Citi Morg Commercial
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Let’s try to have a good debate without making statements that just aren’t true. Southern Broker … the type of FA you just described probably won’t be in the business after this recent downturn or is some type of insurance rep or index annuity salesman. Maybe most Indy reps until now are the type of person you described, but there has been a major shift in our industry and I think most of the reps going Indy now are planning/fee based advisors who just want to do the right thing for their clients without all the other BS. Over the last 4 months, I have interviewed 30-40 FAs looking to leave a wirehouse and most of them have been institutionalized. If you spend the time to get educated and do the due diligence, what you will find is that you can do everything for your clients and more at an Indy firm and get paid more to do it. I don’t have a huge book, but I make a pretty good living. I’m a CIMA, 95% fee based and my practice is holistic wealth management. I’m not looking for $100k accounts, but if I decide to take one, I’m sure as hell going to get paid for it. I actually just brought in a $2m new relationship (referral) on Friday that will generate $20k in recurring revenue each year. At no point was the fact that I’m not at a big firm even brought up in conversation. By the way, if you think the wires offer you that software for free, you are institutionalized.
This guy has been drinking way too much kool aid. It seems like a no brainer to me, why would you pay the major's back office 60% of your revenue. For what? You can't convince me there is that much value add. It's ridiculous, the comp model at the major firms is outdated, it hasn't been updated in 40 years. Think about it, 40 years ago you would work for a major because of name recognition, prestige of having client money with a large firm, and access to product. Things have definitely changed since then, no more prestige, it's more of a barrier to open accounts, independence from wall street is rewarded and highly thought of, product is everywhere, clients can do it themselves. Bottom line, giving the house 60% of your revenue doesn't make sense, whether you're a $350k producer or $1mm producer.[quote=Chazzy]
[quote=Lex123]I agree with you that if you’re a lower-end producer with lower-end clients, an Indy/Regional is the place to be. If you have clients that actually have money they don’t need to worry about the minimum HH, tiered money market rates, account fees, etc. Despite all the BS on this board about how great it is to own Joe Blow financial and get a higher payout, if you want to be in the big leagues you work for a wire and after all the recent consolidation, MSSB is the clear leader. [/quote]Careful, Lex. The ex-Jones Indy group here has quite a complex…[/quote]
DING DING DING. WE HAVE A WINNER! The whiners on this board are amazing. They all claim to be big shots who were mistreated by the big firms. Now they’ve re-discovered life with their office next to a Quiznos. The truth is, we all have these clowns in our office. They whine when they end up with no SA, an interior office, and no T&E money. Yet, when you ask why they aren’t working harder, they say “I had a $10k day today”. Its amazing. Face it, if you want to manage $50k rollovers in MF wrap products, go indy or to a regional. Cheat old folks out of $5k in ‘planning fees’ for some BS software that the wires offer for free. Then stick them in your annuities and get your 8% load. Pikers!
Couldnt have said it better. The world has changed. I too, run a fee based business, am a CFP, and use the knowledge i gained in obtaining that designation, in helping clients. Do i have 100k wrap clients? Yeah sure i do, but they are all people who dont bother me, are happy to hear from me once a quarter and pay me well enough to make it worthwhile relative to the time they take. Then i have folks like the 1.8mm prospect i just closed. Financial planning client, i advise him on all the "other" issues in his financial life, aside from investments, and he pays me a fee to run his investments When i was a manager at a wire, I met a few indies who were real losers. I wouldnt hire them on a prayer. But like i said the world is changing. Not saying that the wire is not viable. Sure it is. I'll never be one of those guys that says if you are at a wire you're a fool. Depends on what you want. The indie approach will serve my needs for the rest of my career. Diff strokes.Let’s try to have a good debate without making statements that just aren’t true. Southern Broker … the type of FA you just described probably won’t be in the business after this recent downturn or is some type of insurance rep or index annuity salesman. Maybe most Indy reps until now are the type of person you described, but there has been a major shift in our industry and I think most of the reps going Indy now are planning/fee based advisors who just want to do the right thing for their clients without all the other BS. Over the last 4 months, I have interviewed 30-40 FAs looking to leave a wirehouse and most of them have been institutionalized. If you spend the time to get educated and do the due diligence, what you will find is that you can do everything for your clients and more at an Indy firm and get paid more to do it. I don’t have a huge book, but I make a pretty good living. I’m a CIMA, 95% fee based and my practice is holistic wealth management. I’m not looking for $100k accounts, but if I decide to take one, I’m sure as hell going to get paid for it. I actually just brought in a $2m new relationship (referral) on Friday that will generate $20k in recurring revenue each year. At no point was the fact that I’m not at a big firm even brought up in conversation. By the way, if you think the wires offer you that software for free, you are institutionalized.
does it matter what platform you work from…wire,indy, bank. so as long as you take care of your clients and make $ for yourself. given the economic climate and uncertanty - if you’re producing in this eviroment you should be happy.
Vin I agree with you except.
I take issue to the big wires and banks that try to tell the public how honest & great they are and to me they are one of the reasons we are in this financial mess because of there greed.The best point you made Vin, is that it really doesnt matter what platform you serve your clients from. You can serve your clients well, and serve your family well, from either platform. Its just what the individual FA wants.
What i dont understand is why the wire guys have to show that they are all big swinging d***s. Thats the big difference in the cultures, it seems."MSSB is the clear leader" I have not read more than two posts on this thread, but this line is idiotic Do you understand that "IF" treasury did not guarantee the preferred (against failure) to Mitsu..MS was bankrupt over the weekend? Citi/SB was bankrupt w/o fed help. What a joke. If you believe this crap fools one person in the public you are mistaken. Most of the industry is now a joke but this firm is a total joke.I agree with you that if you’re a lower-end producer with lower-end clients, an Indy/Regional is the place to be. If you have clients that actually have money they don’t need to worry about the minimum HH, tiered money market rates, account fees, etc. Despite all the BS on this board about how great it is to own Joe Blow financial and get a higher payout, if you want to be in the big leagues you work for a wire and after all the recent consolidation, MSSB is the clear leader.
Once again the inferiority complex shining through for the Indy’s. Like I mentioned previously, guys that have jumped ship from our branch to the Indy’s and small Regionals are struggling big time to bring their clients over. Bottom line MSSB has the superior products and advisors that make it “sticky” to stay. I am also a CFP, and have been pleased with the direction of the firm. I have learned very quick when I joined the local FPA the hatred of the Wirehouses, similiar to this board from the members who are indy’s. I laugh because they, the Indy’s, value from the FPA comes from the wonderful CE you get and the “tools” you get, guess what? I already get that and more with my Firm. I think it boils down to what type of platform works for you. Also, to respond to an earlier post, if you make over $1mm or mor you get upwards of 45% or more payout not including all the bonus you get.
Wow. 45%! That is awwwsummmmmm!
On one million dollars, that’s like… $450k!
Do you really think that you get $550k worth of service from your firm? If you work like an Indy, you might do an ROI analysis before you purchase some services. My guess is, that your payback period would be NEVER on that level of payout.
That does not include the benefits of deferred comp or business expense accounts (probably close to 50% payout if you include all payments), and that doesn't include firm provided staff or health insurance. Tell me and Apples to Apples comparison on what $1 million at a wirehouse vs. Indy (please include all the expenses you are going to take on) NET VS. NET!Wow. 45%! That is awwwsummmmmm!
One one million dollars, that’s like… $450k!
Do you really think that you get $550k worth of service from your firm? If you work like an Indy, you might do an ROI analysis before you purchase some services. My guess is, that your payback period would be NEVER on that level of payout.
How many Indy firms needed TARP money? How many Indy firms sold their clients into off-balance sheet investments and auction-rate securities that they later walked away from? How many Indy firms came crawling to the government asking for billions, then pretended to be magnamimous by paying it back?
Yes, it’s likely true that multimillion dollar accounts probably “feel safer” at a major wire, especially now that the government has promised that no more will be allowed to fail. It’s also true that if you handle such accounts, you’re probably reluctant to leave, because you always wonder: are they MY clients? Or MorganStanleyDeanWitterSmithBarneyCitigroupGrogalMarkets clients? And if you have to ask, you already know.
Depending on one's real estate and admin costs, I think it is very reasonable for an Indy advisor doing $1m to net 65-70%. Even if it was only 60%, that's still $100k more to the bottom line and you won't have some of your pay tied up in 7-9 year deferred comp programs, that is cash money in the here and now.
I don't necessarily agree with the superior products statement. The only proprietary products these days are alternative investments, which most advisors & clients don't use and if they do, you can find product just as good from 3rd party providers. Now if I want to provide a loan to my client based on their art or wine collection or get paid to help them finance a private jet, you are right, I'll miss out on that business at an Indy, but who is actually doing that?[quote=Moraen]Wow. 45%! That is awwwsummmmmm! One one million dollars, that’s like… $450k! Do you really think that you get $550k worth of service from your firm? If you work like an Indy, you might do an ROI analysis before you purchase some services. My guess is, that your payback period would be NEVER on that level of payout.
That does not include the benefits of deferred comp or business expense accounts (probably close to 50% payout if you include all payments), and that doesn’t include firm provided staff or health insurance. Tell me and Apples to Apples comparison on what $1 million at a wirehouse vs. Indy (please include all the expenses you are going to take on) NET VS. NET! [/quote]
Full-time assistant $70,000 (includes insurance and bonus)
Mortgage $21,600 (four person office)
Utilities $1900
Internet/Phone $4800
Health Insurance $6000
E&O $2000
Biz Insurance $150
Accountant $800
Banking Fees $144
PT Mktg. Ast. $3800
PT BookKeeper $3800
Stamps $600
Paper $70
Toner $600
Planning software $1200
Reporting Software $7000
Research $6000
Plan Packaging Mat $4000
Maint. Office $5000
CE Classes $1500
For an RIA, this would be a payout of 87.76%
Other Indy shops I’m not sure, but my guess is still pretty high.
By the way, I’m running these numbers pretty high on some of these things. My firm doesn’t produce $1million yet, so there may be other expenses, but I figure for one guy doing $1 million, this is probably overstating the expenses. Let me know if you think I’m leaving anything off, and I’ll add it.
How many Indy firms needed TARP money? How many Indy firms sold their clients into off-balance sheet investments and auction-rate securities that they later walked away from? How many Indy firms came crawling to the government asking for billions, then pretended to be magnamimous by paying it back?Yes, it's likely true that multimillion dollar accounts probably "feel safer" at a major wire, especially now that the government has promised that no more will be allowed to fail. It's also true that if you handle such accounts, you're probably reluctant to leave, because you always wonder: are they MY clients? Or MorganStanleyDeanWitterSmithBarneyCitigroupGrogalMarkets clients? And if you have to ask, you already know.
[quote=thunderkwb]
How many Indy firms needed TARP money? How many Indy firms sold their clients into off-balance sheet investments and auction-rate securities that they later walked away from? How many Indy firms came crawling to the government asking for billions, then pretended to be magnamimous by paying it back?Yes, it’s likely true that multimillion dollar accounts probably “feel safer” at a major wire, especially now that the government has promised that no more will be allowed to fail. It’s also true that if you handle such accounts, you’re probably reluctant to leave, because you always wonder: are they MY clients? Or MorganStanleyDeanWitterSmithBarneyCitigroupGrogalMarkets clients? And if you have to ask, you already know.
Nobody “owns” a client and you probably already know that. You want to play “TARP” card because it is the easiest for you, if you want to use that broad brush, ok, what about the aggressive “annuity bonus” products I see Indy’s push on their clients, or the poor reporting I see from the Indy’s, the numerous custodian changes that I have seen Indy clients go through, or the fee+ commissions accounts I see Indy’s. Half the crap I see coming from the Indy’s, especially advertising that smells of used car salesman, using words describing themselves as “honest”, we would never get away with our compliance. So yes let’s talk about the morals and lets take the high road, How many Indy’s are getting a “bailout” on their clients accounts. I have seen more “unethical” actions on clients from indy’s then I have ever seen from a wirehouse client we have brought over. [/quote]
As far as advertisements, see the post about the FINRA advertisements, and my comment about the new MSSB commercials. False advertising if I ever saw it. MSSB did not form because they wanted to answer Wealth Management questions, they formed because they had to.
Deferred comp and stock options. How has those stock options worked for you! That ML stock is sure was a winner.
As far as the FPA and the CE credits your firm gives you man you are saving money on that one! WOW. Good thinking. I am a CFP also and I spent at the most $300 on CE last year.Greenbacks, my dc was not in co. stock, also you missed the point on CE it was a big selling point to the indy’s that are in the FPA, not to me.
Morean, "As far as advertisements, see the post about the FINRA advertisements, and my comment about the new MSSB commercials. False advertising if I ever saw it. MSSB did not form because they wanted to answer Wealth Management questions, they formed because they had to." Wow! Scandaleous! For your Information the MS & SB have been in talks about since early 2008. What is your point? Is our commercial the worst thing you can come up with? Also, I checked with the gird and for $1,000,000 producer it works out to about a 60% payout.I think that 60% number is high. I just came from SB and at $1m, you are probably getting 43% payout. If an FA is getting a LOS award and other deffered comp at $1m that is maybe another 10%.
[quote=thunderkwb] Greenbacks, my dc was not in co. stock, also you missed the point on CE it was a big selling point to the indy’s that are in the FPA, not to me.
Morean, “As far as advertisements, see the post about the FINRA advertisements, and my comment about the new MSSB commercials. False advertising if I ever saw it. MSSB did not form because they wanted to answer Wealth Management questions, they formed because they had to.”
Wow! Scandaleous! For your Information the MS & SB have been in talks about since early 2008. What is your point? Is our commercial the worst thing you can come up with?
Also, I checked with the gird and for $1,000,000 producer it works out to about a 60% payout.[/quote]
Ok, so is 87% more than 60%? Somebody help me out on that one. I can’t do the math.
The commercial isn’t the worst thing, but it’s a little disingenuous to say the reason you brought the two companies together was to help investors with their wealth management questions.
And I only brought it up because you mentioned “crooked” Indy commercials.
If they are so wonderful, why do they feel the need to lie as to why they are together?
Morean,
Look I would bet you run your business clean and do a fine job for your clients. My team takes pride on helping the client, the comment about the "crooked" indy's advertisement was in response to this thread on the MSSB commercial. I don't make a living on tearing down Indy's, or for that fact anybody business. But all I read on this board is independents tearing down wirehouse', and yes I can do the math on payout, but is all about just the money? No, I have looked at 2 independant platforms and it didn't work for my business financially or the technology. I have a friend that went indy and he is happy than ever, does annuities, but their platform does not work for us. I don't get why so many people on this board work to build our clients up, but then get on this board and start ripping each other's business a new one.