MWD to BAC (Wirehouse to Bank)

or Register to post new content in the forum

 

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.
Jun 14, 2005 4:50 am

As this is my first post I would like to extend greetings from the trenches.  My post stems from my interest in transferring my book of business from Morgan Stanley to Bank of America Securities.  MWD is a good firm and mgmt has treated me well.  My book has grown from $0 to $18MM AUM with TTM production of $220M and 2005 FY projected production of $275-300M.  June 2005 ends my 4th yr of production having started in July 2001.  My book was built by cold calling on munis, and now my business has transitioned into roughly 50% fee based / 50% asset based revenue.  Any of you that cold called your first few years to build your business understand the effort & committment involved.  Prospecting has become even more difficult with the institution of the DNC registry, seminars are tough and the client referrals have not been forthcoming (although many of my clients have faired well considering these volatile markets).  That said, my prospect pipeline is relatively full and and a few of my significant accounts have more assets yet to gather.  In addition I have a partner who has a similar AUM and Revenue.  We joined forces recently to attract higher net worth fee-based relationships and our joint book holds $2.5M all fee based.  We would both make the move. 


A year ago a senior broker that mentored me as a rookie moved his book to BAC and claims that if wirehouse brokers only knew how good it was "they would be lining up at the door".  He claims to receive steady bank client referrals, and he also says that you have to know how to work with a "team" at the bank although he has an offsite office not in the branch.


Here are my questions....What payout should I expect (up-front and grid)?  Should I expect to receive a steady source of bank client referrals?  If I do receive referrals, should I expect to be required to train branch personnel and provide kickbacks?  I have read that national banks are becoming more competitive with wirehouses everyday.  I am looking for the most direct way to gain clients, assets and revenue because prospecting just keeps getting tougher.  Would it be wise to explore the national banks to grow my business at this stage in my career?  Am I just seeing the silver lining? 


Please advise....



Jun 14, 2005 9:35 am
muniman11:

As this is my first post I would like to extend greetings from the trenches.  My post stems from my interest in transferring my book of business from Morgan Stanley to Bank of America Securities.  MWD is a good firm and mgmt has treated me well.  My book has grown from $0 to $18MM AUM with TTM production of $220M and 2005 FY projected production of $275-300M.  June 2005 ends my 4th yr of production having started in July 2001.  My book was built by cold calling on munis, and now my business has transitioned into roughly 50% fee based / 50% asset based revenue.  Any of you that cold called your first few years to build your business understand the effort & committment involved.  Prospecting has become even more difficult with the institution of the DNC registry, seminars are tough and the client referrals have not been forthcoming (although many of my clients have faired well considering these volatile markets).  That said, my prospect pipeline is relatively full and and a few of my significant accounts have more assets yet to gather.  In addition I have a partner who has a similar AUM and Revenue.  We joined forces recently to attract higher net worth fee-based relationships and our joint book holds $2.5M all fee based.  We would both make the move. 


A year ago a senior broker that mentored me as a rookie moved his book to BAC and claims that if wirehouse brokers only knew how good it was "they would be lining up at the door".  He claims to receive steady bank client referrals, and he also says that you have to know how to work with a "team" at the bank although he has an offsite office not in the branch.


Here are my questions....What payout should I expect (up-front and grid)?  Should I expect to receive a steady source of bank client referrals?  If I do receive referrals, should I expect to be required to train branch personnel and provide kickbacks?  I have read that national banks are becoming more competitive with wirehouses everyday.  I am looking for the most direct way to gain clients, assets and revenue because prospecting just keeps getting tougher.  Would it be wise to explore the national banks to grow my business at this stage in my career?  Am I just seeing the silver lining? 


Please advise....





The only way I'd consider this move is if I wasn't making it at a wirehouse. With your partner you're in a position to gather the coveted HNW and middle level clients that the trust dept at BAC would be swooping in to grab from you. BAC has chosen the business model where the brokerage arm and the trust dept or “private bank”, (chuckle) are separate channels and often compete against each other. And you want to take about snug, yet under-qualified, nothing beats the crowd in the TD for that title as investment managers.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


The TD types will tell the tellers, and CSR types that it’s bank policy that account opportunities over $300k (it might be $500k) go to the TD, when the fact is that number simply represents the smallest account that dept will handle, and there’s no real policy at all about where accounts go. The TD will also provide cash incentives for accounts, something you can’t match. Bottom line, expect sizable accounts to be shuffled off away from you. Also expect the larger accounts that you do get to constantly be asking you about the “Private Banking” their friends have at BAC. They do a great job of marketing the exclusive nature of the TD, and leaving you either in the lobby or off in some far less opulently appointed area of the building. I got tired of losing larger accounts that way.


Also expect to attend a plethora of bogus cheerleading sessions (to me at least) with your “partners” on the banks side about thrilling subjects like passbook savings accounts that you need to be aware of but don’t add a dime to your paycheck. Yes, you have mandatory meetings now, but they’re usually about compliance or related to business you get paid for.


On the plus side, BAC has a middle tier banking system called Premier. That’s for customers too big for the lobby, too small for TD. That’s a nice referral system with decent sized accounts. If you’re connected to it, fine, if not, you’re sucking.


My bottom line on leaving BAC (aside from the move to centralize admin support away from broker’s offices to a main hub) was that I was tired of being a grown-up with years of experience and qualifications required to surrender the biggest assets and work with $2k IRAs. I really think their strategy is to have the TD handle real money and employ the youngest, greenest brokers they can find to handle the accounts that don’t qualify for TD treatment.


YMMV


Jun 14, 2005 1:42 pm

Amen!  It's about time somebody finally told the dirty little secret about working in bank brokerage.


I just recently transitioned to ML after four years at a super community bank.  There really is no comparison.  While the bank is a good place to learn and begin to build, it is by NO MEANS the panacea that so any bank managers want to lead you to believe. 


The final coup de grace for me was when I had to give a joint presentation to one of my EXISTING clients who sold some land for $1.25 million.  The office manager, who referred to me quite a bit and I made sure were taken care of, was the one who set her up with trust.  I already knew that the client was selling and we had already made preliminary allocation decisions.  Needless to say, I sat through a trust presentation thinking to myself, "I can't believe I lose a $1 to these people - let alone first crack at every $250K+ account."  The client took my recommendations and made that comment that they just didn't see why the bank thought they should talk to trust.


ML called a week later, and I haven't regretted it at all.  My best clients actually tracked me down and I've been able to leave the $2K IRAs and other service nightmares behind me.  I now have more time to actually work with my best clients and network more aggressively for new clients.  I've actually had people come up to me and say, "Well, now that you're with ML, can you handle my account?"  Clients pick up on the perception that at a lot of banks, brokerage is just an afterthought.


Jun 14, 2005 2:40 pm

Another BAC (any bank really) nightmare is having to calm down a client who wants to jump ship because they had a bad experience with a teller, CSR, mortgage drone, ATM, check, savings account, yadda yadda yadda

Jun 14, 2005 10:00 pm
TallyPanther:

Amen!  It's about time somebody finally told the dirty little secret about working in bank brokerage.


I just recently transitioned to ML after four years at a super
community bank.  There really is no comparison.  While the
bank is a good place to learn and begin to build, it is by NO MEANS the
panacea that so any bank managers want to lead you to believe. 


The final coup de grace for me was when I had to give a joint
presentation to one of my EXISTING clients who sold some land for $1.25
million.  The office manager, who referred to me quite a bit and I
made sure were taken care of, was the one who set her up with
trust.  I already knew that the client was selling and we had
already made preliminary allocation decisions.  Needless to say, I
sat through a trust presentation thinking to myself, "I can't believe I
lose a $1 to these people - let alone first crack at every $250K+
account."  The client took my recommendations and made that
comment that they just didn't see why the bank thought they should talk
to trust.


ML called a week later, and I haven't regretted it at all.  My
best clients actually tracked me down and I've been able to leave
the $2K IRAs and other service nightmares behind me.  I now have
more time to actually work with my best clients and network more
aggressively for new clients.  I've actually had people come up to
me and say, "Well, now that you're with ML, can you handle my
account?"  Clients pick up on the perception that at a lot
of banks, brokerage is just an afterthought.






Reading this brought back memories.  I left a bank and went to a
wire (ML) several years ago...and for those that are not used to me
beatng this horse...it was the best thing I ever did.  My business
is 3 times what it was at the bank and I have 1/2 the clients and
actually work in an environement that supports what I am doing...and
understands the business.  I thiunk the banks are the worst when
it comes to sales practices and unsuitable sales management
practices.  Their day will come.

Jun 15, 2005 1:19 am
rightway:
TallyPanther:

Amen!  It's about time somebody finally told the dirty little secret about working in bank brokerage.


I just recently transitioned to ML after four years at a super
community bank.  There really is no comparison.  While the
bank is a good place to learn and begin to build, it is by NO MEANS the
panacea that so any bank managers want to lead you to believe. 


The final coup de grace for me was when I had to give a joint
presentation to one of my EXISTING clients who sold some land for $1.25
million.  The office manager, who referred to me quite a bit and I
made sure were taken care of, was the one who set her up with
trust.  I already knew that the client was selling and we had
already made preliminary allocation decisions.  Needless to say, I
sat through a trust presentation thinking to myself, "I can't believe I
lose a $1 to these people - let alone first crack at every $250K+
account."  The client took my recommendations and made that
comment that they just didn't see why the bank thought they should talk
to trust.


ML called a week later, and I haven't regretted it at all.  My
best clients actually tracked me down and I've been able to leave
the $2K IRAs and other service nightmares behind me.  I now have
more time to actually work with my best clients and network more
aggressively for new clients.  I've actually had people come up to
me and say, "Well, now that you're with ML, can you handle my
account?"  Clients pick up on the perception that at a lot
of banks, brokerage is just an afterthought.






Reading this brought back memories.  I left a bank and went to a
wire (ML) several years ago...and for those that are not used to me
beatng this horse...it was the best thing I ever did.  My business
is 3 times what it was at the bank and I have 1/2 the clients and
actually work in an environement that supports what I am doing...and
understands the business.  I thiunk the banks are the worst when
it comes to sales practices and unsuitable sales management
practices.  Their day will come.





funny....I feel the same way about going indy!