Circling the bowl

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Feb 4, 2009 4:34 pm

The Retail Brokerage Business is circling the bowl.  Within 2 years anyone who is now doing less than $500M will be out of the business.  Those of you who are clinging to books generating 250-300M should begin to explore your options. 

Many firms now pay 20-25% of all monthly gross less than 10M.  I predict that number quickly grows to 15-20K.  To make any money you'll have to do 40-50K per month.  You won't be fired you'll be starved out.

I wonder whether this creates an opportunity for a boutique type firm that would pay the 300-400 guy well and cater to their clients?

Feb 4, 2009 4:36 pm

Or there will be a mass migration to independent...

Feb 4, 2009 4:37 pm

Agreed, i would rather leave the business because i think the market is crap for the next 5 years. Only problem, the job market is tough right now, any suggestions?

Feb 4, 2009 4:52 pm
kappa1997:

Agreed, i would rather leave the business because i think the market is crap for the next 5 years. Only problem, the job market is tough right now, any suggestions?




Figure out what people want to buy and sell it to them.

Feb 4, 2009 5:18 pm

Here's a little perspective check for all of you: The CLIENTS (you know, those annoying folks we ACTUALLY work for) are not going anywhere. It is the management, business models and attitudes of the wirehouses that is in danger of become more scarce. I swear this site has caused tunnel-vision to a hilarious level!

Feb 4, 2009 6:46 pm

I think it's great because a lot of advisors are in that paralyzed mode, waiting for retention or payout/job cut.


Great time to add good assets.
Feb 4, 2009 6:55 pm

I disagree.  It was either RayJ or Stifel that recently said they would take the 300-400k producers all day long.   It all depends on what kind of firm you are running and at what level you can be profitable.

 
If you are running a huge wirehouse with a lot of expenses the trend is toward to teams and bigger producers no doubt.   But some of these global banking models are imploding while they try to be all things to all people.
 
The trusted advisor will always have a place and their clients will stick with them.  Keep in contact with the clients, provide good service and value and the loyalty will be to you not the ever changing logo and name on the statement.
Feb 4, 2009 7:28 pm

I think the Irony of this is that $250 - $300K producer will stay at a Wirehouse, while the heavy hitters doing $500-$1million will go indy or boutique. I think there will be big opportunities for Bank Brokers who's banks haven't been tarnished with this crisis.


I think HankG has a valid point - there will be more pressure on the sub $300 producers

Feb 4, 2009 7:56 pm
HankG:

The Retail Brokerage Business is circling the bowl.  Within 2 years anyone who is now doing less than $500M will be out of the business.  Those of you who are clinging to books generating 250-300M should begin to explore your options. 

Many firms now pay 20-25% of all monthly gross less than 10M.  I predict that number quickly grows to 15-20K.  To make any money you'll have to do 40-50K per month.  You won't be fired you'll be starved out.

I wonder whether this creates an opportunity for a boutique type firm that would pay the 300-400 guy well and cater to their clients?



Welcome to Stifel....where you are profitable and don't haircut you!

Feb 4, 2009 8:07 pm
Vin Diesel:

I think the Irony of this is that $250 - $300K producer will stay at a Wirehouse, while the heavy hitters doing $500-$1million will go indy or boutique. I think there will be big opportunities for Bank Brokers who's banks haven't been tarnished with this crisis.


I think HankG has a valid point - there will be more pressure on the sub $300 producers

 
There will be more pressure on smaller producers.  It's already happening. The evidence is already there by the reduced payouts, less/no retention, the pressure to form teams etc, etc.  If the lower producers can't recognize what is going on around them and they are at a big wirehouse they are in trouble unless their star is rising.. or should I say their production is rising.    If they can't hook up with a bigger producer, join a team, or increase their production they should strongly consider going to an independent or regional where they can make it becuase staying at the big wirehouse doesn't look to have much of a future for them.
 
my 2  cents
 
-WW
Feb 5, 2009 11:30 am

I think the answer is go to Edwards and Jones! They now have EMAIL!

Feb 5, 2009 12:21 pm

Ironically, I was just told by my field supervison director that I'm over-using email. Only at EDJ would a person be told they need to cut back on their use of technology.

 
The majority of my email is third-party newsletters, and I've spent an hour this morning unsubscribing from them.
 
From now on, it's back to 100% kool aid. If it doesn't have Alan Skrainka's name at the bottom of the page--with a beautiful background of yellows and greens--I ain't reading it.
Feb 5, 2009 3:59 pm

Seriously... how many newsletters do you have to get each and every day for that to be the majority of your email?  Seems like most of the email should be communications with clients.


And do you really need so many newsletters?
 
I'm not trying to give you are hard time, I would really like to know.. how many newsletters are you subscribing to each month?