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Jan 24, 2009 3:57 pm

As a broker for Smith Barney all of this is pretty unbelieveable to me. We all want to blame our broker dealers for our financial situation but all of us are in the same boat.

 
Most want to move simply to repair their  personal net worth, or want a retention package to do the same.U
 
Understand that. When you are a million dollar producer you bring a lot of revenue to whatever firm you are at.
 
My personal situation is most of my net worth is toast because of my C holdings. My back end  recruitment bonus due in 12 months is all but gone as well as the 25% of my income I contributed to our CAP plan for the last 3 years. And now we are being sold to MS and all is supposed to be good?
 
Revenues continue to decline because of the market conditions and any retention package will be based on a much smaller number than even just 6 months ago. The fact that I am on my last year of my tranisition package may preclude me from being involved in any retention bonus.
 
This is not a "poor little me" story, but I may be forced to move just to repair what has been lost and out of my control. My view of a FA's relationship with a BD is that of a vendor and in most cases all vendors are in the same muck. If I have nothing to look forward to with my current vendor so how can they question anyone that is considering leaving?
Jan 24, 2009 4:03 pm

If someone is a million dollar producer, why the hell not go indy and keep almost double of your net?

 
What is it with guys that leave one wire for a different wire?  You could probably sock away more from the higher payout over time than you would get in the form of a check which commits you to the company for X amount of years.
 
This is not in regards to your post Squizz, I'm just a little tired of all this retention crap.  I know it sucks for a lot you guys out there, but it's not the end of the world. 
Jan 24, 2009 4:14 pm

I am not sure going independent is the answer. Certainly the payout is higher, but so are expenses, and dealing with employees  and day to day business operations is something I am really not interested in doing again. Additionally a large number of clients would have reservations I am guessing.

 
Compare that with getting a lump sum dropped on you and it's really hard to compare. I have looked into going independent before and really was reluctant to take the plunge based on the information I was getting.
 
 I am sure it's good for some, just not me.
Jan 24, 2009 4:17 pm
Squizz:

I am not sure going independent is the answer. Certainly the payout is higher, but so are expenses, and dealing with employees  and day to day business operations is something I am really not interested in doing again. Additionally a large number of clients would have reservations I am guessing.

 
Compare that with getting a lump sum dropped on you and it's really hard to compare. I have looked into going independent before and really was reluctant to take the plunge based on the information I was getting.
 
 I am sure it's good for some, just not me.



And FWIW when I look at 7-9 years of indentured servitude in exchange for "getting that big check dropped on my", and to me it's really hard to compare to owning my own business...different strokes for different folks I guess.

Jan 24, 2009 4:47 pm

Where would the inherited accounts come from?

Jan 24, 2009 4:59 pm

Indentured servant?  LOL...

 
I work when I want. I am as independent as any independent and I don't have to worry about employees personal problems.
 
I also am in my 50's...not really a time in my life that I want to start an independent office. Like you said different strokes for different folks...don't hate me for wanting something different in my life than you do.
 
 And I am not here in these  forums like you are recruiting FA's to your independent platform.
Jan 24, 2009 5:02 pm

You might check on UBS...that's where the rest of your brethren seem to be going.

Jan 24, 2009 5:21 pm
Squizz:

Indentured servant?  LOL...  Perhaps an inflammatory choice of words on my part, but that's how I see it.

 
I work when I want. I am as independent as any independent and I don't have to worry about employees personal problems.   I've had first-hand experience on both sides of the ledger.  You may think that you are, but you're not.  Take a look at your current situation...if you were indy and your firm was in such poor financial condition that you had to be concerned about them failing, if the headlines were screaming about how your b/d had gone to the government for a bailout, you'd simply pick up your book and move...because you own it by contract.  No interference from the b/d, just the hassle of repapering accounts.  So there's one example of how you are NOT as independent as you'd like to think.  I'm sure I could come up with more.

The whole idea, by the way, is to be careful in your hiring process so as to avoid hiring employees with personal problems.  And if they don't get the job done you can hand them their walking papers and find someone else.

 
I also am in my 50's...not really a time in my life that I want to start an independent office. Like you said different strokes for different folks...don't hate me for wanting something different in my life than you do.  No hate here.  Sorry if it came across that way.

 
 And I am not here in these  forums like you are recruiting FA's to your independent platform.  I assume you're referring to my post in another thread.  Please tell me how I am 'recruiting FA's to my independent platform' by telling them how they could step into an office with an existing OSJ and go right to work.  I didn't mention my firm, nor whether or not I am an OSJ, nor whether I have open space in my office.  Actually both 2 and 3 are true, but I didn't plan to use this forum to recruit, so I intentionally ommitted those facts about my personal situation.
Jan 24, 2009 5:35 pm
"This is not a "poor little me" story, but I may be forced to move just to repair what has been lost and out of my control. My view of a FA's relationship with a BD is that of a vendor and in most cases all vendors are in the same muck. If I have nothing to look forward to with my current vendor so how can they question anyone that is considering leaving?"
 
Guys on here wont admit it too often, but your "I need to repair what has been lost (money)" is the reason the Wachovia retention post has 77,000 views or the reason brokers are scrambling from the firm to firm right now like crickets when you flip the light switch.  Dont feel like your alone, it is what it is..I think most guys have lost a majority of their net worth, their book is damaged and they are worried if they dont take a deal now or get retention fast that their t-12 will keep dropping and then what??
Jan 24, 2009 5:51 pm

I am at SB as well and i cannot imagine taking a check to go to another wire and being owned for 7-9 years. If i am offered retention, i'll turn it down if it locks me in. Otherwise, I;ll take it, and put it in CD's and leave it there safe and sound for when i am ready to blow, so i can give it back.
The indie channel makes so much sense.
SB and the other wires are a blight on the industry. It is embarrassing to have to talk to clients every day and explain why we are in this situation and why they dont have to worry if the firm goes under and why our stock is at $3 and why our Senior Management is still making millions to muck it up.

Jan 24, 2009 5:52 pm

Squizz - your honesty is refreshing.



I think its so funny how the indy guys go crazy and cant fathom how some people prefer the wirehouse model over independent. You answered well different strokes for different folks.



The indys are like jehovas witness!

Jan 24, 2009 6:02 pm
Sportsfreakbob:

I am at SB as well and i cannot imagine taking a check to go to another wire and being owned for 7-9 years. If i am offered retention, i'll turn it down if it locks me in. Otherwise, I;ll take it, and put it in CD's and leave it there safe and sound for when i am ready to blow, so i can give it back.
The indie channel makes so much sense.
SB and the other wires are a blight on the industry. It is embarrassing to have to talk to clients every day and explain why we are in this situation and why they dont have to worry if the firm goes under and why our stock is at $3 and why our Senior Management is still making millions to muck it up.

 
Well Said
 
maybe it's not this high, but I think over the past 4 months Ive spend 20% of all client phone calls talking about my firm or some other wirehouse or its management that's blown up.  I am so sick of it.  I cant believe anyone would sign any deal right now or retention if you had to stay put unless you are really hurting for money...When I see the places pretty much fall in line and cut payouts on 400K and under types its outragous when you think the firms are responsible largely for all the debacles, they should give everyone a 100% payout increase to repair the damage, even  the pikers.
Jan 24, 2009 6:12 pm
 
maybe it's not this high, but I think over the past 4 months Ive spend 20% of all client phone calls talking about my firm or some other wirehouse or its management that's blown up.  I am so sick of it.  I cant believe anyone would sign any deal right now or retention if you had to stay put unless you are really hurting for money...When I see the places pretty much fall in line and cut payouts on 400K and under types its outragous when you think the firms are responsible largely for all the debacles, they should give everyone a 100% payout increase to repair the damage, even  the pikers.[/quote]
 
Yes, I am sick of it also. My situation is I have watched 1.2m in restricted stock become 80k. I have 1 year and a half left on my deal and I would owe money to leave. So my options are few. My back end deal is all in stock and C stock may never see 5 again much less 45. I feel like the guy that says..."Thank you sir, can I have another".
Jan 24, 2009 6:24 pm

I could care less if anyone comes to indy.  It works for me, perhaps not for everyone.  You really cannot get around this issue:  If you are at a wire making 35-40%, your expenses are what you are not getting paid.  complance, rent, staff, marketing, subsidy for bigger producers etc.  If you are indy, in most cases, you control your expenses.  How many times are you going to pay for a desk, and a chair and artwork for your office?  If your b/d is a manufacturer of product (research, underwriting Investment banking) and/or mutual funds then you are paying out your arse and you just do not recognize it.

 
If you run a clean practice, going indy just about doubles your net in one year.  Certainly will the second year as you will not have the once in 5 year expenses like furniture, tech etc.
 
I too have spent alot of time explaining crap that has nothing to do with me, and INDY that does not require a bailout from the Gov't.  My new client roll is up about 15% since November, so I hope things actually squeeze many out of the business.  All new clients are from wires tired of all the drama.
Jan 24, 2009 6:38 pm

If your in the Citigroup stock option plan they will keep all that
hasnt vested for 2 years. I was paying after tax money into their plan
and when I left, they kept 2 years worth of after tax contributions to
it. Yeah, they give you a discount buying it, but leave before its 2
year vesting period and you lose what YOU put into it. One of Sandy Weills great little
gimmicks. They were sued in a class action over it and various states
Supreme Courts upheld it. I was told they were getting back up to 3
million shares per year in the co. coffers with this scheme. Maybe its changed but 5 years ago this was the case. 

Jan 24, 2009 10:23 pm

Thanks, but I am well aware of how the plan works. It's a moot point now 1.) because the stock is nearly worthless, and 2.) I don't think I can afford to leave.

 
I am not sure that I will sign any retention deal. But I am pretty sure that I will leave when my original deal is up. I may at least revisit the independent platforms and see if it makes any sense to do in 18 months. I have a great book of business and I am sure I will retain a good portion of it under most circumstances.
 
Thanks for all the responses. I appreciate everyones opinions.
Jan 24, 2009 11:54 pm

Squizz, I think you're wise to forego any retention package and keep your options open.  At least as an independent, you'd have a book to sell at retirement.  Take your time...look at all options...and carefully plan whatever transition you decide on.  Hopefully the next move is your last.

Jan 24, 2009 11:56 pm

After reading this thread, something came to mind - 

There is definitely a division developing between the wires and indies and it is apparent that the indy platform is winning. Proof - I don't see ANY independent advisors whining about their retention (or lack thereof), how senior management has done them wrong, pay grid constantly getting cut, blah, blah, blah...
 
Squizz - it is my belief that you should review ALL of the various channels available to you.
Things have dramatically changed in the independent/RIA world. Technology, investment options, fixed income offerings, etc. have all become equal or better than the wires in the last few years. I also think you are using the old age as an excuse for laziness, you are complacent. The wirehouse model is dead, cut your losses like a good trader and move on to a new model. Face the music... 
Jan 25, 2009 12:06 am
ABOM:

Squizz - your honesty is refreshing.



I think its so funny how the indy guys go crazy and cant fathom how some people prefer the wirehouse model over independent. You answered well different strokes for different folks.



The indys are like jehovas witness!



If so, then I guess that means you are like one of those Scientology recruiters who hangs out at the mall asking peope if they want to take an 'intelligence test'....

Jan 25, 2009 12:13 am
ABOM:

The indys are like jehovas witness!

 
Brother Abom, if you'll PM me your address, I have some tracts I'd like to share with you...