I am building a fee based business from scratch since 2005.  Thank goodness my firm is really behind building a fee based business.   I did have to balance getting paid upfront vs perpetuity but fortunately my firm with its farsighted perspective was willing to pay me about 50-60% of what I would've made in a "transaction based" trade so it wasn't as big a sacrifice as you are describing.

Thanks Scrim.



Of course, I don’t know how the model is going to be presented. Maybe they front-load the fees to us for the first year - who knows (basically give it to us like a C-share commission). Hopefully there will be some bump up-front. But I don’t really know the way most firms handle these.



I know some of the people that developed our model came from AGE, so chances are it is similar to their structure. I guess I’ll know in about a month or so.

i have been able to offset some of the smaller up front payouts with insurance sales.  focus on the investments, but also try to become a complete planner, throwing insurance in there now and then for some better immediate tickets.

If you want to annuitize your revenue, but would still like a “pop” when you sell something, look into UITs.  If you stick to the 15 month UITs from Van Kampen and First Trust (which you CAN use at Jones), you will make about 2% upfront, and 1.2 or 1.3% every 15 months (which works out to about 1.04%/year).  There are some very nice UITs. First Trust now has the “Moderate Growth” UIT with a bond componet to it (1-ticket drop).  Just an idea.

N.I.-



Interesting. I have not spent much time looking at UIT’s. But I know my friend over at AGE use them quite a bit. Not sure, but I thought Jones screws you on the UIT commissions. We are very limited with inventory that we can sell (unless I am wrong - I also haven’t looked at them real close).



I’ll look at it though.



Thanks.



IH -

I have been focusing more on insurance lately, as I really have embraced our planning concepts and hope to continue ramping that up. That will help.

Thanks.

Broker24-

Clients that have more $ tend to understand the fee model better—basically that you’ll get paid for taking care of them instead of moving things or bringing in new clients. It is helpful to pick a size of account you’ll lean towards a fee-based approach (say, potential to have $250k at some point). Then accounts that come in lower than that, you can still pick up the income on day 1. But yes, it hits your income in the short run…but it is worth it to realize you are clearly building a business that allows you to thoroughly service a set # of families at some point.

B24 - I think you can also look at things like VAs, bonds, individual stocks, and LTC to make up the difference.  In addition, we are going to get those clients that just simply don't have the $100K to put into the plan.  I think it will be more realistic than what you expect to hit your goals.   

I agree with all of you.  I was just curious what obstacles people have run into in the past.  Spiff, you and Cowboy are correct - a lot of that other “stuff” will come.  I am fortunate in my area that there are a lot of people with wealth - I get a higher percentage of “large” accounts than EDJ guys in other areas, but landing those accounts are tough in the early years (lots of competition).  Given this fact, I realize that fee-based needs to be a component of what I do with this group.

[quote=Broker24]I agree with all of you.  I was just curious what obstacles people have run into in the past.  Spiff, you and Cowboy are correct - a lot of that other “stuff” will come.  I am fortunate in my area that there are a lot of people with wealth - I get a higher percentage of “large” accounts than EDJ guys in other areas, but landing those accounts are tough in the early years (lots of competition).  Given this fact, I realize that fee-based needs to be a component of what I do with this group.

I was able to buy First Trust UITs when I was at Jones. I think that was around 2005.  You may want to check to see if they’re still available.

I might be wrong…

We can buy First Trust UIT’s. But, as Noggin mentioned, the inventory of what we can sell is very limited.



Noggin, you are probably right. I would bet it will be very limited and very structured. However, they are probably doing this from the outset so they can evaluate how it goes. They have said that they will eventually allow individual stocks as well, but after some time. As with most things, they are dipping their toes in after everyone else has swum a few laps. The program will likely be expanded after they have made it “work” for a while.



We’ll see.

Actually, very few of the preferred funds will be in the fee based model.  The GP that is in charge of it spent some time with our region recently.  He said that 75% of the funds are going to be non preferred.  Some A shares LW, some no load, some ETFs.  And the number was 180.  There are all sorts of rumors flying around.  I've yet to talk with a MP conference attendee to get the real scoop.  Summer regionals (Indy this year) are coming up in June.  We'll find out then. 

Sounds like the Jones platform for fee based is going to be pretty limited and restricted.

babs, there’s no doubt that you being indy means that you have the entire universe of funds to pick from.  I would also laugh if a Jones guy said that.  It’s just retarded. 

Does anyone know when the Jones fee-based program is going to come to fruition?

It was introduced at the Managing Partners Conf last week. Those people are now able to start using it. It will get introduced to the rest of the firm in June at Regionals. I believe it will be fully implemented between June and August, by region maybe? (most likely so Support staff has ramp-up time during rollout, as opposed to 11,000 people calling all at once).

Noggin,