Retiring Broker Relationship

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Apr 16, 2007 9:24 am

We have a couple of brokers in our office that are nearing retirement and they have approached me about working with them.  My manager said that I should approach them and discuss the possibility of helping them to increase production on their existing books.  They each have roughly 50MM under assets and are barely do any production because they are over 65 and 70 years old and play golf all the time.


I am working hard to build my own book but this would be very helpful to keeping my head above water.


Anyone with experience in this type of relationship please give me some things to contemplate?? 



Apr 16, 2007 9:11 pm

Mining an existing book can be very beneficial when it's from someone with long-term relationships.  Sometimes those clients' situations have changed over the years, and the existing broker has not stayed on top of them.  I am working on a bunch of inactive accounts for a senior broker, and I have turned zero gross the past 18 months into 10K gross in a three months.  Nothing to live on, but I have just scratched the surface.  But there better be something decent in it for you.  And don't take your eye off your own book.

Apr 16, 2007 9:33 pm

Get it in writing...


Time lines, percentages, everything.

Apr 17, 2007 12:21 am

I am just curious, how much does a book cost? I have heard of the concept and I assume the cost is based on the amount of assets under management. Can someone help me out with this?

Apr 17, 2007 12:24 am
BigRed:

I am just curious, how much does a book cost? I have heard of the concept and I assume the cost is based on the amount of assets under management. Can someone help me out with this?



The cost is what ultimately what a willing buyer is willing to pay.

It also depends up on whether or not the b/d in question(i.e. brokerage firm) will allow said broker to sell his/her book.

The actual valuation depends upon many factors, including assets, velocity, percentage of revenues from recurring fees versus commissions, etc.

There have been threads on this matter in the past.  Try the "search" function in the upper right hand corner of this page.