Most productive FAs
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[quote=exUBS]
In my case, I benchmark my client’s performance to the S&P 500. I do this for 2 reasons, it represents a plain vanilla investment that they can buy for themselves quite cheaply and it is an easy way to evaluate how I do. My numbers are net of fees etc and I tell my clients (new and old) that if I can not show a clear difference between what I do and the benchmark, then I should be fired.
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I do the same for most accounts, but I also look at mutual fund benchmarks like Lipper and target date funds are probably what I’m most interested in to evaluate my own value add. The problem with the S&P 500 is if the client has a big chunk of fixed income and benchmarking against a blend of equity and fixed income benchmarks is really, really problematic.
IMHO - Ultimately, a money manager should probably benchmark against something like the S&P 500, but a financial advisor should be benchmarked against some kind of fire and forget type vehicle, like a target risk or date fund.
Hi, it’s David, the editor-in-chief of Registered Rep. Yeah, ML FAs are (or were) the most productive, on average, but I have to look at the numbers again — or, I should say, freshen them up. I’ll have a look and post at some point and let you know. You can always call me if I forget. (Am swamped these days.)
[quote=iceco1d]My benchmark is whether or not my clients reach their financial goals.
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That should be one of your benchmarks, but not the only one.
Hi, it’s David, the editor-in-chief of Registered Rep. Yeah, ML FAs are (or were) the most productive, on average, but I have to look at the numbers again — or, I should say, freshen them up. I’ll have a look and post at some point and let you know. You can always call me if I forget. (Am swamped these days.)
MEL?
[quote=anonymous]SF Broker, what other benchmarks should iceco1d have for his clients?[/quote]
An FA should look at the performance of their recommendations vs. various benchmarks like the S&P 500 and fire and forget investments like target date funds. This isn’t to derive some kind of black or white, good or bad distinction, but to to understand what their returns are driven by and what to expect - this should, ideally, enhance their value over time.
Why would someone care what firms have the highest producers?
Most big producers are ego self serving pricks anyway. I would think about what the client keeps in his pocket and also what the rep keeps in his. The hell with the firm.Why should benchmarking performance to the S&P or any other index matter? I kicked a wholesaler out of my office early in 2009 because he came in and wouldn't shut up about how well they were doing compared to the index. I don't give a flying fcuk if your fund returned -32% when the index did -37%. I'm with Ice on this...performance relative to client's specific goals is all that really matters. Whether something beat or missed an index by 100 basis points is irrelevant to me.[quote=anonymous]SF Broker, what other benchmarks should iceco1d have for his clients?[/quote]
An FA should look at the performance of their recommendations vs. various benchmarks like the S&P 500 and fire and forget investments like target date funds. This isn’t to derive some kind of black or white, good or bad distinction, but to to understand what their returns are driven by and what to expect - this should, ideally, enhance their value over time.
Why should benchmarking performance to the S&P or any other index matter? I kicked a wholesaler out of my office early in 2009 because he came in and wouldn't shut up about how well they were doing compared to the index. I don't give a flying fcuk if your fund returned -32% when the index did -37%. I'm with Ice on this...performance relative to client's specific goals is all that really matters. Whether something beat or missed an index by 100 basis points is irrelevant to me.[/quote] I agree for the most part but knowing what your Alpha is can be quite a selling tool. What if you could say that you beat the S&P's performance every year for the last decade? Would that be of value? I think it would. It's also a simple task until your book is so large you move the market.[quote=san fran broker] [quote=anonymous]SF Broker, what other benchmarks should iceco1d have for his clients?[/quote]
An FA should look at the performance of their recommendations vs. various benchmarks like the S&P 500 and fire and forget investments like target date funds. This isn’t to derive some kind of black or white, good or bad distinction, but to to understand what their returns are driven by and what to expect - this should, ideally, enhance their value over time.