Jones to RIA
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First and foremost I have to give this forum kudos, it has helped me in many way and I have been reading constantly since entering the industry. I joined edward jones over a year and a half ago and did okay my first year. I was not given any assets in a goodnight, and a little over a year from my can sell date have right around 9 million in auc. I have read on this forum some great opinions about jones, and I have read how some advisors feel otherwise. IMO jones has done nothing wrong to me, has been very passive in there supervisory of me. They brought me on, trained me, and i feel much loyalty to them for that. With that said I have another place looking at me, and offering me an opportunity as a RIA. they will give me a base salary, much better than jones, pay for office space, and a higher payout (60 percent ). My main reason for liking the RIA opportunity is that it will make it much easier to manage clients account with an asset based fee that isn’t limited to certain fund, and much more open to other investment vehicles inside the asset based fee account. I cannot do this to its extent at jones I also will be set up with a co a that will profit share on the asset fee (not coming from my portion). The cap firm is fairly large, I met them and the partners are great looking forward to referring business. What would you guys do in my scenario?
Someone if they don’t mind please give their opinion. I don’t have anyone to talk to in the industry.
I’m a Wholesaler, not an Advisor. But, I’d probably go with the RIA for a) higher payout and b) higher base. Plus, the whole industry is going fee-based with the DOL Fiduciary Rule out. I don’t think that EJ is as well-positioned for it. I’d tell them you agree to 60% the first 12 months and if you do X in new business, you get it bumped to 70-80%. These guys are probable looking for someone that can connect with a younger clientele (assuming you are younger) and an exit strategy which means younger team members that they can transition more assets to in the years ahead. At 55-60 you just want to work the best clients and work a little less. Check the firm out on BrokerCheck to make sure their compliance record is clean and they really have the assets under management they say that do on brokercheck.finra.org. A lot of due diligence “fact checking” is in order. Also, get the Base Salary and payout terms IN WRITING in the form of an “Offer Letter.” You’re going to probably dump all your licenses but, the 65 or 66. But, not the big deal it once was IMO. I’ll probably be doing the same myself. Wholesaling has changed a lot over the years. Work for the Recurring Income now and you’ll have great years ahead of you.
I would go RIA. I made my own a couple of years ago. While you might not be a partner, it is still better off. I imagine it is the same type of deal I give my associates. They get 70% of Gross Revenue and a 50K floor (or base, once they are over that, I don’t pay it anymore). I cover all expenses and give them a 5K annual marketing budget. They get an assistant that they share and that is it. If one day they want to be partner (profit sharing) they have to “buy in”. I have worked at the big boys and at banks, was looking for a mix. I couldn’t understand why it cost so much of my revenue to have an office an a phone line. So I did it myself and asked others if they want in. Everyone seems to be happy with it. I have yet to have anyone leave and actually have a lot of people from the wire houses asking when I will have an opening (usually after their 2 years salary is gone). Some things I would make sure. Make sure the RIA is not a person’s name. Meaning it is John Smith Financial. You want to be part of a “team” so make sure it looks that way. Ask how walk ins are handled. In my firm, all walk ins go to “associates”, because the partners get profit sharing. Hope this helps!