For those that have ever changed firms

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Mar 17, 2006 8:34 am

What % of your total CLIENTS and ASSETS came with you to your new firm?

Mar 17, 2006 10:38 am

Of what was in play (what I targeted as desireable and able to move), about 60% of the clients and thus far, 75% of the assets.  I'm eight months in and running right at $21 mil AUM.  I'm making no effort to reach old clients who haven't made the switch...new business is much more profitable at this point anyway.  March is looking to be a $23-25K net month...indy life is good...

Mar 17, 2006 10:43 am

get the check and don't care who comes with you!!!  Trust me, it won't matter to you.  If you get bored, just stare at your checking account balance.

Mar 17, 2006 11:29 am

...and count the days until your agreement is up...

Mar 17, 2006 7:10 pm

As many people that are on these forums that have left EDJ and other firms, I would think more of you would chime in here.  Unless of course things didn't go as well as planned?

Mar 17, 2006 8:59 pm

The first response was the answer...I think most people that are succesful don't spend as much time here as some of us.  I switched and my #s are similar to Indyone's.  If YOU don't know or feel that most will move, there's your answer.  If you move for greed and don't have the relationships, of course it doesn't work.  I moved to cash in a bit, but had good relationships so everything has been great.  It's just a pain to do it--if it was easy (building great relationships and going through the trouble of moving), everyone would do it...it's not, so you get paid handsomely if you can and do.

Mar 18, 2006 4:05 pm

I left Jones in 2003 with 80 plus million and took a little north of 90% of the assets.  I went indy.  Two years later comfortably above 100 million and very happy.


To answer your question: In my experience of talking to at least 40 or 50 Jones reps over the last several years who left (most went indy), I'd say the average is close to 80%.  This assumes that you started your office from scratch.


Planning and preparation are key along with your client relationships.


Don't be a bum and go for the front cash--go indy.  You will make up the difference with income and you will never regret it for one second.


Mar 18, 2006 5:27 pm

RJ is a firm who will offer some up front cash and a higher payout as an employee than the avg firm out there from what I've heard.  In addition they consider the adviser to own the clients, not the firm.  After the commitment, the adviser is free to stay an employee or do whatever, including going to the indy side.   You can still run your own office, bring in others such as your sons, have a licensed assistant, and more. 


Why would this be bad?


Who else feels the same as zacko about front cash?


Mar 19, 2006 1:45 am

indyone, i'm not doubting you but how do you net 23-25k on 21mm in assets? i've never sniffed that on 32mm in assets. but, i'm not indy.  double b 

Mar 19, 2006 2:05 pm

RJ has 5 differnt divisions.  The Indy model is available through a couple of those as well as a quasi-indy model which looks OK.  The employee side is a wirehouse and represents about 25% of the total business of thye firm.  Indy is the rest.  The wirehouse side is decent for what it is...same technology and backoffice as indy.  Your payout will average about 45% or so.  As an indy, you will be 60% plus after all overhead--same products..why not own your own business and get the higher comp as an indy?  200k is min prod to go indy.

Mar 19, 2006 2:45 pm
doubleb:

indyone, i'm not doubting you but how do you net 23-25k on 21mm in assets? i've never sniffed that on 32mm in assets. but, i'm not indy.  double b 


I can't speak for Indyone, but it isn't that hard.  Do 300K in variable annuities at 7.5  add in a few hundred K of mutual funds at 3 to 5%, maybe some stock trades with an override of 20% from the B/D and OSJ.  If you are doing insurance business there is no override.   Granted it may not be every month, but it is not hard to net 23K on a nice month.

Mar 19, 2006 4:15 pm
zacko:

RJ has 5 differnt divisions.  The Indy model is available through a couple of those as well as a quasi-indy model which looks OK.  The employee side is a wirehouse and represents about 25% of the total business of thye firm.  Indy is the rest.  The wirehouse side is decent for what it is...same technology and backoffice as indy.  Your payout will average about 45% or so.  As an indy, you will be 60% plus after all overhead--same products..why not own your own business and get the higher comp as an indy?  200k is min prod to go indy.


What if I have a highly paid assistant, high rent, maybe a spouse with a medical problem that makes health ins on my own astronomical?  Why not take the upfront money which guarantees a 60% payout when amortized over say 5 years without any of the above concerns. Still own the book, still have the flexibility to go indy at any time, still have my own office, still can bring in jr advisors, etc.   Point is, indy may be great but its not necessarilly for everyone. 


Back to my original question, I'd like to hear from some other regulars :  Duke, BL, Revealer, Sooth, Doberman, Joedabkr, xej1984, exdrone, even Lance legs and Player....come on chime in.  How much of your book did you take???  How long before you were doing the same level of biz as before you left??

Mar 19, 2006 6:25 pm

The quasi indy model is better as you have no multi-year contract with minimum prod requirements.  You run your own office (with a high payout) and share overhead, but with full health benefits.  Kind of like Jones with a higher payout.  I'd give recruiting a call to find out more as I'm not too familiar with it beyond this.  If you need me to refer you to someone PM me and I'll help.  Either way, good luck.


Keep in mind, Jones brokers take a higher % than industry average when they change firms.  It's a known fact--just ask recruiters at various firms you talk to.   1 1/2 years is about average to get to same level of production by the way....since you asked. 

Mar 19, 2006 8:26 pm

My going indy is atypical and serves as a cautionary tale for those who partner with others. It's purposefully brief in order to exclude certain details, but you'll get the picture.


I left a wirehouse to partner with 2 other "friends" of mine, at an indy firm. We each worked in our areas of expertise. The first few months were great. Within three months we were making more money than we ever had before. Then one of the "friends" started slacking off and also started making noises like he was the boss. That's when the arguments began.


Myself and this "friend" argued for nearly 8 months about the business. He wanted to hire all these people and move to expensive offices (jacking up the overhead), while I wanted to keep the overhead low (I didn't mind working my butt off - as long as the money was good.) The other "friend" maintained his neutrality.


Then one day, the bossy friend announces that he is going to be boss, "No more partnership". So, I asked my neutral "friend" his opinion and he just mumbled something incoherent. That's when I packed up my stuff and the client list of the partnership and left out on my own.


My bossy "friend" then hired several people and moved into some expensive offices. He was bragging to everyone how successful he was. He was finally the big cheese (head).


To prevent me from "stealing" clients, the bossy "friend" tried lying to my original clients, making up stories that I was in trouble with the law, had tax problems, etc. My attorney put a stop to that.


Long story short, I have all of my original clients, plus 60% of those of the partnership. For several years, I had specifically targeted the clients of the partnership, with a good deal of success. Now, I make more money than I ever did as a partner.


The partnership has lost so many clients, the extra people and my "neutral" friend were fired. The bossy "friend" has moved to smaller offices, has 6 state and federal tax liens filed against him, hasn't paid his property taxes for last year, and has a dirty U-4.


The day he's finally driven from this business, I'm popping a cork and taking the day off! 



Mar 19, 2006 10:26 pm

Toss: I have changed firms a couple of times in my career (various reasons) and I would GUESS AUM retention @ 80-90%. I didn't keep that close of track. Production was running full tilt @ about 3rd. month. First 60 days is REAL busy with acats,etc. Usually after a change, my experience is that you are excited about the move and you work harder, ergo the production ramp up. You can expect your old firm to go after YOUR accts. pretty hard. If someone stays back, don't waste your time trying to persuade them to move. I give them about 2-3 trys then move on. I am always surprised about a couple of non-movers, but, they were probably not happy with the relationship for some reason or another. Don't fret over it. My type of business pretty much requires a traditional branch/ firm model. If I was younger, I'd build a model where an indy platform would support me.But, the "walk check" is ALWAYS nice. I don't blow them on BS stuff. I save them in my muni acct. If you still have the dough, you can always tell your firm to STICK IT. Hope this helps.  

Mar 19, 2006 10:35 pm

zacko thanks for the input I'll check on that quasi model too.


doberman, wow thats an interesting story.  Glad it all worked out for you !!


revealer, sounds like good advice on the 2-3 tries on a client who doesn't move. 


Two things everyone has agreed on, about 80% comes with, and not one person says they regret making their move.  Good to know.

Mar 20, 2006 8:33 am

You won't regret the move IF you move for a good reason(s).

Mar 20, 2006 10:11 am
Tossthekoolaid:
zacko:

RJ has 5 differnt divisions.  The Indy model is available through a couple of those as well as a quasi-indy model which looks OK.  The employee side is a wirehouse and represents about 25% of the total business of thye firm.  Indy is the rest.  The wirehouse side is decent for what it is...same technology and backoffice as indy.  Your payout will average about 45% or so.  As an indy, you will be 60% plus after all overhead--same products..why not own your own business and get the higher comp as an indy?  200k is min prod to go indy.


What if I have a highly paid assistant, high rent, maybe a spouse with a medical problem that makes health ins on my own astronomical?  Why not take the upfront money which guarantees a 60% payout when amortized over say 5 years without any of the above concerns. Still own the book, still have the flexibility to go indy at any time, still have my own office, still can bring in jr advisors, etc.   Point is, indy may be great but its not necessarilly for everyone. 


Back to my original question, I'd like to hear from some other regulars :  Duke, BL, Revealer, Sooth, Doberman, Joedabkr, xej1984, exdrone, even Lance legs and Player....come on chime in.  How much of your book did you take???  How long before you were doing the same level of biz as before you left??



I have addressed this question on a prior thread within the last month.  Call me lazy, but I'm not going to re-type it just for your benefit.  Look around and you'll find it.  I think the thread may have been started by ezmoney and had an appropriately descriptive title.

Mar 20, 2006 10:32 am

I did not actively solicit ANY of my book when I left, but within six months the top 20% of my clientss found me, bringing about 85% of the assets.


It was the best move of my career, bar none.

Mar 20, 2006 10:44 am
doubleb:

indyone, i'm not doubting you but how do you net 23-25k on 21mm in assets? i've never sniffed that on 32mm in assets. but, i'm not indy.  double b 


Well, to start with, I'll tell you that I have not averaged that, but see it starting to come on a regular basis.  I'm to the point where, if I don't have a $1,000 day, I'm disappointed.  March happens to be a particularly good month thus far.  Babs hit some good points in her reply and new annuity business is a nice part of that number, although I usually take the option that pays 3-4% upfront and 1% thereafter...it matches my fee-based business better.


Without getting into all the specifics, I can tell you that a lot of that number is new business.  $500K new biz should net, say 3%.  Add my monthly fee-based, some miscellaneous trailers, etc., and it is not hard to get to those kinds of numbers, and I expect to hit them regularly going forward.  I can also tell you that I worked much harder to hit numbers like that with almost $50 mil at my former employer, but have since realized that a lot of the business was mis-priced (not under my control), and just plain crappy, time-consuming stuff.  It didn't help that my old employer kept 60% of the gross when LPL only takes 10-20%.


I made a conscious decision to leave the crappy, time-consuming business behind and start with a smaller book that was built to match the way I do business.  It was a little scary at first, and I went six weeks with no paycheck, but looking back, I have no regrets and am much happier running the business the way I believe it should be ran.  Customers are much happier and several have told me that they expected the move for some time, probably even before I did.


I could ramble on, but there's client (and prospect) dreams to turn into reality and money to be made...