Account minimums

or Register to post new content in the forum

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jul 11, 2006 11:06 pm

Which firms have set account minimums? I've heard about  Merrill
and Morgan Stanley  going the call center route for under $100k.
Just curious about who else is doing it or contemplating it. Thanks.

Jul 11, 2006 11:18 pm

I think this is absolutely stupid. I have several clients that started off with a Roth IRA 3K or 4K that now have accounts over 250K with me.



I also opened an IRA rollover for 15K a couple years ago. He just referred his father who is rolling over 800K.



Jul 11, 2006 11:30 pm
no idea:

Which firms have set account minimums? I've heard about  Merrill and Morgan Stanley  going the call center route for under $100k. Just curious about who else is doing it or contemplating it. Thanks.


Essentially all of the major wirehouses are moving towards a platform designed to cater to the $500k+ account.


Think about it; Do you really want to make less than $3-5k a year off a client?

Jul 12, 2006 8:18 am
san fran broker:
no idea:

Which firms have set account minimums? I've heard about  Merrill and Morgan Stanley  going the call center route for under $100k. Just curious about who else is doing it or contemplating it. Thanks.


Essentially all of the major wirehouses are moving towards a platform designed to cater to the $500k+ account.


Think about it; Do you really want to make less than $3-5k a year off a client?



Gorman at MS has talked about how large a percentage of total fines and arbitration losses happen with the firm's smaller producers and with smaller accounts. It isn't just profit those small accounts hurt the firm with, it's the legal exposure. The question is, in my mind at least, who's going to find a safe, profitable way to engage those smaller households that the wirehouses don't want. There's money to be made in that market by someone.

Jul 12, 2006 10:21 am

Yeah... EDJ, Ameriprise, banks, credit unions, insurance companies....

Jul 12, 2006 10:26 am

I echo blarm's last comment.  Every firm has a client that is in their "wheelhouse."  Are there $1M+ accounts at Jones, AMP, etc?  Sure.  They like their rep and are happy with what the firm provides, but these firms pale in comparison to the average account size at the wirehouses or "elite firms" (ie., Goldman, Bear, etc.).  They have identified, much as Jones has, who their client is, and they are going after it.  I see nothing wrong with it.

Jul 12, 2006 12:34 pm
no idea:

Which firms have set account minimums? I've heard about  Merrill
and Morgan Stanley  going the call center route for under $100k.
Just curious about who else is doing it or contemplating it. Thanks.



All the wirehouses have official account minimums. Many advisors set higher minimums for their practice.  As far as I know, all of them allow exceptions with management approval, or with a reduced payout.

Most of these minimums are there for marketing purposes and to keep new FAs focused on the right markets.  As others have pointed out there are numerous strategic reasons to take on undersized clients.  No branch manager is going to tell you to turn away a strong referral source, your biggest client's best friend, a client with near-term growth potential or your pastor because they can't quite make the minimum.

The official minimum makes it easier to politely turn down inappropriate clients.  It also increases initial wallet share with HNW clients that want to "just start with the minimum and see what happens".