H&R Block Fin Advisors Bought by Ameriprise

or Register to post new content in the forum

32 RepliesJump to last post

 

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.
Aug 13, 2008 12:37 am

What do we do?  Retention packet?  Run like hell?


They don't pass my gut check based on what I've ACATed from them...but I don't know a thing about what they're like to work for.
 
 
Aug 13, 2008 12:45 am
unsure_at_HRBFA:

What do we do?  Retention packet?  Run like hell?


They don't pass my gut check based on what I've ACATed from them...but I don't know a thing about what they're like to work for.
 
 
 
This is news to me, I've been dealing with my own fiasco of late.  Will they still do taxes as H&R Block?  Did they just sell off the investment side?  What can you even invest in at H&R Block?
 
You might PM Big Taco about Ameriprise.  Personally I would leave the business before going there.  Do you have enough assets to go anywhere else?
Aug 13, 2008 12:54 am

Yes - only the investment arm was sold.  About 900 advisors, average advisor T12 about $180k.  Top 10% are 500K+.


We've always been able to gain access to referrals from tax, and we've been told that even under the rebranding, this will continue for 3 years (part of selling agreement).  What they're not telling us is how the tax doors will be open to the other 12,000+ Ameriprise advisors.
 
Scary times.  This has been an incredibly good company to work for.
 
Our investment arm is full service.  Trust services, planning, fee-based accounts, UMAs, 1031, managed futures, VAs, insurance, IPO - the lot.  Also no pressure to run your business any certain way.  Like I said, it has been great here.
 
I'm well above average and can go elsewhere.  Just trying to get a feel for the company that's about to offer me a retention check...
Aug 13, 2008 5:52 am

Ameriprise has a pretty bad reputation.   They sell financial plans and then, in my experience, always recommend variable universal life insurance.  

 
The questions should probably be:
 
1) Will their reputation in the industry negatively imact you?  (I doubt it.)
2) Will you have the freedom to continue running your business like you have been? (no idea)
3) Are they the best place for you and your clients? (You owe it to yourself to explore all of your options.)
Aug 13, 2008 8:57 am
unsure_at_HRBFA:

What do we do?  Retention packet?  Run like hell?

They don't pass my gut check based on what I've ACATed from them...but I don't know a thing about what they're like to work for.


Having experienced being with a firm that was bought out before, these would be my initial observations for you.

1. Fight the urge to think you have to make any immediate or even hurried decisions about staying where you are or moving.  You will have plenty of time to make that decision.  Relax. The offers will be there.  Work on YOUR timetable, not theirs.

2. Over focus on servicing your existing clients NOW.  No matter what decision you make about future firms to work with, the key will be having your clients firmly on board.  Call early and often, especially your A clients, and reassure them that you will be certain their best interests are served by whatever happens in the future.  Tell them that this is due diligence time, and that you will be carefully watching events to make sure that no matter what happens, you will make sure they, and you, are in the best place to take care of them.  Them, them, them, them.

3. Decide what is most important to you in terms of your professional future and be clear on that.  Don't let the noise that is about to flood in about retention bonuses and recruiting calls & upfront offers distract you from YOUR priorities.  Don't let it become simply a question of who will pay the most money in the short run, unless that really is all that you care about.  This should be a time of careful and thoughtful due diligence.  Take your time and do it right, not necessarily quickly.  Measure twice, cut once.

In short, resolve to yourself to take the lemons that you have been given and turn them into lemonade.

Good luck.

Aug 13, 2008 11:06 am
snaggletooth:

You might PM Big Taco about Ameriprise.  Personally I would leave the business before going there.  Do you have enough assets to go anywhere else?

 
My sentiments exactly.
Aug 13, 2008 11:41 am

I know some guys who are "independent" Ameriprise advisors and they HATE it. They know that the products suck. They feel trapped there because the products aren't portable to other b/d's. 

Aug 13, 2008 10:05 pm

I left AMP with almost 13 years to the Independent b/d arena.  I wish I had done it sooner, but I had the Kool-Aid running through my veins.

 
Now with that said, you should follow the advice of another poster.  Service your clients better than you ever had in the past.  Do not make any quick decisions to leave until you get details of the facts for your group.
 
Platform 1 is for employees
Platform 2 is for 1099 reps (you are not forced to sell proprietary products) Directly
 
You will have access to everything you had anywhere else with the exception of VA/VUL. Term you can use First Colony (Genworth) or RVS Term.  The LTC is Genworth.  You may get opened up to other VA in the near future, but a product manufaturer will compensate you the most for their product.
 
Compliance cost is based on your past history plus your last year's GDC (GDC is set by the firm paying you so GDC will most likely be different than the industry standard)
 
There is a scorecard that is longevity based that details your BOB book of business value based on several metrics.  Certain values of AUM in product categories yield certain points.  Total points determines pay out.  The kicker for me leaving (been there since the IDS Days) was that the company changed the metrics every year.  Once you got your practice in balance per se according to corporate managment, BAM they would change it and you were out in the cold, perhaps even having a pay cut.
 
P2 pays a franachise fee, compliance fee, technology access fee, (either a la carte or comprehensive) payout percentage based on scorecard and ENDLESS PAPER CHASING.  Now that does not include getting your office space at your own expense (no new reps allowed to work out of their homes) So you have rent, insurance, find your own health insurance et al.
 
I have no clue what your costs were at Block, but watch this very closely.  When I left, I sold  most of my clients and kept 1/3.  They all followed me to Indy.  My GDC on 1/3 less clients went up by 75%, my expenses went down over 50%.  (this was not due to switching VA or replacing life as those assets totaled less than 800k.  Il left most there) The primary reason for my decrease in expenses is that I did not have 400/mo franchise fee, 380/mo compliance, 130/mo technology package.  Keep in mind that when I left, if you didnt have avg aum over 60m and GDC as defined by AMP, your pay was going down from 85% to 82%, maybe 79%.
 
I do not keep up specifically with them, but this is what you need to watch.  I have been INDY for 26 months, and my b/d has had 1 computer outage (defined as I cannot get to the home page portal to do my job during market hours) only once.  When I left AMP it was 3-4 times per week.  Also when you call the back office for support, you will be most likely routed to Manilla, only to speak with good people but (not exceptionally skilled) and the hold times to get things done is less than desireable.  I am not bashing the rank and file people, just the process.
 
So if you need to have a big corporate name and to be quasi independent (you still will have a paycheck with the name of a product manufacturer) and do not mind paying big bucks for it, stick with AMP.  If you do not want that, then go INDY as soon as you can.  I am sure you can Find the numbers to LPL or Commonwealth very quickly.  They both have minimums but if your older, looking to sell, Ameriprise may be a good fit for you.  Do your homework!
Aug 13, 2008 10:44 pm

P1 is the platform we're all going under.  AMP is saying they're going to do their best to transition us as smoothly as possible.  Sticking out like a sore thumb is that 10% GDC comes from VA business for me...not one Riversource (they are available on my platform) contract on the books though.  P2 will definitely NOT be available to us until after our 5 year retention packet runs its course.


No costs @ Block whatsoever.  Payouts 37-50% range (most 38-42).  Absolute captive market on the referrals from our tax business up until now.  HRB tax doors will soon be opened up to 12,000 other AMP reps (vs. our 900!!).  I'm going to lose a lot of tax relationships that are further from town, I'm sure.


Going to wait and see what restrictions come from AMP.  If I can't run my business they way I have been, and continue to act objectively, I have LPL's number.  I have had no pressure from management at all at Block - i've built a successful business with loyal customers and nobody is going to force me to do anything to compromise that.
 
Retention package is not what I hoped for.  But, if I can continue to grow as I have been and run the business with no interference, anything is a windfall.
 
Still entertaining recruiters.  If the name on the door is going to change, it should be because I selected it as the optimal firm.
Aug 14, 2008 12:49 am
unsure_at_HRBFA:

P1 is the platform we're all going under.  AMP is saying they're going to do their best to transition us as smoothly as possible.  Sticking out like a sore thumb is that 10% GDC comes from VA business for me...not one Riversource (they are available on my platform) contract on the books though.  P2 will definitely NOT be available to us until after our 5 year retention packet runs its course.


No costs @ Block whatsoever.  Payouts 37-50% range (most 38-42).  Absolute captive market on the referrals from our tax business up until now.  HRB tax doors will soon be opened up to 12,000 other AMP reps (vs. our 900!!).  I'm going to lose a lot of tax relationships that are further from town, I'm sure.


Going to wait and see what restrictions come from AMP.  If I can't run my business they way I have been, and continue to act objectively, I have LPL's number.  I have had no pressure from management at all at Block - i've built a successful business with loyal customers and nobody is going to force me to do anything to compromise that.
 
Retention package is not what I hoped for.  But, if I can continue to grow as I have been and run the business with no interference, anything is a windfall.
 
Still entertaining recruiters.  If the name on the door is going to change, it should be because I selected it as the optimal firm.
 
If you're going to be on p1, I would get the hell out of there faster than you can post a reply to this.
Aug 14, 2008 2:37 am

Agreed with snaggletooth. I have not worked for AMP although I went through the interview process about six months ago before selecting my current firm. I have been a long-time reader of this forum and believed that most of the negative comments were probably a bit exaggerated or potentially based on previous practices before restructuring of the AMP business model. From my viewpoint, this is not the case. The non-indie version at AMP appears to be a total sweatshop in which the business needs to be done a very specific way. (Mandatory plans, proprietary product pushing, etc.) I have a coworker who put in two years at HRB and then retired for a year before coming back to the biz in a different context. (He's in his mid-70s now, so nothing against the firm.) From his statements about HRB, it is nothing like AMP at all. Unless they are smart enough to make the transition somewhat accommodating for the acquired reps, you're best to evaluate all of your options in a reasonable manner and then get out.

Aug 14, 2008 7:58 am

Can you do p2 if you don't take the retention package?

Aug 14, 2008 8:38 am

Doubtful. Not taking the cash could only mean you're not bound to stay for 5 years.

 
How do you guys think this affects Block FAs doing north of $400,000-$500,000?
Aug 14, 2008 9:23 am

If you are 450k and above, with a 70/30 split between new business 70 and old recurring 30, then you will be a just fine with AMP.  Keep in mind that the planning will net you more opportunity for deeper business penetration.  P1 or P2 with consistent level of 400K does very well at AMP.  If you want to be left alone for the most part, go P2...but if you are doing that and are going to have to foot the expenses yourself, you should strongly consider independent (not a product manufacturing b/d).  AMP sets the GDC for each type of investment sold.  For instance, 95% of the client cost on an A share was the GDC when I was there, X your payout rate.  IE  5,000 x .95 x .85 = 4,037.50.  True indy firm would net you as follows: 5,000 x .85 -= 4,250  (doesn't include ticket charge) That is 5.26%.  You start adding in the additional cost for the OSJ, and the Franchise Fee and the INDY route will net you even more.

 
The point I am trying to make is that the AMP rep is a PROFIT center.  When it all comes down to it, if you run your practice the same way at P2 AMP as you did at Block, your net will be very different.  You must do consistent new business and grow that new business every year.  Ask to see how your practice fits into the latest scorecard metrics as both P1 and P2 and you will see what you can expect.
Aug 14, 2008 11:57 am

What was the retention deal?

Aug 14, 2008 9:37 pm

5 year forgivable loan / promissory note, and stock grant with 5 yr cliff vest.

 
P1 is the only option.  They're saying that they're developing the platform so that in 12-18 months, everything should integrate with minimal disruption.  We're being led to believe the product offerings will be expanded to accomodate us.  i.e. more VAs etc.
 
(T12 range / % cash advance / % stock award)
 
<$125 / 0 / 0
125-249 / 10 / 10   
250-349 / 20 / 20
350-449 / 30 / 30
450-549 / 40 / 30
550-749 / 50 / 30
750-999 / 60 / 40
1,000+ / 70 / 30 
Aug 14, 2008 11:10 pm

Non prop VA was in the works when I left in 2006, but the schtick was that they wanted Reps to be fully versed in the new living benefits being rolloed out at the time, and the endless regulation to follow (as it always does and actually did).  Mgmt stated in so many words that they did not want a mass-exodus from older generation annuities to non-prop annuities sold within the AMP system.  So I expect that you will have maybe 4 or 5 to choose from but you can bet that the comp will be less than what a true indy can offer.  If the product manufacturer doesnt give the concession to the distributing b/d, it will be taken from the selling rep.  The "available" GDC as set by AMP will be significantly lower than what is available on the Indy side.  For your existing biz they will approve the b/d change for whatever you have. 

 
If you do not need the hand holding of a corporation (and the money grabbing of one), then make the change to independent.  Either way you are changing, you might as well hang out your own shingle and keep what you earn, based on true INDUSTRY STANDARDS rather than a GDC that AMP sets for you.  I said it before, you will give up 1-5% on initial GDC. 
Aug 15, 2008 8:26 am

Average production at Block is below $250. With the retention deal at < $125 / 0 / 0

125-249 / 10 / 10     250-349 / 20 / 20 most brokers should have no reason to stay.
Aug 15, 2008 8:37 am
pussman:



Average production at Block is below $250. With the retention deal at < $125 / 0 / 0

125-249 / 10 / 10     250-349 / 20 / 20 most brokers should have no reason to stay.



Does anyone else have a hard time believing that the 2008 recruits are averaging $120,000? What about the guys who came on last year doing $200,000?

Aug 15, 2008 9:08 am

perhaps their natural market was bigger?  New folks seem to start off huge and once everyone they are related to by blood or friendship is a client, production drops 40%.  Give it 26 months and they generally trail the median.