Merrill going to 250k minimum
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Well I just got my number as a PMD, and start Stage 1 the first of the year. The small HH policy applies yes, but only for excess comp. I was not counting on that anyway. All PCs count towards the hurdle, which is now the only hurdle. You take the good with the bad at a wire. You have the name, the benes, the resources, etc. I plan to jump in with both feet and hit the ground cold calling. Already have a $250K+ account to start, so just building from there. Any comments other PMDs?
Excess comp? Wait until 3 years from now when you take a paycut because you won't get paid on HH's under 250k. I'm sure you'll be counting on excess comp then. Quit focusing on the salary and the short term and start looking long term.
I'll admit that I am struggling with making a decision, but these kool-aide drinkers are killing me.
Just a quick queston....so at the end of the PMD program you lose all of the HH's under $250K that you have in your book....upon graduation, can you only open a new household with a min of $250K going forward?
It seems that might be severely limiting and slash your numbers upon getting out of the program...
Even Dave Mullin in his book talks about the need for $100K+ accounts in your quest to become a million dollar producer
I am certain it is a move by the Bank of America side. Just like when they tried to impose the debit card fee 2 months ago. They are just trying to find ways to increase their bottom line. Cheaper to pay Merrill Edge order takers 12 bucks an hour than paying mid-level FA's.
You can open sub 250k accounts and have a year to bring them up over the 250k mark with additional assets.
[quote=Kresge]
Even Dave Mullin in his book talks about the need for $100K+ accounts in your quest to become a million dollar producer
[/quote]
There has been several studies which say 200-ish is the maximum number of accounts that an Advisor can properly service. So to make the $1,000,000 GDC with a 1% fee (assumption) that means....
200 accounts X ave sze of $500,000 X 1% = $1.0 mil
Amber
Unless you are a well connected PMD you are not bringing in 10 million that will pay you 1% in year one. Even the veteran million dollar producers are not bringing in the 10 million per year at 1%, so what makes you think the PMDs can do it?
You can only cold call since any other type of media is forbidden. In addtiion, you have to contend with the internal scrub list so you can take another 30% off of that list.
Mullen said to call on 100k accounts? You know how many accounts you need to reach 10 mil? Forget the simple math, I am referring to the 1 out of 3 that may convert. So you need a pool of roughly 300 100k accounts - that you have met and proposed to - in year 1. That is roughly 6 prospects a week after proposals.....good frikkin luck. This forces you to prospect at higher asset levels which means you need experience and knowledge. 500k min to prospect is making a proposal to 5 a month counting on that 1 out of 3 will hit. Good luck on getting a list that will specifically give you 500k and above prospects.
Most of the producers stole their books (ripped it from their partners), inherited it, was handed assets by the resident director, or been there enough years (like 10) to get it from distribution when a broker left. Very few of the producers know how to initiate. They all say they can close, but if they never knew how to get an introduction how would they ever get the experience of closing?
This is still a recession and competition is getting more fierce - the asset hurdles should not be pegged at delusional levels. Well, if you hare hiring just rich kids then it may be possible, but who is going to give millions to a kid who was born with a silver spoon up his......?
I've heard many of these rumors, but are they still rumors or is any of this actually confirmed and available to read internally?
I had a conference call with my regional PMD coordinator two weeks ago, and she wasn't aware of any of these changes.
I've heard the rumor of goals being strictly PC based, but this 250k minimum is also new to me.
[quote=DTA]
So I am having a meeting with my former employer today. I am pretty confident about my plan and hopefully we will be able to come to an agreement.
Merrill is a great place to work and my complex has provided me with great training. The 100k minimum was acceptable and made sense. This new 250k minimum leaves a PMDer in a situation where they might not do what is best for their clients so they can generate PC's and keep there job. Even if they are able to graduate the program, the sub 250k accounts that they picked up along the way to generate the needed PC's will be worthless and sent to Merrill Edge. The clients who are sent to Merrill Edge will not be happy with the PMDer and will not refer any business to them.
Anyone who says that this change does not affect a PMDer while they are in the progaram and not to worry about it until they gradutate will have a rude awakening when they go 100% commission. Anyone who is not thinking about the long term consequences will most like starve out even after graduating the PMD program.
The only option I see is to pool with a Senior FA who is going to retire in the next 4 years (since you have to be pooled for a minimum of three years to automatically transfer their book to you) and be some one's employee. Its a good deal if you can actually find and cultivate a relationship with a Senior FA who is willing to bring you on with the understanding that YOU take over their book.
[/quote]
Read Mullens books; open under 250 accounts by opening them to the Edge program so you can get them back if they increase and grow a set.
[quote=Takingnames]
Read Mullens books; open under 250 accounts by opening them to the Edge program so you can get them back if they increase and grow a set.
[/quote]
Grow a set? I knew this was coming.
Since I have served in both Afghanistan and Iraq, I will assume my "set" is sufficient for this forum. It's actually said that in America buying a David Mullin's book and cold calling makes you a man.
I am not talking about prospecting. Prospecting is hard where ever you work. I am talking about looking at the long term repercussions of what Merrill did and how it affects me. If I am going to work my ass off, I am going to do it where I come out on top, where I have actual equity and own my book, where I don't have to think about F'in PC's and where I don't have to log in with a NBK# because after all, I am just a number to that firm.
[quote=DTA]
[quote=Takingnames]
Read Mullens books; open under 250 accounts by opening them to the Edge program so you can get them back if they increase and grow a set.
[/quote]
Grow a set? I knew this was coming.
Since I have served in both Afghanistan and Iraq, I will assume my "set" is sufficient for this forum. It's actually said that in America buying a David Mullin's book and cold calling makes you a man.
I am not talking about prospecting. Prospecting is hard where ever you work. I am talking about looking at the long term repercussions of what Merrill did and how it affects me. If I am going to work my ass off, I am going to do it where I come out on top, where I have actual equity and own my book, where I don't have to think about F'in PC's and where I don't have to log in with a NBK# because after all, I am just a number to that firm.
[/quote]
Baloney. Your set qualifies you for the Army; not the financial services business. It's a different battle. The way I've built my practice is irrelevant.
Whining about being a PMD coming out of a training program is not going to help you. Learning to add by subtraction and learning to hunt better prospects will.
It's as easy to close a multi million dollar case as it it a 100k case. Spend your career working on 100k cases so you can get paid and you will have the skill set of a 100k advisor.
There is a big difference between getting a 100k account and multi-million one.
I know several guys who graduated the PMD program and quit - they were starving. The problem is the idiotic hurdles which forces you into a horrible business process. You are forced to sell more one-off annuity and life insurance products then wrap accounts.
If you are in a good office with turnover you will get your accounts through other brokers leaving. Otherwise, hook up with a broker ready to quit in 5 years. I have seen a broker with no clue become a million dollar producer from inheriting a book. I think he was better at serving coffee to the senior broker then picking up the phone.
Otane - I said "It is as easy to CLOSE a million dollar account; as it is a 100k case". Just because it's EASIER to find 100k cases doesn't mean their is a big difference. Smaller accounts take up as much paperwork, time (and sometimes more time ); effort, insight, understanding, compliance and potential liability to your license as a million dollar account.
In the training programs I've seen, sure, there are guys that cling in it for a few years and then fail. The ones that don't make it didn't "graduate" from anything. They got paid to get a license and got training to do a job. They had support, systems, office space, computers and access to research, data etc. They didn't starve. They failed. If they can't generate what it costs to support them, they go. It's not exclusive to this industry; it's all business and it's the fundamental economics of business.
People fail all the time. They make lousy parents; fumble the ball on a crucial play, their marriages fail, they can't get a promotion, lose a road race, can't get a presidential nomination. So what? They still might succeed in some other way or at some other time, or some other place. Thoreau feels about right here "Most men live lives of quiet desperation" or something like that.
People who don't make it at something simply couldn't perform at the level they were asked to (and I might add, that they indicated they could or would). If they trimmed their pipeline and DID NOT try to pick the low hanging fruit, but instead had the discipline to seek out the fruit at the top and held out to get that and not do one off annuity or life products they might succeed. If they really worked to find the kinds of clients they wanted - let's say their ideal are millionaires in a fee based account - they would simply have to work harder or smarter to find them. Of course, not all millionaires want a fee based account. Some want an annuity. Others want a bond.
Some states have more millionaires than others - but the firms set the same requirements for all individuals. Does that mean the FAs in some states are "luckier"? Baloney. The demographics are known and the firm to firm competition is fierce - and big producers from one state will prospect the big accounts in another. This can mean that the new FA in a state with a lot of millionaires is at more of a disadvantage than one with fewer.
The reality is that a lot of businesses start and fail every year. A lot of newly minted graduates enter the work force every year - not all of them will be a CEO; top earner, etc. The reality of this business is that some make it and some don't. Some start at the big firms and they leave the business. Some go to firms with lower account thresholds.
Letting your mind set weaken to say 100k is the way I'm going means that you are not going to play the way the rest of a team plays if a firm moves the target strategically. It means that you are not tactically aligned.
I have to say, I guffawed clean out loud when I say your last paragraph. Sitting around hoping to inherit assets when someone else leaves the business is not a business plan.
[quote=Otane]
There is a big difference between getting a 100k account and multi-million one.
I know several guys who graduated the PMD program and quit - they were starving. The problem is the idiotic hurdles which forces you into a horrible business process. You are forced to sell more one-off annuity and life insurance products then wrap accounts.
If you are in a good office with turnover you will get your accounts through other brokers leaving. Otherwise, hook up with a broker ready to quit in 5 years. I have seen a broker with no clue become a million dollar producer from inheriting a book. I think he was better at serving coffee to the senior broker then picking up the phone.
[/quote]
I really don't see the metrics for how you "graduate" the PMD program and then quit because you are starving. Unless you used daddy's money to buy a 10 million annuity, you should be walking about with about 150 in production which, at a 20% growth (which is completely reasonable considering the size of the book) means you would do 180K your first full year on the grid. Thats 72K a year.
People graduated POA (NOT PMD) and then starved. ITs almost impossible to have "graduated PMD" and then be starving considering the PMD program, as it is now, did not start until 2008, which at 43 months (total program length) means the first classes only started rolling out 3-4 months ago.
POA =/= PMD. POA was a joke where someone could ledger over 15 million in non performing assets and you would graduate.
The metrics of the PMD is based on more upfront PCs then building a book based on wrap accounts. It takes at least 6 months to have wrap accounts converting, so the requirements from month 1 is to produce. PMDs have little choice but to push mortgages, annuities, and life insurance to make their numbers. If you think management will wait for you to build a solid business based on wrap accounts - think again.
I am not advocating inheriting assets or waiting for advisers to leave, but a lot of books have been built on the back of these methods. I remember we had several brokers that retired and 300 million was distributed in the office. When brokers leave, 20% -30% usually stays behind. Do the math, and a lot of these brokers rarely busted their asses. There are a number of PMD managers pushing the trainees knowing they will fall off the map and collect their assets as well.
All of this motion is built on the BD model of paying 200% for books of business. Once the model is extended in time, or if the BDs decide to quite paying these high rates then you will see more advisors quit the business.
No doubt the program is to feed the corner offices. People who almost always inheirited their books. But that strategy was for ML lifers, and it remains to be seen if the Bank or its 5 dollar stock can even keep those guys in place much longer. they are currently hostage to them, and paying the ransom. Meanwhile regionals happily cash in on the pmd program too. Things are. very much in motion, i doubt trying to maintain old policy while implementing new policy at the time will work for much longer.
There will be a day soon where the wires regrest this decision. Once the baby boomer advisors get out of the business they will have a big time talent drain.
This thread has taken on a life of its own which is good. I believe in communication from both sides of the coin. I see both sides. This career is still one of the best opportunities in America in my opinion. You have an opportunity to build a business. I agree with Takingnames to a point. Most people people have a employee mentality and its really not their fault. They might have had parents who worked for the same company for 30 years, received their gold watch and seemed happy throughout the years. Others are children of entreprenuers and have seen the low's and high's to being a business owner.
If you work for a wire, be smart and have an exit plan if "their" hurdles become to much or you know you are falling behind. Anybody who was smart enough to be hired by one of these firms is smart enough to know when they are about to get the boot as well. Set your clients up in very non-sticky products, service the hell out of them and hope that most come with you when you switch firms or go indy. I have re-structured my thinking and I will take their salary and thier training and use it to my advantage. Most trainees at wires are reactive instead of proactive.
Like I said above, bring in clients, keep them fairly 'slick' as opposed to 'sticky' and service the hell out of them. Always make them feel like you are taking care of them and make them feel safe. Never sell the firm, always sell yourself.
I understand that I might have set a negative tone starting this post, but at the time I was a little shell shocked. I see good points being said on this thread. The main thing is that people at wires need to stop allowing themselves to be victims and start being proactive. Have an exit plan or strategy in place. Plant those seeds now and if the time arrises when its time to go, go, but take those hard earned accounts with you. Don't just shrug your shoulders while you are shown the door.
My 2 cents...
[quote=Otane]
Unless you are a well connected PMD you are not bringing in 10 million that will pay you 1% in year one. Even the veteran million dollar producers are not bringing in the 10 million per year at 1%, so what makes you think the PMDs can do it?
You can only cold call since any other type of media is forbidden. In addtiion, you have to contend with the internal scrub list so you can take another 30% off of that list.
Mullen said to call on 100k accounts? You know how many accounts you need to reach 10 mil? Forget the simple math, I am referring to the 1 out of 3 that may convert. So you need a pool of roughly 300 100k accounts - that you have met and proposed to - in year 1. That is roughly 6 prospects a week after proposals.....good frikkin luck. This forces you to prospect at higher asset levels which means you need experience and knowledge. 500k min to prospect is making a proposal to 5 a month counting on that 1 out of 3 will hit. Good luck on getting a list that will specifically give you 500k and above prospects.
Most of the producers stole their books (ripped it from their partners), inherited it, was handed assets by the resident director, or been there enough years (like 10) to get it from distribution when a broker left. Very few of the producers know how to initiate. They all say they can close, but if they never knew how to get an introduction how would they ever get the experience of closing?
This is still a recession and competition is getting more fierce - the asset hurdles should not be pegged at delusional levels. Well, if you hare hiring just rich kids then it may be possible, but who is going to give millions to a kid who was born with a silver spoon up his......?
[/quote]
Im in the ML PMD program and this is exaclty how we all feel.