I have recently picked up playing the guitar.

Michelangelo was appointed architect of St. Peter's at the age of 71.

If my attempt at guitar fails, maybe I'll start trying to shoot my age around the age he died.

And then there is always sheepherding. Probably solo, though.

James, I agree with you. Some of the old school churn burn, extra juice nasdaq point spreaders just found a new gig. And, NASD and Finra were'nt stupid, caught on quick. But, there's a right way to do it, and like all else, maybe 30% do...

I'd like predictive revenue, but so would my clients.

Yeahbut, James.

Clients don't "get" separate planning fees.

Advice needs to be delivered steadily over time. What's good for the advisor is good for the client.

A monthly deduction from an account to cover services is very different than an invisible commission. Sorry.

Better for the industry for the client to know what they are paying, and let them walk if they don't see or receive value.

I'm not against commissions or getting paid, they just make me feel cheesey. Considering the various stories clients get from various advisors, I seriously doubt commissions are better. Maybe for the typical Jones client.

Buy a car, pay a commission. Lease a car, pay as you go.

We should be very clear about the difference.

[quote=Spaceman Spiff]

  I think a purely discretionary trading platform with zero interaction with clients would be a nice change of pace. But then I don't want to run a mutual fund.  Which is in essence how Mr. Owebama runs his business. 

[/quote]

yes you do.

leverage your time.

get clients away from focusing short term on the market

and making people money

HELLLLLLLLLLLLLLLLLLLLOOOOOOOOOOOOOOOOOOO

drink the GD Koolaid

get off you're butt and convert your peeps.

AGAIN...................SHOW ME HOW YOU GUYS BEAT THE INDEXES OVER THE LONG RUN CALLING MR JOE CLIENT AND COMIS TRADING??

you gotta decide of you're in this thing for the long haul making people money or if you want to fight each month to make a living wasting your time.

the conversion process aint easy

you WILL take a pay cut in short run 

trust me, i generated much more then 1ish % back in the day trading stocks.

man up.     the efforts you put in will pay off like a GD miricle once you get a revenue stream going

think?   the levrahge of your time is incredible

will you lose some peep?   yep

in the long run will you better off?  duh

get out of the 80's  move on with your life

(space-u know by now this is shania, right?)

[quote=Spaceman Spiff]

Y

But he said "old school is BS school for stubborn MF like you", 

[/quote]

im sorry

i was insensitive

hows this:

"old school is BS school for stubborn dumb a%$'s like you"

i should have NEVER called you a MF-sorry

There is no way to determine which is "better" for the client. commish biz should be "cheaper" in markets with low volatility. There is less of a reason to buy/sell if the market is trending up. Fee based should be "cheaper" in highly volatile markets because of the increased trading activity to mitigate the volitility.

IMO, advice should be a fee of the client's net worth since proper advice can only be given based on the client's total financial situation and they should pay a commish to buy/sell products to implement that advice.

Even this will have its pros/cons. The important thing to remember is which set up allows you to deliver the most value to the client? The fee based push is the industry's way to commoditize more of the business.

 I see some day that we will all be solicitors/relationship managers and the back office will do everything else.

Yes, I know you're Shania. 

It's not that difficult to put together a portfolio of funds or stocks that have outperformed the S&P over the last 10 years. You don't seriously think that fee based guys have cornered the market on out performing the S&P do you? 

So, here's how we beat the S&P over the last 10 years with a really boring buy and hold, commission based, call the client portfolio.  I'll use one of the portfolios that Jones has as an example in our Morningstar hypo system.  All American Funds, $100k.  That would have been incredibly typical for me when I started. 

AMCPX - 10%, AHITX - 5%, ABNDX - 15%, CWBFX - 5%, CWGIX - 5%, AEPGX - 10%, ANCFX - 10%, AIBAX - 10%, AIVSX - 10%, ANEFX - 5%, SMCWX - 5%, AWSHX - 10%. 

Client pays $3400 in commission to me on the front end because we buy A shares.  I didn't even rebalance this portfolio or tweak the funds that I know would have juiced the return.  Ran the hypo for 10 years ending 12/31/2010.  How much do they have today?  $156,638  How much is the S&P worth over the last 10 years without any commission or fees taken out?  $118-119K. 

I can repeat that hypo with lots of other fund families.  Like I said before, it's not difficult to beat the S&P. 

Let me be clear, I don't think that running a fee based, discretionary platform is bad.  I also don't think that running a fully commision based practice is bad.  They both have merit.  I don't think that you have to make a choice to be a fee based guy to make it in this business long term.  I've survived a long time on just commissions.  It sucks starting over every month at zero, but that's just the breaks of the game.  I assume if things stay the same, I'll have a business that is some fee based some commission.  And I can make a decent argument for both sides of the coin. 

I laugh when someone who has a strictly "fee" based business feels they are giving any more advice or providing more service than someone who has a strictly commission based business. Each model has it's good and bad points, but for you to think you work any harder, provide more advice, or provide better service because you charge a fee is a joke. I know plenty of old school brokers who have always had client reviews, rebalanced accounts, etc, and didn't churn accounts.  In my opinion, neither model is superior to the other in any part.

[quote=Spaceman Spiff]

Yes, I know you're Shania. 

It's not that difficult to put together a portfolio of funds or stocks that have outperformed the S&P over the last 10 years. You don't seriously think that fee based guys have cornered the market on out performing the S&P do you? 

So, here's how we beat the S&P over the last 10 years with a really boring buy and hold, commission based, call the client portfolio.  I'll use one of the portfolios that Jones has as an example in our Morningstar hypo system.  All American Funds, $100k.  That would have been incredibly typical for me when I started. 

AMCPX - 10%, AHITX - 5%, ABNDX - 15%, CWBFX - 5%, CWGIX - 5%, AEPGX - 10%, ANCFX - 10%, AIBAX - 10%, AIVSX - 10%, ANEFX - 5%, SMCWX - 5%, AWSHX - 10%. 

Client pays $3400 in commission to me on the front end because we buy A shares.  I didn't even rebalance this portfolio or tweak the funds that I know would have juiced the return.  Ran the hypo for 10 years ending 12/31/2010.  How much do they have today?  $156,638  How much is the S&P worth over the last 10 years without any commission or fees taken out?  $118-119K. 

I can repeat that hypo with lots of other fund families.  Like I said before, it's not difficult to beat the S&P. 

Let me be clear, I don't think that running a fee based, discretionary platform is bad.  I also don't think that running a fully commision based practice is bad.  They both have merit.  I don't think that you have to make a choice to be a fee based guy to make it in this business long term.  I've survived a long time on just commissions.  It sucks starting over every month at zero, but that's just the breaks of the game.  I assume if things stay the same, I'll have a business that is some fee based some commission.  And I can make a decent argument for both sides of the coin. 

[/quote]

space

my brother.......................hello...................................

YOU DONT GET PAID............................................

THE FUND DOES.

HELLLLLLLLLLLLLLLLLLOOOOOOOOOOOOOOOOOO

A GOOD BALANCE OF FUND IS AN AWESOME WAY TO BEAT RISK FREE RATE OF RETURN OVER THE LONG HAUL

THE TRICK IS TO DO BOTH

UNLESS YOU WANNA BE THE RED CROSS 

(and guess what?  FA managed fee based accounts BEAT the crap out of the indexes.   at least at 3 large wires where I have seen the numbers)

sooooo

lets review:

client is tied to YOU

you taylor it to YOUR client

you mak ethem money

and you get paid yearly

and you charge less then internal fund fees 

plus its fun running money

(and if you're a pussy.  use etf's    you will do well there also)

(I meant trading stocks and bonds (not funds) on a commis per trade basis was REALLY hard to make money for people over the long haul)

plus

i forgot

you control cap gains a billion times better then funds

you add the fukc out of mf value.

takes balls to man up and run the money.

and if you leave

the tie is TO YOU.

not to the stupid funds or products you push

.

(and if you're a pussy.  use etf's    you will do well there also)

I thought men could use these and get away with it.

The way it works for me is to charge a higher wrap on small accounts ( or use 12b1s and commissions) - and use ETFs for the real money.

This is about delivering advice and service to clients, and keeping the reps in business so they can service the clients, not making money for fund managers and their (wholesaler) employees.

I would bet money (but not my time or energy proving) that intellegent tactical asset allocation using indexes can beat the snot out of relying on managed funds. Paying attention to the economic cycle and talking to clients about it is more efficient and perhaps productive than telling stories about funds and relying on someone's nephew manager at the managed company to deliver.

I would prefer to take individual security risk out of the portfolio and focus on client's total risk tolerance at any given time and negotiate. People wonder how they can deliver value? But hey, that's just what works for me.

( And keep talking about other risks to achieving goals of "the plan", and hedging those risks. Much more interested protecting the downside and overdelivering on expectations for the potential upside. The downside is real, (aging, death inflation, bag lady, disability ...), the upside is imaginary. ( My neighbor got 15% compounded ...).

I completely understand your argument, Barack, and the type of business you want to run. 

The difference between you and I is that I don't want to be the money manager.  I want to be the asset allocator, planner, hand holder, funeral attending, question answering guy that they come to when they want to know whether they should buy the red truck or the white sedan.  I don't think you can do both.  You just don't have the time. 

So, you've really got to pick which one you want to be and move your business in that direction.  If you're going to be the money manager, then you almost have to run a fee based business.  If you're going to be the planner, you've got to decide if you're going to do it all fee based, all commission based, or a combo of both.  That last one is where I'm at. 

My clients are still tied to me.  They still think of me as the guy running their money.  They could give a rip whether I use American Funds, Hartford, Ivy, or Fidelity.  They don't really care if I use ETFs or individual stocks.  It's a non issue for them. 

BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. 

BFP  Big Fire Power

can you email dashover  at   dash(@)dashover.com

thx

Had a ? and can't figure out pm thx

real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. 

Amen, bro.

Spiff-it's not just the breaks of the game. You have control. You can run the biz any way you want and you don't have to start from zero every year, you just choose to (unless you work for a broker dealer who has limited platforms.) With all due respect to BFP and Spiff, Shania is dead on here.

I do discretionary management. I am running a for profit enterprise and expect clients to pay me for my advice whether that advice is to do something or nothing

I talk to my A clients and many of my B clients every month. It’s just that I don’t talk to them about trades. I talk to them about there kids and their parents. And other stuff that matters to them.

Let me ask you a question - do most of your clients care more that you get them 7 percent on their portfolios, or that you help them make sure that if they had a stroke their family wouldn’t be financially destroyed.
Because I am fee based discretionary, if I need to make a change in 20 client portfolios I make zero phone calls and one block trade. That gives me the time to talk to clients about their real priorities.

[quote=Spaceman Spiff]

BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. 

[/quote]

No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.  The "send their wife to the baby shower" is particularly appalling though Spiff (and I know you didn't mean it that way) stinks of Jones Kool-aid, where your wife is supposed to do the "woman" things.  Why don't you go to the baby shower yourself?

As for discretionary advisors being sissies, I dunno. They had to ask for the order at some point.  I would say they are merely more efficient.

[quote=Spaceman Spiff]

The difference between you and I is that I don't want to be the money manager.  I want to be the asset allocator, planner, hand holder, funeral attending, question answering guy that they come to when they want to know whether they should buy the red truck or the white sedan.  I don't think you can do both.  You just don't have the time. 

[/quote]

man up.  grab some balls.  quit being a girly man puss.

ITS NOT THAT HARD

IT DOES NOT TAKE MILLIONS OF HOURS

(hellllllo, plus you will have so much extra time have because you dont have to call people "convincing" them of your next move)

you are afraid of screwing up.   admit it.  of losing people money.

IT AINT THAT DAMN HARD

use the ETF's like times7

OR HELL

use your firms models and stock selection/etf selection.   most of these are pretty damn good

or HELL   buy Goldies!!!  these are the smartest MF on the planet

this is so worth it

this will change your gd life.

THINK

you can be a better friend,asset allocataor funeral director , candle stick maker because you dont have all the BS sales crap with people 24/7.    

You sell them on you.  

you run their money with clear vison

 you leverage your time  and you gain they trust over the years and you NEVER have the GD conflict of interest Jedi crap to worry about.   you are always on the same side of the table as them.

you have one GD goal   make them money.  beat the crowd

make them money, match allocation and risk to them based on your understanding of them, charge a fee lower them stupid mutual funds, control cap gains.

duh

you DO want to run the money

you think it is some magically thing that only peter lynch can do.    answer me this.  how many funds have bagged you because the manager got stupid?  or left or F'ed up n some way>?

[quote=lovindaindy]

[quote=Spaceman Spiff]

BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. 

[/quote]

No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.  The "send their wife to the baby shower" is particularly appalling though Spiff (and I know you didn't mean it that way) stinks of Jones Kool-aid, where your wife is supposed to do the "woman" things.  Why don't you go to the baby shower yourself?

As for discretionary advisors being sissies, I dunno. They had to ask for the order at some point.  I would say they are merely more efficient.

[/quote]

No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.

EXACTLY!!!!!!!!!!!!

al that other saves the whales, i love you crap is an excuse to hope you dont lose the biz cause you aint making people money and they dont respect you

its your insecurity    (and dude, i have BEEN there)

like ND siad  you first priority is to add GD value THEN, when you do that you hang out with and be friend your COLL clients because you WANT to!

not sending cards to teh ass^&*( because you are afraid of an ACAT because your mutual fund jedi is something ANYONE CAN DO 

[quote=Barack Owebama]

No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.

EXACTLY!!!!!!!!!!!!

all that  saves the whales, i love you crap is an excuse to hope you dont lose the biz cause you aint making people money and they dont respect you

it's your insecurity    (and dude, i have BEEN there)

like ND siad  you first priority is to add GD value

THEN, when you do that

you hang out with and be friend your COOL clients because you WANT to!

not sending cards to the ass^&*( because you are afraid of an ACAT because your mutual fund jedi is something ANYONE CAN DO)

and the more real it is .....the less of a girly man you are.

buy stocks, bonds and cash.  

real men

manage

real stuff 

for a fee

with discretion

packaged bs, funds, etf's,cef are all things you sell because you are afraid to take a stand and put your nads on the line to be right and make people money  

they shd stamp "girly man trade" on the confirm

real men hang out with the clients they truly like

pussies hang out at funerals with dick heads because the fear ACATS

[/quote]