Making money....not!

This may sound simplistic, but try not to look at the income generated from what you bring in today or tomorrow as the only fruits of your labor, particularly when you're annuitizing your business.  Instead, recognize the long-term value, and view each segment of new assets under management as another positive step toward achieving your ultimate goals.   That million $ you brought in is not just paying you today, it (and it's appreciated value) will be paying you for as long as you continue to earn the client's business. 

So, when you're at $25mm of assets you're net payout @ 40% is $100k/yr, $50mm is $200k/yr, $100mm is $400k/yr.  (And, should you get to the point where you might want to go independent, your net payout after expenses should be no less than at least 60%, increasing each of those #s by 50% to $150k, $300k, & $600k, respectively.)

Also, as you're building your business remember the "psychic value" of this profession.  You are helping your clients to achieve their goals.  You're helping to solve their financial problems.  You're making a positive impact upon their lives.  While the value of that doesn't directly put additional money in the bank, it gives you rewards that for many may be equal to or greater than the money earned.  That'll sound altruistic to some, but those reps who experience that value truly enjoy their work, and they tend to be the most successful in our business.

So, (to use a trite analogy) think of those segments of new assets coming in the door as yardage gained on a football field.  The small increments of yards gained by themselves don't appear to be so meaningful, but when you reach the end zone, life is grand!

Thanks for the perspective, you are absolutely correct, and I am a very optomistic guy…really. For my last 3 1/2 years in the business, I have always done right for my client, and I annuitize every cent that I bring in…but, my patience is wearing thin, I have made 30,000 - 45,000 -50,000 for the last three years - I can’t take it anymore. The thought of helping people (which does give me the sense of worth you speak of) is not enough of a motivator for me. I feel like I have been paying dues forever.

Do you have an insurance license?

First of all, if you are straight commission or on a draw trying to hit a grid...don't annuitize EVERYTHING.  You have to eat, and if your waiting for that day when you can turn the lights on on Jan 1, and you've already made $300,000, well, you're gonna annuitize yourself right out of the business.

I want a fee based book as much as anybody, but I (as do most) have expectations, whether from management, our families, or ourselves.  So you can't annuitize everything, it just isn't feasible unless you are on a two year salary like at the big wirehouses like ML or MS.

Also, why don't you think about incorporating some insurance business into your practice.  That can help you even out those months when you aren't getting much in up front payout.

Hope that helps a little.

Duke, that was an excellent post.  Thanks for sharing that.

Money,

How much in AUM do you have so far?  Did you hit the goal of $15MM before two years?

[quote=moneyadvisor]Thanks for the perspective, you are absolutely correct, and I am a very optomistic guy.......really. For my last 3 1/2 years in the business, I have always done right for my client, and I annuitize every cent that I bring in........but, my patience is wearing thin, I have made 30,000 - 45,000 -50,000 for the last three years - I can't take it anymore. The thought of helping people (which does give me the sense of worth you speak of) is not enough of a motivator for me. I feel like I have been paying dues forever. [/quote]

Given your #s, if you enjoy this business you may need to give a hard look at how you're building and doing your business.  If the #s given are your payout, at 40% with $50k made, that equates to only about $125k gross production.  After three years you should be well above that.

The other posters hit on one such thing, and that's doing insurance business.  There's no reason why you shouldn't be looking at the estate plans of each of your viable clients and taking over their insurance business (don't forget disability and LTC). 

But, more importantly, I'd look at the bigger picture of how you're building your business.  If you're doing the same thing you've always done, then $125k gross or so after 3.5 years is an indication that it's probably not working.  Like the old saying goes, doing the same thing over & over again expecting different consequences is a definition of insanity!

Yeah man think outside the box. If you are a broker also expand your services.

Insurance, mortgages and annuities are some money makers.

Maybe I am not as experienced as some in this field, but hope my input helps.

[quote=moneyadvisor]Thanks for the perspective, you are absolutely
correct, and I am a very optomistic guy…really. For my last 3 1/2
years in the business, I have always done right for my client, and I
annuitize every cent that I bring in…but, my patience is wearing
thin, I have made 30,000 - 45,000 -50,000 for the last three years -
I can’t take it anymore. The thought of helping people (which does give
me the sense of worth you speak of) is not enough of a motivator for
me. I feel like I have been paying dues forever. [/quote]

…(cough)…(cought) - There are only two ways to face the future -
with apprehension or with anticipation. Your designs are flawed.
Period. Stop working outside of the box. You can’t possibly have the
referrals from A+ clients to make it to the next level. Forget COI’s.
Total fishing expedition - just stay home and down the Wild Turkey -
you don’t have the scratch for the fishing tags. If I were in your
shoes I’d be hopping mad at myself. “Optimistic guy” you need to get
off the anti-feez kool-aid and start a bread and water regimin that
rewards results and repetitive activities that will build the kind of
muscle to do the heavy lifting you seem to be optimistically expecting
to materialize. Start an activity log with some basic goals in writing
and I’ll check back with you next week. You should start to see some
positive results in about 90 days. 

[quote=moneyadvisor]Thanks for the perspective, you are absolutely
correct, and I am a very optomistic guy…really. For my last 3 1/2
years in the business, I have always done right for my client, and I
annuitize every cent that I bring in…but, my patience is wearing
thin, I have made 30,000 - 45,000 -50,000 for the last three years - I
can’t take it anymore. The thought of helping people (which does give
me the sense of worth you speak of) is not enough of a motivator for
me. I feel like I have been paying dues forever. [/quote]



You almost doubled your income in 3 years.  Keep going, and it
will be 50,000- 75,000 -95,000, then it will be 110,000- 150,000-
180,000.  The market values increase the annuitized value, keep
adding clients, streamline your process.  Before you know it you
will be doing a million and change and still not satisfied…which is
the trait that drives all of us.

I have annuitized whenever I could since I began in this business in January this year.

I inherited a pretty small book of 1.5M and I just passed the 10M threshold today when a 250k IRA rollover hit.    Half of my current book is in an annuitized mutual fund wrap program that pays a 1.5% trail beginning in month 13.    I am grateful my firm does pay 3% upfront on these assets to my grid and a prorated chargeback during the first 9 months (only one client has pulled out so far).

When I began this journey my goal was to have 100 accounts and 10M annuitized by end of 2006.      As this juncture I have 70 accounts and 5M so I am ahead of my goals.

If you extrapolate the AUM assuming a very modest 6% annual total return the numbers become very powerful relatively quickly.

I do have an insurance license but only have closed two fixed annuities (unsolicited btw) and zero VA's as I truly believe they are suitable for a very very very small niche of clients.    That being said, the LTC presentations to my existing clients is a great idea as our relationships deepen.

Hope everyone is having a good summer.

Scrim67,

Great year so far.  Being new to the bank also (since July), I'm glad your doing well.  I brought in 1.3 million this month, but ZERO annuitized.  I really need to start doing it.  I just feel like at the bank, why?  If I was getting 3% upfront, it would be a different story. 

Great job.

I'm just shy of the 15 mil to graduate in 2 months. I am finishing a training program at a major wire. So, There really is no incentive to do higher ticket business. Accounts don't come in super regular, and I don't want to get into the roller coaster ride of one great month, next sucky month.   Bye the way...thank you all for your input, it really is helping. I do have my insurance license, I do a good share of annuity business (level load).

wow some great infomation to hear you all talk about different things. Thanks

You know, you can't have it both ways. My firm has this focus on annuitized business, "It's all we should be doing to build and protect your business, and health of your career" yet, People judge you on Gross Production. If I were to tell you that I did 80,000 Gross last year (in yr.3) some D'bag broker will say I am a slacker......However, all but two trades were done at 1%!!!!! No kidding, if I were grabbing 5% on the business, Gross would be up. I have guys in my firm 5-6 years who do 200k gross, but they have sacrificed to build regular income. You can't judge these guys on Gross. What keeps us focused on annuitizing - half a dozen guys in the office do 100-150k A MONTH in annuitized business. it sucks now, but is'nt it the way to go.

I know what your all going to say......Why am I bitchen, if I believe I'm doing the right thing....I JUST AM, and my colleagues don't want to hear it!

[quote=moneyadvisor]

You know, you can’t have it both ways. My firm
has this focus on annuitized business, “It’s all we should be doing to
build and protect your business, and health of your career” yet, People
judge you on Gross Production. If I were to tell you that I did 80,000
Gross last year (in yr.3) some D’bag broker will say I am a
slacker…However, all but two trades were done at 1%!!! No
kidding, if I were grabbing 5% on the business, Gross would be up. I
have guys in my firm 5-6 years who do 200k gross, but they have
sacrificed to build regular income. You can’t judge these guys on Gross.
What keeps us focused on annuitizing - half a dozen guys in the office
do 100-150k A MONTH in annuitized business. it sucks now, but
is’nt it the way to go.

I know what your all going to say......Why am I bitchen, if I believe I'm doing the right thing....I JUST AM, and my colleagues don't want to hear it!

Snap - What the hell are you saying?

The “200” guy is year 6 - making 80K (No…big house, car or vaca, because instead of taking large payouts to have those, he built his future - Are we on the same page here?) but he has annuitized his book, the bene’s of which are obvious. The 1/2 dozen, are just guys whove been around for 15 + years, and have monster books. Why all the aggression, and highlighting my statements??? A lot get’s lost in interpretation I guess on these boards.

I have been working in this profession for 24 years.  I would say that my first career altering revelation came when I understood that I could not control the actions of my clients.  They would invest when they were ready.  I could not control oil prices, the Federal Reserve, the financial markets or the NASD.  All I could control was my own activities.  For many years now I have maintained a daily work log on my desk.  I specifically keep track of the numbers of clients and prospects that I talk to on the phone and in person daily.  In addition, I keep track of thank you notes sent, other notes to prospects and clients, newsletters mailed, prospect letters sent, public exposure at civic events (such as board meetings), earned media, hours in the office, work hours out of the office, referrals generated, new accounts added and prospects added to my drip list.  I post these to a master ledger and track trends religiously.  What have I learned.  The more people that I communicate with in a variety of ways, the more business I will do.

I now manage 126 million AUM and earn trail income of 27 bps on the total amount.

I know... I should incorporate some of your habits.

Moneyadvisor, I was dripping some sarcasm on the irony of your words. I get a good laugh out of your name, too. Thanks.



Dash handed you a $10,000 piece of advice. You respond with a lame “I
know-I know” -  I wonder what part of that exchange was lost in
translation?



What color is the kool-aid today?

Dashampersand,

To gather all those assets you must have done a great job for your clients.  Congrats.

The way I'm building my business I would rather have 25M under mgmt getting 140 bps trails simply because, in theory, I could give better customer service since I would have many fewer accounts.

There is more than one way to build a business and I have chosen my path.   Check back with me in 2010 to see if it was the right one.

Good luck to all!!!

In 2010 my bps will be up to 55.  I have a bunch of VA business with 1% trails that will come on line starting in 2007 and growing each year.

I would not rate the performance of the investments that my clients received as "great", just a little better than the indexes in the good years and much better in the bad years.  I believe the secret to asset growth is communication with clients, accessibility, high (positive) public profile and asking for referrals.

Money - Are those $200k guys really working their asses off to bring in accounts?

earn trail income of 27 bps on the total amount.

What does this mean?

That is some great advise and I am going to follow your guide. I know getting out there and meeting a lot of people is the key to success in every aspect of life!

[quote=dashampersand]

I have been working in this profession for 24
years.  I would say that my first career altering revelation came
when I understood that I could not control the actions of my
clients.  They would invest when they were ready.  I could
not control oil prices, the Federal Reserve, the financial markets or
the NASD.  All I could control was my own activities.  For
many years now I have maintained a daily work log on my desk.  I
specifically keep track of the numbers of clients and prospects that I
talk to on the phone and in person daily.  In addition, I keep
track of thank you notes sent, other notes to prospects and clients,
newsletters mailed, prospect letters sent, public exposure at civic
events (such as board meetings), earned media, hours in the office,
work hours out of the office, referrals generated, new accounts added
and prospects added to my drip list.  I post these to a master
ledger and track trends religiously.  What have I learned. 
The more people that I communicate with in a variety of ways, the more
business I will do.

I now manage 126 million AUM and earn trail income of 27 bps on the total amount.

Executive Jock:

My total trail commissions total $340,000 per year.  I have $126,000,000 under management.  That amounts to 27 basis points of trail income on my asset base.

Dash- How do you keep track of all those different activities and track them? 

I made out a single sheet with my calendar running down the left side of the page in 1/2 increments.  Upper right side are my phone calls.  Under that are tasks to complete.  Under that is the "Scoreboard".  Clients Met Face-To-Face____Client Telephone____Prospects Face-to-Face____Prospects Telephone____Thank You Notes____Other Notes to Clients____Notes To Non-Clients____Account Aggregation Statements Sent With Note____Newsletters Sent____Prospect Letters____Public Exposure @Events____Earned Media____Live Radio/TV Exposure____Hours In Office____Work Out of Office____Referrals Received____New Accounts Added____Prospects Added to Mailing List____

I stroke tally most of the scoreboard items.

I transfer these totals to a 13 column green ledger every day and then tally up the month.

[quote=dashampersand]

I made out a single sheet with my calendar
running down the left side of the page in 1/2 increments.  Upper
right side are my phone calls.  Under that are tasks to
complete.  Under that is the “Scoreboard”.  Clients Met
Face-To-Face____Client Telephone____Prospects Face-to-Face____Prospects
Telephone____Thank You Notes____Other Notes to Clients____Notes To
Non-Clients____Account Aggregation Statements Sent With
Note____Newsletters Sent____Prospect Letters____Public Exposure
@Events____Earned Media____Live Radio/TV Exposure____Hours In
Office____Work Out of Office____Referrals Received____New Accounts
Added____Prospects Added to Mailing List____

I stroke tally most of the scoreboard items.

I transfer these totals to a 13 column green ledger every day and then tally up the month.

Dash- Thanks. I printed it off, will take to the office Monday and get started on it. I appreciate your help.

This is one of the best threads I have ever read on this BB.

Thanks gentlemen!

actaully for a 24 yr vet it makes sence.

I have seen money do funny things to otherwise honest and normal people. 

He is stating obvious facts that if implemented can increase ones probability of success. So bravo for helping those who are listening.

Run 4 office are you John Kerry or some other Democrat? You know the people who are against everything and never have a plan but to obstruct.

[quote=executivejock]

He is stating obvious facts that if implemented can increase ones probability of success. So bravo for helping those who are listening.

Run 4 office are you John Kerry or some other Democrat? You know the people who are against everything and never have a plan but to obstruct.

[/quote]

Not John Kerry.  I think he's proabably Put Trader.  He has the same attidue and lack of command of the actual facts....

Dash - Awesome advice, according to snap, I owe you more kudos. I wanted to reply days ago but forgive me....have been busy.

Your habits are impressive, why we all don't do those activities......I will be brutally honest.......I am not that organized or disciplined, to do what you do. If someone told me I had to do that....I would leave the company. I LOVE thank you notes however, I like writing them, and think they serve as a great point of contact. So all is not lost. I just simply am not the type that is going to track everything I do.

Lambda - The couple of 200k Guys I know well, one brought in 6-7 million last year, smart guy, about 30 million AUM - almost all annuitized - Why is doing 200k, when your averaging 1% on most of your business so astonishing. If a guy were getting 4% on the same business, he would be doing $800k.

Are these guys killing themselves working...no, probably not. Some days they may be.

Only on this website could you say you like babies, puppies and your mother and someone would accuse you of being a liar and a scoundrel.

I am a 24 year vet.  I think the Dow was at 816 when I started.  About the time Henry Kaufman made his big call.  I guess I should really say I am now in my 24th year.

I do have $125 million under management.  I do not make $3,000,000 per year.  I make about $600,000 gross and retain 95% on funds and VAs.

I post for rookies because I had some very nice veterans who helped me in my career.

My signature line was from my fraternity days.  I was forced to memorize a bunch of meaningless drivel, but this one made some sens, particularly for a broker.

Even a good, decent, honest broker will have a lapse in judgement or make a mistake at some time.

But for those of you who just have to complain, there was another slogan that I had to memorize, "Them that mind don't matter, them that matter, they don't mind."

Dash,

Well said. Thanks for caring enough about us newbies to post here. 

[quote=dashampersand]

Only on this website could you say you like babies, puppies and your mother and someone would accuse you of being a liar and a scoundrel.

I am a 24 year vet.  I think the Dow was at 816 when I started.  About the time Henry Kaufman made his big call.  I guess I should really say I am now in my 24th year.

I do have $125 million under management.  I do not make $3,000,000 per year.  I make about $600,000 gross and retain 95% on funds and VAs.

I post for rookies because I had some very nice veterans who helped me in my career.

My signature line was from my fraternity days.  I was forced to memorize a bunch of meaningless drivel, but this one made some sens, particularly for a broker.

Even a good, decent, honest broker will have a lapse in judgement or make a mistake at some time.

But for those of you who just have to complain, there was another slogan that I had to memorize, "Them that mind don't matter, them that matter, they don't mind."

[/quote]