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Choosing the right house

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Sep 1, 2008 8:11 pm

Morphius, XB,

There are obviously pros and cons to both models. I think the biggest thing is to know yourself. There are some people who are just not cut out to be indie and others who are just not cut out to be in a wire. Of course there are other considerations, but i think those are two big ones that are dangerous to ignoe. With all that said, i think the best place to train, learn the business, and build the foundation (not just a book, the foundation of knowledge and skill, is at a wire.
Sep 2, 2008 1:05 am

Morphius, I’m the first to admit I don’t like the wires. I don’t want to be an employee to anyone. I don’t want to be told to sell prop funds, do a particular type of business, be in the office at a particular time of day, and then have a pathetic salary (40k or so) used as a reason to justify my treatment as an employee and a 35% payout. I also do not believe the “branding” or “training” they try to sell new recruits has any value at all. Train me to approach my friends and family then get on a phone? New concept; sure they don’t say that elsewhere. ML’s “training” is all online now anyway. MS stopped sending people to TX and replaced everything with online. How can they try to sell “training” with a straight face? A discount firm is MUCH better for a short period of time just because you get in front of tons of clients. Just don’t stay there very long.



Sportsfreakbob, regarding client reassignment, I don’t know how all the wires work but I had a fried who got a couple orphaned accounts at MS and was told the payout wouldn’t start on those until he’d had them for 2 years. This was in 06 so maybe not the case any more and maybe not the case everywhere. And as far as the 16000 advisors go, that’s neither here nor there. It’s a success if 20 or 30k were hired, but if 300k were hired, not so much. If the wires were such a great place to be, they wouldn’t NEED to offer huge sign on bonuses to get people to come and put up with their BS.



My experience was getting an offer at ML, which I declined for many of the above reason. I was told within the POA program that a certain type of business (near only fee based) was to be done, and that specific rigid hourly requirements were to be met, as well as contact metrics and other micro management. This is not what I was looking for as someone wishing to run their own business. It was very clear to me that a rep at a wire is nothing more than an employee bowing down to the whims of their branch manager, selling whatever proprietary crap was shoved down their throat in the morning meeting before going back to a cubicle.

Sep 2, 2008 1:44 am

x, my point is there are enough reasons to not like wires - you don’t need to resort to guessing, exaggerating and making things up about them.  Much of what you say about poor training is simply not true, and I’m puzzled as to why you even feel the need to go there.  ML and MS’s training is “all online?!”  Huh? 

Making such unnecessary and outlandish claims simply undermines your credibility.  There are enough things wrong with wires that are true; you don’t need to go beyond that.

Sep 2, 2008 2:57 am
I'll answer point by point - but i want to stress that as i said, i recognize that Indie/wirehouse - both models have their pros and cons, and some people couldnt survive in a wirehouse, while others just dont have what it takes to go indie. So to be clear - this is not a bashing, just addressing your points. Lastly, full discosure - i am with a wire, so i guess i am prone to spin it my way, but i'll try to just deal in facts..... With all that said, i have to say i think you are looking at this from a narrow and somewhat closeminded view, so just trying to open your mind a bit... Sportsfreakbob, regarding client reassignment, I don't know how all the wires work but I had a fried who got a couple orphaned accounts at MS and was told the payout wouldn't start on those until he'd had them for 2 years. This was in 06 so maybe not the case any more and maybe not the case everywhere. You are correct - you dont know how all the wires work. I have never seen a situation like the one youare referring to. I;ve never seen an FA inherit an account and be told they wont get paid for the first year. In fact, i;ve seen a broker leave, and their clients in fee based platforms offerred no fee for a year, as an incentive to stay, and the brokers got paid on the fee even tho it was never actually billed to the client. Maybe what you saw was specific to one BOM, or one firm. I dont think its something that happens generally speaking. And as far as the 16000 advisors go, that's neither here nor there. It's a success if 20 or 30k were hired, but if 300k were hired, not so much. I never said anything about 16000 advisors, not sure where this is coming from. I have heard that nationally, our firms success rate has historically around 40%, have to be honest, i havent seen it that high where i have been. However i still think its not a result of our training program, its a result of bad hires, people who jsut dont understand what it takes. Dont forget how hard it is to succeed at whatyou and i do. Thats why those who make it get paid a lot of money. If the wires were such a great place to be, they wouldn't NEED to offer huge sign on bonuses to get people to come and put up with their BS. The huge bonuses you refer to are paid to good producers, not pikers. Further, 99% of the time, they are paid to an FA coming from one wirehouse to another. And considering the fact (opinion i guess, but i;m sure you'll agree) that all wires are more or less the same, they are movnig for one reason only - its all about the check. I personally think its a stupid business model, but the wires perpetuate it, and i'm happy about that. But my point is, the fact that the wires pay big bonuses to people who come and bring their book, has nothing to do with whether the wires are good or not. I could make the argument that they cant be bad, because brokers move from one wire to another to take that check.

My experience was getting an offer at ML, which I declined for many of the above reason. I was told within the POA program that a certain type of business (near only fee based) was to be done, and that specific rigid hourly requirements were to be met, as well as contact metrics and other micro management. This is not what I was looking for as someone wishing to run their own business. Mother Merrill. This is something that is specific to ML, its in the culture. (Although i have heard anecdotal evidence that it is changing). I have seen million $ producers at my firm doing all transactional business - 100% - and being left alone. I have seen them offerred a check and taking it, to go to another wire, for $2.5 million. So the wires dont insist you do it their way.  It was very clear to me that a rep at a wire is nothing more than an employee bowing down to the whims of their branch manager, selling whatever proprietary crap was shoved down their throat in the morning meeting before going back to a cubicle. Nothing could be farther from the truth. In fact if you are a decent producer (admittedly the definition of good production is different at a wire than at an Indie), the BOM works for you. And any BOM will tell you that. Think about it If i could walk across the street and be handed a check fo a million bucks and bring my book with me (which anyone who works for a protocol firm (which includes all the wires) can, do you really think that i work for THEM? Sorry, no way. They work for me. As far as proprietary crap, i can only speak for the wire i work for. We have none - zero-nada-zilch. We got rid of it a long time ago. And my payout is the same on every product and platform in the system, fees, commissions, funds, trails, etc. Product neutral. So this is just my humble opinion. Different strokes for different folks. Dont make generalizations and have an open mind.  And again, this is not meant to be a bash on the Indies, i have the utmost respect for guys like you, Morphius, and my friends Ice, Indyone and Hyman, who have gone out on their own and found that Indie is the right thing for them.
Sep 2, 2008 3:16 am

I guess I’m at fault for being “all over the place” in my posts. My basic comment should read as follows:



It is my opinion that the basic business model of the wire platform is to intentionally bring on as many fresh faces as possible with the expectation that they will bring in mommy and daddy’s account plus a couple more if lucky, then fire those individuals. The environment does not seem to me to be a place to “grow” one’s career but to either A) go to get licensed or B) sell a book once you’ve reached a point of success already.



There is nothing better or worse about this model from the standpoint of the business itself, but don’t tell me you’re train to “train” recruits. They are there to bring more or less friend and family accounts to the firm, get booted and leave. Hopefully a couple of those accounts will stay. I actually told someone on this forum to USE the wires to get paid to get licensed. The system can be played both ways.



Regarding ML and MS training, at the time of my ML interview, they told me reps were no longer sent to NY but completed a number of “online modules” which include tutorials on systems, product information, and the first course of the CFP curriculum as well as the passing of any licenses not already held. Perhaps “all online” is a bit much. I’m sure occasionally there’s a speech from a sales manager about closing techniques or something. I should have stated the in person centralized training component no longer exists and has been replaced by these online modules. This is also the case with MS, which no longer has an introductory post-licensing TX-based training component. They have also replaced this with online content. SB and UBS apparently both send new reps back to NJ and have a limited amount of branch based training, some of which I was told is online. Not sure about AGE/WB in it’s new format.



This isn’t a flame against this industry or specifically the wires but almost any job. ALL employers who bring nothing to the table for the recruit will say, “It’s a great opportunity to learn with room for advancement.” How much do either of those things cost the firm?

Sep 2, 2008 11:52 pm

XB - I understand your points now. You make some good points to ponder. You are correct about SB sending their trainees to training after in branch but prior to starting production. MS does send them but only after they have started production and hit bogeys.

From my experience the FA's that fail, dont have more than 5-10 MM assets max when they get booted, most have a lot less, like 2-5 mill. I can tell you that in my office there are two brokers who went thru our program - one is 8 years in and will do $700k gross this year  - not from friends and family. They other is 6 years in will do $300k on $50MM in assets. Of course a lot more failed out. But these two guys i think, demonstrate that the few who want it bad enough, and are willing to kill themselves for a few years will succeed with the training. JMHO