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Feb 1, 2010 8:05 pm

[quote=EDJ4now]So far, reception from clients has been better than expected, one good client that I thought I would lose for sure asked me if I would please keep them on so they don’t have to “train” a new advisor.  I figured they would be more loyal to the bank than to me.  Overall I have only had a couple of dissapointments, and they weren’t outright refusals, they just told me they wanted to think about it first.  I’ve also had a few that I thought I would lose for sure say they will come over.

  Paperwork on the other hand has been a bigger PITA than I expected.  So I'm taking a 5 minute break for this instead of screaming that the new account forms are so far behind what I thought we would be doing by now.  Despite my tagline I'm not that bad on the computer, but learning a new system is driving me nuts.    Fortunately my assistant is trying to hurry up our tech support call, because once he tells her something she has it.  She also worked 20 hours this weekend not because I asked her to but because there was work to be done and she couldn't stand leaving when things weren't finished.  Please no one tell her she is overqualified for this job and that she should be paid more.[/quote]   You're doing fine.  Nothing out of the ordinary from what I see.  Just get the definite "yes people" over right way.  The "not sures" will likely come over, but you may have to lay off them for a while.  I had clients that I thought would surely move with me, but they had other issues in their lives and didn't want to make changes.  A few months later, many of them finally moved over. I'm sitll working on a few others nearly 6 months later.   Paperwork is a bitch, but you definitley need to stay on top of it.  The sooner the assets move, the sooner you get paid!   Keep pluggin!    
Feb 1, 2010 10:10 pm

Mind sharing a few details when you have a chance?

How big is your place? buy or rent? You have an asst.. PT/FT? Pay?   Any other details about your set-up(always looking for ways to improve mine)
Feb 2, 2010 8:03 am

My space is big, I don’t know the sq feet, but the reception area has my assistant and another desk if we add someone.  There is also a couch and a couple of chairs for people who are waiting.  I have my office, which has a huge desk, and a small conference table, the table seats 4 easily and 6 if we are a little cozy.  There are 2 other smaller offices, one I am using for a breakroom, the other one is set up as an office.  Both are still bigger than my office at the bank.  There is quite a bit of storage space, a narrow room that has the copier/printer/fax area, and 2 bathrooms.  I pay about $400/month, although utilities to heat this place are higher than I pay to heat my house.  Obviously I’m not in a thriving metropolitan area. 

  I own a building down the street, and I may move into that in a year, as my main tenant is vacating in October.  If I do that, I will probably fix the building up to be a first class place.  For the immediate future, I will rent.  My office is probably the same rough quality that you would find in a p/c insurance office in this part of the country.  Not exactly what I want, but given my market I don't think it will cost me many people, at least in the short run.  Eventually I need to class it up, either here or in the space I own.   I would like to add an assistant in a couple of months, she would be great to have now, but I want to see how much I bring first, because if I only take 1/2 I can't really afford 2 people on staff.  I'm using the Bill Good system, which is pretty labor intensive.    Why do I need 2 assistants?  I'm looking right now at $40mm and 900 clients, although the number of clients will be pared down somewhat in this move.  Still probably 400 or more though, which requires more work than a $40mm book with 100 clients.  I know this business setup is not what most of you would be looking for, but I'm not in a wealthy part of the country, I have a few $1mm clients, but mostly they are smaller.  I would starve trying to serve only the affluent or even only the mass affluent here.  That's why I have the more streamlined system to deal with a high number of clients.   My current assistant (new to me, but not to about 1/2 of the clients) gets $14/hour with no benefits.  If I hire the 2nd, I think she will work for $12.  She would also be a good candidate for moving up to being a jr advisor in a couple of years (ultimately I would like her to work with all but probably 100 clients who I would continue to service as the primary advisor, let her have the administrative headache of all these clients).  Having someone 1/2 time would probably make more sense if she was just going to be an assistant, but she's smart and ambitious enough to be an advisor, so I'm willing to give her full time hours.  I don't think she would come over part time, and frankly there aren't that many qualified people around here, so if I have to hire her for a few more hours than I want it is still probably worth it to get her in here.   As to my status:  I'm really f===ing tired.  But I woke up and can't fall back asleep.  That's why I gave such a long answer at 2 am.  I have apointments or paperwork done already for about 1/4 of my book (aum and revenue, not even close on # of clients). 
Feb 2, 2010 2:10 pm

Well hopefully you can go paperless and avoid the hiring of another staff member.

Feb 2, 2010 2:13 pm

EDJ, just curious, if you have so many clients to move over, why are you using the Bill Good system?  Isn’t that primarily a prospecting tool? (mail, call, mail, etc.)  Would it not make more sense to focus all your attention on moving your book?  Maybe I’m confused about the BG system.

Feb 2, 2010 4:01 pm

$400/month are you kidding?? or are you in Mexico? WTF

  That is a sweet deal, but like you said the larger accounts are plentiful, but with $400 in rent do they really need to be?   Do you have a lot of small accounts or do you average $45K accounts? Because if you were to wrap $40 mil at 1%, I am guessing you could buy the town...
Feb 3, 2010 4:54 am

Wow…THAT is cheap rent!  I pay myself $1,500-$2,000/month and that’s cheap IMO.

  Sounds like you are doing things right...keep your head down and keep rolling along.  you need at least 50-60% of your book to cover overhead and pay yourself a decent salary.  My goal has always been to hit $50 million in AUM and while it's been a goal delayed, I figure on getting there maybe this year, probably next year.  At 80bps, I won't feel any pressure to get larger...heck, I don't feel any is good.
Feb 4, 2010 3:45 am

[quote=Squash1]$400/month are you kidding?? or are you in Mexico? WTF

  That is a sweet deal, but like you said the larger accounts are plentiful, but with $400 in rent do they really need to be?   Do you have a lot of small accounts or do you average $45K accounts? Because if you were to wrap $40 mil at 1%, I am guessing you could buy the town...[/quote]   I'm not in Mexico, but quite a few people in my town were born there.  I believe the non-native born population is over 50%.   When I was growing up it was probably one of the whitest towns in America.  One industry moved out, another moved in, and the need for office space plummeted.  $400 isn't much, but if I left the landlord might have to wait a decade for a replacement tenant.  I'm in the downtown area, and there is plenty of empty space.  He has storage above my office, and due to the lack of insulation I keep his stuff from freezing upstairs.  So my heat bill is north of $300/month this time of year, but overall, I can't complain.   It's a different practice from most of you, the average guy in this town is either broke or working manual labor and paycheck to paycheck.  However, because of that, there is me, EDJ, and a few part timers in a town of 10,000.  So the average guy isn't a good prospect, but there aren't many of us chasing the people who do have money.  Lots of the small accounts were opened up on the theory that you have to eat some rabbits while you are hunting elephants, both by me and by my predecessors.  In this town, there are lots of rabbits and few elephants.  The account sizes are all over, $2mm, 3 at $1mm, and a crapload at $10,000 and under.  Quite a few of those are going to be shed in the move.   About 1/2 of the book is mine, and 1/2 I recently inherited.  Thus far, the inherited seems to be moving with no problem, probably too well as I am going to end up with all the sub $10,000 accounts too.  It's kind of an unusual circumstance, and more complicated than this, but basically the existing rep is my new assistant and is transferring all of her accounts to me.    Right now I am just trying to get everyone papered, which is a massive undertaking.  After that I hope to move quite a few of these clients to a fee based solution, you are right that grossing $400,000, netting $250,000+ would make me a big swinging d*** around here.  No one but me and my accountant would know I was making over $100,000 though, buying a new BMW and a 4,000 sf house would be obtainable but would alienate 1/2 of my clients.   Part of what makes this business model work is that a few of these crappy accounts who I barely speak to are going to inherit money, or otherwise step into decent amounts of cash.  That's the reason for the Bill Good system, it keeps me at the front of everyone's mind, without actually having to do all that much for the B and C clients.  They get letters and their questions answered, and that's really about it.   I think if I had an assistant work that book more, she would probably pay her own salary, and help me mine the A clients out of the B and C's.   I'm still tired and procrastinating on doing paperwork.  I would be lying if I didn't say the last couple of weeks have basically sucked.  However, it's still a great feeling to be out on my own.  Tomorrow morning one of the $1mm clients is coming in to move his accounts from the bank.  I moved another $1mm spread over a few clients today.  I will know better what will come over in a couple of months, but thus far I am surprised by some of them that I have transferred, $800m of the $ today came from accounts that I would have thought I wouldn't be able to keep.   Back to work.
Feb 4, 2010 2:05 pm

So did you take over an existing Indy practice, in addition to bringing clients from the bank?  Did you have to buy it?

Feb 4, 2010 6:26 pm

I took over existing indy practice, plus trying to get bank clients.  The existing practice was with AIG, so we are switching that to LPL.  PITA, but so far not one client has balked at the change, nor at me becoming the new advisor.  That practice and mine were pretty similar in size and makeup, mine at the bank was a little bigger and less dependent on A shares, but overall it’s comparable.  I bought it, but there were some potential problems so I didn’t pay much for it.  I figured if half stayed I got a bargain, so thus far it looks like an incredible deal.

Feb 4, 2010 6:31 pm

That is sweet.  Congrats, and keep pounding away.

Feb 4, 2010 7:05 pm

[quote=B24]That is sweet.  Congrats, and keep pounding away.

  I used the exact same quote with my wife last night.[/quote]

Were you talking to the other dude in the room doing the work?
Feb 4, 2010 7:14 pm

[quote=mlgone][quote=B24]That is sweet.  Congrats, and keep pounding away.

  I used the exact same quote with my wife last night.[/quote]

Were you talking to the other dude in the room doing the work?
[/quote]   I'm sorry, but that's funny!  I need a little humer today as the market implodes.
Feb 4, 2010 7:16 pm

[quote=mlgone]It was two dudes silly[/quote]

Well done! That’s how you take a joke…

Feb 4, 2010 7:25 pm

Probably too late for this suggestion, but here it is anyway…

  To help with the non-compete, on my ACAT paperwork I wrote the phrase "per your request".   For what it's worth.    
Feb 4, 2010 7:30 pm

[quote=SometimesNowhere] [quote=mlgone][quote=B24]That is sweet.  Congrats, and keep pounding away.

  I used the exact same quote with my wife last night.[/quote]

Were you talking to the other dude in the room doing the work?
[/quote]   I'm sorry, but that's funny!  I need a little humer today as the market implodes.[/quote]   When does a man not need a hummer ?
Feb 4, 2010 7:30 pm

When he has the squirts?

Feb 4, 2010 7:35 pm

[quote=Wet_Blanket]When he has the squirts?[/quote]

I just puked in my mouth a little.

Feb 9, 2010 9:23 pm

I hate that puke in the mouth a little thing!

Feb 15, 2010 9:29 pm

Back to the original topic, I thought a few of you might want an update. 

  Right now I am working 6-7 days a week and here until 11pm except for days the kids have activities I can't skip.  And it beats the crap out of working for the bank.  My biggest ($2mm) client from the bank is coming in an hour to sign over his accounts to EDJ4Now Financial.  He was their customer since before I was born, so it wasn't an account I was counting on.  Right now, life is crazy but good.  In a couple of hours, I will have my 4 biggest accounts from the bank transferred, which is about 1/4 of my AUM and my recurring revenue.  I have several other smaller accounts transferred as well.    Noone from the purchased book is balking at transferring to me and to LPL (it helps that the alternative is staying with AIG and going to the out of state OSJ they have never met).  Hopefully those accounts will stick, although I'm sure I will see some transfer to EDJ and misc. others over the next year.  Those accounts have actually been coming over so well that I haven't worked my bank book as well as I would like.    Overall, it is going slower than I had hoped, and the bank is being more difficult than I expected, but the success is as good or better than what I was counting on, so I can't complain.