My uncle runs a manufacturer with 3-5% margins before overhead, he borrows a million dollars to make 50K then has expenses fortunate for him he sells a ton of goods. Wasn't always that way when I was young he had one machine, now he has three factories.
This is the best business in the world, ask him (he was a rep). If your in the game and can't make this work just forgo any entrepeneural aspirations and get a JOB a salary based JOB. Yes the regulatory environment sucks right now, but what other business prospers in both recessions and booms, offers you the opportunity to own your own business with very little startup cost, has unlimited income potential, and doesn't discriminate for business a one man shop can compete with Mother Merril for business.
If you think this sucks wait until you get a JOB. If I were you I would buy in and dig deep and build yourself a career not everyone has that opportunity, I can tell you as a fellow CFP, I would jump at the opportunity.
I agree 100%. Even though this job really sucks when your pipeline runs out. Thank god for fee based! Where else can you make 100k working 30-35 hours/week?
Concerning private client or private bank. They won't look at you unless you have quite a large book with clients in the 3-5 mill net worth. They pay you a salary of about 90k. With bonus you might do 120k. You won't get paid your bonus until you have done enough business to cover your 90k base. It really is draw. It's not the easy cush, cush job it used to be. You are expected to go out and find new prospects. Good luck. There's fewer prospects with net worth of 3-5 mill than below that criteria. You're better off being an advisor at a bank starting from scratch. Better unlimited income.
Thanks to you both - bankrep1 and ezmoney for the good info. It is not that I can't cut it in this business, it's just that I am not certain that I want to stay in the independent route. The reason I brought up the private bank was that I had heard of some new activity in our area here (smaller town) and wanted to investigate. We have several big name firms up here as well - ML, Morgon, UBS, and then Scwab, and EDJ. - as wells as all of the large national banks.
What type of atmosphere would a bank branch rep expect. Knowing that I am coming from a financial planning oriented environment would I be setting myself back from that philosophy? (from what I have heard I would be) I know they are all "sales driven" positions and to me this aspect is not a bad thing as long as it really is in the best interest of the client first. Do they allow fee based accounts for branch reps?
Your best bet is to go with a community bank or credit union tied to a good group. Large banks production expectations only merit selling high commission products, you don't make your goal your gone, you can't meet your goals doing fee based. They want you to meet your goal then put extra into fee based.
A credit union or community bank will care more about the best interest of their clients. PM me your state and I will give you a couple of contacts/places to get started looking.
same here at my big bank. I have been doing almost 100% fee based since day one 18 months ago. Of all the accounts I've opened only 2 were annuities and those were unsolicited.
I imagine my immediate bosses are having some foresight in letting me build my business this way.
I figure once I get 10M in fee based I'll be ok. I'm halfway there and building momentum too. My goal for 10M was originally DEC 2006 but if things go the way there are I should reach it much sooner.
Bank broker experiences seem very conflicting. Some of you seem to be loving it, but I have heard from more than one source that they dictate your product, and they really are not crazy about you making more than $100,000 to $150,000, and do what they can to control this. Two buddies of mine who have been in the business for years are at Banc of America and confirm this. They are moving to indy.
Is it like anything, the ones who have good experiences have unique situations?? Or is it different in various parts of the country?
The big banks love profit, no one, except those at the very top can make more than 100K per year, it's profit and they'll find a way to take it. A community bank or credit union could care less that your successful as long as they get their cut.
I disagree. The big banks will let you make as much as you want. They don’t care. The more you make the more they make. Think about it. Why in the world would they want to limit your earnings? Remember they have to compete with the same pool of talent these days as the wirehouses.
I may be speculating...but for various reasons, I view bankers as extremely tight. And the peronalities of local bankers that I have been exposed to, don't seem like they would be all that hip on a "broker" making $400,000 per year, when the guys at the top of the bank line worked their network of friends and family so hard to get where they are.
The wires on the other hand, appear to want monster brokers. You can't overlook that when a Local Merrill guy who makes $1 million a year for himself, belongs to the best country clubs, is on the right boards, sends the kids to the right private school, has some allure for other wealthy people. The exposure is there, The brokers confidence level is there - hey he's become one of the rich (not just another panhandling $250,000 producer scrapping for a break).
When I think of the banks, I get the impression that they will let you make a few bucks, but you don't have to kill yourself. Pushing prop. funds and VA's is not back breaking work when the majority of your customers are Approaching YOU (the trusted bank rep), and let's face it.... your replacable with the next guy who did'n make it at SB or more recently Morgan...or a trainee. We would not want you becomming HUGE and start to think that those bank clients would follow you and your big pay check to a wire, or an independant.
EZ Jealousy - It's not their primary business. You have a VP making 150K a year who has an MBA from some Ivy league school, travels 3 days a week and works 60+ hours a week, then you have some rep 35 years old with a cush job that leaves at 5, plays golf and takes alot of vacation who makes 300K a year.
The VP's at all three large banks I worked at all came from the Bank side, they don't get that this business rewards success, because not everyone can get there. They see your check, your credentials, then they see theirs. They look at profit margins and say here's an area we can SQEEZE out some more, and my bonus (based on profits) will be a bit bigger.