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Am I Going to Starve?

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Aug 2, 2008 9:59 pm

Hello all, long time reader, first time poster.

  I spent some time on the Service side of a discount brokerage from and have recently taken a job as a 1099 independent rep.  I bought a book containing 5m in assets.  Half my payout from the book goes towards paying it off.  The book is mostly VA's and A share funds with about 1m fee based.    My concern is that my firm, although full service, focuses on the 403B marketplace.  I have some school districts assigned to me and I can sit in the teachers lounge.  I would like to go all fee based/managed money.    Even if I get 50 new accounts socking away an avg of 5k a year from their checks, that only totals  250K = 2.5K for a fee.  That would only come out to $1300 bucks payout for me a year!  Even selling A shares I'd starve.  Granted, I'll find some rollover money, set up some 529's, and write some insurance but how much of that am I likely to dig up from teachers making 35K a year.    My payout + draw comes to 15K a yr salary.  Using the previous paragraphs logic, I might make about 16.3K yr two and year three, my draw is done with.    Anyone have any idea's for how I might survive?  Should I abandon the schools and door knock jones style?  Cold call businesses?  Also, I can't put stocks or bonds in the wrap accounts, is that likely to hurt me long term?     
Aug 2, 2008 10:09 pm

I’m guessing your placing biz through AXA? If so, be advised of the large number of fees they’ll inform you of after coming on board that will further diminish that number. If not, then to address your 403b question. This market is a WASTE OF TIME unless you are using it as a foot in the door for rollover business. Dealing with pikers who want to sock away $25 per pay period will do nothing for you other than guarantee that the majority of your time in a few months will be wasted with service calls from individuals wishing to make hardship withdrawals/take loans, etc.

Aug 2, 2008 10:32 pm
Xbanker   Its not AXA, or any other insurance company for that matter.  Its a small broker/dealer.  You are quite right about the annoying maintenance hardship withdrawels, loans, address changes, deaths etc.  I'm concerned because client quantity is large with little money.    Somehow, many of the other reps are massive producers.  I'm not sure what they pull in, but they can afford to pay multiple assistants out of their own pockets.  From what I have read, my payout schedule is quite a bit better than wirehouses or EDJ (probably because we are 1099's.)  This is why I'm thinking of chasing business owners and cold walking.    Anyone have any experience working with a company focused on TSA's that went and did their own thing?  
Aug 2, 2008 10:58 pm

IF you’re a long time reader, how the heck did you get yourself mixed up with a firm that has nothing to offer you? I’ve never seen an indy firm with a payout as crappy as yours. Good luck with those indecisive teachers. 

Aug 3, 2008 1:46 pm

Not sure where you live, but in my state, teachers make in the 50-70K range. And most of those teachers (women mostly) have husbands with high paying jobs. But I know some of the 403B people, and as ICE said, they have BIG coverage. I once looked into that marketplace but determined that I would have to be very dedicated to it.