Starting ML PMD

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Jul 18, 2012 2:05 pm


Hello everyone. I've been reading these forums for a couple weeks now and thought I'd start an account and get more involved. I start the ML PMD program in a couple weeks and am pretty pumped. I'm in my early 20s but have a relatively good network to help get me started. 



Any advice anyone has for the ML or PMD in general would be much appreciated.



 

Jul 18, 2012 4:15 pm
blitzinger:


Hello everyone. I've been reading these forums for a couple weeks now and thought I'd start an account and get more involved. I start the ML PMD program in a couple weeks and am pretty pumped. I'm in my early 20s but have a relatively good network to help get me started. 



Any advice anyone has for the ML or PMD in general would be much appreciated.



 

This is not what you want to hear but you asked so here goes:

You are not special.

It doesn't matter that "...I have never failed at anything in my life." Unless you've worked as an FA at a wirehouse in a post 2008 crash world, your previous lack of failure means exactly... squat. If you want a graphic representation of the paradigm shift you are about to experience rent the move Men in Black 1. The scene where Will Smith and Tommy Lee Jones are getting on the down elevator for the first time going into the trans-space station is a good one.

A network no matter how marvelous is of zero value unless they will move assets to you pronto. You do not have the luxury of waiting for six months into production to get the assets moved. By that time, if you have no other serious production, you will be well behind in your hurdles and Merrill is in a phase where they are cutting people who fall behind...quickly.

Merrill Lynch is, in my experience, a rich kid's club. If you're not a rich kid your chance of fitting in is close to none percent.

In respect to your next three months of studying for your licenses. It doesn't matter nor does anyone care for more than five seconds what your score is on your series 7 and series 66. Yes, you need to pass to keep your job, but getting a 75 vs. a 95 will mean nothing. And this phase is the easy part. Remember that when you are working through the FIRE material. BTW: The guy who teaches the FIRE series 7 is a great guy and he genuinely wants you to pass. The 66? Good luck. Their curriculum and the teacher are dreadful.

You are entering Vulture Land.

The smaller producers will be eying you trying to figure out how quickly you will fail out and they can pick up some new assets. Don't trust their smiles. They know that you are a statistical probability to fail out.

You need to be connected to wealth from the get go. If your network has millions in investable assets AND will (quickly) view you as a person to oversee those assets then your chances of making a career at ML are good. I can't tell you how many PMD's I've observed and heard of through the grapevine that thought they had a wealthy network but the network didn't move assets in sufficient amounts, fast enough. Often, the people in the network don't want someone in your position to know their personal business.

If you can get on a REAL team, do so immediately. A real team is one that will take you under their care and gift you assets when you need them so you can stay ahead of your hurdles. Watch out for teaming opportunities with the Vultures. This time last year I was asked to come into one of the small/medium producers offices. When I showed up he had the local BofA Wealth Management Banker in his office. I sat down and he closed the door.

He proceeded to stroke me about my great work ethic and how wonderful I was and that they both wanted to help me make it. I was really stoked. He laid out ideas on how we could work together. Those ideas involved me doing all the work he was too lazy to do, namely, prospecting. I thought that was an even trade-off and I gladly accepted their offer.

I got busy in a hurry and started setting up meetings via cold calling and cold walking. He breezed into those meetings just before they started and did a half-hearted job of presenting. He rolled his overweight self out the door and left EVERYTHING else up to me. Nice work if you can get it.

About six weeks into it he put a pool number/split agreement under my nose and told me I needed to sign it. I read it and you know what the split was? 75/25 and guess who was the 25?

I never lifted a finger again for working with him. He is lazy. He comes in late and leaves early.

You can say that I am just being negative, and I am. When I joined ML I was happy and super pumped about it. It was Merrill Freaking Lynch!!! Well, Merrill Freaking Lynch had to be bailed out and acquired in 2008 because they are so stupid.

I had stars in my eyes when I walked in the front door and no one could have convinced me that I was headed for a downfall. Life is an excellent teacher.

And don't get me started on BofA. It started out with them pushing us to do mortgages and pushing us to feed them leads for commercial loans. Now guess what they are pushing in my neck of the woods? Dealer financing and individual car loans. Yeah Baby! The great Merrill Lynch is now supposed to start hawking loans to car dealers.

I know that there is a 99.999999% probability that this will go in ear and out the other because you believe you are different and special, and you may be. I challenge you to stay active in the forums and let us know when reality hits.

Jul 18, 2012 4:51 pm

I like to take the bad with the good so I'll really consider the post and I appreciate the input. Fortunately, I was an intern at the same office a couple years ago so they know me well and I left a good impression (at least from what several have said).

I would rather work solo as one of the people I know with investible assets that's been my mentor through college is worth quite a bit. I'll definitely consider teamming up but will have to look closely at the split as you noted.

Thanks again

Jul 18, 2012 5:20 pm
blitzinger:

I like to take the bad with the good so I'll really consider the post and I appreciate the input. Fortunately, I was an intern at the same office a couple years ago so they know me well and I left a good impression (at least from what several have said).

I would rather work solo as one of the people I know with investible assets that's been my mentor through college is worth quite a bit. I'll definitely consider teamming up but will have to look closely at the split as you noted.

Thanks again

Good luck with that.

Jul 19, 2012 9:50 am

Unless you're coming in to take over your dad's book, get put on a team, or are on a second/third career it is a VERY hard job.

Jul 19, 2012 10:17 am

I'm aware it will be difficult. And it wasn't a case where I just woke up and decided to be an FA. I've researched this for a while and have already talked to people so raising money will be 80% based on current network contacts and third-party contacts.

Jul 19, 2012 12:00 pm
blitzinger:

I'm aware it will be difficult. And it wasn't a case where I just woke up and decided to be an FA. I've researched this for a while and have already talked to people so raising money will be 80% based on current network contacts and third-party contacts.

It is hard sometimes to work your personal network to get them to invest with you. It changes the relationship. I am a CPA, many people don't want to make that change because it ruins the relationship and they liked having their accountant be an independent opinion for their investments.

When it comes to personal relationships, sometimes people don't want to mix business with personal stuff. I researched it, just like you did and I wasn't prepared for how hard it really is.

Jul 19, 2012 8:44 pm
blitzinger:

I'm aware it will be difficult. And it wasn't a case where I just woke up and decided to be an FA. I've researched this for a while and have already talked to people so raising money will be 80% based on current network contacts and third-party contacts.

Research means nothing. As I said in my original post there is a 99.999999% chance that what you will hear from other PMD's will go in one ear and out the other. The reason for that was addressed early in my original post. You, just like me when I walked in the front door, and just like every other fish errrrr new PMD hire who walks in the front door, think you are special.

You should believe the post from the CPA. Others have found that having a "network" does not mean they will move money to you. To start with you are young. You can't hide that. Again, I know you won't let yourself consider that what you're being told will hold true for you, but I'll tell you that IMO here is how to use your 80% figure: There is an 80% likelihood that your network is not going to want you to know their personal business.

After you pass your exams please come back and let us know how it's going.

Jul 19, 2012 11:18 pm

I agree (again) with the other replies, it is going to be HARD (as in near-impossible-hard). People really don't like to mix business with pleasure PLUS many people are very resistant to doing ANYTHING in this economic climate, including moving their assets to someone they know has only been an advisor for months (not years).
Hopefully you negotiated a high salary so that you can afford to wine and dine your network. It takes money to make money in this business. Be prepared to harrass everyone you come into contact with, and if you do that, you can hopefully squeak along long enough to see enough others fail that you will inherit accounts. Then graduate the program making $35,000 a year if your accounts aren't all over $250k. Struggle past that and maybe eventually make a great living, unless the whole advisory model begins to fail because this is the information age and people can get the same advice cheaper elsewhere.
All that being said, there are younger advisors who are very successful. (It just isn't the 40-50% of new hire pmd's that the firm likes to say it is..) But as long as you aren't burning bridges behind you, give it a shot.

Jul 20, 2012 10:30 am

I read mostly negative reviews about Merrill and the constant trouble people had hitting hurdles and eventually dropping out of the program. I really wouldn't do this if I didn't trust my network base.

With that said, I noticed one of the posts said "$35,000/year". What AUM are you basing that on if my bps is 42?

Thanks

Jul 20, 2012 5:25 pm

Blitz, I'll chime in here as well. Here's the deal, my friend, you simply don't know what you don't know. Face it, we ALL "did the research" before we accepted the job. And, those of us in the program will most likely each own up to the fact that we felt - at least to some degree - that we were different from the rest. We shrugged off damning stories from those that had come before us!

Here are words from another PMD speaking to you about my personal experience. I've been here at ML for about 2.5 years. My first 12 months out of the shoot, I busted A$$! I was the first one at the office and the last to leave consistently, not just of PMD's, everyone. I made it into the office between 5:30 and 6:00 most mornings. I typically didn't leave until after 7 most evenings except Fridays. And, yes, I worked Saturdays as well from about 10-2. I did seminars monthly, cold called 250-400 dials/day between seminars, and, I networked at least one evening/week. I also had/have a network. Prior to ML I owned a fairly large consulting business, which allotted me close relationships with significant business owners. In addition, I got extra designations to make myself more credible (I felt).

I was stoked. I was... different. BOOM! I'm an FA at ML!

I've come to find out that the prospects I was targeting didn't share my same level of enthusiasm about Merrill. Honestly, I don't believe that one account has been won because of Merrill. But, I've certainly had more than one account lost because of ML and B of A. Believe it or not, I had one meeting with a prospect that wasn't aware that Merrill was owned by B of A until sitting at my desk. He said "I'm sorry, but this meeting is going to be real quick..." And, he got up and left! (The guy owned a software company and was worth about $4MM).

When I started there were 10 PMDs in the office. Guess how many are left??? Including me: 2. And, the other is here 3 half days a week and simply waiting until they let him go... Since I have started, I know of 3 PMD's that have graduated the program. That's not 3 PMD's in my office that have graduated, that's 3 in the state. 2 of them were from extremely wealthy families (hundreds of millions) and one simply got it done by barely hitting minimum hurtles. Of course they have him on the conference calls now touting his success. He was also on a team and handed assets.

2.5 years into the program, I can attest, the stories others have shared are not off base. This is an extremely tough position that is made next to impossible by ML's leadership, producing RD's, and "the new" BofA. It is very clear the motives of the company decisions are for the benefit of the bank and it's large producers. As a PMD (or lower to mid tier FA), the actions will show that they could care less about you.

It all falls in line. Get the PMD pumped that he's special, push him to work his network and get his family money in, keep the hurdles low the first year so they continue with it for a while to complete the mission (of moving over family money and their network's assets, which amount to a few sub $250K accounts) and then ramp those hurdles up to push them out the door - knowing they will keep the lion's share of the newly moved assets. And, everyone is happy: you've brought the firms some assets, the accounts have been distributed to the senior FA's and you're off the salary. Rinse, wash and repeat.

Me, I'm fairly over it. Still here, but the shine has certainly worn dull. Trust me; the life of an established FA is nice. These guys make a half mill/year and work 20 hours/week. But, the system has changed. The game is no longer played as it was 20 years ago when they were in our position. Neither those FA's nor ML understand that.

The pivotal point for me was when they decided that we would no longer get paid for new sub $250K households. Tell me how that aligns to a new FA that is looking to build a book? When I no longer have a salary and work on primarily new business acquisition, why would I be OK with not getting a payout on a new $200K account that may pay out $2000-$9,500 PC's? (That’s $840-$3,990 out of your pocket, by the way). How is that in the new FA's best interest??? I completely get targeting larger households, but charging the client the same fee as always and the firm profiting on that account (as they always have), but not paying me for my efforts just doesn't sound appealing to me. Perhaps I would understand it more if the firm said we just aren't going to charge those sub $250K accounts. They aren't good enough for the FA to get paid on them, so we aren't going to charge them fees. But, no, not the case. Or, I would even understand if they said we are no longer accepting sub $250K accounts... Again, not the case.

While this may sound negative, let me attempt to acknowledge the benefits. I've been paid a decent salary for my time, provided a great office, became fully licensed, designations, and had the opportunity to see how some very efficient teams run their business. Those are all positives.

However, when you lay out the full scenario, take it for what it is. It's an OK place to get your start. Just be aware of the other creatures lurking in the water. Those other low to mid level FA's that smile in your face after they see that you’re actually putting an effort into this thing; they aren't your friends. It's true – they can't wait until you fail out! In fact, they wish you would hurry up and get the hell out of the office. You’re cramping their style. Or, if they really feel you have some fire power, they will offer a "team" scenario with you. Don't do it. What they are offering you is an opportunity for you keep doing all the prospecting activities you've been doing, but put them in the new pool... This way, when you fail out they can claim territory for all the accounts and your efforts.

(Some other advice on teaming: If you're going to team, only team with someone producing $1MM+, preferably closer to $2MM. FA's at this level have several things that lower FA's do not. For one - pull. They can call the BOM or Director and say "I've got him...”. They also have the level of production that can get you through the program. They aren’t starving for PC's. They are at a level that they don't need smaller households, which for them smaller households may be defined as $250K or anything under $750K depending on the team. They are also in the capacity to have a PMD focus on marketing, analysis, bonds, etc. Most importantly, you will have their fire power when meeting with large prospects. They've been there and know what they're doing.)

Know that if you have a producing manager, he doesn't really care about your success either. He cares enough that if you do happen to graduate the program he will get a fairly small bonus for your efforts. Same goes for your PMD "coach". Also know that he cares a much greater deal about building his own production. Know that the CA's in the office really can't stand you because they have seen too many PMD's just like you stroll into the office, not seemingly doing much, but have a higher salary than they do. Know that the cards are completely stacked against you to make it. Know that IF YOU DO actually make it through the PMD program you will most likely be making less than the salary you have become accustomed to the last three years. (And, after you graduate, assuming you will not be on a qualified OPM team, your payout grid will be at 38% for months 37-48, after that dropping to actual grid). Do the math - If you had the "suggested" assets of $15MM annuitized by month 36 - AND all of those assets were over $250K households (so you actually get paid for your work) - and were at a .8% velocity, which would generate $120K in PC’s, @ 38%, that gets you a whopping $45,600. Good luck with pulling down those numbers.

And, you need to hear this, just the fact that you are asking that question is telling. If you have "researched" this as much as you say you have, you would not have had to ask the question. Rule number one when going into this job: know how you get paid. And, know it well. If you don't have the new 2012 compensation guide, ask for it now and read it several times.

I really do wish you best of luck. But, you've already gone down the path of many. Others have given the time to share their experiences about ML and you have refuted them as hearsay. And, that you are different and these things won't apply in your situation.

I'd like to help in any way I can. PM me if you have any questions on anything. Steaks on me if you're still there in 18 months.

Jul 20, 2012 7:49 pm

"Others have given the time to share their experiences about ML and you have refuted them as hearsay"

How did I refute what anyone said? All I said was that I'm taking the good with the bad and that I've become accustomed to negative reviews. I appreciate the advice and know full well it's not going to be an easy gig.

Regarding the payout breakdown, by the time you finish the 3yr program at ML, I believe the expectation is to have $30M AUM. 15M is for the first year alone (actually might be closer to 20M). I have numerous family members about to sell property and buy houses which can help with PC's and some extended family that are venture capitalist that will be helping out. But the family money is very very small (less than $5M) relative to what's expected. The rest will be raised through the networks I've created in college including an investor with a net worth just shy of $1B.

As I said earlier, I just wanted to see who has done the ML PMD program, what their experience was, good or bad, and what advice they might give.

Jul 20, 2012 9:36 pm
blitzinger:

"Others have given the time to share their experiences about ML and you have refuted them as hearsay"

How did I refute what anyone said? All I said was that I'm taking the good with the bad and that I've become accustomed to negative reviews. I appreciate the advice and know full well it's not going to be an easy gig.

Regarding the payout breakdown, by the time you finish the 3yr program at ML, I believe the expectation is to have $30M AUM. 15M is for the first year alone (actually might be closer to 20M). I have numerous family members about to sell property and buy houses which can help with PC's and some extended family that are venture capitalist that will be helping out. But the family money is very very small (less than $5M) relative to what's expected. The rest will be raised through the networks I've created in college including an investor with a net worth just shy of $1B.

As I said earlier, I just wanted to see who has done the ML PMD program, what their experience was, good or bad, and what advice they might give.

Mr. Net New has laid out PMD reality in one of the best posts I've ever seen and as I predicted, everything in your "research" that does not affirm your predetermined outcome is overruled. That's not research. That is selective listening.

I'm sure that no one on this forum including me wishes you anything but well. We want you to not pour your time energy and money down a rat hole like we did.

Obviously you're going to go ahead no matter how many actual current PMD's tell you it's not a workable program. Your life, your call.

I hope you can prove us all wrong. Best wishes to you.

Jul 22, 2012 11:46 am

I wish I had read this thread before I started the interview process with ML. Problem with this world is everybody thinks they're different. It won't happen to me.

Jul 22, 2012 2:21 pm
blitzinger:

With that said, I noticed one of the posts said "$35,000/year". What AUM are you basing that on if my bps is 42?

Thanks

Your 42 bps off the grid doesn't mean anything if 0 is going onto the grid.

I've been in the program almost a year. At any given time, there are about 60-75 pmd's in my complex. I have seen exactly ONE pmd actually graduate the program in the whole time I've been there . Unfortunately for him, very few of his accounts are over $250k. He is on a team and they probably gave him pc's at times to get through. So ta-dah, he graduated. Now he lives off the grid. Too bad that next to none of his accounts are over $250 so he doesn't get paid on any of those. He gets paid on a couple larger ones. But since he had to, at times, push annuities and MLI's for the pc hits, a lot of those assets aren't even annuitized. So he's making less than $40k now that he's out of the program.

Jul 22, 2012 2:37 pm
Mr. Net New:

Blitz, I'll chime in here as well. Here's the deal, my friend, you simply don't know what you don't know.

Great post.
I think a pmd (without family money or family team) is very wise to really digest everything in this thread. It is completely accurate in my complex. Maybe someone living in BFI will have a gentler experience, but otherwise, I believe it will mirror the same - or possibly be even more cut throat.

There are aspects of my local office that add additional layers of near-impossibility that hasn't even been broached. CA's wont' do anything for us, it takes weeks to open an account once you get the paperwork, we get zero inherited accounts no matter who leaves, no pmd's for walk-in clients, specialists do not ever reply or acknowledge you, our local coach has never even introduced himself, zero assistance from anyone and compliance won't let us do anything but cold call.
On a brighter note, i know of two (of the 60+) pmd's who have a chance to make it in the business without family money or family teaming.. One is the type of salesman that would make it anywhere. He doesn't care if 9,999 people in a row tell him that he's a POS scumbag. He only cares about getting the "yes". Which is great but trust me, most people are not built that way (thank god). The other person worked in payroll at a huge company, and is spending $2000 a month on lunches and dinners to take prospects out to talk about their 401k's at the former company. I've seen dozens and dozens more with wealthy networks and business contacts and everything else become a DNM on their hurdles.
So build your brand, learn, but odds are that if you make it in this business, ML won't be your last stop..

Jul 25, 2012 8:04 pm

Let me ask this question (even though I'm pretty sure I already know the answer). Merrill Lynch compliance currently doesn't want anything to do with social media, blogging, etc do they? In other words, building an online presence is not allowed.

Jul 25, 2012 9:02 pm
Mr. Sweaters:

Let me ask this question (even though I'm pretty sure I already know the answer). Merrill Lynch compliance currently doesn't want anything to do with social media, blogging, etc do they? In other words, building an online presence is not allowed.

You can mention that you are a ML FA, but that's it. You cannot do ANY marketing nor carry on ANY kind of conversation/dialogue with people over social media. You cannot blog. You cannot podcast. You cannot build a web page outside of ML's own Web presence that is marketing oriented for your practice.

I don't know how it works at other firms but this may part of the "advantage" of working for a firm that played a role in crashing the global economy.

BTW It does take a long time to get accounts open when you first start out. It's pretty convoluted and if your CA won't help you your going to use up precious time you should be doing something else.

Aug 1, 2012 10:24 am

So question for you guys........if you had to do it over again, what would you do? What's the better way to break into the business? Everybody wants to partner with a $1MM producer but those are few and far between in smaller markets. Bank brokerage? Try and find an indy?

Aug 6, 2012 10:31 am
JoeBull:

So question for you guys........if you had to do it over again, what would you do? What's the better way to break into the business? Everybody wants to partner with a $1MM producer but those are few and far between in smaller markets. Bank brokerage? Try and find an indy?

I've only been in the business for a few months and I'm happy that I started with a wirehouse. There are a lot of branches on the way down and I feel that if I don't make it here, I'l lbe picked up by another firm quickly so I can keep going. I feel with an indy, it would be harder to be picked up.