Bank Channel

Feb 2, 2006 10:29 pm

I'm curious if anyone has experience with RJ in a bank channel.  I've heard good things about RJ, I'm sure it's the same at the bank level.

Curious what the payout structure is both on the product gross as well as the payout to the broker.

Is 350K - 400K year one with limited bank referrals doable under this type of structure?

Feb 2, 2006 10:46 pm

that's like asking can you run a 4.4 forty...it would be doable for a few, but not for most...

Feb 2, 2006 11:06 pm

It’s going to be with smaller local banks that typically aren’t in a position to attract the UHNW clients.  It’s possible, but not probable.

Feb 2, 2006 11:36 pm

How do you define UHNW?  You can do 400K with 250K rollovers if you can get enough

Feb 3, 2006 1:08 am

I would say in year one it’s going to be tough unless you have a huge branch network.  Typically bank programs = 1 rep to 200 Million in this scenario it is unlikely anyone is going to do 400K in 1st year, unless they only sell VA’s

Feb 3, 2006 3:01 am

[quote=bankrep1]I would say in year one it's going to be tough unless you have a huge branch network.  Typically bank programs = 1 rep to 200 Million in this scenario it is unlikely anyone is going to do 400K in 1st year, unless they only sell VA's[/quote]

Well isn't that pretty much what you guys do? 

Feb 3, 2006 3:03 am

Joe,

No. That's what your boy Dirk does.  He's independent right?

Don't make blanket statements, it makes you look stupid.

Feb 3, 2006 3:10 am

is it possible with 100% fee-based biz?  Where I am now pays little on fee-based - 1 - 1.4%.  That's a tremendous volume to do this..

BrokerRecruit - what did you mean - "It's going to be with smaller banks"....(??)

Feb 3, 2006 3:21 am

Don't even attempt to build your business 100% fee based unless you own the business or a frim is paying you a good salary while you build it 50K+.

Gather assets, meet your monthly goal, everything after that goal has been reached can go into fee based.

Feb 3, 2006 3:40 am

Bank,

I got the same advice from colleagues when I started my practice 2 years ago.

I had an ethical problem with only doing fee based after meeting my monthly goal.

Why should I treat a prospect differently just because I hadn't met my goal yet?

My attitude was, if my firm has a problem with the way I'm building my practice, so be it.

I'm still here :)

scrim

Feb 3, 2006 3:46 am

Scrim,

If your firm supports you building a fee based business and you feel it is the best fit by all means pursue it.  I believe you have mentioned your firm pays you 3% or so upfront.  At 1% you'll starve, drop out of the business and not help any clients.

Alot of advisors want to be advisors from day 1.  From day 1 your a salesman, you get to be an advisor after you sold enough sh*tt that you can now consult rather than sell.

Feb 3, 2006 3:51 am

very salient point.

I guess I luckily found a good fit that my firm supports building a fee based business.

If I was only getting 1% on new money I would've had to negotiate a salary for a few years to get by before my practice would be viable.

scrim

Feb 3, 2006 3:55 am

Exactly,

Most programs want the fee based biz, but are unwilling to support it, kinda funny what a circlejerk it's been in alot of prgrams.

Feb 3, 2006 6:02 am

[quote=bankrep1]

Joe,

No. That's what your boy Dirk does.  He's independent right?

Don't make blanket statements, it makes you look stupid.

[/quote]

Couldn't resist...it was too easy.

Geez man don't ya have a sense of humor?  Or does it hit a bit to close to the truth?

Feb 3, 2006 11:51 am

Do most bank b/d pay 3% on fee-based biz? 

And are we talking mutual fund wraps or professional money managers who manage stock and or bond positions for the clients - i.e., Allianz, Oppenheimer, Lord Abbett, Kayne Anderson, etc.

Is 350K doable year one with 3% payout given no referral program at the bank?  If you're not getting bank customers, I don't quite understand the value of being at the bank (??) - perhaps a few "walk-ins" but that would not build a viable business.

Feb 3, 2006 1:26 pm

If you go to the bank have a plan to be gone in 3-5 years.

Feb 3, 2006 2:34 pm

[quote=newrookie]

Do most bank b/d pay 3% on fee-based biz? 

And are we talking mutual fund wraps or professional money managers who manage stock and or bond positions for the clients - i.e., Allianz, Oppenheimer, Lord Abbett, Kayne Anderson, etc.

Is 350K doable year one with 3% payout given no referral program at the bank?  If you're not getting bank customers, I don't quite understand the value of being at the bank (??) - perhaps a few "walk-ins" but that would not build a viable business.

[/quote]

Exactly my thought....

Feb 3, 2006 5:43 pm

If you're at a bank and NOT getting back customers, you are an idiot.

It's called opportunity cost.  I am making much more than I did at ML not because my payout is higher (actually only slightly).  I am making more because my VOLUME is way up from the access to bank customers, both retail and commercial.

If you are at a bank and aren't getting these referrals, you need to do one of two things:

1.  Start learning how to "be one of them" and build a relationship with your co-workers, and the referrals WILL come.

2.  Leave.

#2 isn't meant to be funny, it's meant to be sincere.  Banks are THE BEST PLACE to build your book of business, especially smaller community or regional banks.  Do a great job, stay humble, make nice with EVERYONE, don't let people know about the kind of money your making (I could make as much as the President of the bank...but you just keep that to yourself).  If you do those things, you can't help but be very successful.

Feb 3, 2006 6:04 pm

[quote=BankFC]

If you're at a bank and NOT getting back customers, you are an idiot.

snippity do dah

If you are at a bank and aren't getting these referrals, you need to do one of two things:

1.  Start learning how to "be one of them" and build a relationship with your co-workers, and the referrals WILL come.

2.  Leave.

#2 isn't meant to be funny, it's meant to be sincere.  Banks are THE BEST PLACE to build your book of business, especially smaller community or regional banks.  Do a great job, stay humble, make nice with EVERYONE, don't let people know about the kind of money your making (I could make as much as the President of the bank...but you just keep that to yourself).  If you do those things, you can't help but be very successful.

[/quote]

Good advice.  I was a bank broker for quite a while. You need to get the rank and file and the branch managers behind you.  Besides paying for qualified referrals, one thing that worked for me was to hold some educational seminars for the tellers, loan officers etc to let them know just exactly what I did and my philosophy on investments.  They really have no idea.  The branch managers look at you at competition for assets. The more business you do, they see it as taking away from their demand deposit base. (you should learn bank terminology too) .  Show the managers how your business will contribute to their bottom line.

Once they are not afraid that you are going to ream "their" customers and burn the client to the ground, you will start getting referrals.   You might also try to make the employees of the bank your clients.  

It is all about trust.

Feb 3, 2006 6:11 pm

Bank,

I'm doing pretty well on the retail side getting customers but lagging with business owners and their biz accounts.

What do you think I should focus on to increase my accounts from small business owners?

scrim

Feb 3, 2006 6:19 pm

[quote=scrim67]

Bank,

I'm doing pretty well on the retail side getting customers but lagging with business owners and their biz accounts.

What do you think I should focus on to increase my accounts from small business owners?

scrim

[/quote]

1) Make friends with your commecial lending department.

2) Always introduce your small business owner clients to your commercial lenders.

Feb 3, 2006 6:50 pm

Figure out exactly what you have to offer them, and what NOT to offer them.

They don't need cash management, they go to branch for that.

They do need qualified plans (aka SEP, uniK, 412i, 401K if big enough).

They do need liquidity, so if they have cash that's gonna sit for the next 6 -9 months, maybe offer some 6 month corporates for their cash they need later this year (although most will opt for a CD), or maybe some 35 day auction rate preferreds (you won't make any money on these, but you'll have a HNW relationship that can give referrals, retire one day, sell property, etc)

They need insurance, both life, disability, and LTC.  Not to mention buy sell agreements, key man, exec comp...etc

Put yourself in their shoes.  If I sell lumber, and I know I can make a 20% margin on my product, while would I invest and hope to get 10%.  Sell them what they NEED.  Business owners typically have all the risk they want in running the business. 

They buy safe, they buy insured, they buy liquid, they buy convienent. 

Feb 3, 2006 10:50 pm

I'm not at a bank, just curious as I have never explored that end of the business.

What I'm reading is that the optimum situation would be to be at a bank that:

Pays some sort of base salary, has a good fee rate on fee-business (3%) so that you can build an annuitized business, and has a referral program in place (formally or informally) for bank clients to the investment arm.

I think I'm also reading that if the bank has stated they are not willing to "share" their clients, it's a losing proposition even if the other 2 criteria are in place (salary and good fee rate)??  Still would have stiff goals to meet, which means it's all outside prospecting.

Whoever here was getting 3% on fee business, don't clients balk since the going rate is @1% for fee business these days??

Feb 3, 2006 10:58 pm

In my program the clients don't pay the 3%.  They pay nothing to buy and nothing to sell because we are managing the assets for a flat fee annually of about 1.4%.

The 3% is simply a fee we get paid because we aren't paid any salary but we are encouraged to build part of our practice in fee based.

My company can see the forest thru the trees and is willing to take a short term hit to the bottom line for long term profitability.

scrim

Feb 3, 2006 11:12 pm

 1.4% they pay you .462% pf that at 33% payout.  Paying you 3$ is really just giving you 100% the first year after that they are in for 67% every year.  Smart move on both of your behalfs.

I am waiting for some indy to chime in and say or you could get 100%. Do you want 33% of a million of 100% of 100,000?

Feb 3, 2006 11:18 pm

I'm not sure I fully understand the above.

All I know is what I get upfront and then we get trails on AUM after one year.

The downside is that if the client liquidates during the first 9 months we will get a chargeback.     By doing the right thing and fully understanding needs I have had very few chargebacks.

scrim

Feb 3, 2006 11:20 pm

ah, you are assuming my grid is paid at 33% I would imagine.

That's pretty close actually.

It's a good program and I usually feel i'm lucky I found it (or it found me).   

Of course I am fully aware compensation plans can and will change over time.

Bottom line is, I enjoy coming to work most days.

scrim

Feb 3, 2006 11:23 pm

[quote=bankrep1]

 1.4% they pay you .462% pf that at 33% payout.  Paying you 3$ is really just giving you 100% the first year after that they are in for 67% every year.  Smart move on both of your behalfs.

I am waiting for some indy to chime in and say or you could get 100%. Do you want 33% of a million of 100% of 100,000?

[/quote]

Well in reality for the first year that's a pretty good deal.

You don't get 100% unless you go with some sort of unbundled RIA platform and that's a lot of work.

My fee based payout starts at 90% and goes up with bonuses.  My fee based assets are definitely more than 100k.

It's not merely about the payout or the $$....it's also about the freedom and being able to mold your own business.  Not for everyone, for sure, but it makes me plenty happy.

Feb 4, 2006 5:45 am

I love my 401K match, pension, health care, other insurances, nice office, sweet referrals from hot chicks and did I mention the hot chicks.

Joe I can appreciate being alone in your office and having the freedom, noone around. Joe I really get what your saying.

Feb 4, 2006 6:04 am

[quote=bankrep1]

 1.4% they pay you .462% pf that at 33% payout.  Paying you 3$ is really just giving you 100% the first year after that they are in for 67% every year.  Smart move on both of your behalfs.

I am waiting for some indy to chime in and say or you could get 100%. Do you want 33% of a million of 100% of 100,000?

[/quote]

bankrep1, why do you assume that an indy couldn't possibly land a million dollar account?

Feb 4, 2006 2:03 pm

Philo,

I don't doubt this at all.  I am talking more about the volume of being in a bank vs. being indy.  The bank has alot of customers and it is a referral machine.

It is no secret that bank reps do a higher volume of business per rep.  Just talk to a wholesaler who handles both sides of the business.

Feb 4, 2006 2:23 pm

[quote=bankrep1]

Philo,

I don't doubt this at all.  I am talking more about the volume of being in a bank vs. being indy.  The bank has alot of customers and it is a referral machine.

It is no secret that bank reps do a higher volume of business per rep.  Just talk to a wholesaler who handles both sides of the business.

[/quote]

Since it's not a secret, why don't you tell us about the volume that bank reps do?

Feb 4, 2006 2:31 pm

Dirk any trade mag will show average production of a bank rep (around 22K) is much higher than a wirehouse rep avg (around 15K) and I cannot recall the indy # but it was much lower.

I know there are exceptions, people doing large amounts of business in their own shop.  I am talking in general.

Feb 4, 2006 2:34 pm

[quote=bankrep1]

Dirk any trade mag will show average production of a bank rep (around 22K) is much higher than a wirehouse rep avg (around 15K) and I cannot recall the indy # but it was much lower.

I know there are exceptions, people doing large amounts of business in their own shop.  I am talking in general.

[/quote]

I think you're way off. Can you find a link to an article about this?

Feb 4, 2006 3:42 pm

No dirk I won’t spend my time on you

Feb 4, 2006 4:09 pm

[quote=bankrep1]No dirk I won't spend my time on you[/quote]

I'd say the same thing if I were a lying, piker bank broker.

Feb 4, 2006 6:03 pm

[quote=bankrep1]

I love my 401K match, pension, health care, other insurances, nice office, sweet referrals from hot chicks and did I mention the hot chicks.

Joe I can appreciate being alone in your office and having the freedom, noone around. Joe I really get what your saying.

[/quote]

Like I said, different strokes for different folks.  I'm not all alone either, because I just hired someone a couple of weeks ago.

Feb 4, 2006 7:42 pm

Dirk,

Just look below your screen name,you joined this board 1 year after I did, and you have more posts here than I do.  Only a piker like yourself has this much time on his hands, now get back to counting the beans, thats where you belong.

Feb 4, 2006 7:47 pm

[quote=joedabrkr][quote=bankrep1]

I love my 401K match, pension, health care, other insurances, nice office, sweet referrals from hot chicks and did I mention the hot chicks.

Joe I can appreciate being alone in your office and having the freedom, noone around. Joe I really get what your saying.

[/quote]

Like I said, different strokes for different folks.  I'm not all alone either, because I just hired someone a couple of weeks ago.

[/quote]

I hope she's hot!

Feb 4, 2006 7:54 pm

Read what a few of your colleagues who have made the switch have to say:

http://registeredrep.com/mag/finance_bank/index.html

Feb 4, 2006 8:06 pm

[quote=bankrep1]

Read what a few of your colleagues who have made the switch have to say:

http://registeredrep.com/mag/finance_bank/index.html

[/quote]

Some piker that is still cold calling, after nine years, in not a colleague of MINE. I'm sure he has a lot in common with you, though. I can stand on my own two feet without paying a firm/bank 75% of what I earn.

Feb 4, 2006 8:19 pm

[quote=Dirk Diggler][quote=bankrep1]

Read what a few of your colleagues who have made the switch have to say:

http://registeredrep.com/mag/finance_bank/index.html

[/quote]

Some piker that is still cold calling, after nine years, in not a colleague of MINE. I'm sure he has a lot in common with you, though. I can stand on my own two feet without paying a firm/bank 75% of what I earn.

[/quote]

Actually Dirk I know Eric Hernandez-the fellow in the article-pretty well.  In fact I used to see him every day.  He's far from a piker mi amigo!  Does pretty well for himself.

Feb 4, 2006 8:25 pm

[quote=joedabrkr][quote=Dirk Diggler][quote=bankrep1]

Read what a few of your colleagues who have made the switch have to say:

http://registeredrep.com/mag/finance_bank/index.html

[/quote]

Some piker that is still cold calling, after nine years, in not a colleague of MINE. I'm sure he has a lot in common with you, though. I can stand on my own two feet without paying a firm/bank 75% of what I earn.

[/quote]

Actually Dirk I know Eric Hernandez-the fellow in the article-pretty well.  In fact I used to see him every day.  He's far from a piker mi amigo!  Does pretty well for himself.

[/quote]

Can he stand on his own two feet without paying his pimp 75% of his money?

Feb 4, 2006 8:55 pm

 Dirk it's not 75% read the article.  It clearly states banks and wirehouses now have very similar payouts.  40% payout, no expenses, I truly don't grap the wirehouse model, if your going to build it from scratch why not just be indy share an office with a lawyer, however, I do get the Bank, existing relationships to leverage.