Starting out

EJ… just to clarify. 

$40-50K gross is feasible however, you walk away with maybe 45-50% of that in the right training program; plus it takes some money to make some money starting out, so you need to be prepared to spend a little too.

Well, I have about $75k saved up to try to make it through the next 2 years, hopefully that will be enough. 

75K saved and you are willing to use some/all - and you have a goal initially of 50K or so, you have a strong basis to get started.

Well… goal of 50k net is my minimum “expectation”.  Thats the part I need a reality check on.  EJ’s program with the small base pay and bonuses during the first year should get me half way to a net of 50k, but I don’t know what to expect from a commision standpoint.  How many Clients will I really get?  The 'ole “hope for the best plan for the worst”…

You have the opportunity to make a VERY good living in this business.  Upwards of $200,000 per year.  If it was easy, everyone would be doing it.  It is not easy.  And you have to have a great firm to support you.

At my firm we have to have $4m AUM first year and $100,000 rev.  Second year $10AUM and $150,000 rev.  We have excellent office, marketing, computer, research - - you name it support.  You decide how to propsect, you decide what products to sell and you decide which customers to take on.

So, after two years you will find out if you made it, if you don't they fire you because at RJ we only want the best people.

[quote=maybeeeeeeee]

You have the opportunity to make a VERY good living in this business.  Upwards of $200,000 per year.  If it was easy, everyone would be doing it.  It is not easy.  And you have to have a great firm to support you.

At my firm we have to have $4m AUM first year and $100,000 rev.  Second year $10AUM and $150,000 rev.  We have excellent office, marketing, computer, research - - you name it support.  You decide how to propsect, you decide what products to sell and you decide which customers to take on.

So, after two years you will find out if you made it, if you don't they fire you because at RJ we only want the best people.

[/quote]

Gee let's all link arms and do the RJ Cheer. 

Can anyone say "Herula"?

b-I think your expectations are just fine...your cash reserves should be more than adequate, given what you have told us about your needs, etc., assuming you have a knack for this business.  Trust me...you'll definitely know long before two years whether or not you are cut out for the biz...

Joe, I think she HAS at least toned down the RJ pitch...it was almost subtle this time...

Maybe you & I should lead a cheer for LPL to kind of balance out the noise?!!

[quote=Indyone]

b-I think your expectations are just fine...your cash reserves should be more than adequate, given what you have told us about your needs, etc., assuming you have a knack for this business.  Trust me...you'll definitely know long before two years whether or not you are cut out for the biz...

Joe, I think she HAS at least toned down the RJ pitch...it was almost subtle this time...

Maybe you & I should lead a cheer for LPL to kind of balance out the noise?!!

[/quote]

I'm biting my tongue.....

How hard will it really be to etch out a meager living starting out?  What is good and what is bad?  Is $40-50k very realistic your first year?  Im beginning to form a negative opinion after reading so many of the posts on this site.  I need a realistic viewpoint from someone that has been there.  Can anyone help me

I'll try and I won't try to recruit you to my B/D either.   Whether 40 to 50K gross (meaning your gross after the haircut the B/D takes) is realistic depends on a lot of things.  Where is your office located.  Is it in an area of good potential investors, high net worth people, working people, businesses who need retirment plans and so on.  Or is it in an area of tough competetion with other established brokers?  How is the economy in the area you will be in.  How much competition are you going to get from other professionals including  other Jones brokers?  What kind of overhead or office expenses are you going to have to overcome?  Are you going to be starting a brand new office (new/new) or taking over an office that has already had a failing broker (or two or three) or are you lucky enought to be taking part of an existing successful office (goodnight plan)?  And really importantly, how hard are you willing to work.  Expect to work at least 60 hours a week for the first year or two.

It is possible to net 50K (after taxes and expenses) in the first year, but not easy and I hate to say, it not really likely.  Here is a small  example:  Say you gross 15K a month, which would put you into segement 3 (it has been a while so I may be wrong) which is normally achieved by year two, or the end of year one by quick starters (new/new).   12 x 15,000 = 180,000.   At a 35% payout to you really = 63,000.  Now you would have to have taxes withheld so assume 25% rate = $47,250.  Then you do have expenses that are not covered by Jones. (Advertising costs, toner, paper, part of the postage and so on  Oh Yeah!!  Health Insurance, you get to pay full boat.)  What those costs are depend on how you want to run your office but lets just say $5000.  ......Anyway, I guess you can see it may be tough in the first years.  My figures may be off because it has been a while since I was there.

Don't let me discourage you.  You may fall into a perfect opportunity and get a fast start out of the gate. As others have said, Jones can be a good place to start. You will learn how to prospect, get a taste of the business and build relationships with clients.  There are many Jones people who love it and wouldn't move and there are many who started there and moved on. 

The potential EJ guy is asking if 50k is doable INCLUDING the 24k+ that Jones GIVES him...brings the bogey waaaay down (by more than 50%) from the #s shown above.  Plus I doubt he has any concept of what "15 gross" equates to; for his benefit, that's roughly bringing in 5 $100k accounts in a month (just one of many examples of how to get there).

If you only need to make (net OR gross) 26k after the salary, that's more like a 7k gross nut...very achievable of the course of the whole first year.  It maybe back-end heavy--ie, maybe you only get to 2k in month 1 but more like 10-15k by month 12 as your cumulative efforts are paying off.

Wow.. when I started at Jones you got 2 grand a month....before taxes and expenses. No more than that...just 2,000.   Anything you earned over 2 grand in commissions went into a bonus pool.  If you made enough in commissions you got a nice bonus after the first year in a lump sum, which was taxed to death leaving about 50% left of the bonus pool.   

Sounds like they have changed their system.  I practially starved to death the first year and surely used up a lot of my savings. The bonus was nice but I would rather have had the commissions as I was earning them.

[quote=maybeeeeeeee]

You have the opportunity to make a VERY good living in this business.  Upwards of $200,000 per year.  If it was easy, everyone would be doing it.  It is not easy.  And you have to have a great firm to support you.

At my firm we have to have $4m AUM first year and $100,000 rev.  Second year $10AUM and $150,000 rev.  We have excellent office, marketing, computer, research - - you name it support.  You decide how to propsect, you decide what products to sell and you decide which customers to take on.

So, after two years you will find out if you made it, if you don't they fire you because at RJ we only want the best people.

[/quote]

Does RJ offer newbie training programs and if so, do you have a weblink that you could share?  Thanks!

I see lots of talk about numbers, but what determines your income will be your activity. When I passed my seven I thought I had a license to print money. Boy was I wrong. Reading, dreaming, watching CNBC won't put a dime into your checking account. If I were you, I would pick a product, preferably a mutual fund or variable annuity, and set up a 4 hour time block every day just to make outbound calls to new prospects. Call business owners and executives at work (no do not call laws), for they are easy to get ahold of and will have money and multiple needs. Don't torture yourself calling people at home.Set 10 appointments per week, meet with 8, qualify for at least $25,000. If you open 5 new accounts per month, selling va's @ 7% will gross you $8750 per month. Your payout will probably be 40-50%, netting you the $3500-$4275 per month MINIMUM you're looking for. Pitching individual stocks will get you the lowest payout available. Read Nick Murray's "The excellent Investment Adviser" and Bill Goods "Prospecting Your Way To Sales Success".As you mature in the business, transition over to fees. If you start out of the gate just doing fees, you'll starve. When you see your $75,000 become $50,000, then $25,000 and lower, it will affect your outlook and attitude, till you finally have to leave the business. But if you can remain FOCUSED, you'll do fine- Lots of noise in this business.

Stok- 16 years in the biz, independent for 12.

What is everyone’s take on the successrate of door-knocking?  Does it actually work or is this an EJ dinosaur ?

Depends on where you are.  In small towns and places without anti-solicitation laws, it can be very effective.  In big cities, I imagine it is not too easy or successful.  I actually enjoyed the door knocking part of the Jones experience.  It is very effective with business owners as quite often that is the only way you are going to be able to see them…at their own place of business.  

Did you ever feel like a “sleezy salesman” by going door-to-door?  I’ll do anything, but that’s probably my biggest fear.  I’m not afraid to sell… don’t get me wrong, I just don’t want to feel like a dirty door-to-door salesman for the next 10 years of my life.  Keep in mind this is coming from someone who hasn’t been through the training let alone received the legitimacy of being registered, etc.   Thanks for eveyone’s candidness and time!

babbling-  Good advice as always.

[quote=babbling looney]

How hard will it really be to etch out a meager living starting out? What is good and what is bad? Is $40-50k very realistic your first year? Im beginning to form a negative opinion after reading so many of the posts on this site. I need a realistic viewpoint from someone that has been there. Can anyone help me

I’ll try and I won’t try to recruit you to my B/D either. Whether 40 to 50K gross (meaning your gross after the haircut the B/D takes) is realistic depends on a lot of things. Where is your office located. Is it in an area of good potential investors, high net worth people, working people, businesses who need retirment plans and so on. Or is it in an area of tough competetion with other established brokers? How is the economy in the area you will be in. How much competition are you going to get from other professionals including other Jones brokers? What kind of overhead or office expenses are you going to have to overcome? Are you going to be starting a brand new office (new/new) or taking over an office that has already had a failing broker (or two or three) or are you lucky enought to be taking part of an existing successful office (goodnight plan)? And really importantly, how hard are you willing to work. Expect to work at least 60 hours a week for the first year or two.

It is possible to net 50K (after taxes and expenses) in the first year, but not easy and I hate to say, it not really likely. Here is a small example: Say you gross 15K a month, which would put you into segement 3 (it has been a while so I may be wrong) which is normally achieved by year two, or the end of year one by quick starters (new/new). 12 x 15,000 = 180,000. At a 35% payout to you really = 63,000. Now you would have to have taxes withheld so assume 25% rate = $47,250. Then you do have expenses that are not covered by Jones. (Advertising costs, toner, paper, part of the postage and so on Oh Yeah!! Health Insurance, you get to pay full boat.) What those costs are depend on how you want to run your office but lets just say $5000. …Anyway, I guess you can see it may be tough in the first years. My figures may be off because it has been a while since I was there.

Don’t let me discourage you. You may fall into a perfect opportunity and get a fast start out of the gate. As others have said, Jones can be a good place to start. You will learn how to prospect, get a taste of the business and build relationships with clients. There are many Jones people who love it and wouldn’t move and there are many who started there and moved on.

Agreewith what you said big pay, however the blended payout will be more like 35%. Deduct expenses and your down to about 30-31%. I know I lived it.

Did you ever feel like a "sleezy salesman" by going door-to-door?

No, because I didn't try to sell any investments on the door step. (Even though that was what they suggested we do)  I looked at the process as a way to introduce myself to people personally instead of through newspaper advertisements.  I wasn't selling product.  I was selling myself (no sleazy remarks please   ) and getting to know people.   If they were interested (didn't slam the door in my face) I would give them a general idea of what I did, invite them to visit my office if they really wanted to discuss product, give them a listing of upcoming seminars and open house events, whatever worked at the time.

As to the new IR and pay structure, what I was saying was when I was new at Jones.  Evidently it has changed and it sounds like for the better.

Stok nice post.

As for Bab loon... I think knocking on doors is good and bad. Different parts of the country have different cultures. So if you go the cities of New England they are going to tell you to "go f... your self". If you go to Dothan, AL or the south they might say "come on in." So my point is it depends.

I have talked with thousands of professionals from Maine to Puerto Rico over the past year so this is from my experiences.

BigPayDay's rules for success:

1. Do not come to this board for advice. Most advice here is very jaded.
2. Remember that sales, and that is what this job is for the first two years, is a CONTACT sport. You need to make 25 contacts a day, period.
3. Follow the Jones recipe. It works. Most of the people on this board who have left Jones will agree that the training they got from Jones was very good.
4. Have a good work ethic. When it's 9pm and your falling asleep and you can't seem to get those hand written thank you notes done, DO IT NOW.
5. Have faith that your hard work will pay off.
6. Make sure you set goals for yourself. Not just commission goals, but goals for you and your family. Where do YOU want to be in 5, 10, 15, 20 years? Write it down and keep it in front of you at all times.

Good rules for success no matter what business you are in. Except for number 1  , not all of us are jaded. When I contemplated going from a regular paycheck + commissions at a bank platform to Jones and then from Jones to Indy, my husband gave me the best advice, which was given to him when he started his own business years ago.  "If you aren't prepared to go to the wall and lose everything, then you aren't prepared to be in business for your self."

As far as BL's comments above go, let me clarify a few things:

As I said it sounds like things have changed for the new IR.  However after the first year you will have to pay the full amount of your health insurance package, which amounted to over $600 a month for myself and spouse. As I recall there were only two options the Cadillac plan and the Kia plan.  The BOA had more choices and was subsidised.  Has this changed also?

I'm trying not to be so negative that the OP gets discouraged, but I feel that it is only right to know everything  before jumping in with both feet.  Looking through rose colored glasses (or green tinted glasses in the Jones case) doesn't help because eventually you have to take the glasses off.   It is better to know upfront the good and the bad.

Big Payday's advice is ironic, or revolves around circular logic, or somthing like that....goes something like:

"Here, let me--an 'expert' on this board--give you some advice:  do NOT take advice from people on this board.  Oh, and here are 5 other pieces of advice to take (just ignore #1 for the moment, because I am the ONLY one who is not jaded)."

That argument/logic is eerily similar to "this is the only firm that is honest and the only place worth working attitude."  EJ is a great place to work, but any free market, including the one for labor in the US, allows the "best" to be sought out....I rarely see successful, experienced people in this business go TO Jones.  Unless it's because the rest of the 90% or so are selfish, greedy, etc., that means something--namely, that it's not the ONLY place to make a nice living w/a high quality of life serving your clients the right way.

I hope that didn't come across as jaded--it was meant to be a logical deconstruction of the argument that a new person to the industry should make an exception to a rule stated by the person who gave the rule.  Ironically, the other 5 rules are worth following (simple, but valuable)...unfortunately, #1 prevents someone from paying attention to them...

I understand not selling product on someone's doorstep, rather getting to know them and building a reltionship, I guess I am just skeptical of people's reaction (I'm in the lower north-east) to someone cold knocking.  Thanks for all of the advice!!  I'll will keep everyone posted as to my decision/progress.  My face-to-face with EJ is tomorrow afternoon. 

Also - BPD’s rule #1 is mostly true (although I wouldn’t necessarily call it “jaded” - more of a design flaw in the venue - the internet!).  After all, I’m sure that most of you are incredibly awesome people in real life, but this is the internet and people post some crazy stuff… trust me when I say that I’ve taken this whole site with a grain of salt.  But all in all, I truly truly appreciate all of you keeping it real for me and helping me to stay sobered minded about this decision.  I was truly just looking for some real-life situations and insight.  Any other thoughts are greatly appreciated.

[quote=executivejock]

Stok nice post.

As for Bab loon… I think knocking on doors is good and bad. Different parts of the country have different cultures. So if you go the cities of New England they are going to tell you to “go f… your self”. If you go to Dothan, AL or the south they might say “come on in.” So my point is it depends. I have talked with thousands of professionals from Maine to Puerto Rico over the past year so this is from my experiences.

[quote=SonnyTheBull] [quote=executivejock]

Stok nice post.

As for Bab loon... I think knocking on doors is good and bad. Different parts of the country have different cultures. So if you go the cities of New England they are going to tell you to "go f... your self". If you go to Dothan, AL or the south they might say "come on in." So my point is it depends. I have talked with thousands of professionals from Maine to Puerto Rico over the past year so this is from my experiences.

[/quote]

Exec,
Looks like you have really done your research by talking to a lot of brokers. What's your take on Cold Calling?
Sonny[/quote]

The firm that I work for doesn't do any cold calling. They do promos through large companies in the area and specialize with retirements. Of course, they have a strong media footprint and the marketing dept. is fantastic. I think cold calling is needed for the rookies. Being that I'm a rookie, I hope that by working for my current firm, I wont have to cold call. I'm willing to do my time in the trenches though!

The bottom line comes down finding interested prospects. Whether that's done through door knocking, cold calling, mailing, seminars, or referrals. I've found the most efficient way is to phone those likely most qualified with needs and money- ala businesses. In 2 hours, I can reach 20 and set appointments with between 1 & 5. On the appointment they are interested and expecting me. I've tried door knocking- needed a brace to help keep my chin up though. Took all day to do what can be done in 2 hours with the right list, presentation and product. Door knocking obviously works for alot of people though. I just feel that cold phone calling is the shortest line from point A to point B.

Stok

B-



Have you looked at the other wirehouses for comparison?  UBS, SB
or ML will give you a starting salary between $40K and $80K plus
commissions and bonuses.  (I’ve seen ML go to $100K for premium
candidates).  Company pays all the usual expenses.  Net
income is better (check Registered Rep’s salary survey or the Payout Grids at OWS).  Support is better.



Also, I assume that you’ve read The Rep’s Broker Report Card.







Jeff Cadieux, Partner

Gabriel & Associates

Executive Recruiters

www.GabrielHR.com

Those are certainly options... Im more of a long term sort of person though.  I would be going into a wirehouse knowing that it is temporary... I'd rather be building my own business given the rural nature of the area that I live in.  I certainly haven't written those ideas off and I appreciate your response.  What do you think about starting off as a ML FA? 

Cold calling... The industry I am involved with is a bit different, but we are trying to get information. On top of that we have contacted and traveled up and down America.

We know the culture really effects the results and peoples openess to open to door. This is not to say there are people in every town who will pour you a cup of coffee, just cities are extremly challenging. People in general are too busy and dont want to be bothered.

I would say network at churches, Lions club, Knights of Columbus, Toastmasters and other avenues in the cities. In the good old town you may be good to go with cold calls and door knocking.

I dont claim to be the expert by any means, but I do have some great experience in different industries.