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Million Dollar Producers EJ vs. ML vs. BAC

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Nov 12, 2009 11:13 am

We do get caught up with this production thing…truth is, and it has been discussed to death…I know very few 1mil + guys who do it on there own. i would be a mil producer if I inherited a 200 mil book, or had the “ideal” Jones office. Very infrequently is it the individuals talent or work ethic…I am less than impressed by most of the group…

Nov 12, 2009 11:54 pm

mil dollar producers are fairly common in wirehouses... if you survived 20 years in one, you cant help it but be one with all of hte money and opportunity that gets dropped on peoples laps.

now building your own book to 1mil producer... that is an accomplishment. Doing it as an indy or an RIA is a real big one.

Nov 12, 2009 11:59 pm

Most of the indies or RIA’s that I have seen do it (absent 20+ years in the business), did it by coming from another background.  For example, I know a few guys that formed an RIA near me - they have degrees in Accounting, MBA’s, JD’s.  They have their CPA and CFP and passed the bars.  Former tax attorneys.  They are doing the whole estate planning/trust thing with their HNW connections.  At that level, you only need 50-100 clients (or fewer) to be a 100mm producer.  And they are also writing the life insurance for the estate planning issues, so they get some monster cases.

Nov 13, 2009 1:33 am
B24:

[quote=southcampus]I recently came over with the BAI folks in the Merrill merger. I used to be with Jones. I have to say I was very impressed with the number of million dollar producers Merrill has currently. Based on data the PMG group provided a few years ago there were 1400 plus million dollar producers out of 16000 I’m guessing. I know to be on the Top 500 list the cutoff is 1.5 mill currently. I think at Jones that puts you in the Top 5 in the firm. When I was at Jones during that same survey I know for a fact there were only around 65 FA’s doing 1 million out of 9000. I think BAC had 100 or so out of 2000. It shows how different the business models must be. 1400/16000= 8.75% 65/9000=.7%.  Just thought people would find this interesting.

  Although you are generally correct, keep in mind that most of the $1m+ producers at the wirehouses are part of teams.  So there are many teams with 2-3 advisors doing 1.5mm total.  One of them is the "lead" advisor, and they may also employ several assistants.  ALL of the FA's at Jones are solo, so it is quite possible to be doing less gross, but netting more at Jones, because you aren't paying as many people.  If I were grossing 850K at Jones, and netting 425K, I would be pretty happy. I'm not saying that Jones is even close in terms of production, but you do have to keep in perspective that all fo them are solo's.   Incidentally, the guy at Jones referenced above, has done 12 Goodknight plans.  Yes, he has given away assets to 12 different FA's during his tenure, and still has well over 500mm AUM.  So he basically has NO overhead (the Goodknights absorb much of it).  He also owns his own building, so although he pays the rent, he also collects the rent.  The guy's net is around 65%, plus profit sharing, GP, and LP.  He nets well north of $2mm per year.   Also, most Jones guys don't work in major metro areas, where most big wirehouse advisors (especially the super-prodcuers) work in NYC, Chicago, Silicon Valley, Boston, Atlanta, etc.  I can tell you, in my area, we have ALL the wirehouses.  The biggest producers (a handful) are just over $1mm, and those are guys with 25+ years in the business.[/quote]   It doesn't work that way.  At least, when the OP references pulling the top 500 list of production, it doesn't.  While a team may boast about its combined gross production, the ML system breaks down the allocated percentage applicable to the producer and lists each production level separately.  i.e., the lead FA of a 3 person team doing $2mil in production and splitting 50/25/25 would be listed as doing $1mil in production.
Nov 13, 2009 3:43 pm

Yeah, I see what you’re saying.  However, on most of those big teams, there is enough horsepower behind the “Big Dogs” that there is tons of money coming in on the shoulders of the non-producer “underlings”.  Don’t get me wrong, I’m not discrediting them in any way.  That’s the way to build a real sustainable business model the right way.  My point was, a “solo” advisor doing $1mm+ at ANY firm is pretty impressive. 

Nov 14, 2009 2:07 pm

Another guy that would be grouped in this conversation is Kent Donnelly. I believe he has done Goodknights for every other IR in Olathe,Kansas, which by now might be around 6 or more. I believe there is another top producer now in that same town which he gave a start to. I think he was managing 450 mill back a few years ago and doing 2 mill gross. I wonder if you count what he has given away and compounded those returns if it would be up close to a billion under management? Pretty impressive numbers considering the location.