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Oct 6, 2006 12:20 am

As earning are reported for the parent companies fo some Refional Firm you might hear the faint taps of death echoing around.  Janney, Steiful, Raymind James, Ryan beck, even A G Edwards could be "dead men walking"  The business is consolidating quickly and critical mass will be key determiners.  Parent companies are not going to stand by and watch these firms hemeroge cash.



If you see your mamangment dealing with market conditions by cutting costs and eliminating positions you'll know rthat they're trying to survive.  If they are "maintaining the status quo:  No cut backs or layoffs is a sign that they are window dressing in hopes of getting a wirehouse to uy them, 



Our business is dying!  We're not needed.  Computers and clerks will handle everything at half the cost!

Oct 6, 2006 8:20 am

Wow, I don't think I've ever read so many names misspelled.


What is going to happen is the banks will eventually own all of the legacy brokerage firms--including Mother Merrill which is often considered a target of a major European bank.


I do agree that the business as it has been known is going to die.  There is no reason why people with money to invest should pay more than is necessary to invest it--and it's specious to conclude that "advice" being given by a man or woman who happens to have passed Series 7 is worth a plug nickel.


Wall Street seized on the idea of fee based accounts in an effort to survive--and as I 've been saying since I joined this forum the idea is too new to know for sure if the public will accept having a virtual stranger feel free to steal some of their money every so often simply because they sold the investments in the first place.


We wouldn't stand for a real estate agent who stuck their hand in our pocket every so often just because they sold us our house--there is no logical reason to think that an investor will tolerate it when the market isn't doing very well.

Oct 6, 2006 8:29 am

I agree there will be much more consolidation going forward and 2 years from now Mother Merrill and StanLEH Morgan will be wholly owned subsidiaries of some large bank (not necessarily a US based one).

Oct 6, 2006 9:01 am

In order to charge a fee or commission you simply must add a value that
is worthy of that amount.  This is performance, protection, piece
of mind, service, and planning.  The need for these things will
ever leave the investing public, but their awareness of these will
increase along with the competition. 



SInce I began I have been hearing the end of what we do and it has only
grown so I do not see the end but continued growth.  The key is
having the right platform, pricing, and service model to capture this
growth. 



Mother Merrill is a target because the world knows they get it, and
have it.  They are a firm that is forward thinking and likes to
act.  It is a joy to see the strategies they are pursuing play
out, despite the pain they sometimes cause (virutal elimination of the
traditional wrap account- its coming). 



For those of you new to the business- there is not better time to be in
it.  More money, more products, more services, more of
everything.  YOU just have to be good, and if YOU are you will win.

Oct 6, 2006 9:10 am

How large a piece of mind is offered?

Oct 6, 2006 9:22 am
rightway:

In order to charge a fee or commission you simply must add a value that is worthy of that amount.  This is performance, protection, piece of mind, service, and planning.  The need for these things will ever leave the investing public, but their awareness of these will increase along with the competition. 

SInce I began I have been hearing the end of what we do and it has only grown so I do not see the end but continued growth.  The key is having the right platform, pricing, and service model to capture this growth. 

Mother Merrill is a target because the world knows they get it, and have it.  They are a firm that is forward thinking and likes to act.  It is a joy to see the strategies they are pursuing play out, despite the pain they sometimes cause (virutal elimination of the traditional wrap account- its coming). 

For those of you new to the business- there is not better time to be in it.  More money, more products, more services, more of everything.  YOU just have to be good, and if YOU are you will win.


I thought you had to close a sale to recieve a commission.

Oct 6, 2006 9:27 am
Helter Skelter:

I thought you had to close a sale to recieve a commission.



Now you've gone too far.

Oct 6, 2006 9:41 am

A month or so back I had a client, errr customer, that called and
demanded to speak with me straight away.  This is unusual, and I
do not take in-bound calls at this time of the day.  I grabbed the
phone and he went on a rant about the fee's being charged in his mutual
fund account. 



His fee is 1.5% above and beyond the mutual fund management
fees    and his account is valued at $125,000.  His
account was in the          
positive just over 8% for the year, a few points over the averages
at   that time (a month or so ago), and up about 30% since we
took the     account.  This was his entire
retirement asset pool and we did full       
planning for him, despite its gloomy outlook.



He really yelled at me about the amount of money we had taken from his
account.  I listened to his point patiently and told him he was to
find another provider of whatever service he was looking for and he
hung up on me. 



I tell this story here on my day off (going hiking) because this guy,
perhaps like Soo 2 B Gone, does not have the capacity to focus on what
we do well, but instead looks at the other side of the equation. 
This guys portfolio had done just fine, but there was no convincing him
because he focused on the fee. 





Guess What...wealthy people don't do that. 
Our very best clients and those that that pay the most in fee's, and
their performance and experience is better right along with it. 
They understand this dynamic.  This is reinforced regularly with
the client satisfaction surveys they complete. 



I charge a fair fee for the service I provide, and that fee is higher
than most...so is what I provide.  I don't appoligize for it, but
I work very hard to deliver.  Our business is doomed?  I
don't think so...but I don't want a business made of up $100K and $200k
clients that can't see the forest for the trees. 

Oct 6, 2006 9:44 am
Helter Skelter:
rightway:

In order to charge a fee or
commission you simply must add a value that is worthy of that
amount.  This is performance, protection, piece of mind, service,
and planning.  The need for these things will ever leave the
investing public, but their awareness of these will increase along with
the competition. 

SInce I began I have been hearing the
end of what we do and it has only grown so I do not see the end but
continued growth.  The key is having the right platform, pricing,
and service model to capture this growth. 

Mother Merrill
is a target because the world knows they get it, and have it. 
They are a firm that is forward thinking and likes to act.  It is
a joy to see the strategies they are pursuing play out, despite the
pain they sometimes cause (virutal elimination of the traditional wrap
account- its coming). 

For those of you new to the
business- there is not better time to be in it.  More money, more
products, more services, more of everything.  YOU just have to be
good, and if YOU are you will win.


I thought you had to close a sale to recieve a commission.





Point?

Oct 6, 2006 9:53 am
rightway:



I tell this story here on my day off (going hiking) because this guy, perhaps like Soo 2 B Gone, does not have the capacity to focus on what we do well, but instead looks at the other side of the equation.  This guys portfolio had done just fine, but there was no convincing him because he focused on the fee. 


If you were his customer and you found out he's taking a day off to go hiking would you feel all warm and fuzzy about the fact that he's robbing your account of 150 basis points, as if it were a challenge to you to question him?


Arrogance has done more than a few goofballs in.

Oct 6, 2006 9:56 am
rightway:

A month or so back I had a client, errr customer, that called and demanded to speak with me straight away.  This is unusual, and I do not take in-bound calls at this time of the day.  I grabbed the phone and he went on a rant about the fee's being charged in his mutual fund account. 

His fee is 1.5% above and beyond the mutual fund management fees    and his account is valued at $125,000.  His account was in the           positive just over 8% for the year, a few points over the averages at   that time (a month or so ago), and up about 30% since we took the     account.  This was his entire retirement asset pool and we did full        planning for him, despite its gloomy outlook.

He really yelled at me about the amount of money we had taken from his account.  I listened to his point patiently and told him he was to find another provider of whatever service he was looking for and he hung up on me. 

I tell this story here on my day off (going hiking) because this guy, perhaps like Soo 2 B Gone, does not have the capacity to focus on what we do well, but instead looks at the other side of the equation.  This guys portfolio had done just fine, but there was no convincing him because he focused on the fee. 


Guess What...wealthy people don't do that.  Our very best clients and those that that pay the most in fee's, and their performance and experience is better right along with it.  They understand this dynamic.  This is reinforced regularly with the client satisfaction surveys they complete. 

I charge a fair fee for the service I provide, and that fee is higher than most...so is what I provide.  I don't appoligize for it, but I work very hard to deliver.  Our business is doomed?  I don't think so...but I don't want a business made of up $100K and $200k clients that can't see the forest for the trees. 


The little guys who never made more than $100,000/year are always the worst clients. They don't understand how the world works beyond their cubicles.

Oct 6, 2006 9:56 am
gruntal92:

As earning are reported for the parent companies fo some Refional Firm you might hear the faint taps of death echoing around.  Janney, Steiful, Raymind James, Ryan beck, even A G Edwards could be "dead men walking"  The business is consolidating quickly and critical mass will be key determiners.  Parent companies are not going to stand by and watch these firms hemeroge cash.



If you see your mamangment dealing with market conditions by cutting costs and eliminating positions you'll know rthat they're trying to survive.  If they are "maintaining the status quo:  No cut backs or layoffs is a sign that they are window dressing in hopes of getting a wirehouse to uy them, 



Our business is dying!  We're not needed.  Computers and clerks will handle everything at half the cost!




Your business will  die, If all you do is basic stocks, annuities, mutual funds. If you are just like all the other wire houses down the street  and the client can go online and do what you do you are right you will die!


Good bye!


Oct 6, 2006 9:58 am

Good point.  Most people in the world take days off now and again,
I am no different.  I think my clients understand this
notion.  None-the-less I have a team and we have people there from
8am to 7 pm except on Firday, which is 8am to 5 pm.



I am not punching a clock making widgets.  The product I produce
does not sieze in my absence.  Man buddy, do you really not get it
or are you just being combative?

Oct 6, 2006 10:11 am
rightway:

Good point.  Most people in the world take days off now and again, I am no different.  I think my clients understand this notion.  None-the-less I have a team and we have people there from 8am to 7 pm except on Firday, which is 8am to 5 pm.

I am not punching a clock making widgets.  The product I produce does not sieze in my absence.  Man buddy, do you really not get it or are you just being combative?


If you're a wage slave you take days off.  If you're an ambitious self employed entrepreneurial type you get your joy from making something happen in your business.

Oct 6, 2006 10:18 am
Soon 2 B Gone:
rightway:

Good point.  Most people in the world take days off now and again, I am no different.  I think my clients understand this notion.  None-the-less I have a team and we have people there from 8am to 7 pm except on Firday, which is 8am to 5 pm.

I am not punching a clock making widgets.  The product I produce does not sieze in my absence.  Man buddy, do you really not get it or are you just being combative?


If you're a wage slave you take days off.  If you're an ambitious self employed entrepreneurial type you get your joy from making something happen in your business.



And if you're really an entrepreneurial type, you don't divide your time up into days. You work hard and you play hard.

Oct 6, 2006 10:48 am

I work at a regional and I do not think we are dead. We are profitable and have an incredible balance sheet. If we are bought out, I guess I will cash in my stock, get my retention bonus and leave after my contract for another regional or independent.


 If you look at the stock performance of SF and RJF vs MS and Mer for the last 10 years, they are about the same. AGE has lagged. The only reason you are seeing merrill, ubs buying companies is that the are under pressure to show growth. There have been very few trainees that have made it in the business in the last 5 years. So the big companies are paying crazy money to buy companies. Merrill took a bath on the advest deal. They lost 400 out of the 500 brokers  UBS is paying an average of 1.4 million per broker for macdonald. The legg mason brokers, who have not jumped will jump when the retention deals are over.We, the brokers, are being offered crazy money to go other places because we have made it.


I went regional because they still care about the client.  I was tired of being told who I can deal with and what I should sell them. A small account did not take up much of my time. Everyone out there can chase the 10 million dollars accounts. I have the same chance to get them as a wirehouse. Send me you 100-300k accounts. I have made a good living off 200k accounts. I also have million dollar accounts. I also have 50k accounts. After working at MS for 17 years and interviewing with all the firms, I realized we all have the same type of  accounts. I do not work in NYC or DC and maybe in those markets the accounts are larger. The competition is also larger.


Lastly regarding the complaining client. Some people refuse to pay fees. They are cheap. These people will never deal with us. Some large account, some small accounts think this way. Why do you think the discounters get so much business. We do add value. 20 years in the business is worth 1 or 1.5%. We bring that to the table. There are enough people out there that understand this if you present it right. This is a business not a non profit.

Oct 6, 2006 11:04 am
Helter Skelter:
Soon 2 B Gone:

[quote=rightway]Good point.  Most people in the world take days
off now and again, I am no different.  I think my clients
understand this notion.  None-the-less I have a team and we have
people there from 8am to 7 pm except on Firday, which is 8am to 5 pm.

I
am not punching a clock making widgets.  The product I produce
does not sieze in my absence.  Man buddy, do you really not get it
or are you just being combative?
[/quote]


If you're a wage slave you take days off.  If you're an
ambitious self employed entrepreneurial type you get your joy from
making something happen in your business.


And if you're really an entrepreneurial type, you don't divide your time up into days. You work hard and you play hard.





Hmmm.  I just like to take some days off and go hiking or
boating.  I guess I am a wage slave in your eyes.  I like my
life.

Oct 6, 2006 11:07 am
aldo63:

Lastly regarding the complaining client. Some people refuse to pay fees. They are cheap. These people will never deal with us. Some large account, some small accounts think this way. Why do you think the discounters get so much business. We do add value. 20 years in the business is worth 1 or 1.5%. We bring that to the table. There are enough people out there that understand this if you present it right. This is a business not a non profit.



It is not a good idea to refer to people who don't want to pay extortion as "cheap."


Twenty years in the business is meaningless since the business can be understood in about six months or a year.


The fact that it is a business is true, but it's the only business I can think of that feels justified to take an ongoing fee for doing very little other than sitting down once or twice a year and suggesting things that are as close to common sense as it comes.


I think you're going to find more and more people who will consider the idea of ongoing fees to be repugnant.


Somebody said something to the effect of, "His portfolio was up 8% so my 1.5% was justified."  My response is, no it's not because your 1.5% was close to 20% of his portfolio's increase--and that's on top of paying fund managers too.


It really is an obscene idea.

Oct 6, 2006 11:09 am

It's funny how these children think that we're going to turn into dinosaurs. I can close deals. All I have to do is figure out what people are buying and sell it to them. It's the kids who can't recognize that when a person doesn't want what the kid THINKS is best who will wash out. The clients think that what THEY want is what's BEST for them.

Oct 6, 2006 11:16 am
Soon 2 B Gone:
aldo63:

Lastly regarding the complaining client. Some people refuse to pay fees. They are cheap. These people will never deal with us. Some large account, some small accounts think this way. Why do you think the discounters get so much business. We do add value. 20 years in the business is worth 1 or 1.5%. We bring that to the table. There are enough people out there that understand this if you present it right. This is a business not a non profit.



It is not a good idea to refer to people who don't want to pay extortion as "cheap."


Twenty years in the business is meaningless since the business can be understood in about six months or a year.


The fact that it is a business is true, but it's the only business I can think of that feels justified to take an ongoing fee for doing very little other than sitting down once or twice a year and suggesting things that are as close to common sense as it comes.


I think you're going to find more and more people who will consider the idea of ongoing fees to be repugnant.


Somebody said something to the effect of, "His portfolio was up 8% so my 1.5% was justified."  My response is, no it's not because your 1.5% was close to 20% of his portfolio's increase--and that's on top of paying fund managers too.


It really is an obscene idea.



Charging on-going fees isn't to my liking and it's easy to steal clients who are being charged fees. However, recurring fees appeal to a lot of people and if that's what they want to do, so be it. In addition, they should be able to charge whatever the market will bear. If they want to risk having their clients run into someone like me who will turn off the broker meter, that is their choice. I get a kick out of raising assets and closing deals. They get a kick out of looking at midget porn on the internet and collecting their money every quarter. To each his own.