Bac

What’s different about this quarter, Ez?

The bank will begin holding back 10% of their payout. In the 3rd quater it will be 25% holdback.

“Holdback”?  What on earth are they talking about?  How can an employer ‘hold back’ wages arbitrarily? 

[quote=Starka]“Holdback”?  What on earth are they talking about?  How can an employer ‘hold back’ wages arbitrarily? [/quote]

Probably under some employment agreement that brokers “voluntarily” signed…

...but you don't have to prospect.

Holdback is only for those that did under 350k last year,starts in 3rd qtr. I wonder what they will do next year?

Also not so bad a place to work if you bust your balls and do over 400k.

[quote=badmove?]

Holdback is only for those that did under 350k last year,starts in 3rd qtr. I wonder what they will do next year?

Also not so bad a place to work if you bust your balls and do over 400k.

[/quote]

What does it mean to hold back 10%? Can you give us a quick math example of how it will work? If a guy makes $50,000 do they hold back $5,000? If a guy is at a 35% payout, do they drop him to 25%? Thanks.

33% payout, you do 30k, pay shopuld be 9900, they hold back 990, pay you 8910, if you hit certain goals you get a percentage of the 990 back at end of quarter.

Hold back goes to 25% in 3rd and 4th qtr. You can not do under 300k here or you are dead.

I can speak for myself only, but I can assure you that I’d be out the door before they finished explaining that to me.  The fact that one is above $400K production would, at least to me, mean nothing more than you’re next.

Why not cut their pay? All they do is sit around waiting for some teller to refer Mrs. McGillicuddy to them.

exactly

[quote=Bobby Hull]Why not cut their pay? All they do is sit around waiting for some teller to refer Mrs. McGillicuddy to them. [/quote]

bobby, you sure have a low opinion of a bank brokers...

i know several bank brokers who all do over $900k, how much biz are you doing?

[quote=Vin Diesel]

[quote=Bobby Hull]Why not cut their pay? All they do is sit around waiting for some teller to refer Mrs. McGillicuddy to them. [/quote]

bobby, you sure have a low opinion of a bank brokers...

i know several bank brokers who all do over $900k, how much biz are you doing?

[/quote]

Does it matter, Vin?  The point being made is that your $900K gross is worthless if the bank comes in this afternoon with the new, improved payout grid giving you 5% net with a 10% 'holdback'.

[quote=Vin Diesel]

[quote=Bobby Hull]Why not cut their pay? All they do is sit around waiting for some teller to refer Mrs. McGillicuddy to them. [/quote]

bobby, you sure have a low opinion of a bank brokers...

i know several bank brokers who all do over $900k, how much biz are you doing?

[/quote]

A better question would be "how much are you keeping?"

the bottom line is the payouts at banks & wirhouses are being cut for low-end producers. anything less than $350k in production isn't profitable enough for firms anymore. so they "encourge" you to do more or get out. that's the harsh reality. thats why you see so many people going indy.

The reason so many go indy is that they are tired of answering to assholes that keep sucking up more and more of their paychecks in return for nothing.  THAT'S the harsh reality.

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[quote=Indyone]

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Well, they might still be "greedy", but the fact is LPL charges for things banks and wirehouses provide their people, doesn't provide others the rep is expected to carry out of their own pocket AND LPL doesn't (currently, but watch for it to change) carry the same business and regulatory exposure the banks and wirehouses carry for their brokers.

IOW, if LPL had the same expenditures and exposures banks and wirehouses have "10-20% off the top" wouldn't keep them in the black.

[quote=Indyone]

The reason so many go indy is that they are tired of answering to assholes that keep sucking up more and more of their paychecks in return for nothing.  THAT'S the harsh reality.

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Yeah, but the banks DO pay for the business cards.

It seems to me that in the next 5yrs reps doing less than $350k with less than 1/2 book in wrap accounts will be forced out of the business or become part of a team.

Firms can't afford to keep those reps, and going indy is getting more costly due to compliance.

[quote=mikebutler222][quote=Indyone]

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Well, they might still be "greedy", but the fact is LPL charges for things banks and wirehouses provide their people, doesn't provide others the rep is expected to carry out of their own pocket AND LPL doesn't (currently, but watch for it to change) carry the same business and regulatory exposure the banks and wirehouses carry for their brokers.

IOW, if LPL had the same expenditures and exposures banks and wirehouses have "10-20% off the top" wouldn't keep them in the black.

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[quote=badmove?]

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[/quote]

People with wirehouse prospecting attitudes don't end up in banks. Banks are for people with social worker prospecting attitudes.

[quote=Bobby Hull][quote=badmove?]

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[/quote]

People with wirehouse prospecting attitudes don't end up in banks. Banks are for people with social worker prospecting attitudes.

[/quote]

bobby bobby bobby,

i do feel like a social worker in that i help people, but i just compensated significantly more

[quote=Vin Diesel][quote=Bobby Hull][quote=badmove?]

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[/quote]

People with wirehouse prospecting attitudes don't end up in banks. Banks are for people with social worker prospecting attitudes.

[/quote]

bobby bobby bobby,

i do feel like a social worker in that i help people, but i just compensated significantly more

[/quote]

Yes. The difference between $24,000 and $36,000 is significant. 50% more.

[quote=Bobby Hull][quote=Vin Diesel][quote=Bobby Hull][quote=badmove?]

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[/quote]

People with wirehouse prospecting attitudes don't end up in banks. Banks are for people with social worker prospecting attitudes.

[/quote]

bobby bobby bobby,

i do feel like a social worker in that i help people, but i just compensated significantly more

[/quote]

Yes. The difference between $24,000 and $36,000 is significant. 50% more.

[/quote]

Bobby, you're just bitter that bank reps do more biz than you. But hey, if making fun of people makes you feel better...knock yourself out.

If you've been in the biz 5 years and can't put up 350k, you deserve a 90% holdback or whatever it's going to take to make you realize you're in the wrong career.

[quote=joedabrkr] [quote=mikebutler222][quote=Indyone]

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Well, they might still be "greedy", but the fact is LPL charges for things banks and wirehouses provide their people, doesn't provide others the rep is expected to carry out of their own pocket AND LPL doesn't (currently, but watch for it to change) carry the same business and regulatory exposure the banks and wirehouses carry for their brokers.

IOW, if LPL had the same expenditures and exposures banks and wirehouses have "10-20% off the top" wouldn't keep them in the black.

[/quote]

Mike it is true that we pay for some things that come free at a bank or wirehouse, but the difference doesn't even compare when you factor in the higher payout.
[/quote]

I'm not talking about YOUR end of it, I'm talking about what LPL would have to take FROM you if they provided for you everything a bank or wirehouse provided for their people.

[quote=mikebutler222]

I'm not talking about YOUR end of it, I'm talking about what LPL would have to take FROM you if they provided for you everything a bank or wirehouse provided for their people.

"Bobby, you're just bitter that bank reps do more biz than you. But hey, if making fun of people makes you feel better...knock yourself out"

Most bank brokers are like the TD Ameritrade and Schwab guys. They can wear Brooks Brothers to work everyday with a nice pair of Allen Edmunds and a nice tie from Ferragamo. They can walk into their office, check their emails and a couple voicemails in the morning. They can put on their Plantronic earpiece and get to work. But at the end of the day- everybody knows that they really arent Brokers.

They just play pretend with the 50MM book that is given to them. Or with the live bodies that are schlepped into their office by the 19 year old teller who you promised an ice cream cone to for every referral that they give you.

Notice that I underlined "most" above, as I know of several decent bank brokers in the area. But most are hacks on their way out of the industry or on their way over to Scottrade...

[quote=AllREIT] It would still be less.

Think about it, there are three levels of expense

1) Operating Expense
2) Human Expense (i.e what the indy's provide for themselves)
3) B/D Profit margin.

For $100 of GDC, the argument is that

(OpEx + LPL Profit) + Self Paid HumEx << (OpEx + HumEx + MER Profit)

So far the annecdotal evidence from indy's is that even after paying your own HumEx, the total expenses are less than at a wirehouse.


[/quote]

Said "total expenses" don't seem to include any costs for regulatory and liability exposure. Trying employing 12,000 people and ignoring that cost. Furthermore, you're not duplicating the expenses faced by a bank or wirehouse for every rep they put in a desk, because, for among other things, you're not duplicating their office standard, support staff and advertising budget . How big is your compliance department? The reason Indies, themselves, can be profitable at much lower production levels than a bank or wirehouse is, among other reasons, the barebones nature of their average operation. I’m not passing judgment, simply pointing out that the Indy takes on, and thus takes off the balance sheet on the cost side, many duties the bank/wirehouse broker doesn’t face and combines roles the bank/wirehouse ITSELF doesn’t combine.

More importantly, you're changing the original question. Indy said “If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.”.

All I pointed out was that while banks/wirehouses (actually, shareholders, and most reps there ARE shareholders too) may be greedy, LPL couldn’t “make money taking 10-20% off the top of a 100k producer” if LPL had to provide everything a bank or wirehouse provides their people. Somehow that got twisted into a question of TOTAL cost to operate an Indy shop.

[quote=mikebutler222][quote=joedabrkr] [quote=mikebutler222][quote=Indyone]

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Well, they might still be "greedy", but the fact is LPL charges for things banks and wirehouses provide their people, doesn't provide others the rep is expected to carry out of their own pocket AND LPL doesn't (currently, but watch for it to change) carry the same business and regulatory exposure the banks and wirehouses carry for their brokers.

IOW, if LPL had the same expenditures and exposures banks and wirehouses have "10-20% off the top" wouldn't keep them in the black.

[/quote]

Mike it is true that we pay for some things that come free at a bank or wirehouse, but the difference doesn't even compare when you factor in the higher payout.
[/quote]

I'm not talking about YOUR end of it, I'm talking about what LPL would have to take FROM you if they provided for you everything a bank or wirehouse provided for their people.

[quote=badmove?]

Vin Deisel-Tru Dat

Joeda-Indy may be a good gig, but a decent bank program will put 1-2mill of prospects through your office a month. Leverage that with a wirehouse prospecting attitude and things can end up looking pretty good. I do think the future brings an even bigger squeeze to the (soon to be) sub 400k producer.

[quote=joedabrkr]

Fair enough.

I choose to believe that wirehouses and banks waste a lot of money between my 70-90% payout and your 35-45% payout.

I'm happy to keep the difference and provide for myself.

In the end Mike, there's more than one way to skin a cat.  You like your way, and I like my way.  And that's just fine by me.
[/quote]

Agreed, my comment about LPL making a profit off only 10-20% of a 100k producer's gross wasn't a slight of indies, it was to point out what LPL povides.

[quote=mikebutler222]

[quote=joedabrkr]

Fair enough.

I choose to believe that wirehouses and banks waste a lot of money between my 70-90% payout and your 35-45% payout.

I’m happy to keep the difference and provide for myself.

In the end Mike, there’s more than one way to skin a cat.  You like your way, and I like my way.  And that’s just fine by me.
[/quote]

Agreed, my comment about LPL making a profit off only 10-20% of a 100k producer's gross wasn't a slight of indies, it was to point out what LPL povides.

[quote=joedabrkr] [quote=mikebutler222][quote=joedabrkr] [quote=mikebutler222][quote=Indyone]

If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.

[/quote]

Well, they might still be "greedy", but the fact is LPL charges for things banks and wirehouses provide their people, doesn't provide others the rep is expected to carry out of their own pocket AND LPL doesn't (currently, but watch for it to change) carry the same business and regulatory exposure the banks and wirehouses carry for their brokers.

IOW, if LPL had the same expenditures and exposures banks and wirehouses have "10-20% off the top" wouldn't keep them in the black.

[/quote]

Mike it is true that we pay for some things that come free at a bank or wirehouse, but the difference doesn't even compare when you factor in the higher payout.
[/quote]

I'm not talking about YOUR end of it, I'm talking about what LPL would have to take FROM you if they provided for you everything a bank or wirehouse provided for their people.

[/quote]

Fair enough.

I choose to believe that wirehouses and banks waste a lot of money between my 70-90% payout and your 35-45% payout.

I'm happy to keep the difference and provide for myself.

In the end Mike, there's more than one way to skin a cat.  You like your way, and I like my way.  And that's just fine by me.
[/quote]

...well, I didn't intend to start a cost structure debate.  I was speaking from my personal experience and some anecdotal information on waste in the wirehouse, i.e., the "Todd Majal" and the "money honey" controversy.  I saw up close some very stupid and wasteful decisions in the program I was in...we literally hired people to stand around with their hands in their pockets because of their supposed "connections".  People were hired to help and ended up only interfering with my productivity.

I'm not saying that LPL has no waste in their cost structure, but I feel like I have A LOT more control over wasteful spending than I did before, vs. having expenses just forced upon me.  When management did something stupid, it was up reps who ultimately paid with lower profitability bonuses, unrealistic production goals and creative new grids designed to squeeze us further.  I don't miss any of that.

[quote=mikebutler222]Said “total expenses” don’t seem to include any
costs for regulatory and liability exposure. Trying employing 12,000
people and ignoring that cost. Furthermore, you’re not duplicating the
expenses faced by a bank or wirehouse for every rep they put in a desk,
because, for among other things, you’re not duplicating their office
standard, support staff and advertising budget . [/quote]

You must be confusing me with someone who wants to pay for all of that.

[quote]How big is your compliance department? The reason Indies, themselves, can be profitable at much lower production levels than a bank or wirehouse is, among other reasons, the barebones nature of their average operation.[/quote]

Which means I can charge less and yet earn more.

Alternately I can spend money on where I think it is important. I.e my T&E expenses and dry cleaning bill. As I tell clients, the marble tiles and oakwood trim in the lobby don't help your investments.

[quote]More importantly, you're changing the original question. Indy said “If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.”[/quote]

Not really, LPL works in a competative market. If an Indy doesn't like the price of the platform, he can switch. If an ML broker doesn't like it, he can't switch to another provider of the ML experience.

[QUOTE]Somehow that got twisted into a question of TOTAL cost to operate an Indy shop.[/quote]

Which after you include platform fee's and imputed expenses is still cheaper than working at a wirehouse.

[quote=joedabrkr]

How do you ever have the time to get to know any of your prospects or clients beyond a superficial level?
[/quote]



After you sell them an annuity and get your check; who cares?

[quote=mikebutler222]

[quote=joedabrkr]

Fair enough.

I choose to believe that wirehouses and banks waste a lot of money between my 70-90% payout and your 35-45% payout.

I'm happy to keep the difference and provide for myself.

In the end Mike, there's more than one way to skin a cat.  You like your way, and I like my way.  And that's just fine by me.
[/quote]

Agreed, my comment about LPL making a profit off only 10-20% of a 100k producer's gross wasn't a slight of indies, it was to point out what LPL povides.

[/quote]

Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues.

[quote=AllREIT][quote=mikebutler222]Said "total expenses" don't seem to include any costs for regulatory and liability exposure. Trying employing 12,000 people and ignoring that cost. Furthermore, you're not duplicating the expenses faced by a bank or wirehouse for every rep they put in a desk, because, for among other things, you're not duplicating their office standard, support staff and advertising budget . [/quote]

You must be confusing me with someone who wants to pay for all of that.

[/quote]

No, I didn't have you confused with anyone, I simply assumed you knew you were not making an apples to apples comparison of costs.

[quote=AllREIT][quote=mikebutler222]How big is your compliance department? The reason Indies, themselves, can be profitable at much lower production levels than a bank or wirehouse is, among other reasons, the barebones nature of their average operation.[/quote]

Which means I can charge less and yet earn more. [/quote]

You seem to think my original comment was about you and what you can charge and still be profitable. It wasn’t. It was about what LPL needs to charge YOU to be profitable.

[quote=AllREIT][quote=mikebutler222]More importantly, you're changing the original question. Indy said “If LPL can make money taking 10-20% off the top from a 100K producer, you know that banks and wirehouse managements are just plain greedy.”[/quote]

Not really, LPL works in a competative market. If an Indy doesn't like the price of the platform, he can switch. If an ML broker doesn't like it, he can't switch to another provider of the ML experience. [/quote]

Not only are you wrong about the ML broker (they move to other providers of the wirehouse experience all the time), you’re confused about the original question. It had to do with profitability of LPL (and simply as a proxy for all firms that provide Indies with back office operations) versus that of banks and wires.

It doesn’t mean much of anything that LPL can stay in the black taking only 10-20% of the gross of a $100k producer while banks/wires can’t, because even if you remove what YOU consider excess (class A versus class C office space, no national advertising budget, no regulatory or legal exposure carried by LPL) LPL doesn’t even provide things NO ONE would rationally consider excess, like ANY form of office space. It's not shocking they can be profitable working with lower producers and charging far less, they don't provide a great deal or have the exposure banks/wires do.

[quote=AllREIT][quote=mikebutler222]Somehow that got twisted into a question of TOTAL cost to operate an Indy shop.[/quote]

Which after you include platform fee's and imputed expenses is still cheaper than working at a wirehouse.

[/quote]

Again you’re in left field, I was NEVER commenting about how cheap or not it is to work at a bank/wire versus an Indy platform. The POINT was the production percentage LPL must take and how small a producer they can keep to be profitable given the fact that they do not provide many of the BASIC elements of running the office and leave THAT expense to you. I have no idea how that basic, indisputable fact keeps being twisted to question about what the Indy brokers THEMSELVES have to charge or produce to be profitable.

[quote=Indyone] I'm not saying that LPL has no waste in their cost structure, but I feel like I have A LOT more control over wasteful spending than I did before, vs. having expenses just forced upon me. [/quote]

Nothing wrong with that, but that's not at all what I was addressing. ALL I ADDRESSED was the observation that LPL can stay in the black while only charging 10-20% of the production of 100k producers.

They don't have the business model banks/wires have, they (LPL) count on YOU picking up all the other costs of doing business, and leave to YOU questions like staffing levels, compliance, legal exposure, office level appointment, advertising, etc.. Of course you can choose to do those things at a lower cost level than banks/wires.

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

Whoa, Mike! Relax!



The point being made is simply that the indy firms have a different cost

structure. For example, office space, to the traditional firm, must be paid

for whether it’s New York or Olatha, Kansas. There is no such thing as

controlling rents in any meaningful sense. To RayJay or LPL however, that’s

up to the individual and not corporate.

[quote=mikebutler222]

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

[/quote]

I pay the market rate for my office space. You pay six figures for yours.

I look at this way…As a $500k producer in a wirehouse I lose $300k to my firm and in return I get…branding, 1 staff member shared by 3-4 other advisors, Class A office space, their proprietary research and product teams, and whatever else.  A lot of those things may or may not benefit or help what I am doing locally but that money is spent w/o any of my input.  As an indy, I can take that $300k and determine how best to spend it and will do so in areas that will directly impact what I am doing locally.  For me, this is what has been so great about being independent.  Reality is, I spend nothing near that $300k to get what I would receive at the wirehouse.

[quote=csmelnix]I look at this way....As a $500k producer in a wirehouse I lose $300k to my firm and in return I get...branding, 1 staff member shared by 3-4 other advisors, Class A office space, their proprietary research and product teams, and whatever else.  A lot of those things may or may not benefit or help what I am doing locally but that money is spent w/o any of my input.  As an indy, I can take that $300k and determine how best to spend it and will do so in areas that will directly impact what I am doing locally.  For me, this is what has been so great about being independent.  Reality is, I spend nothing near that $300k to get what I would receive at the wirehouse.[/quote]

You think like an entrepreneur and Mike thinks like an employee.

[quote=Bobby Hull]

You think like an entrepreneur and Mike thinks like an employee.

[/quote]

 And your evidence for that would be.....?

[quote=Starka]Whoa, Mike! Relax!

The point being made is simply that the indy firms have a different cost
structure.  [/quote]

"Whoa"?  The "point" you address above is exactly what I've been saying from jump street. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I find it amazing how the simple issue I addressed, how LPL can stay in the black taking only 10-20% of a 100k producer's gross has EVERYTHING to do with the fact that LPL ONLY provides to the rep a small part of what’s required to run a business has been twisted as if I've passed some sort of judgment on being Indy. These are two completely different issues.

It’s as if we were talking about restaurants and there was a restaurant business channel, let’s call it “channel A” that offered the prospective chef a turn-key deal, but charged 50% of the gross and would only offer their services to chefs whose restaurants who grossed over X amount. Over in  “channel B” they only take 20% of the gross and will work with restaurants grossing far less, but the costs of rent, staffing, equipment and administration were all left to the chef.  The fact that “channel A” takes more of the gross isn’t a sign of “greed” (although I acknowledge there may be greed as well in the mix) versus Channel B, since they’re not offering the chef the same package. Could it be any simpler?

Given the leap by so many to defend the Indy business model, which I never challenged, makes me wonder if I’ve struck a nerve.

[quote=csmelnix] Reality is, I spend nothing near that $300k to get what I would receive at the wirehouse.[/quote]

If we're going to change the subject (as so many here seem to want to) about what's in it for reps in the two competeing business models, I'd say I've yet to see an Indy who spends the difference on an apples to apples equal of what he or she left behind at a wire. They've spent what they've wanted to of the difference on what they want of what they've left behind and at different levels or manners than what they had.

[quote=Bobby Hull][quote=mikebutler222]

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

[/quote]

I pay the market rate for my office space. You pay six figures for yours.

[/quote]

Yeah, that's it, we have equal office space, staffing levels, etc.....

[quote=mikebutler222][quote=Bobby Hull]

You think like an entrepreneur and Mike thinks like an employee.

[/quote]

 And your evidence for that would be.....?

[/quote]

Your own words.

[quote=Bobby Hull][quote=mikebutler222][quote=Bobby Hull]

You think like an entrepreneur and Mike thinks like an employee.

[/quote]

 And your evidence for that would be.....?

[/quote]

Your own words.

[/quote]

Yeah, it was obvious from jump street you couldn't answer that....

[quote=mikebutler222][quote=Bobby Hull][quote=mikebutler222]

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

[/quote]

I pay the market rate for my office space. You pay six figures for yours.

[/quote]

Yeah, that's it, we have equal office space, staffing levels, etc.....

[/quote]

No. We don't have equal office space. I have a large office and you don't. I have a contact at the clearing firm who handles any back office issue that I may have. She costs me nothing. I have a girl who comes in and bangs out paperwork for me at $15/hour. I have a cold caller who is compensated solely on a per appointment basis. No appointments, no money.

[quote=Bobby Hull][quote=mikebutler222][quote=Bobby Hull][quote=mikebutler222]

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

[/quote]

I pay the market rate for my office space. You pay six figures for yours.

[/quote]

Yeah, that's it, we have equal office space, staffing levels, etc.....

[/quote]

No. We don't have equal office space. I have a large office and you don't. [/quote]

Thanks for reminding me how talking with you is so often like arguing with a pig.....

Here's a little hint for you, though, same advice I gave someone here recently who was sure that being on a different side than him on an investment management issue meant you were less ethical than he is. You make a fool of yourself when you assume so much.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

No one who “thinks like an employee” makes it in this business, period. Clearly an Indy can’t, but even someone at a wirehouse can’t. You have to look at your book (and it is your book, even if a wirehouse wants to wrestle with you for it if/when you leave them) as your business. At a wirehouse it may be more of a franchise business, but it’s a business all the same. Who you turn from prospect to client, where you fish for clients, what approach you take to managing assets, how you organize your approach to it, how much of it you do, how much time you devote to it, those are all decisions up to you, the business owner.

Whether you chose to run as a franchise or take on the additional tasks to put your own name out front is another matter all together. But one thing you shouldn’t assume is that someone who hasn’t taken the route you have hasn’t considered it, and you shouldn’t assume you know the reasons why they rejected it.

[quote=mikebutler222][quote=Bobby Hull][quote=mikebutler222][quote=Bobby Hull][quote=mikebutler222]

[quote=Bobby Hull] Mike, your harping on provisions is laughable. What do we need that is so expensive? I need a phone and an office. All other costs are variable, driven by revenues. [/quote]

You can decide those "provisions" levels. You can use Class A office space and have an assistant or not, you can have staff legal counsel or not, you can do all the required compliance work or hire someone. If all you personally need is a phone and an office (of indeterminate level and location) good for you. I’m not trying to make judgments about what YOU or anyone else “needs”. For all I care you can have the Glengarry Glen Ross

Office appointment level and location or you can have marble and oak on the town’s most prestigious corner. It’s doesn’t matter to me one bit what you select.

OTOH, I’m also not much concerned about what YOU think others in the business “need”.

[/quote]

I pay the market rate for my office space. You pay six figures for yours.

[/quote]

Yeah, that's it, we have equal office space, staffing levels, etc.....

[/quote]

No. We don't have equal office space. I have a large office and you don't. [/quote]

Thanks for reminding me how talking with you is so often like arguing with a pig.....

Here's a little hint for you, though, same advice I gave someone here recently who was sure that being on a different side than him on an investment management issue meant you were less ethical than he is. You make a fool of yourself when you assume so much.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

No one who “thinks like an employee” makes it in this business, period. Clearly an Indy can’t, but even someone at a wirehouse can’t. You have to look at your book (and it is your book, even if a wirehouse wants to wrestle with you for it if/when you leave them) as your business. At a wirehouse it may be more of a franchise business, but it’s a business all the same. Who you turn from prospect to client, where you fish for clients, what approach you take to managing assets, how you organize your approach to it, how much of it you do, how much time you devote to it, those are all decisions up to you, the business owner.

Whether you chose to run as a franchise or take on the additional tasks to put your own name out front is another matter all together. But one thing you shouldn’t assume is that someone who hasn’t taken the route you have hasn’t considered it, and you shouldn’t assume you know the reasons why they rejected it.

[/quote]

I would discourage you from talking about your career path, given your history.

[quote=Bobby Hull]

I would discourage you from talking about your career path, given your history.

[/quote]

Oh, golly, the pixels on my monitor just tried to intimidate me. It’s as if they (that’s the pixels) know something that I’m ashamed of and fear they (again, since you’re not the sharpest knife in the drawer) might openly discuss. Oh, the howaw….<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I don’t know what power you think you have on this front, little fella’, but I can assure it it isn’t anything like what you think.  You really are the sort of thing people scrape off the bottom of their shoes after they walk their dog...

If you’re are grossing under 300k at BAC, and don’t have 50% in fee based, you are dead in the water. Wait till they increase the 350k requirement to 375 0r 400k next year.

Agreed, scares the sh*te out of me. at some point i thinkt they let go of sub 500 guys then put people on salary + bonus. JPM did that when they bot H&Q back in 99.

Bac is not a good place to be right now. They are the laughing stock of the wholesaler community.

disagree.

work your managed money, do some syndicate, drill into your book for other assets and you should be fine.

Its the annuity slingers that are having a hard time.

You know I read this board and it amazes me everytime..

So I have some questions here for everyone ...

1) Please inform me of a product that will allow clients to recieve a lifetime stream of income (protected against market volatility) while still allowing participation in market movement.. asides from an annuity?

2) Why is it so hard for the indies vs. wirehouse & banks to admit to themselves that they have a different business model ..not better but different? Because I would like to meet someone ..anyone on here who didn't start in the wirehouse or bank that started as a indie from day one with their newly minted series 7 in hand.  If you are there please email me as I would like to congratulate you!!

3) Why is it that there is a mantra on here for ALL or nothing in managed money .. ?? I think it is amazing in classic fashion no on here speaks about life insurance or how the firms where they work are addressing the growing needs for wealth transfer for the HNW.

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

Not to go on a rant but it seems it always the same with some people on here . .. and I just don't understand it .. I think this website offers a great chance for us to stay interconencted in an industry that encourages a loner state of mind... but yet I often see bashing on here and I don't get it.. Incase you didni't notice the media will happily do that for you .. and there is always Suzy Orman.. I don't know .. I just get sad when I see some things on here ..*sigh*

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[quote=whitewlfz]

2) Why is it so hard for the indies vs. wirehouse & banks to admit to themselves that they have a different business model ..not better but different? Because I would like to meet someone ..anyone on here who didn't start in the wirehouse or bank that started as a indie from day one with their newly minted series 7 in hand.  If you are there please email me as I would like to congratulate you!!

[/quote]

Wirehouse brokers are upset that they pay WAY too much to their firms for what they get in return.

Indie brokers are upset because they know they keep more in their pockets, but it requires being thrifty and they end up doing more office management than brokering. 

[QUOTE]

3) Why is it that there is a mantra on here for ALL or nothing in managed money .. ?? I think it is amazing in classic fashion no on here speaks about life insurance or how the firms where they work are addressing the growing needs for wealth transfer for the HNW.

[/quote]

I agree. About 60% of my production comes from fee's.  I would prefer 100%, but let's face it... it's not right for all clients.

[QUOTE]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

[/quote]

Jealousy.  It's irritating that anyone that can fog a mirror can get a steady stream of referrals for no effort.  Wirehouse reps need to depend on referrals from happy clients so they do what it takes to make those clients happy and they build relationships.  No one likes to have to work hard for something that is just handed to another.

Another decent broker will leave BAC today in the southeast. This one was well respected by the premier ranks. He'd had enough. No business to be had he says. Note future recruits, he had a very good relationship with his veteren premier. The premier wasn't sending him referrals becuase of the new comp plan.

When are the rest of you guys going to get the picture? All BAC wants are little pathway guys grossing less than 350k they can lead around by the ear so as to make sure they don't make more than their precious worthless client managers. 

A sad story at BAC. I can't believe managers wake up in the morning and look at themselves and in the mirror after recruiting poor lugs to that firm. God bless you guys. You obviously can't do the math to see that it ain't working at BAC.

[quote=ezmoney]

Another decent broker will leave BAC today in the southeast. This one was well respected by the premier ranks. He'd had enough. No business to be had he says. Note future recruits, he had a very good relationship with his veteren premier. The premier wasn't sending him referrals becuase of the new comp plan.

When are the rest of you guys going to get the picture? All BAC wants are little pathway guys grossing less than 350k they can lead around by the ear so as to make sure they don't make more than their precious worthless client managers. 

A sad story at BAC. I can't believe managers wake up in the morning and look at themselves and in the mirror after recruiting poor lugs to that firm. God bless you guys. You obviously can't do the math to see that it ain't working at BAC.

[/quote]

Funny thing about the new comp plan for CMs :  I just had a CM (who has done nothing but garbage credit for the past year) come to me and apologize that he hasn't brought me  "anything good in a while".  He told me that he "really wants to start ramping up our joint appointments".  He just figured out that if he gets 20 new accounts (households) this quarter he gets paid $4k.  If he raises (something like) $2.75mm in credit he gets $1000.00 bonus.  I had to explain that I am not opening bullsh*t money markets...

The tide is turning - but act fast  - It will be different next quarter

[quote=NOFX][quote=ezmoney]

Another decent broker will leave BAC today in the southeast. This one was well respected by the premier ranks. He'd had enough. No business to be had he says. Note future recruits, he had a very good relationship with his veteren premier. The premier wasn't sending him referrals becuase of the new comp plan.

When are the rest of you guys going to get the picture? All BAC wants are little pathway guys grossing less than 350k they can lead around by the ear so as to make sure they don't make more than their precious worthless client managers. 

A sad story at BAC. I can't believe managers wake up in the morning and look at themselves and in the mirror after recruiting poor lugs to that firm. God bless you guys. You obviously can't do the math to see that it ain't working at BAC.

[/quote]

Funny thing about the new comp plan for CMs :  I just had a CM (who has done nothing but garbage credit for the past year) come to me and apologize that he hasn't brought me  "anything good in a while".  He told me that he "really wants to start ramping up our joint appointments".  He just figured out that if he gets 20 new accounts (households) this quarter he gets paid $4k.  If he raises (something like) $2.75mm in credit he gets $1000.00 bonus.  I had to explain that I am not opening bullsh*t money markets...

The tide is turning - but act fast  - It will be different next quarter

he’s a banker…He’s got a 45k salary

[quote=NOFX]he’s a banker…He’s got a 45k salary[/quote]



Bingo, and how many people who bank elsewhere want to switch to BAC?

I’m not sure I understand your point…

[quote=NOFX]he’s a banker…He’s got a 45k salary[/quote]

like I said…a PIKER!

[quote=NOFX]I’m not sure I understand your point…[/quote]



The point is that the “CM” (what ever that means, I assume a typical
floor banker), is all lathered up about getting more deposits and
writing more credit. Except that doing the first thing (and getting the
$4K bonus for twenty new accounts) will interfer with the bank reps
business.



If you lock up cash in BAC’s below market CD’s you don’t have that cash
to be spent on investments and annuities. So the goals of the CM are
contra that of the bank rep.



Of course its deathly hard for BAC to grow deposits because BAC as
retail bank is not that impressive. Fee’s are high, interest rates are
low, service is mediocre, and hours are poor etc etc. All B&M banks
are losing huge amounts of deposits to internet savings accounts, and
banks with low rates are being hit the hardest.



BAC’s main advantage is a huge ATM network.

What the CM told you and 25 cents will buy you a piece of candy. What's your wife going to say (or should I say soon to be ex-wife)after you tell her what that precious little CM told you and she sees what your net check is after no referrals and a 25% holdback?

How about see ya.......

[quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[quote=AllREIT]

Of course its deathly hard for BAC to grow deposits because BAC as retail bank is not that impressive. Fee's are high, interest rates are low, service is mediocre, and hours are poor etc etc. All B&M banks are losing huge amounts of deposits to internet savings accounts, and banks with low rates are being hit the hardest.

BAC's main advantage is a huge ATM network.


[/quote]

I've read that banks are prohibited from holding 10% or more of the total deposit base of the nation, as per bank regulations. BAC is close to that limit, due to their acquisitions; hence, the extremely low CD rates. (They don't need to grow their deposits.)

[quote=Bobby Hull][quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[/quote]

That is just what I am talking about.. and another point was raised just getting referrals handed to you ..you won't get a decent referral without working the network just so you know.. they don't give you "GOOD" referrals.. unless you have earned the right for them..

According to their comp plan they want deposits.

[quote=Bobby Hull][quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[/quote]

My best year at a wirehouse I did $350k gross, Im now doing almost double that at a bank at the same payout. So you're right im on the path to failure.

[quote=Vin Diesel][quote=Bobby Hull][quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[/quote]

My best year at a wirehouse I did $350k gross, Im now doing almost double that at a bank at the same payout. So you're right im on the path to failure.

[/quote]

Yeah. Sure. I believe you. From what I gather from the bank kids on this board, every bank broker does at least $750,000 gross and raises 2mm/month in a bad month.

 They only talk to new money, and never get stressed by their boss.

[quote=ezmoney]According to their comp plan they want deposits.[/quote]



Of course BAC wants deposts. Why make (1-broker payout)*25bp on customer assets held as investments, when BAC can make 320bp on financing spread between deposits and loans?



From the banks perspective, the main use of the investment platform is
to keep deposits inhouse, and earn fee’s on customers non-deposit
assets.



But given the choice, the bank would much much much rather have you sell CD’s vs A-shares.

[quote=Bobby Hull][quote=Vin Diesel][quote=Bobby Hull][quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[/quote]

My best year at a wirehouse I did $350k gross, Im now doing almost double that at a bank at the same payout. So you're right im on the path to failure.

[/quote]

Yeah. Sure. I believe you. From what I gather from the bank kids on this board, every bank broker does at least $750,000 gross and raises 2mm/month in a bad month.

[/quote] Those numbers are way off.   In my bank program the median rep does about $300k.   However, the top quintile is over 500k.

I would think wirehouse reps have higher production mainly because bank programs are nowhere near as mature.  My prediction is that this gap should close over the next decade.

scrim

[quote=scrim67][quote=Bobby Hull][quote=Vin Diesel][quote=Bobby Hull][quote=Vin Diesel]

4) Why too is it so fun to kick the bank advisor? I am amazed at how you seem to think on here that they are nothing but hacks and has beens.. I would challenge you to inspect your local bank representation ..because where I am ..they are viable advisors making a difference ..(and yes I am one) ..

I was one of those people who would look down on bank brokers. It's funny when I started in the business at an Institutional Firm, people would look down at wirehouse reps, then when I was at a wirehouse we would make fun of bank reps, calling them "order takers'.

Im at a bank now and couldn't be happier. I think bank reps get a bad rap from the preception that they only sell annuities to old ladies. And maybe it used to be that way, but it's not that way anymore. Also bank reps are doing some serious gross production with less effort than wirehouse guys, which makes some people bitter.

[/quote]

Sounds like you're on that path to failure. Let us know when you become a clerk at Fidelity.

[/quote]

My best year at a wirehouse I did $350k gross, Im now doing almost double that at a bank at the same payout. So you're right im on the path to failure.

[/quote]

Yeah. Sure. I believe you. From what I gather from the bank kids on this board, every bank broker does at least $750,000 gross and raises 2mm/month in a bad month.

[/quote] Those numbers are way off.   In my bank program the median rep does about $300k.   However, the top quintile is over 500k.

I would think wirehouse reps have higher production mainly because bank programs are nowhere near as mature.  My prediction is that this gap should close over the next decade.

scrim

[/quote]

In my program our top third are ove $700k and then about 1/2 are over $500k.. the kicker for my group is that they lambasted about 1/2 of the firm 2 years ago that were under $250k.. So our group of 40 or so .. if you are not moving you are going to be moving ..out the door. and they are not going to think twice about it.. I know for my group practice.. (I stared one to get momentum) .. We are doing a pace fo about $1.3 - $1.5 million .. so not so bad.. I think we might get closer to $1.5 if we  can get some of our seious insurances cases to pop! :)

I might add in addendum …to the above before I stared my group this year … I did over $450 in production for 2006 …not bad… but as you can see the partner helped considering he did about $80k or so the year before…