Thinking about leaving Edward Jones for Wells Fargo FiNet
I am a 14 Vet with Edward Jones, and a 700K producer. I just got and offer from Wells Fargo independent size FiNet. The upfront cash is 500K along with a 90% payout. Has anyone else received such an offer?
It depends on the stipulations of the proposed contract. I have seen a little higher than 30% of assumed T12 GDC per year of contract signed i.e 300% for 10 years. But there will be hurdles etc and the 300% will be split between upfront say 150% and back end 150% divided into a check for each hurdle.
Your 500k should IMO be all upfront and last no longer then say 3-4 years. But without knowing the stipulations, it is hard to say.
It is a no brainer for that payout and the upfront money. Just don't spend it in case you want to change to another indie firm in a few years.
We toured Finet back when we left EJ and found the environment to be quite restrictive and too "matter-of-fact" for our taste. There were signficant fees on all accounts. These issues as well as other things completely turned us off. We eventually decided on LPL and haven't been disappointed at all. In fact, there have been several significant issues that we have posed to LPL to have them actually act on them on a firm-wide basis. There hasn't been a stitch of the power-player issues that we saw at Finet. Sure, there may be up-front money, but do you want to be independent or not? This is not independence. If you are happy to push the product that EJ gives you then maybe Finet with your foot stapled to the floor is fine for you. But if you really want to change your life and how you deal with your clients and respect your practice, choose something else.
The FINET platform does have fees for a transactional broker but so does LPL and RJ. If you have a fee based or insurance based business it is pretty competetive. The upfront money in the independent world is helpful for start up costs and could be used to buy a condo/building. You will get a 1099 on the money so you can control your taxes by setting up SEP, etc. The notes are usally spread over 8 years or so so the annual 1099 is not bad. I think the name recognition along with the robust platform is worth the extra fees. Finet, LPL and Raymond James are really hybrids. They are part independent part wirehouse. But you do run your business and it is yours. All are good firms. All will blow away EDJ. Good Luck
IM me with more questions.
Wells Fargo FiNet is the world's biggest nitemare of all. I was there for almost eight years and it was the worst experience of my 42 year plus business career. Don't make the same mistake I did. FiNet is to be avoided at all costs. They wine and dine you until you make the switch. Then the nitemare's begin within a few short weeks. They treat you like a crook and nothing more than pond scum. They have no respect for you, anybody working with you in your branch office and could care less about your clients. Their fees are outrageous; the back office support is non existent. They have no business offering this so called independent platform to any producers with a pulse! The only good thing about this platform is when you leave and realize how miserable you were associating with this group of nasty people and how great the new firm you move to is. They are the BLACK PLAGUE of the independant brokerage houses!
Wow. my experience has been the polar opposite of the above. I came from being many years with a major wirehouse and have found the people including the back office go way over the top to help you. The compliance side is how can we get this done and how fast. The payout is very fair and the support in terms of having access to all wells has to offer while being independant is awesome. It has exceeded all my expectations thus far.
Coming from PCG, it has been a no-brainer. Is it perfect? No but, there is no downside when you are coming from the WFA PCG side of the business.
I left EDJ about 5 years ago for FiNet and have had, overall, a positive experience with the firm. MUCH better than EDJ. You are fully independent (1099) and can self brand your own practice. I can talk to the CEO whenever I want. They are not perfect (I'm not sure anyone is). For example some of the compliance rules that require for the Wells wirehouse side carry over to FiNet, and they are a little more fee heavy on your real small accounts (under $10k). Can't do private REITS or some of the smaller annuities out there, but most all the big companies are available. 90% payout on funds and annuities and fee-based but they take admin fees (from 10bps to 30ps depending on account size) in lieu of ticket charges on fee based. They have a min production of $250k to $300 so I've found that most of the other FiNet owners are pretty succesfull and serious people (they don't have guy's doing $75k working out of their house). Very open platform and great if you want to run discretionary accounts. They have lots of free practice mgt programs and coaching. I was about $500k when I started gross and now am about $1 Million gross. I figure my net after FiNet and local overhead is about 65%, it could be higher but I'm with 3 partners and we have 9 staff and high rent. My only beef is they won't let us set up our own RIA. They've said this may change down the road but I'm not counting on it. I think LPL and Commenwealth are good also from what I hear. The other nice thing is that during the transition you can always tell your clients you are still with a major firm (who's heard of commonwealth or lpl) sometimes makes the transition easier for some clients. You can use the Wells brand on your business cards (I did at first) and then once the dust settles you can change to a custom/self brand. PM me if you want more info.
RWM is flat wrong when he says "LPL, RJ and FiNet" are part indy part wirehouse. While RJ has an employer model, and FiNet is not pure independence by any stretch (product constrained, platform constrained), LPL is in no way "part wirehouse". To make such an assertion is ridiculous and uninformed.
As a proven EJ producer, FiNet, RJ and LPL should all be on your radar. Your process should focus on the distinctions of each, and how they align with your business and practice values and needs.
Full disclosure: I am an LPL rep, as well as recruiting coordinator supporting over 100 LPL reps.
The notes are usally spread over 8 years or so so the annual 1099 is not bad. I think the name recognition along with the robust platform is worth the extra fees.
I am sure "Indyguru" is not biased toward any one firm since he is compensated on bringing people to LPL...
The point that I meant to get accross was they are all better options than Jones. FINET, Raymond James, and LPL all have their advantages and disadvantages. Visit all three and see which is the best for your clients and and you style of business.
LPL has awsome technology and his a great firm as is Raymond James. My personal experience with FINET has been very possitive and the back office has been improving since the merger.
Viper, Decaf at your age.
Has anyone looked at the admin fess these indys charge on fee based business. Are there any indys that do not charge admin fees or ticket charges on fee based business ( wrap fee accounts) Not RIA
How can a firm not charge either an admin fee or ticket charge for a feebased account if an IAR is trading the account? There are costs for trading. Now, the firm I am affiliated with does not have any admin fees inside the account if you are handling the investment management, only very reasonable ticket charges (under $15 per trade). Whether you decide to eat the charges in a wrap format or push them to the client is your choice (non-wrap). PM me if your inerested in the firm I am affiliated with.
Upfront $$$ provided by firms can sometimes be a double-edge sword. I've seen scenarios in which the new B/D provided forgivable loans (based on trailing 12-mos production) but then the market went south and the Advisor couldn't generate the needed production to meet the demands of the loan. Plus, with an outstanding loan, it somewhat restricts the Advisor in switching to a new partner. Taking upfront $$$ seems to restrict the true sense of independence to some degree.
Probably why some advisors go straight RIA. Might be a short term financial hit but the 'net-net' in the long run tends to be a lot more positive.
All I'm saying is be careful with these types of deals. As we all know, there is no free lunch particularly in our business.
Whatever you end up doing, best wishes to you and I hope you achieve the highest level of success possible.
As one of Finet's prefered ER's, let me set the record straight.
1st) Finet has never and will never offer 200-300% deals, I think you are mistaking PCG for FiNet.
2nd) FiNet really is the only hybrid independent channel out there. RJ has an employee model and an independent model. FiNet takes the best of both and puts the in one channel. With FiNet, you may pay slightly higher fees, but you get a load of support in exchange. If you go to a "skeleton bd" like LPL, you'll be responsible for your compliance, back office, HR, etc. With Finet, they handle these things for you.
3rd) FiNet is NOT for everyone. If you are already with an IBD (independent broker dealer) then FiNet is probably the worst option for you (outside of joining a wirehouse). However, if you like the idea of getting a higher payout for doing BASICALLY the same job at Ed Jones, FiNet fits like a glove.
I see a lot of people saying "Be warry of firms or IBDs that gave truckloads of upfront money." While there is some truth to this, especially with the wirehouses, you are being misled.
The reason Finet offers way more transition support than any other IBD out there is because they are targetting individuals at wirehouses and regionals. The majority of producers at WH/Regionals are usually under some sort of retention agreement. (The dreaded "Golden Handcuffs") So, to help individuals get out of retention deals and pay back money, they've decided they have to offer significant transition assistance.
How can they do this you may ask? Simple. Wells Fargo is a bank. They have more money than God and are used to operating on razor thin margins. It's their business model.
If we all went RIA it would not work. If we all went indy it would not work. If we all stay with the wirehouse it will not work.
I would look to see what some of the indys have first. My firend left EJ for a firm based out of AL. I cant think of the name off the top of my head. there was no cash up front. but he has full control of his business and what he wants to do. he liked that he was alowed to work with the clearing firm directly and did not have to call the home office. just look at all options before you jump ship.