Move to Ray Jay

I'm with RJFS, overall I won't complain.  Every place has some minor hangups, but coming from Jones a year ago, I'm pretty happy with them.

Dark Knight:

Are you in the full blow indy platform or one of the others? What are the hangups in your opinion?

I like that they have no subprime junk in their trunk and clients seem to have a good impression of them. They also cap the fees in VA’s.

Yea, I like when an indy firm caps my fees. That’s a great attribute.

Do you like screwing your clients?

I don’t srew my clients, I believe in getting paid a fair fee, and I most certainly don’t believe an indy firm has the right to cap my fees. This is why I chose LPL, and not RJ. RJ is run like a wirehouse.

That is one thing that really gives me pause with RJ.  Capping VA fees gives me the feel of not truly being an independent firm and makes me wonder what else they’ll be changing unilaterally.  I did due diligence on RJ among others and it just had a little more of an “employee” feel vs. a “client” feel…hard to explain, but I remember how I felt.  In fairness, that was three years ago and I’ve never actually worked with RJ, so my impressions are just that.

EZ, that is a fair statement I think.

Here’s a question with an answer that might be “telling”

That is a good question - do they cap the M&E & the commission to the broker? I guess brokers there do fewer L shares and more 7 year cdsc as it might fall within RJ’s guidelines. I don’t do a ton of VA biz but it’s good to hear about the specifics. The group calling on me covers some of their overhead and their payout ends up in the upper 40’s which is pretty decent.

It’s the one where a group covers most of their overhead, I think they are employed by Ray Jay, I think their benefits are through them as well so it’s one step below the full blown indy route. My familiarity with their terminolgy is pretty weak at this point.

The description I got doesn’t seem to match up with any of the ones listed, maybe the employee model?

I believe the VA products are tailor made for RJ. So the expenses and broker commissions were negotiated by RJ and the VA companies.  Bank of America was about to do the same this year but the idea got scrapped because there weren’t enough vendors interested in creating a new product (and having to license it in all the state insurance agencies).  A handful of companies had the new product ready for us but, thankfully, nobody else was interested.

I think the group I am looking at is some sort of hybrid between the branch and indy levels.  Is anyone familiar with this setup?

They are probably an Indy Contractor (90% payout) shop with the bucks to pay you like an employee.

G, I work for the independant employee division.   You are a w2 emp not 1099.  Minimum gross to qualify is 500k.  No upfront $$$ as far as I know.  Payout is 75%+ roughly with no ticket fees. You pay 100% of expenses. RJ does pay your deferred comp and esop which can be substantial.  You run your own show hire your staff and pay all the expenses.  RJ will do your expense spreadsheet, write your rent checks etc and handle all payroll.  Do yourself a favor and visit the home office in St. Pete.  PM me if you like.

I think RJ is a good firm but the one bonehead move that bothered me about the firm within the last year was the move they made which allegedly cut Variable Annuity internal expenses and at the same time drastically cut the commisions on ALL VA’s in the RJ system.  If you don’t sell allot of these the change was a take away to your bottom line but if your book has allot of annuities this was a BIG negative.

RJ made a major error with their annuity fiasco. Hurt their recruiting efforts in a big way.

If I could respond to the annuity questions.  RJ did cut commissions but the YTB was higher than any other wire on the street.  They negotiated with all the annuity companies to come out with a product that had a 5 year surrender rather than the typical 6-9 year.  Yes, "a" share annuity commish went from 7% to 5%.  Internal expenses dropped by roughly 30-50pb's.  If you work at ML,SBS, UBS you still sell the same "a" share with the long surrender but I doubt you are not getting the haircut down to 4-5%, while your b/d keeps the 100% of the other 2 points. 

RJ did hurt annuity business because all of this was not communicated correctly to the media, clients and fa's.  This should not be a deal breaker for any fa considering RJ.  If you do 40%+ annuity business you should be inde with whomever pays you the most.

Tarpon:

Annuities are a non issue here.  Only 1% of biz but 50% of my problems. Our strong suit is managed money which makes up 70% of revenue, both in individual securities and mutual funds.  If you are a old school broker, this is the place for you.  Good stock and mutual fund research plus they leave you alone.  RJFS for the past 5 years.

West, I meant "b"share annuity.  As far as portability I cannot answer that.  It seems to me today nearly everything is portable.

I do almost zero annuities, so I can't really vouch for any of that stuff.  I have had no major complaints.  Some of their procedures give me headaches.  Such as the process for getting Trust accounts approved.  At Jones we never had to have the client sign to send them their own money.  Things like that.  Overall people in home office are very helpful.  Investment options are great.  I really can't compare to any other Indy firms.  It is heaven compared to being at Jones, that's all I can really say.    

tell the truth now Tarpon, they also cut out the "L" share and made the seperate classes proprietary, so that an FA couldn't take his annuity book with him elsewhere.

My two cents if you care to know. I left a wire after 8 yrs and went to RJFS last year. Prior to that I was a Kool Aid drinker at EDJ. I looked at LPL, Finet and First Allied. LPL didn’t seem to want to help me through the transition as much a RJ. Finet seemed to be in a state of flux. I became concerned that many of the key people I met at Finet were unlikely to move to St. Louis. (Can’t say that I blame them. I never was that impressed with the city the four times I was there to meet and teach at EDJ) I was impressed with First Allied until they posted a video on their website on their annual meeting. It was tacky. RJ offered a great transition package and I like the fact I can pick up the phone and call any of the higher ups if I have an issue that I need help with.

As far as the annuity thing I don’t have any issues with what they have done. The same contacts at my wire house I was getting paid 5.4% gross on while the firm kept the difference. The same contracts modified for RJ does have much lower expenses. Additionally, RJ offers great research on each products’ riders. For example they expose explain the way the Annuity companies give themselves loop holes that can cause a rider to be worthless. Finet has a capped payout on annuities and keeps the difference themselves. The President of Finet said they decided to make annuity products revenue neutral after finding that their reps were putting 70%+ of their business with whoever had the highest yield to broker at any given time. 1035 exchanges are frequently in new clients best interests because I can lower their old contract m&e and provide riders at lower expense ratios on riders. It is a good to be here.

Forgive my typos on my last post. I should know better than posting at 1:30 a.m.

I’ve heard through the grapevine that some big producers are taking the dog and pony show in Tampa with Ray Jay. If not a good place to land, maybe RJF stock is worth taking a look at. The amount I’d get to move to RJF would be a lot less than I owe on my “loan” which is a big problem.

If they are really paying out big cash up-front right now like the rumors say I can see why.

[quote=Gordon Gekko]The amount I’d get to move to RJF would be a lot less than I owe on my “loan” which is a big problem.[/quote]
Gordon,

Surely someone with your experience knew enough to keep that unvested loan liquid and not at risk, lest you decided you wanted to change your mind and leave?  Or are you an indentured servant now?

I think mine is more liquid than some, meaning I didn’t buy MARS or company stock. The value of that upfront money is questionable though. I don’t like anything hanging over my head, meaning it might be better to have a smaller “loan” but bigger payouts/better working environment. I have noticed the recruiting calls have picked up lately.

I suppose there may be some comfort in knowing your loan money is more liquid than most, but really the only thing that matters in any given situation is if YOU can quickly access the funds for repayment in the event you wish to leave.  Since you said in your earlier post that the difference between what RayJay might offer upfront and your loan balance was a big problem, it sounds like you’ve got yourself into a common predicament. 

I happen to agree with you that better payouts/working environment is more important than upfront money, and anyone who runs the numbers over a reasonable time period - say at least 5 years - should be able to see they would be better off financially.  It’s ironic that the vast majority of us - people who are paid to help people plan their financial futures - seem uninterested in really doing a longer term analysis of the options.  Wave a big load of cash in our face right now and game over before it even begins.  I understand it perfectly, but it’s still amazing, really. 

Hope you beat the odds.  Good luck.

Unless you are locked up in that MARS fiasco, everything is liquid in my eyes. It’s just a matter if you are sitting on a gain or a loss at the time. I am waiting until things potentially hit the fan where I am at. Right now I am just scoping out the landscape. I agree totally about advisors telling their clients “long term” and doing the immediate gratification thing.  I didn’t have to do anything to get my current deal, moving would require a lot of work.

[quote=Gordon Gekko]I didn’t have to do anything to get my current deal, moving would require a lot of work.[/quote]
I agree moving involves more work than staying.  Do you generally base important decisions on how much work is involved as a primary criterion? 

I like the way you selected your words, indicating that I am lazy by staying. I appreciate that!

[quote=Gordon Gekko]I like the way you selected your words, indicating that I am lazy by staying. I appreciate that![/quote]
It was your words I selected, not mine.

Morphius, this is going nowhere fast. Have a swell weekend!