Goodknight Question
16 RepliesJump to last post
I recently recieved an offer to do a $5mil goodknight plan. The other Jones guys in the region say that I’m in an outstanding position because he is so well respected, great advisor etc. I know that they give you the bottom of the barrel, however I’ve never really been in sales (believe it or not) and am wondering if it is as big of a help as the Jones guys make it out to be. I’ve had one guy tell me it doubles your chances of success, I’ve had another tell me the goodknight attrition rate is almost zero. I have a hard time believing that it’s almost zero. I’m young and just out of college, in denver (i’ve heard urban areas are tough for EJ). Any advice?
I am currently finishing up a $5mm Goodknight…It is a GREAT opportunity, however, it doesn’t guarantee success. The assets are nice but the experience of working with a successful respected advisor is much more advantageous. If you take it…the most important thing for both you and the GK Host…is that you guys get along well because you will be married for the next 8-12 months. I believe that the stats the other FA’s are giving you are pretty close, with a GK you have a much better chance to succeed. Good Luck.
Two situations: same FA, same work ethic, same town, etc. Scenario 1, he goes new/new, works out of his house for 18 months, has no assets, no BOA and no live-in mentor. Scenario 2, same advisor, gets $5mm, maybe 150-250 open households (albeit crummy accounts), an office to work in and call home, a place to show clients, a live-in mentor, and a BOA that will, at minimum, answer the phone for you (and most likely a bit more than that).
You tell me which one has the higher chance of success. Then tell me which one has the higher chance of success after you have been new/new for a year. I would say the GK success rate is 70+% after 3 years versus 15-20% for new/news. That is PURELY unscientific. But I will say, of my class I trained with, there are now ZERO new/new's left, and ALL of the people that got GK or existing office takeovers are still there. Now, that's out of maybe 15 people, but there are 7 of us left (after 2.5 years). Just some food for thought.And FYI, it is NOT the assets you are given that make the difference. That has accounted for maybe 15% of my gross over the past 2 years. It is the items I mentioned above, in addition to the confidence you gain by not having to work out of your dining room, and wondering when you might get into an office.
And FYI, I was new/new for 8 months into production before I was offered a GK, so I know what it is like to do both.I think the big benefit to the GKN is the accountability. If you are that new/new, who monitors what you do on a daily basis? If you are a GKN, you go to his office everyday, he sees if you’re there or not, doing what you are supposed to or not. You get to talk with him, bounce ideas off of him, pick his brain. While he’s not your boss, until you leave his office, it’s his book. He’s got a vested interest in your success because he looks incompetent if you fail.
I'd take the GKN.I agree with B24 that the assets you get will have very little impact on your success.
The assets you inherit have already been invested, and new money is the name of the game at Jones.
Are GKNs offered through new FA training or must one solicit an opportunity by calling around his region?
I completely agree with the above. I completed a 5mil GK about 8 months ago and the best advice the experienced advisor gave me was this: " The assets I am giving you are irrelevant. If everyone doubles the amount of their assets with you, which they won’t, but if they do you are at 10mil. You need to find 90 mil more of NEW ASSETS to achieve what you want to. Now go find them."
GKNs are offered very sporadically. You typically won’t get one by asking for it. Unless you were brought into Jones because someone picked you to be their GKN, then your best bet would be to work your tail off, make it know to the powers that be that you’d be willing to do a GKN if asked, and then work your tail off some more. Be happy if someone offers you a spot, but don’t be suprised if they don’t. The vets would tell you to spend the time you’d waste on making calls to EDJ offices looking for a GKN on productive calls to prospects.
Even $10 mil isn't going to make or break your career. It might make it a touch easier, but won't put you on easy street.Not so sure. I think the more likely scenario that plays out (at least for the first many years) is that vets start GK’ing off their non-managed accounts. All of a sudden, that 250K or 300K account doesn’t seem so attractive anymore when it’s sitting in A-shares collecting dust. So if vets start putting more into managed money, I would maybe see MORE GK plans being done, but not necessarily giving away managed assets (not yet anyway).
And most of the GK accounts that you get will never qualify for managed money. Most of them are little IRA's, 529's, small blocks of stock, a few long bonds, etc. Most GK's aren't getting many large accounts.I can see maybe 5 years down the road for a vet to start giving away those fee based accounts that he really doesn't want to meet with anymore. So, not only will the new FA be getting all those smaller accounts that don't qualify, but he may get those nuisance accounts that he is required to meet with, but really doesn't want to. On the flip side, it does get him in front of people more often. He can practice his Boone's and Claussen's story some more.
not to take this thread into a different direction BUT…
what are everyone's thoughts on taking over an office? i hear it rarely happens with newbs but it's happened a couple times in my region (being given an office just after and often JUST before eval/grad). Quite a risk that EDJ is taking but what are everyone's thoughts on the success rate from that point? I would intially venture to say that success rates improve drastically, but i also hear that jones will increase your required numbers to qualify for pdp. In other words, now thta you've been given an office, producing should be easier and therefore, the bars will be raised... Love to hear from anyone of course, but anyone who's been in or near an office that was taken over by someone out within their 1st year would be great. Cheers.Happens all the time when someone leaves. It is more commonly given to a new FA when it was a relatively small office. If it were a large office, or a competitive situation, it may be split up, some may be absorbed by other FA’s, and sometimes given to a willing, producing transfer broker that is experienced. It all depends on the situation with the office.
If it is a little office (say, less than $25mm in assets), they would likely have no problem giving it to a newbie. Keep in mind, a 25mm office can turn into a 5mm office in a matter of days or weeks. So your leg up is having an established presence (not working out of car). Yes, your expectations go up. You also get pulled into the office longer to handle existing clients, most of which will feed you only a few nickels in commissions. So it can easily hinder your prospecting process. Your success rate is almost 100% for the first few years (assuming there is some level of assets, not just a shell of an office), but your long-term success rate may be endangered because you got too relaxed and comfortable with the existing client base. Give more details on the situation, and that may help the evaluation: How many assets, households, etc. (now, not before the broker left), and are assets continuing to flow out? How many offices in area? Where did previous broker go? When did he leave? How many brokers have been in office in past 10 years? What is competition like? You may not know all these answers, but you should find them out.It happens in my region all the time. As guys leave the industry or move firms, they put a new guy in. In fact, only two of the guys in my immediate area started new/new. And that was 10+ years ago.
Jones will raise the bar a bit if you take over a book. The problem with taking over a book when you are brand new is that a lot of guys have the tendency to just sit on that book and not grow it. A $10 mil book is a nice start, but it won't feed your family for very long.I agree. A lot of the takeover FAs will sit in the office thinking that the $7-10mm has landed them on easy street. It’s a nice base but you better act as if you’re still a new/new and keep prospecting.