RayJay cutting back on deals

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Oct 31, 2008 7:52 pm

Buddy of mine told me RayJay is in such demand by wirehouse advisors they no long offer as much moeny for the move...don't have to I guess.  Can anybody confirm this?

Oct 31, 2008 9:24 pm

makes sense...this is why AGE never used to give upfront $$....no need to when you have a great place to work.  They are one of the few "good" firms left

Oct 31, 2008 9:46 pm

Regardless of the platform Ray Jay offers, I imagine they will reduce the transition assistance packages to levels comparable to what LPL and other large independent b/ds are offering because of the mass migration of wirehouse and bank reps going indy. Payouts to advisors from all indy b/ds may even decrease as the costs (additional back office personnel, compliance, supervisory, etc.) rise.  

Oct 31, 2008 10:43 pm

any ballpark numbers on Stifel for a 600m producer?

Oct 31, 2008 11:57 pm
rocky:

any ballpark numbers on Stifel for a 600m producer?



eleventy kabillion

Nov 1, 2008 12:27 am

I always appreciate an "eleveny kabillion" respone, whenever properly injected into an RR thread.  Very, very nicely done.....

Nov 1, 2008 8:14 am

Ray Jay hit their annual fc target in a quarter. They might shut it down (broker transfer) as they have enough for now.

Nov 1, 2008 10:17 am
Gordon Gekko:

Ray Jay hit their annual fc target in a quarter. They might shut it down (broker transfer) as they have enough for now.

 
I doubt they will shut it down. They are more likely to cull the lower producers and raise the minimum production levels to get in.
 
Heck, eventually you might even have go through a job application and interview process with several layers of management to see if they like you and approve of your business model.
Nov 1, 2008 11:02 am

IMHO, what taints the RayJay model is the fact they have so many business models they tend to cannabalize their name in many towns.  For example, in my town they have 3 independent contractors, 2 of which have behavior that would get them fired if they were employees, there are 2 banks with RJ in them, 1 office, which I can't think of the name of the model, but it is between full service and independent and there is a full service office.  7 offices and 18 advisors in a town of 70,000.  People can't figure out which Raymond James is theirs in our town.  Causes a lot of image problems.  People just think it is a franchised name anybody can use and it detracts from the real value of the firm.  IMHO, they need to fix this or they will not enjoy the stature they could have in the marketplace.

Nov 1, 2008 11:11 am

Maybe, but I'd say Ray Jay looks like paradise compared to Wachovia Securities/Bank Brokers/Finet.

Nov 1, 2008 1:11 pm
cobra:

IMHO, what taints the RayJay model is the fact they have so many business models they tend to cannabalize their name in many towns.  For example, in my town they have 3 independent contractors, 2 of which have behavior that would get them fired if they were employees, there are 2 banks with RJ in them, 1 office, which I can't think of the name of the model, but it is between full service and independent and there is a full service office.  7 offices and 18 advisors in a town of 70,000.  People can't figure out which Raymond James is theirs in our town.  Causes a lot of image problems.  People just think it is a franchised name anybody can use and it detracts from the real value of the firm.  IMHO, they need to fix this or they will not enjoy the stature they could have in the marketplace.

 
Just think if they merged with Ed Jones, talk about cannabalization. Or our government could just nationlize the independent b/ds and all the advisors could be salaried with benefits. HAHAHAHA... not funny.
Nov 1, 2008 2:45 pm

I agree.  I was just thinking about RayJay models versus Stifel or Hilliard Lyons, or Independence.

Nov 1, 2008 3:29 pm

FYI, if you've got enough guys making the move to create 1.5mm - 2mm+-  in production, and somebody already has, or will get, their 9 and 10, you can create your own office with Ray Jay from the ground up.  That's still a "go" as far as we know.  It should be a lot easier to get some managers or asst. managers to make the move from places now with all the chop in the water.  Something to consider for you guys who are trying to figure out whether to go it alone in a transition or get up a group to make it happen.

Nov 1, 2008 3:38 pm

Is that the branch version of Ray Jay?

Nov 1, 2008 4:22 pm

I would assume that group of FAs in a market that RayJay is not in and fits the profile you suggest would be more desirable than an individual.  Any idea of what kind of deal they might make for such a group?

Nov 1, 2008 6:24 pm

We explored RJ and found that the money deals are not what they tell you when you first start talking to them.  They start out high and then when they think they've got you, they pull the rug out from underneath you.

We found this to be true of all of the Indy BDs to some extent. 

Nov 1, 2008 7:07 pm

The truly independent b/ds aren't really going to pay for more than the initial transition costs (ACAT, licensing & E&O fees, and some startup/marketing). If they do pay over and above that with upfront forgivable monies then they usually lock you into some sort of time commitment and that is not true independence. Sometimes they also hook you with a lower payout and higher fees on the ancillary services. And if it seems too good to be true, then it probably is.

Nov 1, 2008 7:29 pm
Gordon Gekko:

Is that the branch version of Ray Jay?

 
Yes, it's the traditional branch version.  Although you do have some flexibility to set up under a "supervising branch" that already has a manager with 9&10, it's part and parcel of a deal that, in order to be freestanding, somebody needs to embark upon that supervisory journey.  If you get enough juice in the branch, you can even hook up a non-producing manager...great gig for an older guy wanting to transition out/sell a book.  It looks like that's the direction our new branch may be headed.  Although I'm not on the buying or selling side of the book, or the management role, I'll keep you posted on how it goes.
 
To the point earlier about RJ "pulling the rug out" later in structuring a deal, our experience has been completely positive, other than Danny sending the posse after us when we left.  All the RJ promises have been kept, and then some.
Nov 1, 2008 7:37 pm
cobra:

I would assume that group of FAs in a market that RayJay is not in and fits the profile you suggest would be more desirable than an individual.  Any idea of what kind of deal they might make for such a group?

 
From our experience, the 60% T12 was pretty much across the board for each of us individually, or as a group.  If you had Mighty Kong as part of your group, you would certainly have more leverage if it was a group move.  In our experience, we were looked upon as a group for the decision to set up a freestanding new branch, but treated as individuals in structuring each deal.  I'm sure there's still some upward bias for Chairman's level dudes.  We were all bouncing between Crest/President's, FYI.