Schwab ,Td ,Fidelity

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Nov 5, 2005 12:02 pm
Nov 5, 2005 6:27 pm

rader,


As for the new ad's being a threat to bus. I sugg you take a look at your book and ask yourself how many of your clients could be poached by the offerings of these disc firms.  Certainly there are some full service brokerage and ria clients that could be served by the offerings of schwab and td..., but I think these firms are basically fighting amongst themselves for the same piece of the pie.  The new services are just attempts to differentiate themselves from each other and add some value to the disc "relationship."  As for myself, not too worried.


Secondly, I think most of these firms are trying to get back to the pre 2000 heyday for online and disc firms.  A lot of people learned their lesson, but Schwab is hoping they'll forget it eventually.


I already grow some veggies, but I haven't changed my own oil since college.

Nov 8, 2005 9:53 pm

I don't agree that the discounters like Fidelity and Schwab want to return to the pre 2000 era.  They have branched out and are providing investment advice at a reasonable rate, have alligned themselves in many cases with financial advisors and see the value of offering advice.  I'm not sure they are the best source for that advice but they are moving towards a higher margin market.


Some of the smaller discounters like Scottrade probably are wishing for a return to the 90's, don't know.  They haven't really developed a plan for getting into the advice market.

Nov 8, 2005 10:00 pm

Fidelity, TD , and Schwab employ hack advisors... We have an open courtyard in our building with a nice deli and tables... These hacks come over from across the street to dine for the lunch hour... Sometimes on our way back from having a client sign ACATS to move money out of those firms, we toss a couple bagel bites down there and see who we can take out.  Rather amusing when it lands in some guy from Schwabs chicken noodle soup....

Nov 9, 2005 10:06 am

blarmstorn: I believe maybe I am wrong, but maybe Beagle was implying about RIA's that custodian assets with the discounters! And these guys have on average more experience then the wire house reps. And just as much or more products & resources then the big wire houses at less cost to the client and the rep!


Seriously if I had to do it again I would go the RIA route! If LPL messes up this partnership I will leave them in a minute!   

Nov 9, 2005 11:17 am

Possible. But I still couldnt refrain from sharing my bagel bite throwing story with you all... Good stuff......

Nov 15, 2005 10:33 am

The arrogance of the wire house broker is what fuels the asset flows to companies like Schwab and Fidelity. Check the numbers and market share share gain. They are not pulling assets from each other, they are pulling them from the MS, ML, and SB of the world. The guidance they provide is not only better but much more consistant. Think about it, how many rookie brokers blow clients up every year? How many of the reps in your office don't know asset allocation from chicken soup. Quality control and fair pricing serves the mass affluent very well at these firms while the wire houses keep the arbitrators busy.

Nov 15, 2005 11:43 am

F-D,


Give me an expample of "arrogance" - not sure what exactly you and others are referring to.

Nov 15, 2005 1:25 pm

AS far as arrogance is concearned, see the comments in all the posts above. I guess ignorance is also applicable. The typical schwab/ Fidelity rep has around 200-50o million in AUM. Granted, he or she did not go out and build that book, but at the end of the day that's a lot of assets and clients they manage. To call them Hacks is ignorant. Take a look at retail market share sometime. Why do you think ML is going after the million dollar plus client? They can not do what Fidelity and Schawb do for the 250K to 1M client at the same price. The wirehouse client with under a million at a firm will be history, along with the broker who services them.

Nov 15, 2005 1:57 pm
F-DPatrick:

AS far as arrogance is concearned, see the comments in all the posts above. I guess ignorance is also applicable. The typical schwab/ Fidelity rep has around 200-50o million in AUM. Granted, he or she did not go out and build that book, but at the end of the day that's a lot of assets and clients they manage. To call them Hacks is ignorant. Take a look at retail market share sometime. Why do you think ML is going after the million dollar plus client? They can not do what Fidelity and Schawb do for the 250K to 1M client at the same price. The wirehouse client with under a million at a firm will be history, along with the broker who services them.



They can manage such a large book as just one rep because they aren't expected to DO ANYTHING PROACTIVE!  Nor are they expected to give advice........


It's easy to manage a big book when you're just an order taker.....!

Nov 15, 2005 2:35 pm

FD- you're just mad cause I plopped a bagel bite in your split pea soup last week, arent you...  Its okay, come on up to the 3rd floor where the big boys play, and I will give you a dollar to get your shirt dry cleaned...

Nov 15, 2005 2:35 pm

Nothing against you F-D, but...


If that same rep left Schwab/Fidelity, how many of the client would go with him/her.  That's the difference... there the clients are the company's, everywhere else they are OUR clients.

Nov 15, 2005 3:49 pm

F-DP said,


"How many of the reps in your office don't know asset allocation from chicken soup."


"The wirehouse client with under a million at a firm will be history, along with the broker who services them. "


Who is calling who arogant. Wow.


You sound just about as pious as a Jones clone. Go back to your cubicle. Your phone is ringing and you need to take the order.

Nov 15, 2005 4:01 pm

Fdpatrick,


You really do not have a very good understanding of this business. Your comments are accusatorial, paranoid and unfounded. As I would expect you to know....your comparing apples and oranges, and I don't think you yourself know which is which. Come back when you have learned something.

Nov 25, 2005 10:36 am

I dont have a good understanding?? SB just cuts commish on small producing brokers? Again, the wirehouse broker doing less than a million will be history along with clients with less than a million at the firm.

Nov 25, 2005 4:44 pm

They cut commish on low producing brokers who have been there 5-7 years.  They don't want average reps, they want the cream of the crop, why?  Because they don't want to be in the babysitting business, do your job mikey... go get new clients... bring me a report showing me this and that.  SB or any otther firm won't cut someone who is growing a business.  Alot of brokers books have stayed the same size or shrunk.  This despite a few good years in the market.  How does that work?  Even if I just served my clients, my book and revenue will grow.

Nov 26, 2005 7:16 am

Fidelity's tools are the best. In the end they give you the tools so you don't have to pay an advisor to run the numbers for you. I'm an advisor and I'm nervous. Lot's of firms are building strong tools and Gen X'ers will prefer to use these than pay an advisor. I'm seeing it today and that's the future. My .02

Nov 26, 2005 12:03 pm

derekgaddy,


I compete with fidelity all day because thats where I take my rollover business from (70% of my biz), it's simple, their fee based accounts, MF wrap, aren't that great and aren't that cheap starts at 1.25%.  You can go see some screwball at the investor center who will tell you which fidelity fund to buy, but tell your prospect to ask him/her for some estate planning advice or questions about insurance etc.  They can't, then explain how hard the series 6 is and how you can add value because you.......

Nov 27, 2005 2:48 pm

DG,


I remember feeling that way back in the late 90's when everyone was making money and the online discounters were really ramping up their attempts to steal traditional advisor clients.  Then along came 2000-2002, which really weeded out the weak advisors and caused many do-it-yourselfers to cash out their tech losses and reconsider their need for an advisor.  At the same time, while my clients didn't entirely escape the bear market, they certainly fared better than the average bear and were quick to share that with family and friends, resulting in very nice referral activity and a lot of client loyalty.


In particular, I recall a couple of guys getting ready to retire in 1999.  One came to me for advice because he'd known me over the years and had done a little business with me.  The other guy did his best to convince prospect #1 that he should just eliminate my fees and roll his 401(K) over to Janus.  Had the first guy not had some faith in me, it would have been very difficult to convince him to take a conservative, balanced approach as opposed to dumping his life savings into Janus funds averaging 20-30% in the mid-late 90's.  You all know about how this story played out, but I'll tell you anyway.  My prospect became my client and averaged just over 8% from 2000 to 2002 and has been making money ever since.  I kept asking him how his buddy was doing and finally in late 2002, down more than 70% on his life savings, his buddy cashed out and left the stock market completely.


The moral of this story is that most individual investors are their own worst enemies and the ones that realize that end up being good prospects for advisors.  The ones that never figure it out never were good prospects for you anyway, and in my experience, are smaller, and more high-maintenance.  I don't know how everyone else's experience has ran, but in my market, I would say that at least 90% of the prospect population is either too busy, or not confident enough to run their own show, or they just flat-out aren't interested in trying.  There will always be plenty of folks who fall into this category, and the longer you are in this business, the more convinced of that fact you will become...that's my two cents...

Dec 8, 2005 12:07 am
Beagle:

I don't agree that the discounters like Fidelity and
Schwab want to return to the pre 2000 era.  They have branched out
and are providing investment advice at a reasonable rate, have alligned
themselves in many cases with financial advisors and see the value of
offering advice.  I'm not sure they are the best source for that
advice but they are moving towards a higher margin market.


Some of the smaller discounters like Scottrade probably are wishing
for a return to the 90's, don't know.  They haven't really
developed a plan for getting into the advice market.





scottrade does not wanna be in the advice market