that is the time you feel like "what the hell am I doing?"


After 5 years life gets better no matter which firm you survive at.  Most will give you some salary to keep you from welfare and the food banks.  Edward Jones has a good training program provided you can tolerate the sugar from the mass does of koolaide they make you drink.  A G Edwards has a good training program too.  SB has a great name behind it and they do like professionals from other areas to become FC's. 


What area of Chicago do you live in?


Mar 18, 2007 7:23 pm

Roadhard,


I'm in Lake Forest - been here about 10 years. 


Agree w/ you and Prato about focus on training.  Acquaintences in the biz tell me the first few years is tough - nights and weekends. 


The plus you take the kids to school (mine are young - 6 and 9) and use their activities to netork and prospect - there are lots of folks with $ here - even among the people in my unglamorous public school circles.


I might be wrong but it's got to be a whole lot easier being a member of the community rather than a 25 year old with a less prosperous network.


I'd still have to knock on doors (literally), but what the hell - need to earn and opportunties are fewer and far between in my old field - especially in Chicago.


Right thinking?  Major flaws? 


THIS DISCUSSION IS VERY HELPFUL!


Thanks,


MMM



Mar 18, 2007 7:37 pm
MMM_Canfield:

Roadhard,


I'm in Lake Forest - been here about 10 years. 


Agree w/ you and Prato about focus on training.  Acquaintences in the biz tell me the first few years is tough - nights and weekends. 


The plus you take the kids to school (mine are young - 6 and 9) and use their activities to netork and prospect - there are lots of folks with $ here - even among the people in my unglamorous public school circles.


I might be wrong but it's got to be a whole lot easier being a member of the community rather than a 25 year old with a less prosperous network.


I'd still have to knock on doors (literally), but what the hell - need to earn and opportunties are fewer and far between in my old field - especially in Chicago.


Right thinking?  Major flaws? 


THIS DISCUSSION IS VERY HELPFUL!


Thanks,


MMM





I was a Highland Park kid. Lived downtown near Division and LSD as a teenager. Parents currently live in Winnetka. Lake Forest would be a cool place to work in this business.

Mar 19, 2007 7:23 am
MMM_Canfield:

Roadhard,


I'm in Lake Forest - been here about 10 years. 


Agree w/ you and Prato about focus on training.  Acquaintences
in the biz tell me the first few years is tough - nights and
weekends. 


The plus you take the kids to school (mine are young - 6 and 9) and
use their activities to netork and prospect - there are lots of folks
with $ here - even among the people in my unglamorous public
school circles.


I might be wrong but it's got to be a whole lot easier being a
member of the community rather than a 25 year old with a less
prosperous network.


I'd still have to knock on doors (literally), but what the hell -
need to earn and opportunties are fewer and far between in my old field
- especially in Chicago.


Right thinking?  Major flaws? 


THIS DISCUSSION IS VERY HELPFUL!


Thanks,


MMM







Pretty much each new person we hire, mostly just like you, say the same
thing.  Imagining and saying it is one thing, living it is another.



Your Network:  you will find that many of these people have
advisors firmly rooted with them and their families already, and if
they don't they are likely not inclinded to pay for the service or they
just don't have the money.



Door Knocking:     I really cannot tell you how
very difficult dealing with the rejection can be.  You will find
people that normally would greet you with professional and polite
responses will cast a cold look over there face as they figure out how
to get rid of you. 



I am not discouraging anyone, just make sure you are ready for the
challenge.  You really will be starting a career from scratch.



As for AUM and the fee's generated:  I know at ML the goal is 15
mil in AUM in 2 years, with 10 mil of that in fee based. This fee based
will provide a minimum of 1% return, or $100k in production.  Your
pay-out is 50% for a few years, so that is $50k base.  Pick up
another 20K or so in production from the other 5 mil to get another 10K
in income.  Add in the new business you are bringing in and there
is another 10-20K.  So after you graduate the training program (18
months to 2 years) for which you were paid a salary plus bonus, you
should be on firm ground earning around 75-80K. 



Add 5-10 mil per year to the fee based business and you are of and running. 


Mar 19, 2007 11:04 am
MMM_Canfield:

Roadhard,


I'm in Lake Forest - been here about 10 years. 


Agree w/ you and Prato about focus on training.  Acquaintences in the biz tell me the first few years is tough - nights and weekends. 


The plus you take the kids to school (mine are young - 6 and 9) and use their activities to netork and prospect - there are lots of folks with $ here - even among the people in my unglamorous public school circles.


I might be wrong but it's got to be a whole lot easier being a member of the community rather than a 25 year old with a less prosperous network.


I'd still have to knock on doors (literally), but what the hell - need to earn and opportunties are fewer and far between in my old field - especially in Chicago.


Right thinking?  Major flaws? 


THIS DISCUSSION IS VERY HELPFUL!


Thanks,


MMM



The networking will likely bear less fruit than you are envisioning. The transition from group member to advisor is one that is difficult to navigate. Many people already have relationships and may not be receptive to being a guinea pig as you cut your teeth TRYING OUT something new.


Building an advisory or brokerage business is a pure and simple sales task. It's all about the numbers. Numbers of contacts, numbers of presentations and most importantly, number of closes.


It's unlikely that your networking would bring you enough business quickly enough to serve your needs. That's the bad news. The really good news, and it is really good news, is that there a lot of people out there with a lot of money. We are talking millions of people. All you have to do is get out there and find them.


Much of what has been written on this thread is "tellin it like it is." This business is deceptively simple. It's just not easy.


With the ability to pull 200K outside this industry, having young children at a time intensive stage of their lives, and carrying all the baggage that goes along with an upper middle class suburban lifestyle, look long and hard before you leap. Your life, time, pressure, and money, will change for the worse for several years. It only gets better if you can negotiate the web of mazes created from all the competing interests in your life, and fight the voice coming from between your ears. That voice will be telling you that there's got to be something easier than this. And the voice will be right.


I'm not trying to discourage you. I love this business and welcome all who wish to enter the business. Just at your age 45, and livin the life, it might be culture shock to cut that lifestyle back to make this change. For my part, I want you to know what you''re getting yourself into. Your life experience gives you a great advantage over the 25 year old in the next cubical. Your financial and family obligations MAY put you at a disadvantage.


Another point about your age, it doesn't matter from this end. I've seen people in their late fifties come in and succeed wildly. It's all about you. Your ability to withstand the first few years.


Good luck. Let us know what you do.



Mar 19, 2007 2:22 pm
NOVA:

top 20% will make 85K in the first year of production.


That is complete BS.  Top 10% will make 50k revenue in their first year.  Pay out on that will be 10-20% or $5,000 to $10,000 while you are receiving a salary.

Mar 19, 2007 8:35 pm
maybeeeeeeee:
NOVA:

top 20% will make 85K in the

first year of production.



That is complete BS. Top 10% will make 50k revenue in their first

year. Pay out on that will be 10-20% or $5,000 to $10,000 while you are

receiving a salary.





Am I reading this wrong? Are you including the training period and

everything from day 1 of employment? This sounds remarkably low. I

came out of the gate quicker than many, but I am certainly not in the top

10%, and I made more than that.

Mar 20, 2007 11:12 am
Broker24:
maybeeeeeeee:
NOVA:

top 20% will make 85K in the

first year of production.



That is complete BS.  Top 10% will make 50k revenue in their first

year.  Pay out on that will be 10-20% or $5,000 to $10,000 while you are

receiving a salary.





Am I reading this wrong? Are you including the training period and

everything from day 1 of employment? This sounds remarkably low. I

came out of the gate quicker than many, but I am certainly not in the top

10%, and I made more than that.





That's because you're part of the "best sales force on Wall Street".....



Sorry...couldn't resist!

Mar 20, 2007 8:40 pm

There is no way to rank ML POA folks based on income, because they come
in on so many different income levels.  Some come in with $85K in
salary and do very little production in year one, while others come in
at $35,000 and do very well in production. 





Depending on what you come in with in terms of salary, that salary will
stay with you for 18 to 24 months.  The first 17 weeks are getting
licensed and such, then you get a production number.  The clock
begins ticking for your quarterly goals then, however your first month
is a freebie (so you get 4 months to get your 1Q goals. 



Generally speaking the intent should be to graduate in 18 months with
10-15 mil in fee based business.  As I indicated before, this will
bring in around $50k to $75k in income.  In addition you would
have accumulated some stock and several cash bonuses.