So long, farewell, etc
I still have a few loose ends out there, which is driving me nuts, but by this time tomorrow I should be sitting in MY office, looking at $0 AUM and $0 trail income, and wondering why it is taking LPL and FINRA so long to get my temporary license approved.
Hopefully by lunch time, I will be playing Jerry McGuire on the phone.[quote=EDJ4now]I still have a few loose ends out there, which is driving me nuts, but by this time tomorrow I should be sitting in MY office, looking at $0 AUM and $0 trail income, and wondering why it is taking LPL and FINRA so long to get my temporary license approved.
Hopefully by lunch time, I will be playing Jerry McGuire on the phone. [/quote]Congratulations!
You won't regret it! It will be scary for a couple of months.
good luck … I’m guessing the juice is gonna be worth the squeeze, maybe sooner rather than later.
Sort of curious ... to do this on a Thursday; I mean, as opposed to a Friday? Glad to see you decided to do this on a Friday. Fixed.[quote=EDJ4now]I still have a few loose ends out there, which is driving me nuts, but by this time tomorrow I should be sitting in MY office, looking at $0 AUM and $0 trail income, and wondering why it is taking LPL and FINRA so long to get my temporary license approved.
Hopefully by lunch time, I will be playing Jerry McGuire on the phone. [/quote] I can't remember, which firm were you at?You’re good enough, you’re smart enough, and doggone it–people like you.
So EJ to ? and then to ? - fill me in, I missed something
Answers to a couple of questions:
I've been at a regional bank for about 4 years. I view my time here as a good experience, it helped me make a geographical move without having to start completely from scratch, and over the years the bank has made some very good referrals. I have also talked to 4 people this morning, one is 80 and has no interest in making changes, the other 3 are broke. That's been the nature of bank referrals for me. They are plentiful, but the good ones are few and far between. Mostly I get referrals because it puts a few bucks in a teller's pocket, so they don't care if it is a $1mm savings account or a checking account that is usually negative, if the person will agree to meet with me they will set an appointment. Today is Thursday, I resign tomorrow morning (Friday). And yes, Moraen, when you say that I won't regret it but that it will be scary for a couple of months, I certainly do believe that! Right now I am back and forth between wanting to jump up and dance and wanting to throw up in my trash can. I would suspect that I will be bouncing back and forth from those extremes quite a bit for the next few months.[quote=EDJ4now]Answers to a couple of questions:
I've been at a regional bank for about 4 years. I view my time here as a good experience, it helped me make a geographical move without having to start completely from scratch, and over the years the bank has made some very good referrals. I have also talked to 4 people this morning, one is 80 and has no interest in making changes, the other 3 are broke. That's been the nature of bank referrals for me. They are plentiful, but the good ones are few and far between. Mostly I get referrals because it puts a few bucks in a teller's pocket, so they don't care if it is a $1mm savings account or a checking account that is usually negative, if the person will agree to meet with me they will set an appointment. Today is Thursday, I resign tomorrow morning (Friday). And yes, Moraen, when you say that I won't regret it but that it will be scary for a couple of months, I certainly do believe that! Right now I am back and forth between wanting to jump up and dance and wanting to throw up in my trash can. I would suspect that I will be bouncing back and forth from those extremes quite a bit for the next few months.[/quote] Are you taking your bank clients with you ?
I’m certainly hoping so.
You are the best. Seriously keep me posted. I went from EJ to bank also. Good Luck to you!
EDJ4NOW - My guess is that you wont be bouncing back and forth between throwing up and dancing, you will be too busy getting acats signed and opening up accounts.
And unless you have a real ugly u-4, you will be amazed at how quicly your temp licenses will be approved. You wont regret this a bit. Good luckFinally raining ACATs?
EDJ4 - Having left a bank a few years back, no question it can be done well if you work at it. You may not get the 80-90% numbers that some advisors do, as bank assets tend to be more “sticky”. Some clients will decide that they like the convenience of having everything at one place. Some will simply be too tied into the bank to make a break. Some clients you won’t even want. I left some CD rate shoppers behind. I left some unpleasant clients behind (the old guy with the know-it-all son-in-law who second-guessed every recommendation I made). I left some clients behind who were so tied to our trust department that they would be very difficult to extract (requiring trust amendments, etc.). The end result for me was just over 50% of the assets and almost 70% of the revenue.
I don't know what kind of a non-compete you are under at the bank, but I'd recommend getting as much done as you can this weekend. If you get served with a TRO, you could be shut down for awhile, so the work you do before your former employer has time to react is critical to your long-term success. I wouldn't even sleep this weekend! Even if your former employer doesn't have a non-compete or doesn't try to enforce it, rest assured, they consider your clients their property and will likely move aggressively to keep as many of them as they can. Timing and speed is of the essence. Just don't do anything stupid and get yourself in legal hot water. Some banks (definitely the one I came out of) are just nasty about tying departing reps up in legal action and distracting you from what you really need to be doing (moving clients and producing revenue). Good luck and Godspeed.One of the best things about breaking out on your own is the weight loss. I was so stressed that I lost 15 pounds in the first month.
EDJ4,
Today is the day your life is forever improved. Move forward, work hard, and don’t ever look back. A few months from now you will be posting how much better you life is now that you are Indy.
Just ask mlgone, sportsfreak, or any of the other guys that left recently including myself.
Just think about that scene from Shawshank Redemption when Andy has to crawl through the tunnel filled with sewage to get out of prison. That’ s you now, and in a few months you’ll but on a beach with “Red” smiling with a fat bank account.
Good Luck brother!
Good Luck, EDJ. Keep us posted when you can.
Too much time dinking around today with crap, my own fault for trying to put this together last minute. However, the clients I did talk to were very receptive, granted I didn’t get too deep into my list, but so far it’s going well. As is the case with most of us, the top 10% is most of the income anyway, after the first 20 calls it doesn’t really matter that much (although I want it all).
Tomorrow is a bigger phone day, hopefully it continues on the same path.I went Indy May 1 of '09 from EDJ. I got my 1099 yesterday and my EDJ W-2 through April 30…yeah…I made the right decision.
So far, reception from clients has been better than expected, one good client that I thought I would lose for sure asked me if I would please keep them on so they don’t have to “train” a new advisor. I figured they would be more loyal to the bank than to me. Overall I have only had a couple of dissapointments, and they weren’t outright refusals, they just told me they wanted to think about it first. I’ve also had a few that I thought I would lose for sure say they will come over.
Paperwork on the other hand has been a bigger PITA than I expected. So I'm taking a 5 minute break for this instead of screaming that the new account forms are so far behind what I thought we would be doing by now. Despite my tagline I'm not that bad on the computer, but learning a new system is driving me nuts. Fortunately my assistant is trying to hurry up our tech support call, because once he tells her something she has it. She also worked 20 hours this weekend not because I asked her to but because there was work to be done and she couldn't stand leaving when things weren't finished. Please no one tell her she is overqualified for this job and that she should be paid more.- you are my hero and I am not being sarcastic
[quote=EDJ4now]So far, reception from clients has been better than expected, one good client that I thought I would lose for sure asked me if I would please keep them on so they don’t have to “train” a new advisor. I figured they would be more loyal to the bank than to me. Overall I have only had a couple of dissapointments, and they weren’t outright refusals, they just told me they wanted to think about it first. I’ve also had a few that I thought I would lose for sure say they will come over.
Paperwork on the other hand has been a bigger PITA than I expected. So I'm taking a 5 minute break for this instead of screaming that the new account forms are so far behind what I thought we would be doing by now. Despite my tagline I'm not that bad on the computer, but learning a new system is driving me nuts. Fortunately my assistant is trying to hurry up our tech support call, because once he tells her something she has it. She also worked 20 hours this weekend not because I asked her to but because there was work to be done and she couldn't stand leaving when things weren't finished. Please no one tell her she is overqualified for this job and that she should be paid more.[/quote] You're doing fine. Nothing out of the ordinary from what I see. Just get the definite "yes people" over right way. The "not sures" will likely come over, but you may have to lay off them for a while. I had clients that I thought would surely move with me, but they had other issues in their lives and didn't want to make changes. A few months later, many of them finally moved over. I'm sitll working on a few others nearly 6 months later. Paperwork is a bitch, but you definitley need to stay on top of it. The sooner the assets move, the sooner you get paid! Keep pluggin!Mind sharing a few details when you have a chance?
How big is your place? buy or rent? You have an asst.. PT/FT? Pay? Any other details about your set-up(always looking for ways to improve mine)My space is big, I don’t know the sq feet, but the reception area has my assistant and another desk if we add someone. There is also a couch and a couple of chairs for people who are waiting. I have my office, which has a huge desk, and a small conference table, the table seats 4 easily and 6 if we are a little cozy. There are 2 other smaller offices, one I am using for a breakroom, the other one is set up as an office. Both are still bigger than my office at the bank. There is quite a bit of storage space, a narrow room that has the copier/printer/fax area, and 2 bathrooms. I pay about $400/month, although utilities to heat this place are higher than I pay to heat my house. Obviously I’m not in a thriving metropolitan area.
I own a building down the street, and I may move into that in a year, as my main tenant is vacating in October. If I do that, I will probably fix the building up to be a first class place. For the immediate future, I will rent. My office is probably the same rough quality that you would find in a p/c insurance office in this part of the country. Not exactly what I want, but given my market I don't think it will cost me many people, at least in the short run. Eventually I need to class it up, either here or in the space I own. I would like to add an assistant in a couple of months, she would be great to have now, but I want to see how much I bring first, because if I only take 1/2 I can't really afford 2 people on staff. I'm using the Bill Good system, which is pretty labor intensive. Why do I need 2 assistants? I'm looking right now at $40mm and 900 clients, although the number of clients will be pared down somewhat in this move. Still probably 400 or more though, which requires more work than a $40mm book with 100 clients. I know this business setup is not what most of you would be looking for, but I'm not in a wealthy part of the country, I have a few $1mm clients, but mostly they are smaller. I would starve trying to serve only the affluent or even only the mass affluent here. That's why I have the more streamlined system to deal with a high number of clients. My current assistant (new to me, but not to about 1/2 of the clients) gets $14/hour with no benefits. If I hire the 2nd, I think she will work for $12. She would also be a good candidate for moving up to being a jr advisor in a couple of years (ultimately I would like her to work with all but probably 100 clients who I would continue to service as the primary advisor, let her have the administrative headache of all these clients). Having someone 1/2 time would probably make more sense if she was just going to be an assistant, but she's smart and ambitious enough to be an advisor, so I'm willing to give her full time hours. I don't think she would come over part time, and frankly there aren't that many qualified people around here, so if I have to hire her for a few more hours than I want it is still probably worth it to get her in here. As to my status: I'm really f===ing tired. But I woke up and can't fall back asleep. That's why I gave such a long answer at 2 am. I have apointments or paperwork done already for about 1/4 of my book (aum and revenue, not even close on # of clients).Well hopefully you can go paperless and avoid the hiring of another staff member.
EDJ, just curious, if you have so many clients to move over, why are you using the Bill Good system? Isn’t that primarily a prospecting tool? (mail, call, mail, etc.) Would it not make more sense to focus all your attention on moving your book? Maybe I’m confused about the BG system.
$400/month are you kidding?? or are you in Mexico? WTF
That is a sweet deal, but like you said the larger accounts are plentiful, but with $400 in rent do they really need to be? Do you have a lot of small accounts or do you average $45K accounts? Because if you were to wrap $40 mil at 1%, I am guessing you could buy the town...Wow…THAT is cheap rent! I pay myself $1,500-$2,000/month and that’s cheap IMO.
Sounds like you are doing things right...keep your head down and keep rolling along. you need at least 50-60% of your book to cover overhead and pay yourself a decent salary. My goal has always been to hit $50 million in AUM and while it's been a goal delayed, I figure on getting there maybe this year, probably next year. At 80bps, I won't feel any pressure to get larger...heck, I don't feel any now...life is good.[quote=Squash1]$400/month are you kidding?? or are you in Mexico? WTF
That is a sweet deal, but like you said the larger accounts are plentiful, but with $400 in rent do they really need to be? Do you have a lot of small accounts or do you average $45K accounts? Because if you were to wrap $40 mil at 1%, I am guessing you could buy the town...[/quote] I'm not in Mexico, but quite a few people in my town were born there. I believe the non-native born population is over 50%. When I was growing up it was probably one of the whitest towns in America. One industry moved out, another moved in, and the need for office space plummeted. $400 isn't much, but if I left the landlord might have to wait a decade for a replacement tenant. I'm in the downtown area, and there is plenty of empty space. He has storage above my office, and due to the lack of insulation I keep his stuff from freezing upstairs. So my heat bill is north of $300/month this time of year, but overall, I can't complain. It's a different practice from most of you, the average guy in this town is either broke or working manual labor and paycheck to paycheck. However, because of that, there is me, EDJ, and a few part timers in a town of 10,000. So the average guy isn't a good prospect, but there aren't many of us chasing the people who do have money. Lots of the small accounts were opened up on the theory that you have to eat some rabbits while you are hunting elephants, both by me and by my predecessors. In this town, there are lots of rabbits and few elephants. The account sizes are all over, $2mm, 3 at $1mm, and a crapload at $10,000 and under. Quite a few of those are going to be shed in the move. About 1/2 of the book is mine, and 1/2 I recently inherited. Thus far, the inherited seems to be moving with no problem, probably too well as I am going to end up with all the sub $10,000 accounts too. It's kind of an unusual circumstance, and more complicated than this, but basically the existing rep is my new assistant and is transferring all of her accounts to me. Right now I am just trying to get everyone papered, which is a massive undertaking. After that I hope to move quite a few of these clients to a fee based solution, you are right that grossing $400,000, netting $250,000+ would make me a big swinging d*** around here. No one but me and my accountant would know I was making over $100,000 though, buying a new BMW and a 4,000 sf house would be obtainable but would alienate 1/2 of my clients. Part of what makes this business model work is that a few of these crappy accounts who I barely speak to are going to inherit money, or otherwise step into decent amounts of cash. That's the reason for the Bill Good system, it keeps me at the front of everyone's mind, without actually having to do all that much for the B and C clients. They get letters and their questions answered, and that's really about it. I think if I had an assistant work that book more, she would probably pay her own salary, and help me mine the A clients out of the B and C's. I'm still tired and procrastinating on doing paperwork. I would be lying if I didn't say the last couple of weeks have basically sucked. However, it's still a great feeling to be out on my own. Tomorrow morning one of the $1mm clients is coming in to move his accounts from the bank. I moved another $1mm spread over a few clients today. I will know better what will come over in a couple of months, but thus far I am surprised by some of them that I have transferred, $800m of the $ today came from accounts that I would have thought I wouldn't be able to keep. Back to work.So did you take over an existing Indy practice, in addition to bringing clients from the bank? Did you have to buy it?
I took over existing indy practice, plus trying to get bank clients. The existing practice was with AIG, so we are switching that to LPL. PITA, but so far not one client has balked at the change, nor at me becoming the new advisor. That practice and mine were pretty similar in size and makeup, mine at the bank was a little bigger and less dependent on A shares, but overall it’s comparable. I bought it, but there were some potential problems so I didn’t pay much for it. I figured if half stayed I got a bargain, so thus far it looks like an incredible deal.
That is sweet. Congrats, and keep pounding away.
I used the exact same quote with my wife last night.[/quote][quote=B24]That is sweet. Congrats, and keep pounding away.
Were you talking to the other dude in the room doing the work?
I used the exact same quote with my wife last night.[/quote][quote=mlgone][quote=B24]That is sweet. Congrats, and keep pounding away.
Were you talking to the other dude in the room doing the work?
[/quote] I'm sorry, but that's funny! I need a little humer today as the market implodes.
[quote=mlgone]It was two dudes silly[/quote]
Well done! That’s how you take a joke…
Probably too late for this suggestion, but here it is anyway…
To help with the non-compete, on my ACAT paperwork I wrote the phrase "per your request". For what it's worth.I used the exact same quote with my wife last night.[/quote][quote=SometimesNowhere] [quote=mlgone][quote=B24]That is sweet. Congrats, and keep pounding away.
Were you talking to the other dude in the room doing the work?
[/quote] I'm sorry, but that's funny! I need a little humer today as the market implodes.[/quote] When does a man not need a hummer ?
When he has the squirts?
[quote=Wet_Blanket]When he has the squirts?[/quote]
I just puked in my mouth a little.
I hate that puke in the mouth a little thing!
Back to the original topic, I thought a few of you might want an update.
Right now I am working 6-7 days a week and here until 11pm except for days the kids have activities I can't skip. And it beats the crap out of working for the bank. My biggest ($2mm) client from the bank is coming in an hour to sign over his accounts to EDJ4Now Financial. He was their customer since before I was born, so it wasn't an account I was counting on. Right now, life is crazy but good. In a couple of hours, I will have my 4 biggest accounts from the bank transferred, which is about 1/4 of my AUM and my recurring revenue. I have several other smaller accounts transferred as well. Noone from the purchased book is balking at transferring to me and to LPL (it helps that the alternative is staying with AIG and going to the out of state OSJ they have never met). Hopefully those accounts will stick, although I'm sure I will see some transfer to EDJ and misc. others over the next year. Those accounts have actually been coming over so well that I haven't worked my bank book as well as I would like. Overall, it is going slower than I had hoped, and the bank is being more difficult than I expected, but the success is as good or better than what I was counting on, so I can't complain.Client just left, ACATs and Change BD forms all signed. After I wrote that before they came in I got nervous I jinxed myself, I have always gotten along great with the client and his daughter, but his son is a s—head, and he has tried on a couple of occasions tried to get his dad to move to his advisor. Son is one of those guys who is an expert on everything, he isn’t a surgeon, but he definitely has that attitude. Fortunately, daughter told her brother to stay out of it, so Dad did sign papers to transfer all his accounts.
Now back to work.I haven’t gotten a TRO, although I have been threatened with one. I am also getting badmouthed quite a bit to my clients, not by the FA’s (as far as I know) but by the bankers and tellers. I’m greedy, didn’t do a good job, glad I’m gone, etc. They get small bonuses based on the bank’s investment revenue, and they get paid to make referrals, so they are saying whatever necessary to scare my clients into meeting with the “new” FA on the account.
The last 2 guys who left the bank had their books sit dormant for months before the bank did anything to go after the assets, but there is a bit of a feeding frenzy going on with my book. Instead of replacing me they split my book into 3 pieces and got everyone calling my clients. I'm not terribly worried, but they are being pretty aggressive, where in the past they were pretty passive when advisors left. Part of the problem is that the bank's investment revenue is in the toilet, so my former boss is pushing everyone to work my book. Like I said earlier, I've got a good chunk of the assets and revenue transferred already, even though probably only 5-10% of the clients. If I had worse luck with the purchased book I would work my bank book harder, but about 2/3 of the assets, and more than 2/3 of the revenue, are with the top 50 clients so I'm focusing on that right now. If I pick up some of the remainder fine, if not, that's fine too. There are 250 clients with less than $10,000, I'm not exactly freaking out about losing them. I'm probably on track to pick up around $30mm total, and while more is always better, I'm pretty happy with where I am right now. I've also found a couple of nice accounts with Ameriprise and Waddell and Reed that I didn't know about before. So hopefully those can get transferred too. I'm not really focusing on it right now, but I would like to use the move as an opportunity to move some of this book to managed money from A shares. There is quite a bit of Putnam and Oppenheimer, mostly from the old advisor but I'm afraid some of the Putnam is from me a few years ago when I believed them that they had changed. So there are definitely some unhappy people who are willing to listen to alternatives. I'd take any advice people have on making that change in focus, I've done a few managed accounts in the past but I never really got into it because the bank's comp grid punished me for spreading income out instead of getting it upfront. I also didn't have any training on it at all, basically I was told to figure it out so I could train everyone else.Tough to clean the bathrooms at your new firm?
A guy that has posted 1000 posts in a year on one of his 5 names can’t run a real business
75% is a pretty darn good number … congratulations on making it to where you want to be. Must be liberating.
Look forward to your next post!I’m not there (75%) yet, but it looks like when the dust settles that’s a pretty good guess at where it will end up. Lots can change though, the next couple of months are definitely critical.
On the topic of the bank being difficult, I just found out why my 65 license was being held up - the bank hasn't given me a U5 yet, and until I get it my state won't let my license transfer to LPL, it's still with the bank. So I have a call in to them on that. F---ing banks.[quote=EDJ4now]I’m not there (75%) yet, but it looks like when the dust settles that’s a pretty good guess at where it will end up. Lots can change though, the next couple of months are definitely critical.
On the topic of the bank being difficult, I just found out why my 65 license was being held up - the bank hasn't given me a U5 yet, and until I get it my state won't let my license transfer to LPL, it's still with the bank. So I have a call in to them on that. F---ing banks.[/quote] Watching your progress with great interest being in a similar position, keep up the good work![quote=EDJ4now]I’m not there (75%) yet, but it looks like when the dust settles that’s a pretty good guess at where it will end up. Lots can change though, the next couple of months are definitely critical.
On the topic of the bank being difficult, I just found out why my 65 license was being held up - the bank hasn't given me a U5 yet, and until I get it my state won't let my license transfer to LPL, it's still with the bank. So I have a call in to them on that. F---ing banks.[/quote] I thought only the state and FINRA held up licenses. The brokerage firm you departed from has 30 days to file the U5. I have never heard of a departing advisor being held up for this reason.I believe that there is some sort of temporary license that you can get if you quit, if you are fired it is more difficult. I got that after a couple of hours. I think the new firm has to give the releasing firm 30 minutes to report that you did something egregious, if they say you quit or if they don’t respond to the call then you are in the clear.
My problem is partially at the state level, as I think in some other places you can use the 65 on a termporary license, but in my state you can do that for the 7 but not the 65. So they are collecting the advisory fees on my accounts until the U5 gets processed and I can transfer those clients. Unfortunately for me, there isn't really that many of them, but I have a client who wants to add $50,000 to his account, and we can't even get the account open yet. I maintain my position, f---ing banks. Even if it is the state being difficult with the rule, I didn't do anything wrong and they know I didn't, so file the damn U5 already.I could be stating it wrong, because frankly I didn’t care about the mechanics when LPL explained it to me. But my understanding is that the license isn’t really officially transferred for a couple of weeks (possibly due to the U5, but I don’t know). However, the temporary license, or whatever it is called, lets them move your license to get you started right away. Maybe it is a conditional transfer, I don’t know. All I know is that about 3 hours after I resigned from the bank, LPL called me and gave me a green light to talk to my securities clients, but not my IAR clients.
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