Starting your FA business at EJ

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Jul 14, 2009 7:22 am

Hi ,

 

Am new here and yes new at EJ  just starting .So all the bashers of EJ have fun responding to this topic  but please looking for a respond that can help .

So all EJ rep did you start you business with a minimum asset like 25k per client or 50K in investable asset ? or just get any client  . :)
Jul 14, 2009 7:29 am

I think you should start with a minimum of $1 million.

Jul 14, 2009 7:37 am

Faca,

You'll starve if you set those types of minimums getting started. I suspect you've not even passed your series 7 yet since you've asked that?  Talk to your field trainer and he'll give you the details. But here is the long and the short of it .. you'll take anything that moves.  10k rollover? YEP! $250 Roth? YEP!  Jones wants to see activity.  Good luck!

Jul 14, 2009 7:52 am

voltmoie is exactly right, you take anything you can get in the beginning! 

Jul 14, 2009 8:33 am

thanks guy.

 
Yes just starting the series 7
Jul 14, 2009 10:53 am

Faca,

When you're starting out, it is not so much about the initial client, but the relationships you develop.  The more relationships you develop, the more opportunities you have for referrals, leads to networking opportunities, and obviously investment opportunities with a particular client that don't exist right now.  Don't worry about minimums yet.  Down the road if you have too many clients, you can deal with that problem at that point.
Jul 14, 2009 12:21 pm

Good luck FACA!! Knock 'em dead.

 
If you want to make it...work hard, very hard, track your activity daily and be accountable to someone you respect. Those are the keys.
 
Don't worry about minimums right now. Learn how to open acts, and build relationships. Larger acts will come when you are confident. You gotta crawl before you can run.
Jul 14, 2009 12:28 pm

I disagree. I know you have to open a certain amount of accounts with jones and do a small amount of gross to make it to each level. Skip the people who don't have money. Starting off I would qualify for at least $10K, but realistically look for $25K minimums.

Jul 14, 2009 12:45 pm

Squash, I would agree that you don't want to bring on dead wood.  But (1) sometimes there are clients that don't have a lot to invest now, but will be great clients to build with down the line (i.e. high earners, everything in their 401K - why not keep them in your back pocket??), and (2) more clients means more referral opportunities - even from clients that don't have much.   I just think early on that (regardless of the Jones requirements), you should develop as many relationships as possible.  Now, I would not suggest doing the trailer-trash circuit, but in the early stages of your career, there is probably more risk in opening too FEW accounts than too MANY.  You can always prune them down the line if necessary.

Jul 15, 2009 8:35 am

I still disagree, lots of books have been written that people with like attitudes and morals and ideals hang out. So yeah I may get the every now and then referral from a crap client, but chances are that it will be someone similar to them. I want referrals from my larger clients because chances are they have friends with similar accounts. I also think you set a precedent by saying no to people who don't have to your minimum qualifications. And by starting out that way you don't have to piss people off when there account isn't big enough 3 years later.



I refer all my prospects with less than $50K to invest to a local guy down the street who will take anything(and it shows). I simply tell them that for me to be effective the minimum here is $50K, but ideally $100K to fully implement my plan. I also tell them that I could take their account but I would have to charge more and that wouldn't be fair to them since I am not actually doing the strategies i need to do but instead substituting and charging more. But I tell them when you get to that point and want to hear what my strategies are, then come back..... You would be surprised to see the number of people who come back(because the local guy who takes everything gives crappy service and follow up)...

Jul 15, 2009 8:48 am

Squash, I don't totally disagree with what you are saying.  In fact, at some point (though there are some people that run there business taking anyone forever), I think you HAVE TO implement a minimum, or your book will be unmanageable.  But we are talking about someone brand new to the business, not someone with an established book, or a warm network to start pulling from.  If you have the forsight and ability (or luck) to be able to tap into a lucrative niche right away, then that's great, you can start with minimums right away.  But otherwise, I can't imagine telling someone "yeah, I only have 3 clients, but you don't meet my minimums".

 
Again, I am not talking about taking on ANY crappy client with a heartbeat.  But I think there is more to qualifying a client than just amount of assets.  A perfect example for me would be the clients I have that are scientists.  Some of the younger ones make close to 200K a year, but went to school for so long (BS, MBA, PhD), that they have not had enough time to accumulate much assets yet - most started working for real money well into their 30's (like doctors).  But they will eventually accumulate a lot, and they are in a VERY lucrative network of friends and co-workers.  I am not talking about the trailer park grandma that just inherited 18K from her dead mother, and that's all she owns.  There's a big difference.
This is the other way I look at it....for every young, but strong potential future client that I bring on as a client (even if it means just opening a 529), that is one less client I need 10 or 15 years from now.  I am not prospecting for them, because I don't make any money on these clients, but when it falls in your lap, I think you gott take it.
Jul 15, 2009 8:55 am

Potential is one thing, guaranteed is another. Doctors, Dentists etc, is a case where they will have plenty of money in 3-5 years (depending on how they form their practice) and you are right the referrals from them are gold.



But some guy working a corporate job who will have his money stored in his 401k until he retires but wants to do $400/month in a roth, is a waste of time until he meets a certain minimum.



Typically i don't prospect anyone under 45. To me it's a waste of time.

Jul 15, 2009 9:00 am

Chief has a point. But will take independent professionals all day regardless of age and income(because these people are small business owners that end up having a great income and assets by the time they set up their office). I have a dentist client who was working for another dentist, but then purchased an existing practice from a retiring dentist and now has an income of $200-300K just 2 years after purchasing the practice.



Small business owners i will take regardless of age, but i think chief has a point most average corp people have all their money inside their 401K, and that money is not accessible til they retire.

Jul 15, 2009 9:55 am

First of all not with EDJ. Second if someone was DCAing $400/month then I would put him in C shares. Third. seriously 403Bs? Fourth; I think we run our business differently. The way i build portfolios requires a little more than 8K in a roth. also some of the solutions i use have minimum income/networth requirements.

Jul 15, 2009 11:11 am

 The question is not what you do when you have an established business it's if this BRAND NEW guy should set minimums.  I think it's great you guys can turn down business but if it has a pulse and some money to invest I'm going after it right now.  I'm also going to talk about insurance, friends/family, and anything else I can make a buck off of.  I think this guy should too.
 
For me, one of three things will happen to these accounts: 1. I'll goodnight them away at some point.  2. I'll leave them when I leave Jones.  3. They will develop into a nice relationship down the road and I'll enjoy working with them.
 
What's the loss?  I will say this though, I have spent a TON of time chasing small Roth IRAs just to make $50 - I've learned my lesson, it took 12 weeks, but will not turn down business.
 
Please PLEASE Please forward me your crumbs guys, just shoot me a PM and I promise to take care of them!
Jul 15, 2009 11:31 am

Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.




 
Crumbs are nice, but I don't dig for crumbs in a brand new bag of Baked Lays, I go for the big ones and get the crumbs when I get to em.
 
I do agree however that helping out people who are just starting out, is very lucrative for you in the long run. People don't start out rich and popular.
Jul 15, 2009 11:39 am
MJ:

Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.




 
Crumbs are nice, but I don't dig for crumbs in a brand new bag of Baked Lays, I go for the big ones and get the crumbs when I get to em.
 
I do agree however that helping out people who are just starting out, is very lucrative for you in the long run. People don't start out rich and popular.
 
Do you dig for crumbs in your bag of Cheeto's? Just wondering...
Jul 15, 2009 11:40 am

I'm only 3+ yrs in and there are handfuls of clients I acquired in my 1st year that gave me anywhere between $5,000-$20,000 that also DCA'd money every month and now have about $35,000-$60,000+ with me per household.  With 8-10 clients like that I can now flip that $500,000 total into managed money accounts and now those 10 clients are giving me $5,000+ GDC/year at 1%.  Instead of making $100-$200/year of the bank authorizations like before, now I'll be at $500 per avg. client.  It's pennies when you look at the whole grand scheme, but when you think about how these guys would have been turned away by any reputable wirehouse or independent a couple years ago and now they'll be responsible for $2,500 (at 50% payout) of my income next year?  Thats not bad considering their 401(k)'s and TSP's are still in the long term pipeline.

Jul 15, 2009 11:42 am
MJ:

Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.

 
How long is spent on the phone calling this guy?  10 minutes?  I think after spending a couple minutes on the phone w/a $25,000 prospect, there will still be daylight left to call the million dollar guy.
Jul 15, 2009 11:48 am

I've decided to change my business plan.  I am now limiting my prospects to those with 100million or more.  I only need one.