Ameriprise: P2 Platform

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Apr 15, 2006 7:02 pm

Could anyone tell me what a rep operating under Ameriprise's P2 platform pays their principal?


Is it a fixed fee? A percentage of the business? A combination of the two? Are there any rumblings of pending changes to the P2 platform or Ameriprise's scorecard?


Thanks for the help.

Apr 17, 2006 3:12 pm

Too much. 

Apr 17, 2006 3:28 pm

I'm not for certain, but I believe it is a percentage that is charged and determined by the company.  They have been known to also increase this significantly if there are any compliance issues (i.e., an extra $1000/month).  You will also have franchise fees that are a little exorbitant.


I mention these as high because most independent BDs will not charge you for these.  It's almost funny because at AEFA, reps were paying the franchise fee for "the AmEx" name.  Now it's AMP and they're still paying the same ridiculous fee for a less-than-household name.


There are many indy reps on these boards that (I'm sure) would have no problem in giving you some feedback on how these fees compare to other BDs.  Hope this helps.

Apr 26, 2006 7:58 pm

$765 per month.  I average $600k GDC per year and definately on the high end with no compliance issues.  I also have a licensed paraplanner covered under that amount.  If advisors are paying more than I it is because they deserve to pay more. 

Apr 26, 2006 8:17 pm

AMP Advisor - thanks for your post. You pay $765 per month. I ask out of ignorance not to be a wise a**, what do you get for your $9,180 per year? Is that your franchise fee? Does that cover your E&O insurance or is that a separate cost? How much do you kick to your principal? Thanks.

Apr 26, 2006 8:24 pm

"I average $600k GDC per year."


Really????? Its probably more like 400K....

Apr 27, 2006 8:57 am

But if you have the option to have the same stuff, better technology, support and products - why pay that expense.  Of course when you're making $200-400k+/year $765/mo isn't a ton of money, but in offering financial analysis and advice, doesn't it seem like a contradiction to throw $9-10k/year out the window?

Apr 27, 2006 10:37 am

BrokerRecruit - I agree. I'm an indy w/LPL. Between my monthly fee to my b/d and E&O insurance it costs me $280 per month to affiliate with LPL. The technology platform is great. The support I get is terrific. Nobody bothers me. After 11 years w/the majors its nice to be treated as a "client or customer" rather than as a "number."


I ask about AMP b/c I am in talks w/a AMP rep who might be joining my office. In discussin the various costs, he has no idea what it is costing him to be affiliated with AMP and that is what I am trying to figure out.


Apr 27, 2006 11:40 am

What happens in situations with an AMP rep with an LPL for example, when it comes to their prop. accts?  Will LPL or others take care of the surrender charges to free the clients?

Apr 27, 2006 12:53 pm

Full disclosure; I can't speak for LPL, I'm a rep not senior management.


LPL take care of surrender charges on proprietary products. My gut answer is no but I may be wrong. My experience with LPL is that it is a very clean shop. Paying surrender charges has got to involve some compliance issues. Again, my exerpience, is that when it comes to compliance there is no b.s.

Apr 27, 2006 4:26 pm

I understand that, but usually reps will have some idea, especially when trying to recruit someone from a very captive shop like AMP.

Apr 27, 2006 6:38 pm

The guy I have been speaking with has very little Amex proprietary product, less than 5% of his business - no life insurance. We have discussed that the best course of action for him is to move what he can, stay in contact with those clients whose assets he can't move, and then move them after the CDSC has expired.

Apr 28, 2006 8:52 am

That's what I would suggest.  When you find an AMP rep that actually understands the model of AMP and those around and sees that they are taking it in the shorts compared to most firms, then you find a true businessman and financial advisor.  If I knew my rep was paying a huge bogus fee for being associated with a company, I would question things.


The other thing that I've found is that all the AMP P2s tell me "I'm independent."  In theory, that's correct - you have your own office, computer, desk, maybe even an assistant.  But try to leave, Mr./Ms. Truly Independent, then see what happens.  Or try to run a business not centered around the financial plan.  Compare these to firms without a set structure as to how you run your business or a BD that actually signs a contract stating that YOU own your clients and your business.  Why do you think they can't put Smith & Assoc. on the door?

Apr 28, 2006 6:49 pm

You are 100% correct BrokerRecruit. I was having a discussion 9 months ago with a P2 rep who wanted to move. After we looked at his business I told him that unless he wanted to start over from scratch it didn't make sense to move. He thought that since he was on the AMP "independent" platform he was all set but after I pointed out to him that the bulk (+80%) of his book was AMP prop. products and were no transferable he realized that he wasn't truly independent.


For any observers reading this post, moving from the majors to LPL was the best decision of my professional career. No regrets here.

May 1, 2006 1:42 am

Guiness, 


The monthly cost is for the compliance/managing principal. It is in addition to the e & O insurance and franchise fee.  The franchise fee was reduced when we were required to start paying e & o insurance a couple of years back.  The reason I put in the GDC amount is that one of the variable in the cost of compliance is the GDC level. I was being honest in the GDC figure.  The higher it is the higher the risk and thus a higher cost.  I know that the broker recruit is going to reply and tell me I should leave.  I can tell you I have several friends that have left for LPL.  They do a lot of annuities at LPL and they have usually used variable annuities with bonus' to make up for the surrender charges.  They seem to love American Skandia.  I know I pay more than most other advisors but I can also tell you that I receive accounts thru AMP that have more than made up for any of the flat fees that I pay. Most are move in's that come from other parts of the country.  The move in's usually are higher net worth due to the area that I live in.

May 1, 2006 1:53 am

One other issue that you brought up...prop funds....the reason that the firm changed the name of the fund family was to take it to 3rd party distribution.  I know the issues about performance, however,  the move would allow advisors to leave and take more assets with them...if the clients wanted to follow.  I think that we will hear more by the end of the year.  The annuity side has already signed quite a few distribution agreements.  This would help sales within the AMP advisors channel as advisors sell less than 15% prop funds in the P2 world.  The portability issue is one of the reasons for the low percentage.  I know this is contrary to what most think but prop sales within the p2 world are pretty low and have been since 1995 when non-props became available.  Thank goodness we were able to sell Aim, Invesco, Putnam and Janus back in the 90's.  That worked out well for our clients!  You might revisit your conversation with the advisor that had 80% of his business in prop products.  Then again, you might not want to???  No one I know is in that position and for good reasons.

May 1, 2006 11:39 am

AMP,


Dude - seriously, I could care less who you work for, as long as you're happy.  I'm not pushy and at the end of the day, if you're happy there and don't want to move, that just means that there is one less rep that I need to call. 


My point is simply this - it is  a bit boggling to me as to why a company would charge you for a "franchise" fee for something that  a). you don't contractually own, b). is a name you are not associated with anymore.  In addition, why pay a compliance fee?  Especially if you are a seasoned rep that doesn't require a ton of extra supervision, why not have a corporate OSJ or regional OSJ that can be there when you need them? 


Honestly, these are just general questions.  There are thousands of BDs out there because there isn't a perfect firm for everyone.  The indy I work with is fantastic, but it's not right for everyone and I have no problem telling the rep that.  I even have a few concerns about some things there, but I will find that anywhere. 


But I'm glad you assumed that I was going to be the typical "headhunter" and tell you how crappy your firm is and how mine is perfect and anyone that isn't moving there is a complete fool. 

May 1, 2006 1:26 pm
AMP Advisors:

Thank goodness we were able to sell Aim, Invesco, Putnam and Janus back in the 90's.  That worked out well for our clients!


You get a good look at what happened to most of those funds in 00-02?!!  They aren't exactly the poster child of success...

May 15, 2006 9:30 am

I heard Ameriprise is simplifying their comp grid. Can any one shed details of old vs. new?

May 17, 2006 9:12 am
jasper:

I heard Ameriprise is simplifying their comp grid. Can any one shed details of old vs. new?


This is true.  I can talk to you about this offline.  Please feel free to PM me.