Day one in the office is officially in the books. Got 2 ACATS signed today for about $600k, opened my FMA account to receive the "forgivable loan", have appointments set with my biggest clients in the morning and since Friday I have contacted 99.7% of the assets I wanted to take with me. From the response I am gettting, I am really encouraged. From what I can tell, If more than 5-10% of the assets stay behind, I will be really surprised. That's not to say it's not going to be a lot of work.
Someone asked me about the deal. It was this:
80% upfront trailing 12 gross. Another 10 percent after 14 months if 80% of assets follow by that point.
I am 5.5 years in the biz. $30 mil in assets $340000 trailing 12.
No word yet from the legal front.
Hope it stays that way.
The SWAT team from the home office did not get there until 5:00 today. I know because I was back at my old office picking up my things when he showed up.
No word at all from Jones, which I find fascinating.
I'll keep you posted.
day 2. More phone calls. My book has been split between 2 Jones offices in town who have started calling my clients. I still feel good about everything. My biggest client signed up with me. 4 other clients did as well.
so far I have $2.5 million in ACATs signed.
Still no sign from the legal front, which is good.
GEt in your car and have your clients sign the ACATs. Don’t wait for them to come in. Pay a courier to go around and stand there while they sign. YOu should have way more than 2.5mm by now.
Helter is right.... You better get on your horse. Many times Jones will lead your clients to beleive that you left under a cloud of doubt. If nothing else it will give your clients reason to pause. GET OUT and see them get them in the fold. When I left Jones I had several of my clients tell me that the new IR told them I was fired for cause. Also get ready for the TRO. It took Jones about 3 weeks to get the TRO moving on me. But then it shut me down for 30 days.
Just keep doing what you're doing...you know your clients. You don't need to look desperate; keep the healthy sense of firmness, but if you are cool and calm your clients will do what you recommend. No need to do anything to make them think this is anything but an every day kinda thing. I never did hear word one on the legal front.
Just wanted to let everyone know that after much consideration and waiting for the offer to be 90%, I jumped from Jones to Smith Barney on Friday. Got a great reaction from my clients.
What it all boiled down to was I was really getting tired of the Jones BS, the CRAPPY health insurance and the dawning reality that Jim Weddle is kind of a richard cranium.
Not to mention the $500-$600 of office expenses that came out of my paycheck every month.
Seriously, there was $1300 coming out of my paycheck for benefits and office expenses every month. So that’s how much each month started in the hole.
There will be $400/month coming out of my paycheck for benefits at SB and I pick up dental and vision insuarnce in the deal. My health insurance deductible went from $2500/$5000 for the family to $100/200 for the family with NO OFFICE EXPENSES! so it’s basically a $900 raise a month on the same production.
So, thanks again for the input. I’ll keep you posted.
Jones was a great place to start a career, but it was time to move on.
I’m at Jones and am always keeping my eyes open. Just curious:
You mention 90%. I assume this is 90% of your trailing 12 month gross? Correct? Is it over 5 years? Part cash/part stock/part forgivable loan?
Specifically what expenses (besides postage and phone) at Jones are not at SB?
Last question. I have a great BOA. She’s been in the business longer than me and is licensed. Any chance that I could bring her with me to SB?
I have appointments solid for the next three days. If everyone signs that is coming in, it will represent 40% of my book in the first week. Some are on vacation, some are busy with some other things, very very few are not sure what to do. It's been a pretty easy conversation with everyone. It's been fun watching the Jones IRs my book got transferred to (both of which I trained) run around like monkeys trying to screw a football calling all of my clients. If the response I am getting is any indication, my retention rate should be between 80 and 90%.
Helter, the 2.5 mil was just what I had had clients officially sign. I have verbal commitments for a helluva lot more than that and I had another $3.5 mil sign today. I am not worried.
Wizard: 90% of trailing 12 gross=$306000
broken down this way:
$272000 upfront cash, forgivable loan over 9 years.
$34000 back end deferred comp if 80% of assets follow after 14 months. This is in the form of Citigroup stock that vests over the life of the deal (9 years).
expenses not postage & phone:
printer supplies, yellow pages ads, we did a little advertising, some literature and materials from the home office, basically anything you have any discretion over in the office. the $500-600 figure includes a couple hundred dollars a month in advertising. If I sat still in my Jones office I would still spend $300/month.
At SB I have NO EXPENSES WHATSOEVER. NONE. ZERO. This equates to a 6-7% difference net/net/net.
The kicker is the health insurance. I had a $2500 deductible/$5000 for the family and was paying $328/month and dumping $416/month pretax into an HSA. We were going to burn through the whole flipping five grand for my family of four this year in the HSA. I now have a $100 deductible/$200 for the family for $326/month. $20 copay on office visits. Kick arse.
As for yuor BOA, I had to leave behind a good one. They would not let me bring her. Company policy is that unless you are doing $1.2 million in production, you don't get a dedicated SA that the firm pays.
ACAT-ing away and hoping for no TROs-
Thanks for the response. God Bless You man. 9 years? That’s a LONG time.
Are you saying Smith Barney pays for your yellow page ad? Will YOUR name be in it? Remember Jones does not FORCE you to do a yellow page ad. It is a choice. And because at Jones you are the only IR in the office you get a free listing usually under stock and bond broker and investment services for FREE. Look in the phone book, you’ll see what I mean. Remember this is not a business that you can get ahead in by controlling expenses. It’s your volume/revenues that count. Your expenses are for the most part fixed. And sometimes you do have to spend some to make some. Although I spend substantially less in marketing costs today than when I first started.
So you don’t get a dedicated assistant until you’re doing $1.2million. Well maybe in 9 years you’ll be there. I woudn’t be near the producer I am without my BOA, I can tell you that.
Good luck with the transfers.
there's more to the story. I didn't swtich just to switch. The plan is to team up with a senior advisor that I have gotten to know really well so eventually he can sunset out of the business. he's got $120 million under management. He wants to form a joint production number and eventually transition all of both of our clients onto the same number and split the commissions. See if we can make 1+1=3.
Expenses are expenses. Now I have none. I am tenured enough in the business not to need to advertise any more. Those yellow pages phone calls are annoying anyway--"Hey man I'm looking at this stock trading for $.02/share. what do you charge on a hundred dollar trade?"
Yeah nine years is a long time but it's a golden opportunity.
And I will never suck wind for money again.
What guarantee do you have that this "senior advisor"
will follow through?
What if this “senior advisor”…:
1. Decides to take the big check from UBS, RBC, ML, etc1. Where does that leave you?
2. Dies. Where does that leave you?
3. Picks someone else to split his book with. Where does thatleave you?
4. Gets fired. Where does that leave you?
I’ll tell you where this leaves you, stuck at Citi for NINE years. It’s sorta like a 9 year B share.
Better get this deal done quick.
Do you have to pay taxes on the entire Big Check ($272,000 up front cash) in the first year once you move over?
[quote=Helter Skelter]GEt in your car and have your clients sign the ACATs. Don’t wait for them to come in. Pay a courier to go around and stand there while they sign. YOu should have way more than 2.5mm by now. [/quote]
Good advice. I wish I’d thought to do that!
[quote=joedabrkr] [quote=Helter Skelter]GEt in your car and have your clients sign the ACATs. Don't wait for them to come in. Pay a courier to go around and stand there while they sign. YOu should have way more than 2.5mm by now. [/quote]
Good advice. I wish I'd thought to do that!
This from the smartest poster in the covey?
Yeah, rockstar, The Wizard says "They lie to you everywhere except
Edward Jones! Wait, no, don’t come behind the screen…"
Ozzy, the answer to your 1st 4 questions is that he has $272k (can you
compound into the future?) and a helluva lot more resources, better
brand, and better technology (or should I say, HAS technology) to
continue to grow his business.
And if you every paid attention to anything outstide your little Oz, you
might know that you don’t pay taxes on the check (NOT a proper noun as
you make it) right away. Although 9 years probably is too long, one
upside is that he only owes taxes on 1/9 of of the $272k each year. Do
you think he might be a bit more objective when looking at a client
situation vs your new IR who is trying to win his little trip or impress his
RL by improving his 4 month avg production? I bet if you have $272k in
the bank, you don’t sweat how much you’ll make this month, next month,
or any month. You just do what’s best in the long run.
rockstar, any idea why jones would give your assets to 2 existing brokers? normally they would fly in someone from home office to take over until they hired or recruited a new broker.
[quote=doubleb]rockstar, any idea why jones would give your assets to 2 existing brokers? normally they would fly in someone from home office to take over until they hired or recruited a new broker. [/quote]
My guess is that the office wasn't profitable enough or had enough assets to consider a replacement and that two local and convenient offices could handle the extra load. The cost of closing the office is more effective that bringing in a new rep. Possibly the office has had several reps come and go and the company has given up on the location.
No offense meant rockstar. You are much better off since your move.
I would have never agreed to a nine year deal. You may not know it yet, but down the road you will be forced to repay some of that money. Alot can change in nine years.
They left half the assets in the existing office, moved a guy in that was in line to open an office in my town, and moved half the assets to another office in town. Both of the guys are green as can be and need all the help they can get.
I think they knew they would be in for a fight. That and the regional leader is probably pissed off at me. I built that office up from nothing so my guess is they were just trying to be as competitive as they possible could and lie to two new guys telling them "You'll keep half the assets...that's the industry average. Get on the phone" Which it may very well be. But if I leave 20 percent behind I'll eat my shirt.
The big leg up I have in this whole thing is that I have been on the other side of this once already. A big Jones guy left and I got a $34 million dollar shot in the arm overnight. He took 90%. I got the same lie from Jones when it happened to me. "Oh yeah, rockstar, get on that phone and you'll keep 50%" BS!!!
He took 90% and so will I.
I only have to pay it back if I leave. Which is not in the plans.
Nine years is a long time. You just can't be stupid and spend more than is unamortized. Always leave open the option to walk. But i get to draw interest on it. Hell yeah.
[quote=Knows Wall St.]
[quote=joedabrkr] [quote=Helter Skelter]GEt in your car and have your clients sign the ACATs. Don’t wait for them to come in. Pay a courier to go around and stand there while they sign. YOu should have way more than 2.5mm by now. [/quote]
Good advice. I wish I’d thought to do that!
This from the smartest poster in the covey?[/quote]
Truly wise people know just how little they really know. Only arrogant fools think they have all the answers.