WB FINET Program

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Aug 25, 2008 9:36 pm

Anyone have any experience with the WB FINET program?  I am thinking about taking the plunge and would appreciate any input, + or -, that anyone can share...

Aug 25, 2008 9:55 pm

What is it your are hoping to achieve?  What is most important to you?

Aug 25, 2008 10:21 pm

 I feel like a business owner now with all of the responsibilities of keeping the business going and growing only I have someone else taking the lions share of the profits before I see the check each month.  It's not simply about a higher payout by goin indy, but you are being compensated better for doing the same work with a few added responsibilities i.e. rent, staff, expenses all being paid on time. I feel anyone in this business is truly an entrepreneur because it takes that just to survive in this business with a smaller part of the benefit, why not be FINET indy and have the bigger bulk of the benefit while being the same entrepreneur that I am now?  I already work the hours I want, come and go as I please, service my clients as I feel necessary.  None of that would change going FINET.  I look at all of the takeaways that have occurred to us legacy AGE brokers since the WB merger/takeover i.e. 401k match & bonuses,  I would be better off indy wth a SEP or an owner only 401k combined with a DB plan socking away some serious cash and then expensing it all to the IRS.  These would be a few of the bennys, I am sure there are a million more..

Aug 25, 2008 10:46 pm

Agreed.  As a former AGE FC and now independent, I agree wholeheartedly with your premise.

What I'm confused about is your focus on FINET instead of more truly independent options.  Have you considered other independent options and found something appealing about FINET?  Are you even ELIGIBLE to go to FINET yet?  My recollection is Legacy AGE FCs had to wait something like 5 years post-merger before being allowed to go FINET.  Has this changed?

Finally, approximately what % of your current production is fee based vs. traditional commission based?


Aug 25, 2008 11:29 pm

You should broaden your horizons beyond FiNet, as Morphius says.  From what I'm reading there are many on this board who can help you, and you sound like you're of the right mindset to take the leap.

Aug 29, 2008 9:39 pm

Hey Morph,

 
When did you go indy and was it directly from AGE? What was your retention level regarding clients following you?  I can go FINET by DEC but will probably wait until FEB 08 due to systems conversion to WB. No 5 year wait period.  I will probably do FINET for about 1 year and then hire another B/D.  You only have a 30 day window when going FINET to get your clients to return the authorization form to the branch and after 30 days, the clients are open game for the sharks to try to grab.  I think going FINET would be easier and more of a seamless transition for the clients than switching B/D's at first.  Work under FINET for a year or so and then change B/D's and I should have nobody trying to hack my clients .  My infrasructure will be in place and then it will be a tech change for the computers at that time.  Sounds easy, I am sure problems will arise.  I am simply trying to take a simple path that another person took that went indy from WB a couple of years ago.   I hate  WB at this point (actually since 5/31/08) of the game.  They are the biggest bunch of liars and are thieves to us legacy AGE guys.  The bank mentality of trying to run the brokerage side stinks to high HELL !!!  I think I would rather be with BAC or JPM at this point since I am serving a BANK PUPPETEER anyway.  At least their bad news seems to be pretty much behind us .
Aug 29, 2008 10:07 pm
Bud Fox:

Hey Morph,

 
When did you go indy and was it directly from AGE? What was your retention level regarding clients following you?  I can go FINET by DEC but will probably wait until FEB 08 due to systems conversion to WB. No 5 year wait period.  I will probably do FINET for about 1 year and then hire another B/D.  You only have a 30 day window when going FINET to get your clients to return the authorization form to the branch and after 30 days, the clients are open game for the sharks to try to grab.  I think going FINET would be easier and more of a seamless transition for the clients than switching B/D's at first.  Work under FINET for a year or so and then change B/D's and I should have nobody trying to hack my clients .  My infrasructure will be in place and then it will be a tech change for the computers at that time.  Sounds easy, I am sure problems will arise.  I am simply trying to take a simple path that another person took that went indy from WB a couple of years ago.   I hate  WB at this point (actually since 5/31/08) of the game.  They are the biggest bunch of liars and are thieves to us legacy AGE guys.  The bank mentality of trying to run the brokerage side stinks to high HELL !!!  I think I would rather be with BAC or JPM at this point since I am serving a BANK PUPPETEER anyway.  At least their bad news seems to be pretty much behind us .


That certainly sounds like one way to minimize the risk of poaching, as it apparently buys you 30 days hands-off time.  That couldn't hurt.

OTOH, my experience (direct from AGE to RIA) was such that I don't think 30 days hands-off time would have made much difference.  I brought over in excess of 95% of my targeted clients (didn't even ask some that I didn't want to bother with anymore) despite the best efforts of the sharks.  So I didn't find the efforts of the sharks to be particularly effective.  Annoying, sure, but not effective.

I agree that getting your infrastructre in place would be a nice bonus.  Office space, staff, systems, equipment ... it all takes some time and effort to make choices, no question.

My question is this: how much patience/trust will your clients have to go through two changes in roughly a year?  If they must sign the raft of paperwork to authorize the change to FINET, and then go through that again 12 months later, I would guess you may well lose some on the second change.  It's a hassle and a bit unsettling, since clients by and large don't fully understand what is involved.  Generally the safest way across a chasm is with one large leap instead of two smaller ones.

So my suggestion would be to seriously investigate what would be involved in one move to where you want to be.  It probably isn't anywhere near as bad as you fear. 

Good luck.  The dream awaits you.

Aug 30, 2008 2:48 pm

The only paperwork the clients need to sign is the FiNet authorization form (for EACH account).  You do not have to repaper any of the accounts.  I have heard that you also get an additional 30 days (60 total).  You will work on a "reduced" payout, approx 75% for the first year if you go from PCG to FiNet but you get to keep the retention bonus.  You will also need to have both your Regional and BOM sign off on the FiNet request.  Then go to St Louis to meet with the FiNet gang and have them analyze your current business breakdown.  If you are a go from there, it is a matter of getting into the "que" to go indy.  They only release 3-4 FC/teams per month so you might want to at least get the process going.  If they get back to you sooner than you are ready, you can postpone the date.  All in all it should be relatively painless but I agree w/ Morphius, I might want to wait a little longer than a yr before changing BD's.

Aug 30, 2008 10:00 pm

Shredder,   You are right on the money with all of that. You have obviously talked with one of our FINET boys.  I am going to have Robbie run the pro-forma here in a short time for me. Do get to keep the retenton, but will lose the deferred comp (six figures). The only thing I did not know about was the extra 30 days. Not sure what that is for, but 60 days cool off is better than just 30.  I am certain my key households will follow me with no hesitation, but just to be able to not have the other sharks in my branch calling my clients and trying to plant bad seeds will be helpful.  I come from a pretty lazy office and the brokers constantly expect these kind of hand outs and applaude when a broker leaves or is terminated so they can finally call someone.  Average production in my office ex the million dollar producer is only about a buck and a half, maybe 2 tops.  I am sure most of these guys will be pushed out before long.  The word is that WB does not want anyone less than crest with 5 or more years in the biz...That being directly from the Reg Mgr.  I will have to figure out where things stand a year or so after going FINET and pick the best B/D at the time.  I simply cannot stay with WB, they suck and so do their philosophies.  They have a lot to learn about how to treat people that they take over...especially the AGE branch managers.

Aug 30, 2008 11:13 pm
Bud Fox:

I simply cannot stay with WB, they suck and so do their philosophies


And so your plan is to go with WB Finet?!?! 

Aug 31, 2008 9:34 am

Well, Its like this.  I am looking for the easiest transition to go indy for myself and my clients.  I have been told that the FINET brokers are hands off because you are on your own except for a pop compliance visit.  I am really sick of our local complex mgr and reg mgr throwing their weight around.  I guess I just ultimately don't have the balls to break away completely and go indy just yet and that is why I am feeling FINET could be a smoother transition into the indy form.  Maybe I am way out in left field on this. AGE is the only firm I have ever been with and even though it is now WB,  I have never had to leave a firm and try to take clients with me.

Aug 31, 2008 10:53 am

Ah, thanks for the clarification, Bud.  That changes the advice I would offer.

If your priority is what is easiest and least scary, why not just stay where you are and put up with the crap?

More seriously, Bud, I understand the fear factor - the unknown is always more scary than the known.  I, too, had never left a firm and taken clients with me.  That describes a good percentage of the people.  But to make an important decision such as this through fear is beneath you.  That's like the client who refuses to invest in equities because they have never done it before and are afraid.

If you want to go to FINET, go ahead.  But your stated reasoning for doing so does not lead me to believe you will be much happier than you are now. 

Going indpendent isn't nearly as difficult and scary as we tend to make it out beforehand.  Most everyone says - after the fact - that the move to independence was nowhere near as bad as they had thought beforehand.  You simply need to do your homework, talk to the right people and get the help you need to gain confidence.  Plenty of people have done that very thing - and so can you ... if you make the effort. 

And remember the old definition of courage - it is not the lack of fear, but doing what you need to do DESPITE the fear.

Good luck, Bud!

Aug 31, 2008 11:46 am

Bud Fox,

 
I've been with Finet for almost 4 years and came from EDJ.  If I were you, I think you first need to clarify whether you want to be want to be a rep affiliated with an Independent B/D (FiNet, LPL, RayJay, etc) or if you want to go the RIA route.  If you want to eventually go the RIA route, maybe you should just do it now.  You have some timely talking points given the merger, industry, etc., to reason with your clients to move to your new RIA.  From what I can tell, you should probably have over $100 Million in AUM to justify the RIA model.  There will also be more admin/office hassel with RIA. 
 
If you are satisfied with being going the independent b/d route, then by all means go with FiNet.  You'll own your book and be left alone.  I shopped around and the payout is about the same as with LPL, RayJay, etc.  The advantages are that you will have WAY more fee-based platforms, alt investments, and up-scale products and services with FiNet due to their Wachovia's sheer size and their cutting edge rollouts of things.  You also have a big time name, Wachovia, if you want to use it to market.  Or, you can completely customize your name like an RIA.  The only downside, in my opinion, is that even though FiNet is a seperate company with a seperate b/d and staff, there is still a little bit of a bank/wirehouse feel. 
Aug 31, 2008 9:48 pm

Great points Morph & Indy....  I am thinking that if I like the FINET side, if they leave me alone, if the product selection/availability, e.g. syndicate items, bonds,  is still as good,  I may just stay with FINET.  I do a ton of biz with muni's, synd pfd's, so the access to this is important to me.  That is if WB does not implode by then...  Indy, how much bank/wirehouse feel is there if you could measure it?  I want to get away from the majority of it, but if it is just a small % of what we got know,  I can stomach it.  The only thing I wonder about regarding going INDY other than FINET is the fact that I have a lot of HNW clients that like the affiliation of being with a big name firm.  I really had to sell them on WB when the merger/takeover occurred because in our area, WB did not really exist and my clients that did know the name knew them only as a bank in Florida & Georgia.  Now they see all the bad news about WB, almost daily, and it is gettin kinda hard to keep some of them calm, as if it is not hard enough to keep clients calm in this kinda market.  Thanks guys for all of the awesome insights....

Aug 31, 2008 10:18 pm
Morphius:


Going indpendent isn't nearly as difficult and scary as we tend to make it out beforehand.  Most everyone says - after the fact - that the move to independence was nowhere near as bad as they had thought beforehand. 

And remember the old definition of courage - it is not the lack of fear, but doing what you need to do DESPITE the fear.

Good luck, Bud!



Exactly!

Aug 31, 2008 11:17 pm
Bud Fox:

The only thing I wonder about regarding going INDY other than FINET is the fact that I have a lot of HNW clients that like the affiliation of being with a big name firm.  I really had to sell them on WB when the merger/takeover occurred because in our area, WB did not really exist and my clients that did know the name knew them only as a bank in Florida & Georgia.  Now they see all the bad news about WB, almost daily, and it is gettin kinda hard to keep some of them calm, as if it is not hard enough to keep clients calm in this kinda market.  Thanks guys for all of the awesome insights....


What specifically makes you think that a lot of your clients like the affiliation of a big name firm, especially since you say you had to "really sell them" on WB?

Frankly, it is almost always US who THINK our clients value the big brand name, which is why on average 80% + of client follow an FA when they leave a firm.  Most clients are doing business with YOU, not the firm.  This is even truer in your case where AGE was bought out - perhaps they felt a tie to AGE, but few feel any tie to WB for quite a while.

That worry is likely almost all in your head, not your clients'.

Sep 1, 2008 10:01 am

Bud,

 
You need to do the Finet thing for now.  Despite what some people on the board will say, many HNW clients like to be affiliated with a major Wall Street firm.  Yes, I know the headlines aren't good now... but it will pass.  FiNet gives you access to hedge funds, alt investments, etc., that the small Indy firms may not.  What is nice about the concept is that you can market it however you want depending on your situation.  If you think your HNW clients want the name than you can market WS.  However, if I were you, I would custom brand the practice (eg:  Fox Financial Group).  Your custom brand will appeal to other clients and give you a clear feeling of ownership.  I guess the only reason I say there is a little bit of a wirehouse/bank feel is only because the back office operations are all centralized and since FiNet is such a small portion (yet the fastest growing) of WS they tend to assume we are "employees" of one of the other channels... but this is improving.  You'll have all the same access to syndicate, etc.  If you custom brand your practice, and market YOU and YOUR practice for the next few years, then maybe down the road a move to RIA may not be that hard.
Sep 1, 2008 1:58 pm

I'm impressed that you know enough about Bud's situation to know that he "needs" to do the Finet thing for now.  RIA is absolutely not for everyone, but what intrigues me is the common misconceptions that people accept about that route without doing any first hand research themselves.  For example:

Indy4Life:

Bud, 

You need to do the Finet thing for now.  Despite what some people on the board will say, many HNW clients like to be affiliated with a major Wall Street firm. 


And many prefer not to be.  So what?  All that really matters to a given FA is if the majority of HIS best clients follow him wherever he goes.  There is overwhelming evidence that clients do business with the advisor, not the firm, which is why numerous studies have found that about 80-85%+ of clients follow an FA when he moves.  So, what specifically leads you to think "many HNW clients" like to be affiliated with a major Wall Street firm?  Your gut?

Indy4Life:

FiNet gives you access to hedge funds, alt investments, etc., that the small Indy firms may not. 


Another misconception perpetuated by those with a vested interest in people not knowing better.  When I left AGE/WS I had access to far more choice in Alternative Investments than I did before, as I am not limited to only what is available on the inhouse platform - I can access options on virtually any non-captive platform. 

Indy4Life:

What is nice about the concept is that you can market it however you want depending on your situation.  If you think your HNW clients want the name than you can market WS. 


How exactly are you going to know which HNW clients "want the name" and which don't?   What if you guess wrong?

Indy4Life:

However, if I were you, I would custom brand the practice (eg:  Fox Financial Group).  Your custom brand will appeal to other clients and give you a clear feeling of ownership. 


Or you could have the same custom brand appeal and actually HAVE true ownership of your firm instead of a "clear feeling of ownership."

Indy4Life:

I guess the only reason I say there is a little bit of a wirehouse/bank feel is only because the back office operations are all centralized and since FiNet is such a small portion (yet the fastest growing) of WS they tend to assume we are "employees" of one of the other channels... but this is improving.  You'll have all the same access to syndicate, etc. 


If having a "little bit" of a wirehouse/bank feel satisfies your desire to get away from a wirehouse/bank, I guess this ould be a step in the right direction.  Apparently.  I guess.

Indy4Life:

If you custom brand your practice, and market YOU and YOUR practice for the next few years, then maybe down the road a move to RIA may not be that hard.


And it may not be that hard now, or any harder now, but unless you do the due diligence you'll never know.  "Maybe ... next few years ... down the road ... may not be too hard."  

If it's an importat decision, Bud, isn't it worth being a bit more certain than that?

Sep 1, 2008 9:34 pm

Morph,

 
No need to jump down my throat here.  Bud asked for the boards opinion and I gave him mine.  I don't know the size of his book, nature of client relationships, etc. but I'm trying to help him out.  I could care less what he does.   A move to an Independend B/D can be an appropriate place for the long haul or just a stepping stone to your own RIA.  You are right, most FA's, including myself, take over 80% of clients with them.  But not all FA's have the same relationships with clients as others and not all FA's have the same comfort level (i.e. balls) of moving somewhere without a recognizable name.  Bud knows that better than us.  And you are right, he should do the diligence and he doesn't NEED to do the FiNet thing... that was just my opinion from what I could gather from his situation.
Sep 1, 2008 9:58 pm

Lots of great input here guys.  I guess anyone can make an argument either way about going either FINET or RIA.  Its all about ones own experience and attitude that gets him through and allows him to share these ideas down the road. When I say there are HNW clients that like firm affiliation, I am talking about all of the Madison Avenue bullshit like the people that think cuz they drive a Lexus, they are better than the guy next door driving the Toyota, when it is really the same frickin car.  My offfice is in the 3rd or 4th wealthiest county in the country and I see this crap all the time.  You and I know that these people will probably get good planning whether they are with LPL or Morgan Stanley.  And that planning is probably better if it comes from a CFP, which I am.  But, these types of clients just like to be able to tout to their friends, "Yeah, you should  call our guy over at Merrill or something like "Were with Smith Barney".  Its all about huge brand recognition and affiliation that these people like to throw around even though you and I know that you can do as well with your money at LPL or RayJay as you can with Merrill.  I have the feeling if I go FINET for a year or two with my name being "John Doe Financial",  I can always change to another B/D down the road and my name will stay the same and my clients will feel the same.  I think going FINET will be an easy transition with the clients having to sign 1 FINET authorization form per household rather than having to sign an ACAT for each account to switch firms and then have ACAT fees on top of that...Like most of you guys, my average household has 5 accounts which will make one form to sign nice...