Struggling

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Jul 14, 2006 8:59 pm

Anyone have any advice on prospecting, I have been cold calling and trying to network but it just seems that no one wants to listen to me.

I am hoping to have 2mm under management in my first year? Is this a realistic expectation?

Jul 14, 2006 9:06 pm

You won't make it with 2 Million amigo.  Try AT LEAST 5 million to be scraping the bottom of the barell and this is with one of those great 2 year salary packages hoping that you reach 12 million by end of year 2.  Needless to say you wont be making much money at those levels.


Are you working for a real firm?  You should know this stuff before you get on the phones newkid.

Jul 14, 2006 9:27 pm

Working for MS currently. I think I would classify them as a "real firm".

Jul 14, 2006 10:45 pm

newkid,


What are your income goals?Are you on a salary with ML currently?2 mil in fee accounts will definitly starve your wife and children to death( net $10,000 for the year @ 1%, after a 50% payout), but 2 mil as an independent can yield $140,000 net to you in equity index annuity commissions. Furthermore, the cross selling opportunities are tremendous.Go where the money is. Keep it simple. Make a legacy for yourself, not some big wirehouse. Have the courage to follow your dreams, and choose the path of least resistance.


Call business owners- offer market returns with no market risk-something they aren't being beat over the head with like stock picks, etc.offer to stop by, they say sure, profile them at meeting and find out what problems they have and offer solutions at a 2nd appointment.


Good luck

Jul 14, 2006 11:02 pm
Lakers:

but 2 mil as an independent can yield $140,000 net to you in equity index annuity commissions.



One must never underestimate how sleazy those who prowl this business can be.


Whenever somebody stresses how much you can make in fees check to see if you still have  your watch.


http://www.sec.gov/investor/pubs/equityidxannuity.htm

Jul 14, 2006 11:03 pm
newkid:

Anyone have any advice on prospecting, I have been cold calling and trying to network but it just seems that no one wants to listen to me.

I am hoping to have 2mm under management in my first year? Is this a realistic expectation?


Your expectations are way too low. At MS you should be gathering 6-10M per year.

Jul 15, 2006 12:13 am

NASD Newbie, failing to see where you are adding value to this thread, as usual.

Jul 15, 2006 12:51 am

Lakers, I have no sage advice to offer other than this: keep doing what you know you have to do, whether it be cold calling, door knocking, seminars or whatever.  Just when things seem darkest, business will come out of nowhere.


Progress in our business is rarely a straight line graph.  Rather, it's more like a series of hockey sticks, indicating sudden spurts and plateaus.  When you get down, as indeed you seem to be now, talk it over with friends in the business who are NOT, I repeat, NOT negative criers of doom.  It helps.


Best of luck to ya!

Jul 15, 2006 12:54 am

Oh, and one more thing...pay no heed to NASD Newbie.  He knows nothing, and frequently proves it.

Jul 15, 2006 12:56 am

My apologies, Lakers.


The above was intended for Newbie.

Jul 15, 2006 7:45 am
Philo Kvetch:

Oh, and one more thing...pay no heed to NASD Newbie.  He knows nothing, and frequently proves it.


OK Philo, why don't you instruct the assembled on how an Indexed Equity Annuity is going to work.


I'll tell you what, just correct my thinking.


I deposit $100,000 which is reduced to $93,000 by the sales charge.


I am in an indexed annuity with, let's say, an 80% participation.


Let's suppose the index drops 15% this year.  Since I am only an 80% participant my portfolio will only drop by 80% of 15% or 12%--so my $93,000 is now $81,840. 


The next year the index rises by 10% but since I'm only an 80% participant my increse is only 8%--so now my $81,840 is $88,387.


We could do this mental masturbation for a number of years, but the reality is that because of the huge 7% juice taken right off the top, plus the annual invasion of principal for fees of various sorts, and the only really good deal about these things is that the sales weasel gets 7% off the top.


Where am I wrong--especially with the weasel part?


Whaddya bet they're sold buy guys who take the market action from September of 1982 to September of 1987, smear some grape jelly on the dates, seal the chart in plastic and talk about "...this is what would have happened in a recent five year period....."

Jul 15, 2006 7:47 am

Sold BY guys not sold BUY guys.


It's the suckers who buy.

Jul 15, 2006 9:42 am
NASD Newbie:
Philo Kvetch:

Oh, and one more thing...pay no heed to NASD Newbie.  He knows nothing, and frequently proves it.


OK Philo, why don't you instruct the assembled on how an Indexed Equity Annuity is going to work.


I'll tell you what, just correct my thinking.


I deposit $100,000 which is reduced to $93,000 by the sales charge.


I am in an indexed annuity with, let's say, an 80% participation.


Let's suppose the index drops 15% this year.  Since I am only an 80% participant my portfolio will only drop by 80% of 15% or 12%--so my $93,000 is now $81,840. 


The next year the index rises by 10% but since I'm only an 80% participant my increse is only 8%--so now my $81,840 is $88,387.


We could do this mental masturbation for a number of years, but the reality is that because of the huge 7% juice taken right off the top, plus the annual invasion of principal for fees of various sorts, and the only really good deal about these things is that the sales weasel gets 7% off the top.


Where am I wrong--especially with the weasel part?


Whaddya bet they're sold buy guys who take the market action from September of 1982 to September of 1987, smear some grape jelly on the dates, seal the chart in plastic and talk about "...this is what would have happened in a recent five year period....."



So what's your point?


You want to screw old ladies with EIAs now, instead of your usual practice of screwing old ladies with long term bonds?


You're despicable, Put.

Jul 15, 2006 9:51 am
NASD Newbie:
Philo Kvetch:

Oh, and one more thing...pay no heed to NASD Newbie.  He knows nothing, and frequently proves it.


OK Philo, why don't you instruct the assembled on how an Indexed Equity Annuity is going to work.


I'll tell you what, just correct my thinking.


I deposit $100,000 which is reduced to $93,000 by the sales charge.


I am in an indexed annuity with, let's say, an 80% participation.


Let's suppose the index drops 15% this year.  Since I am only an 80% participant my portfolio will only drop by 80% of 15% or 12%--so my $93,000 is now $81,840. 


The next year the index rises by 10% but since I'm only an 80% participant my increse is only 8%--so now my $81,840 is $88,387.


We could do this mental masturbation for a number of years, but the reality is that because of the huge 7% juice taken right off the top, plus the annual invasion of principal for fees of various sorts, and the only really good deal about these things is that the sales weasel gets 7% off the top.


Where am I wrong--especially with the weasel part?


Whaddya bet they're sold buy guys who take the market action from September of 1982 to September of 1987, smear some grape jelly on the dates, seal the chart in plastic and talk about "...this is what would have happened in a recent five year period....."



IF you understood EIA's, which you don't, you would know that if the market falls, you would still be at $100,000. The commissions are 9-10%, not 7%. Also, I get paid that 10% at a 100% payout rate, plus .25% in marketing reimbursement. Pretty neat, ain't it?

Jul 15, 2006 10:05 am
cranky sob:

IF you understood EIA's, which you don't, you would know that if the market falls, you would still be at $100,000. The commissions are 9-10%, not 7%. Also, I get paid that 10% at a 100% payout rate, plus .25% in marketing reimbursement. Pretty neat, ain't it?



So, the investor gets his participation percentage of any increases in the index value, but does not suffer if the market pulls back?


If I give you $100,000 and the market goes straight down for three years then goes up in the fourth year will I be ahead at the end of the fourth year because of the increase in the fourth year?


Or am I still down because of the first three years--and the only way I'll get my $100,000 back is if I don't cash out until some later date?

Jul 15, 2006 10:15 am

I'm not an expert on all EIAs, but the ones that I've seen typically guarantee a return somewhere in the neighborhood of 1-6% with caps built in monthly. In 2004, the market was flat for 10 months and then picked up 10% (ish) Nov and Dec. With a 2% cap and an 80% participation rate they were looking at a return of less than 4% for a year when the market did 10%. If a broker is really looking out for their clients IMO these should not be sold and replaced with a fixed annuity - I can guarantee 5.6% on a 10 yr annuity - why would I buy a 20 yr surrender EIA that will likely average 2-5%. I have seen 20% surrenders on some of this junk. -- Where's Dirk? I'm sure he'll straighten me out.

Jul 15, 2006 10:42 am
NASD Newbie:
cranky sob:

IF you understood EIA's, which you don't, you would know that if the market falls, you would still be at $100,000. The commissions are 9-10%, not 7%. Also, I get paid that 10% at a 100% payout rate, plus .25% in marketing reimbursement. Pretty neat, ain't it?



So, the investor gets his participation percentage of any increases in the index value, but does not suffer if the market pulls back?


Yes.


If I give you $100,000 and the market goes straight down for three years then goes up in the fourth year will I be ahead at the end of the fourth year because of the increase in the fourth year?


Your value doesn't go down. However some of the companies will not guarantee a 100% return of value if the market performance never goes up.


Or am I still down because of the first three years--and the only way I'll get my $100,000 back is if I don't cash out until some later date?



I don't sell these things, but my understanding is that you do not have any negative performance if the index you are tied to goes down.  They have a participation rate of the performance, some are 80%, some are 100% with a cap of anywhere between 3 and 6%


For instance if the index performance was 10% and you are at a 100% participation and your cap is 4% then your 100,000 annuity will recieve a a 4,000 increase.  If the next year the index perfoms at a -1% your account value is still 104,000.  Some of the annuities credit the performance on a quarterly basis. Some of them are point to point, some of them average the index (they call it smoothing  ) and then credit that amount.


The sales charge is not taken out of the annuity (at least in the ones that have been shown to me by the wholesalers) just like any other fixed annuity.


What if the market doesn't ever ever ever go up?  I think some of them have a guaranteed return of some percentage of the initial investment less a certain initial percentage.  They say the guaranteed return is 3% and then don't really clarify that that is 3% over the lifetime of the annuity, not compounded annually.  If the market never ever went up over the 5 or 10 years of the contract the client could come out with less money than they started with. This loss is to compensate the company for the index trading that they are doing with the entire portfolio of annuities. Like any annuity the client must hold to the maturity or have a surrender penalty.


I don't like EIAs because there are too many moving parts and they are very difficult to explain fully to the client.  If they are that risk adverse they should not be in this product which really only performs in a rising market environment.  Plus it doesn't perfom very well. 


I also really don't like EIAs because they are improperly and often fraudulently sold to people who don't understand what they are by greedy insurance sales people who don't really understand investing in the first place.  They give us all a bad name.


If you are going to bitch about this product, you might want to actually know a little bit about it.

Jul 15, 2006 10:51 am

"If you are going to bitch about this product, you might want to actually know a little bit about it."



Good point, BL.


But why limit the comment to one product?  For all the bitching this pimple does, I haven't seen any evidence that he actually understands (or even tries to) anything.

Jul 15, 2006 11:04 am
babloony:

"If you are going to bitch about this product, you might want to actually know a little bit about it."



When you are in a college class if the professor asks you to explain something do you assume he doesn't know?


Or would you think of it as a way to get the student to discuss it so that the discussion can be disected into right and wrong components?

Jul 15, 2006 11:10 am
NASD Newbie:
babloony:

"If you are going to bitch about this product, you might want to actually know a little bit about it."



When you are in a college class if the professor asks you to explain something do you assume he doesn't know?


Or would you think of it as a way to get the student to discuss it so that the discussion can be disected into right and wrong components?



What would you know about right and wrong?