Have you been in the business for 2 or 3 years?

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Jan 18, 2011 1:12 pm

If so, share some stories, experiences. How supportive has your firm been, manager, and support staff? What has happened with the folks you went through training with? Thoughts on this business?

Jan 18, 2011 2:21 pm

Guess I'm disqualified from commenting here.

Jan 18, 2011 5:12 pm

Started 3 years ago.  Of the 25 or so that started with 12 months of me (before or after), 5 advisors are still in the business.  I started with Merrill Lynch, and then left after a couple of years to form my own RIA.  Management was good at ML, I thought.  It depends on what you want.  They basically left me alone to build my practice, which is how I preferred it to be.   When times got tough, the axe came down hard, and some of my peers who I thought has a good chance of making it were let go, and it took them a while to land on their feet.  Once they did, the assets were already swallowed up, and they started from scratch, and failed. 

Ultimately, I knew I would be far more profitable on my own, so I made the leap.  Best move I ever made.

Jan 19, 2011 5:38 pm

I started almost 3 years ago with Jones. Still there, though there aren't many left from that time period. I was new//new and even by the time I got back to what Jones calls PDP (basically a 4-month-out "You made it this far" milestone), 75% of the group I started with were gone.

The firm is great, but I've also learned, the firm is a for-profit entity. The "group hug" feeling of Edward Jones is long gone for me. Sure the home office people are sappily sweet (I used to think they dripped Prozac into the water whenever I visited the Mother Ship), but they are extremely efficient and very supportive of us in the field.

I've learned this much: it's a brutal business if you refuse to accept the "norms" of the business exactly as they are. By that I mean that if you come in thinking that there is any another way to do the business except prospect like crazy, you'll fail out of discouragement. That was a hard lesson for me to learn, because I always, instinctively, challenge the status quo. But if you try to reinvent the wheel to somehow avoid the very obvious and totally imminent unpleasantness of this job, you will fail.

Victory, in this career, or in sports, or just in life, goes to the people who embrace the awful reality, not those who avoid it.

Jan 19, 2011 10:57 am

Two years out, with Jones.  Support has been minimal but I've not needed or asked for it either, so maybe it's better to those who raise their hands.  I find with my firm they have one idea on how to build your business and if you are outside it you don't get called on often to share ideas. Home office has been fairly easy to deal with.  I hate buying toilet paper for my office though.  It's absolute BS!

Three new'news are still with the firm, including myself from my class.  The two guys that got offices are still producing as well.  So, 40% have left. 

I like the business, enjoy the grind but man.... when does it get easier?  My general thought is you can kill it if you work three days a week... not show up but really work!  I however spend 70% of my time avoiding work and 30% doing it.  Gotta fix that.

Jan 19, 2011 11:20 am

Fly, Inland, and Super, those are great responses. I find it amazing that a firm can find it profitable to have 60%++ attrition from new folks in just a couple years. Congrats to all of you for staying alive, during a very difficult time in the business. Inland, your description of facing reality is a must read for anyone toying with the idea of getting into this biz. On one hand, a good rep should be individualistic, bombastic, a real trailblazer... but on the other hand, there are some things you have to accept, despit strong feelings. Man, you're right, it's hard to accept that.

The nice part about this biz, is that when you have gotten to a certain point in your career, you get to call the shots. That freedom only comes when you have enough clients that are loyal supporters. Today, I'd put that number at about 40m-60m, depending upon your cost of living. Note, that number is for the folks that would follow you anywhere, not the size of your book.

Super, I'll share a little secret. That easy day, will hit you one day, like a ten ton heavy thing, will be a big surprise. It will be sooner than you think, as long as you continue to gather households and assets. Much like the subtle shifting of a car, the energy you expend will have a multiplied effect upon production. 

Someone told me, long time ago, that if you made it 3 yrs in this biz, you'd last a lifetime. When I heard it, thought it would only apply to everyone else, but now I "get it".   

Jan 19, 2011 12:25 pm

So are you saying this business gets easy once you have 40-60m?

Jan 19, 2011 12:52 pm

Who, no, it gets easier before then. At 40-60m of loyal hardcore good accounts, you are a FREE PERSON. You are free to work where you want, think what you want, say what you want, do biz the way you see fit, and have a ton of choices/opportunities, and have ENORMOUS EQUITY VALUE. 

The biz gets easier when you have enough households, that are willing to take your call, where you can do 75%+ of your business from your existing book. Bond Guy has written eloquently on this subject. It boils down to, how many phone calls to do 30 grand in a month from cold calls, compared to how many phone calls/meetings does it take to do 30 grand from existing A, B and C book accounts. So, it is two different things...

Even better, when you can do this 30 grand thing, all of a sudden you are probably going through a big surge in AUM. 

Phase one, you are opening accounts, it's hard work, little to show for it. 2-4 yrs

Phase two, you got the accounts, your're opening more, but you are doing trades and making gross, but most important you are gathering assets in a big way. 2-4 yrs

Phase three, you are full of accounts, and AUM. All you do is work your book, and get referrals. Rest of your career...

Those three phases is how I see this biz. And it is extremely gratifying when you promote yourself...  

Jan 19, 2011 1:39 pm

Freedom is dangerous.

Jan 19, 2011 1:57 pm

Yup, it's like drunken sailors with a "serious" bankroll.

Jan 19, 2011 2:24 pm

Yeah, the good ones spend their accumulated freedom, and then they have to go back to the ship to earn more.

We're  navigators, like crusty Ancient Mariners, tied to the ship and beholden to the commands of a sick captain ( would that be Mr. Market or Ms. Client?).

But there is always liberty.  

Jan 19, 2011 3:22 pm

Well said. I'm going to hire you as my public speaker...

Jan 19, 2011 4:12 pm

Aye, 'an if you'll 'ive me pint 'o rum beefeer 'at engagement...

Jan 20, 2011 12:01 am

My status

Just entered prod month 25 at wirehouse, under 30 years old ...doing the impossible so far. Class started with 80, down to around 30 trainees now.

40 HH ASUM 11MM, 9.5MM  fee based managed accounts, MF's & SMA's. I expect ROA around 1.10% on fee-based, and 90% of my 2011 gross from fee-based

2010 - added 15 new households, net acquired was about 6 million, added 8 million in fee-based total that yr

Prospecting Technique: Disciplined cold calling everyday highly organized prospect database and tasks / call cycles / notes etc., scheduled 150 meetings in 2010, 50% canceled, 50% weren't qualified or a good potential client, last 50% were highly qualified & closed 80% of them.

Inherited less than 1 million overall, but my entire book through hard work. Did financial plans for almost all new clients

2011, 3rd Year Prod Goal: 15 + HH's, 7-10MM+ Fee based, 150 new prospect meetings again, overall production 130 - 150,000 GROSS

Jan 20, 2011 8:50 am

A wirehouse lets you keep your job at that production level with that amount of tenure?  I thought you guys had big expections?  Good job on all that fee based!

Jan 20, 2011 3:00 pm

When he says 15 households he's talking about 15 households over, I'm guessing, $250K.  So, he probably added better than $4 mil to his AUM just in those households.  Jones counts all accounts, no matter what the account size.  Just another way that Jones looks at the game a little differently. 

Feb 22, 2011 8:59 pm

I was with Jones for nearly three years, but no more.  I liked Jones, and I liked many of the people I met at Jones.  I didn't fit with Jones, though.  I started out new/new (a new office location with no inherited assets) and at the very last minute took over an office.  When I say last minute, I mean that the lease was ready to be signed to move into new office space by week's end.  I took over the office on a Wednesday.  The office had around 13m in assets, when I left Jones I had around 30m in assets.  Probably around 5m of assets left the office over a few month period after I took it over.  I initially brought in around 7m in assets when I took over the office, which is probably on the high end of what you can do from the dining room table.  I was lucky though, I ran into one or two people with a lot of money.  

My initial Study for Success Class (study for series 7 and 66) had around fifty people in it.  That number dwindled pretty quickly over the months and years following the start date, and as of my resignation, I was one of only two still working for Jones from that initial class.  

During the initial training, I received regular support from the home office, including regular telephone calls from training support staff,  conference calls, etc.  Shortly after the start though, the support dwindled, and I found that the better I performed, the less interaction I had with our home office.

Once I was licensed, I usually had monthly calls from my "development director" whose function I do not know what it was.  Sometimes she didn't call, but when she called she asked if I had any concerns.  When I did voice concerns, she said that she understood that was a problem, but did nothing to resolve the problem.  

The training provided by Jones after the initial training is minimal, and very little of it relates to financial training.

Even when I attempted to reach out and obtain support or assistance, I received little.  I contacted the "Client Consultation Group" which was supposed to assist with high net worth individuals, and the only assistance they provided in a particular case was "sell [the client] more insurance".  

My regional leader was not supportive.  He was regularly intoxicated to the point of not speaking clearly, and was harsh and abrasive.  He told me just prior to taking over the office I ultimately took over that despite the fact that I was the only licensed advisor without an office (or goodknight or legacy) who was exceeding expectations in our region, that I was not his first choice for taking over the office.  I wonder who his first choice would be.  This was the point of my separation with Jones, although I did not realize it until after I left Jones.  Upon further consideration (and several days after telling him I wanted the office) he told me that after thinking about it he thought that my work ethic and performance so far, combined with the assets under management of the existing office increased the likelihood that I would last more than two years tenfold.  When he said that he was going against written Jones policy, it hurt me emotionally.  I am not faint of heart, I do not quake at discomfort or challenges.  I did, however, expect my employer to live up to their written policies, and when the person who was in charge of me told me that he would deviate from objectivity, and turn the process into something else, that hurt, and that bothered me.  

I did have an exceptional field trainer, which is a veteran financial advisor who sort of mentors newbies.  If I were to die tomorrow, I would still want my wife to take my insurance money and whatever else she had and go to that man and avoid everybody else along the way.  He is the only one with Jones I have met whom I feel that way about, and he has a 350mil or so book.  I don't think people realize how much their individual advisor can help them out, especially with Jones and their A-share model.

My segment support specialists (I think that was the title) were unhelpful.  My Seg One guy was really bad.   I was working on a case with a 1.2 mil SEP.  I asked for help in how to deal with it, and he told me that he would get back with me.  He never got back to me, so I went back to the SEP folks and they said, "oh, one of your coworkers came by to see us recently."  It was, of course, my segment one support guy.  I asked for help and he went to try to get that business.

My Seg 2 guy was different.  He lectured me on how to set up portfolios to earn the most commission.  Oh, back to the seg one guy, he said that once you hit 100k in any fund family, you should "diversify" your client into another fund family.  So you hit the 100k breakpoint, and then move into another fund family.  Back to Seg 2 guy.  We looked at a 1mil account.  Well, with that account, you have 100k in fixed income mutual funds, 100k in another fund family equity funds, 100k in UIT's, 100k in laddered bonds, 100k in stocks to trade when you need a quick commission to get your trip, 250k in annuities (and if a married couple 2 different annuities of 125k each), and 250k in advisory solutions.  That is the Jones way of modern portfolio theory.  Harry Markowitz eat my tail.

The Seg 3 guy didn't care much, and I never really heard from him.

I didn't make it to seg 4

I had one support staff person, a "BOA" (Branch Office Administrator).  The most senior FA in my region lost one of his two BOA's about six months into me taking over the existing office, and he took my BOA.  Not that she was competent, she wasn't, but at least she sometimes answered the phone.  So at that point, I was left with at that point about a 22m book to manage without any support staff.  It was no problem for an extended period.  Maybe a year into that process though (me answering the phones, prospecting, etc.) I realized that I couldn't handle a much bigger book and provide decent service to the clients.  I jumped up and down asking for help.  None was given.  It turned out that around 300 applications were submitted  for the open BOA slot, and only 5 were qualified according to Jones.  Here is an example of an unqualified individual.  This is a clerical job, by the way, with some telephone work.  I had an applicant who was a college graduate, he had gone to the best high school in our state, received a full scholarship to university where he played division one soccer and still maintained a GPA high enough to achieve the Dean's List all semesters of his college time.  He had interned each summer with a financial services company including hedge funds, mutual fund companies, insurance (retirement) companies, and the largest regional bank in our area.  Additionally he had received a scholarship to study for the CFA designation but wanted to get the requisite work experience to go along with that.   I informed personally my home office that I wanted to work with this guy, and their answer after interviewing him was that he was not qualified.


I told my regional leader that I needed a BOA, and he (the drunk guy) said his solution was to send out a wire to all the offices in the region to see if they knew of anyone who might want to submit an application.  He didn't get that there had already been lots of applicants, and several good ones, and that wasn't the problem.  But I was in fact pleasantly surprised at how many other FA"s tried to help.  Well it was only three, but those three really did try to help out.

At that point, though, what do you do?  I told them that I needed help.  They received some really highly qualified applicants, and they did not respond.  So I left.

I have since moved on to Merrill Lynch.  I can do so much more here.  I have taken over some really nice sized 401k plans.  I am working on my certified special needs advisor designation so I can help out with some families with special needs kids.  I am also making a 75k salary, paying 25% of what I as for health insurance with a 3k deductible.   I am so much happier, so much less tied down.   

So that is my story.

Feb 23, 2011 1:56 am

weried. My region and HQ were bugging me to hire a BOA.

In addition I call BS on your story about that college kid wanting to be a BOA.
No way in hell does a CFA candidate career after college begin as a glorified assiatant

Feb 23, 2011 11:14 am

surfanddialca what is your pitch?!

Feb 23, 2011 12:26 pm

FrmrJonesGuy, that recap was excellent.