Choosing the right house

That was a heck of a detailed answer! I do have somewhat of a buffer, but having a base salary is necessary through training and the beginning of production. I have about eight months of cash on hand, and mutual fund worth 10K.

[quote=newguy44]

Ice,

Helpful post above as usual, but wanted to make one correction, for the record.

"… you will be literally able to offer any security on Earth at a wirehouse …"

While you certainly have very broad access to securities through a wirehouse - no question about it - you have slightly overstated the case with your comment about “any security on Earth.” 

I was surprised to find I was able to access MORE as an independent that I could at a wire.  Sometimes that requires that I sign a selling agreement with a provider, but it’s up to me if I choose to do so.  Beyond that, b/ds are not anxious to allow their reps to offer something that they (b/d) can’t be paid on, so that will eliminate some offerings as well.  I can advise on and get paid on assets regardless of where they are held, or if they pay 12b1s, etc.

FWIW!

BTW, newguy - a quick word in your ear: none of the firms you mention are commonly referred to as “houses” by those in this industry.  The only place I’ve seen that term commonly used is while referring to mutual fund companies or casinos … or places to live.  

Personally, I would not make a decision on where to start based on the variety of investment choices (unless you’re talking about an insuracne company or primerica or some chop shop). I say this because in the first few years, you will be selling mostly MFD’s, stocks, and bonds. I would be base it purely on the place I think I could make it 3-5 years, period.

[quote=B24]Personally, I would not make a decision on where to start based on the variety of investment choices (unless you’re talking about an insuracne company or primerica or some chop shop). I say this because in the first few years, you will be selling mostly MFD’s, stocks, and bonds. I would be base it purely on the place I think I could make it 3-5 years, period.[/quote]
Agreed.  Not critical when starting out. 

I would add all this talk about starting salaries also misses the most important point in selecting a firm.  I understand it can be one consideration, but based on the never-ending stream of questions here about it, too many seem to make a career choice based on the equivalent of a low teaser rate on a credit card.

Great info from many on this thread.  How would you guys stack up Wachovia to SB and ML in regards to culture, starting salary, prestige etc…

Great post by Iceco1d, lots of good information. However, a few points -

I really appreciate everyone’s input. I feel like I can’t go wrong with SB or MS. It sounds like most hires by EJ never get their branch office. The branch manager at Smith Barney touted their training program as being very expansive. How much do veterans help the rookies? I am going to talk with reps at both this week. I am also meeting with a rep from ML for lunch. I want to pick his brain about the industry.

I am not in a salaried role anymore but would disagree with the common sentiment that those entering the industry should disregard this aspect. If this were the case, why not go indy right from the bat and get the higher payout? Obviously the initial monetary support is the main advantage that the wires have to offer. I’d avoid letting a branch manager tell you how much greater your hurdles will be as an incentive to take a lower comp package initially. They’re going to be quick to get rid of you NO MATTER WHAT. The chances are that you WILL get axed from a wire, so you might as well use them to get your licenses, decent training, and an ok base for the 6-9 months that they’re likely to keep you there. Or better yet, just start in a different business model. I did not opt to join a wire when starting out because I simply did not see the value for a new rep in any way. You mean I have higher hurdles, a pathetic 35% payout, AND the salary really isn’t that great even though I’ll have it thrown in my face as a reason I have to behave as an employee? Or an experienced one for that matter. There’s a REASON they are forced to pay huge sign on bonuses to get talent.

[quote=xbanker]I am not in a salaried role anymore but would disagree with the common sentiment that those entering the industry should disregard this aspect. If this were the case, why not go indy right from the bat and get the higher payout? Obviously the initial monetary support is the main advantage that the wires have to offer. [/quote]
Not sure where you got the idea that people should “disregard” the salary, xbanker.  Here’s what I said on it:
I would add all this talk about starting salaries also misses the most
important point in selecting a firm.  I understand it can be one
consideration, but based on the never-ending stream of questions here
about it, too many seem to make a career choice based on the equivalent
of a low teaser rate on a credit card.

That is a far cry from saying one should “disregard” salary. 

I have no problem with discussing and disagreeing on the issues, but don’t misrepresent what I said and then argue against that misrepresentation. 

Morphius, I’m not referring to you at all. This topic has come up numerous times on the board. That’s why I said “prevailing sentiment.” It seems that new reps get lambasted for even brining up a salary. Don’t get me wrong, I don’t think anyone should choose a firm for that reason, but if you’re going to a wire, that’s really all they have to offer since every other aspect in that environment is cause to run for the hills.

From what I’ve seen in the two branches i’ve been in, (wire) it doesnt matter how much salary you take. If you dont hit numbers you are done, you get the same amount of time to produce no matter what your salary. I saw a trainee come in wtih a $70k salary for 2 years, he is there fo two and a half yeas to date, 5th quintile. Who knows how he is paying the bills.

Sportsfreakbob, Can you tell me what the 5th quintile means at the firm you’re referring to? Is that the lowest metric within that specific program?



I get the impression (although I’ve never been at one) that many wires will keep someone on who is in the ball park on their metrics. The large turnover in two branches I know of from coworkers had several reps who brought in goose eggs, nada, zilch, zero, and flamed out between 6-9 months. If you must go to a wire (not my recommendation), I say take them for all their worth. I know someone who accepted 30k even at MS and got sacked 8 months in. This didn’t buy him any wiggle room.

Sportsfreakbob, Can you tell me what the 5th quintile means at the firm you’re referring to? Is that the lowest metric within that specific program?

I get the impression (although I’ve never been at one) that many wires will keep someone on who is in the ball park on their metrics. The large turnover in two branches I know of from coworkers had several reps who brought in goose eggs, nada, zilch, zero, and flamed out between 6-9 months. If you must go to a wire (not my recommendation), I say take them for all their worth. I know someone who accepted 30k even at MS and got sacked 8 months in. This didn’t buy him any wiggle room.

No prob Sportsfreakbob. I sometimes wish I’d started at a wire. I got an offer from ML when just starting out and another later on from MS but just didn’t see any point in that business model. My one issue with the wire numbers is the narrow focus on AUM vs. production. My explanation for this is that the only purpose for a new hire is to bring in accounts, put them in a fee based environment, then get fired so the firm is paying no one in production for those assets. Otherwise why focus on AUM to such a large degree? The system is designed for failure. If you’ve been divorced once, I’ll believe your ex was at fault, but if you’ve been divorced 10 times, it’s probably you. Same with the wires. When 90% of your hires or more flame out, it’s the system.



Either way, I want to focus on MY interests, not those of a branch manager.

So then who is making it at these wires? I mean you have ML with over 16K advisors. I am sure not all of them came from rich families. Someone has to be doing somethig right…Besides doesnt this business in general have a 90% wash out rate regardless if you are at Avalon Partners, Cit, Raymond, Edward or ML???

xb - i dont see how bringing in AUM is in the interests of the BOM, rather than the broker. If a trainee brings in assets then flames out, what happens to those assets? Do you think they just sit there collecting fees for the branch, and are not paid attention to? The assets/accounts are distributed to existing FA's - who then get the payout that the trainee used to get. In fact in some cases, with the first and second quintile FA;s the branch ends up paying out more, because those brokers are on a higher payout. SO your assumption that its good for the BOM if trainees fail out is not valid. Besides which, BOM;s success in hiring and DEVELOPING trainees is tracked and trust me, its not good for the BOM when he has a bad track record.

I would also venture to guess that the success rate at wire with a solid training program is higher, due to the fact that there is a structured training program and a lot of support. Not only from the firm, and management but in a decent size office, you can always find good brokers to talk to and bounce ideas off of.

xbanker - As you may know I’m not a big wirehouse fan by any means, but there are benefits that you are ignoring, and disadvantages that you are exagerating.  Whether you are doing this out of ignorance or intentionally I’m not sure, but you sure sound like you have an axe to grind against wires for some reason.  

Care to elaborate?

Morphius, XB,

Morphius, I’m the first to admit I don’t like the wires. I don’t want to be an employee to anyone. I don’t want to be told to sell prop funds, do a particular type of business, be in the office at a particular time of day, and then have a pathetic salary (40k or so) used as a reason to justify my treatment as an employee and a 35% payout. I also do not believe the “branding” or “training” they try to sell new recruits has any value at all. Train me to approach my friends and family then get on a phone? New concept; sure they don’t say that elsewhere. ML’s “training” is all online now anyway. MS stopped sending people to TX and replaced everything with online. How can they try to sell “training” with a straight face? A discount firm is MUCH better for a short period of time just because you get in front of tons of clients. Just don’t stay there very long.



Sportsfreakbob, regarding client reassignment, I don’t know how all the wires work but I had a fried who got a couple orphaned accounts at MS and was told the payout wouldn’t start on those until he’d had them for 2 years. This was in 06 so maybe not the case any more and maybe not the case everywhere. And as far as the 16000 advisors go, that’s neither here nor there. It’s a success if 20 or 30k were hired, but if 300k were hired, not so much. If the wires were such a great place to be, they wouldn’t NEED to offer huge sign on bonuses to get people to come and put up with their BS.



My experience was getting an offer at ML, which I declined for many of the above reason. I was told within the POA program that a certain type of business (near only fee based) was to be done, and that specific rigid hourly requirements were to be met, as well as contact metrics and other micro management. This is not what I was looking for as someone wishing to run their own business. It was very clear to me that a rep at a wire is nothing more than an employee bowing down to the whims of their branch manager, selling whatever proprietary crap was shoved down their throat in the morning meeting before going back to a cubicle.

x, my point is there are enough reasons to not like wires - you don’t need to resort to guessing, exaggerating and making things up about them.  Much of what you say about poor training is simply not true, and I’m puzzled as to why you even feel the need to go there.  ML and MS’s training is “all online?!”  Huh? 

Making such unnecessary and outlandish claims simply undermines your credibility.  There are enough things wrong with wires that are true; you don’t need to go beyond that.

I guess I’m at fault for being “all over the place” in my posts. My basic comment should read as follows:



It is my opinion that the basic business model of the wire platform is to intentionally bring on as many fresh faces as possible with the expectation that they will bring in mommy and daddy’s account plus a couple more if lucky, then fire those individuals. The environment does not seem to me to be a place to “grow” one’s career but to either A) go to get licensed or B) sell a book once you’ve reached a point of success already.



There is nothing better or worse about this model from the standpoint of the business itself, but don’t tell me you’re train to “train” recruits. They are there to bring more or less friend and family accounts to the firm, get booted and leave. Hopefully a couple of those accounts will stay. I actually told someone on this forum to USE the wires to get paid to get licensed. The system can be played both ways.



Regarding ML and MS training, at the time of my ML interview, they told me reps were no longer sent to NY but completed a number of “online modules” which include tutorials on systems, product information, and the first course of the CFP curriculum as well as the passing of any licenses not already held. Perhaps “all online” is a bit much. I’m sure occasionally there’s a speech from a sales manager about closing techniques or something. I should have stated the in person centralized training component no longer exists and has been replaced by these online modules. This is also the case with MS, which no longer has an introductory post-licensing TX-based training component. They have also replaced this with online content. SB and UBS apparently both send new reps back to NJ and have a limited amount of branch based training, some of which I was told is online. Not sure about AGE/WB in it’s new format.



This isn’t a flame against this industry or specifically the wires but almost any job. ALL employers who bring nothing to the table for the recruit will say, “It’s a great opportunity to learn with room for advancement.” How much do either of those things cost the firm?

XB - I understand your points now. You make some good points to ponder. You are correct about SB sending their trainees to training after in branch but prior to starting production. MS does send them but only after they have started production and hit bogeys.