What is the min to go independent?

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Jan 22, 2007 7:43 pm

I have been with my firm for several years although I haven't been in production as long.  I would like to leave my firm and manage just a few of my accounts on the side for mainly family and friends (approx 1-2m) to start.  Is there an independent platform out there that will allow me to manage money with this small of an asset base?  I would like to keep my licenses as I do commission work as well as fee based.  Thank you for your help.

Jan 22, 2007 8:09 pm

That is not an asset base that is a nice account

Jan 22, 2007 8:18 pm

Good one bankrep, that is why you work in a bank.  I am a 1st year producer with 9m in assets, I just don't want to work for my firm.  Too many restrictions.

Jan 22, 2007 8:37 pm

$2,000,000 X .0075 = $15,000...can you live on that?  Also, you'll have to take some business expenses from that number.


75 BPs is a typical velocity for a semi-established producer, so take what you want to gross and divide it by .0075 and you'll have the AUM required to be a successful indy.  My B/D required $125K annual commissions to maintain your own office.  That would be an AUM of about $17 million.  Since you won't take it all with you, you should consider the indy leap after you have at least $20 million AUM.  There's my best guess, but really...there's a lot we don't know about you so I'm kind of shooting in the dark here...

Jan 22, 2007 8:44 pm

Thanks Indyone, that makes sense.  I am being recruited for another position with another company, that is why I don't mind such a small amount of money to manage.  I am doing this more of a benefit for my family and some friends, not my wallet.  Anyone else?

Jan 22, 2007 8:54 pm
rmsnickers:

Thanks Indyone, that makes sense.  I am being recruited for another position with another company, that is why I don't mind such a small amount of money to manage.  I am doing this more of a benefit for my family and some friends, not my wallet.  Anyone else?



That's so nice of you to continue to offer them your expertise....

Jan 22, 2007 9:10 pm

You're right, it is nice of me.  Is there any particular reason that you are an asshole?  I am looking for a legit reply, not a funny joke.  Judging by the number of posts under your name, I realize that this is probably the only interaction you get with others but could you please give it a rest just long enough for me to get some info and then leave? 

Jan 22, 2007 9:36 pm

What % of assets can someone reasonably expect to take with them when they go independent?


Also, if you are coming from commission based firm and going to a fee based platform, what has been a successful method of converting those client's mindsets on how they are being charged.


Sorry if I am hijacking, but it was semi on topic.

Jan 22, 2007 9:52 pm
rmsnickers:

You're right, it is nice of me.  Is there any particular reason that you are an asshole?  I am looking for a legit reply, not a funny joke.  Judging by the number of posts under your name, I realize that this is probably the only interaction you get with others but could you please give it a rest just long enough for me to get some info and then leave? 



Is there some particular reason you're assuming I wasn't being serious? 

If you're really such an insightful investment advisor who has so much to give them, why are you leaving the business?

Jan 22, 2007 10:00 pm
joedabrkr:
rmsnickers:

You're right, it is nice of me.  Is there any particular reason that you are an asshole?  I am looking for a legit reply, not a funny joke.  Judging by the number of posts under your name, I realize that this is probably the only interaction you get with others but could you please give it a rest just long enough for me to get some info and then leave? 



Is there some particular reason you're assuming I wasn't being serious? 

If you're really such an insightful investment advisor who has so much to give them, why are you leaving the business?


Who cares?

Jan 22, 2007 10:21 pm
rmsnickers:

Thanks Indyone, that makes sense.  I am being recruited for another position with another company, that is why I don't mind such a small amount of money to manage.  I am doing this more of a benefit for my family and some friends, not my wallet.  Anyone else?


What's so great about YOU and why can't you make a living being so great?

Jan 22, 2007 10:50 pm

What's the deal with all the hostility on this board?  Are you all on your period right now?

Jan 23, 2007 11:56 am

Maybe it's not hostility at the question about how much do you need to be independant, but rather it's that we all view managing people's money as a VERY important task and you asking a question about how little can I hold and still be a broker really rubs us wrong.  I know there's nothing I'd like more than to go to a doctor works as a doctor a couple of  hours a week, but the rest of it he's a mechanic. 


Why don't you do your family and friend a favor and find a broker you respect and trust and send them to him.   Tell him he owes you the equivalent of the amount he makes off of your family and friends in greens fees every year.  That way you can focus on your real job and let the broker focus on making money for your friends and family.  

Jan 23, 2007 12:00 pm
Spaceman Spiff:

Maybe it's not hostility at the question about how much do you need to be independant, but rather it's that we all view managing people's money as a VERY important task and you asking a question about how little can I hold and still be a broker really rubs us wrong.  I know there's nothing I'd like more than to go to a doctor works as a doctor a couple of  hours a week, but the rest of it he's a mechanic. 


Why don't you do your family and friend a favor and find a broker you respect and trust and send them to him.   Tell him he owes you the equivalent of the amount he makes off of your family and friends in greens fees every year.  That way you can focus on your real job and let the broker focus on making money for your friends and family.  




ding ding ding ding ding ding

Johnny tell the man what he's won!!!

(Great call Spiff you knocked it out of the park.  Too bad our dimwitted friend couldn't figure it out himself!)

Jan 23, 2007 1:23 pm
Spaceman Spiff:

Maybe it's not hostility at the question about how much do you need to be independant, but rather it's that we all view managing people's money as a VERY important task and you asking a question about how little can I hold and still be a broker really rubs us wrong.  I know there's nothing I'd like more than to go to a doctor works as a doctor a couple of  hours a week, but the rest of it he's a mechanic. 


Why don't you do your family and friend a favor and find a broker you respect and trust and send them to him.   Tell him he owes you the equivalent of the amount he makes off of your family and friends in greens fees every year.  That way you can focus on your real job and let the broker focus on making money for your friends and family.  



I'm gonna assume that wasn't aimed directly at me, seeing as I didn't ask the question.  I see your point, and if that had view had been explained originally, I probably wouldn't have commented.  But that view wasn't put out there.  Instead, it was a "holier than thou" attitude that many people have here and giving the guy trouble for asking a question.


His question was based on a fact.  What's the minimum? 

Jan 23, 2007 1:33 pm

In my opinion, he should get out of the business (I think that was his plan??) and offer to manage their money informally through a discount brokerage account (i.e. Schwab, Ameritrade,, whatever).  It doesn't sound like they have many needs, except someone to just watch it for them.  He could become and interested party on the account, and get copies of the statements.  When something needs to be moved, he lets them know.


To me, trying to stay in the business just to manage a few million for relatives sounds like a headache (cost, compliance, etc.).  And, I doubt it's even possible - who would keep someone with that book?

Jan 23, 2007 1:41 pm
rmsnickers:

Thanks Indyone, that makes sense.  I am being recruited for another position with another company, that is why I don't mind such a small amount of money to manage.  I am doing this more of a benefit for my family and some friends, not my wallet.  Anyone else?


Ok I'll give you a real answer.  There are some indy firms out there that will take you with a very low minimum annual production.  Some of them specialize in dealing with CPAs who may only be investing as a side business.  (I don't know who they are off the top of my head...but you can probably look it up on the internet)   Any B/D will need to approve of your other business venture and be aware of it before they will take you on.  All outside business must be approved annually by the B/D even if your investment biz is the smaller of the two.   In addition you will be responsible for paying for your own CE, ongoing NASD testing, E&O insurance (mine runs about $2300 a year) and licensing of your office (even at home) as a NASD Branch, among other things.


So the answer is there is no minimum. It just depends on how much money you want to make or how much you want to go into the hole.

Jan 23, 2007 11:50 pm

Thanks for the info Looney, I will do some more research on my own.  For the record, one of the reasons I am leaving my firm is because I am constantly discouraged from entering the areas I would like to prospect in.  So in so in the office has been trying to get in there so you should stay away...etc.  Horrible direction from my branch manager, wouldn't you agree?  Another reason I am leaving is because I do not want to be a salesman.  That's all this job is.  Again Looney, thank you. 

Jan 25, 2007 2:12 am

If you don't want to be a salesman then you  definitely should leave the business.   The point that was made though about handing off your family and friends is very valid.  Your clients are entrusting you with their money and if you aren't focused on it 100% I don't see how you can be in the business.  If you had twenty plus years experience and just wanted to cut back that would be a different story.  Just my two cents.

Jan 25, 2007 9:25 am

i left with less than $4million.  things going great so far (2 months in business).  am i rich?  nope.  but am i doing ok, yep...will make $75k+ this year as i transition to fee-based...still doing 50% transactional.  all told, it took 7k to set everything up.  monthly expenses are $1k.  i have $15k in savings just in case.  prospecting my a$$ off.  loving every minute of it though.  would (and will) never go back.