Insight and advice requested
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[quote=JCadieux]The success rate for new FAs throughout the industry is about 20%.
The success rate among wirehouse training programs is just under 50%. Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years. You may want ask some questions about the recent cuts before you make a decision.
If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best. However, if most of your network only needs insurance, then insurance may be better.
I’m not sure about the earlier claim that you will make more selling insurance than you will at MS. The average FA at MS makes over $200K.
Full disclosure: I recruit experienced FAs for wirehouses. I do a lot of work with experienced trainees, but do not place people with insurance firms. That makes me biased, so I suggest you take my comments in context.
Good luck and let us know what you decide!
[/quote]
Jeff-is the wirehouse success rate really that high? From what I observed when I was at UBS the failure rate in my branch was much higher.
[quote=joedabrkr]
[quote=JCadieux]The success rate for new FAs throughout the industry is about 20%.
The success rate among wirehouse training programs is just under 50%. Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years. You may want ask some questions about the recent cuts before you make a decision.
If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best. However, if most of your network only needs insurance, then insurance may be better.
I’m not sure about the earlier claim that you will make more selling insurance than you will at MS. The average FA at MS makes over $200K.
Full disclosure: I recruit experienced FAs for wirehouses. I do a lot of work with experienced trainees, but do not place people with insurance firms. That makes me biased, so I suggest you take my comments in context.
Good luck and let us know what you decide!
[/quote]
Jeff-is the wirehouse success rate really that high? From what I observed when I was at UBS the failure rate in my branch was much higher.
[/quote]
Some of the wirehouses do better than 50%, and some do not. 50% is an average. Additionally, it’s possible that your branch is not representative of UBS as a whole. Some branches tend to hire more people than others, so your office may have a lower than average success rate.
However, I have been told directly by BOMs and training managers at several firms that the industry average success rate is 50%. I have been told that the success rate of individual firms clusters between 50% and 65%. This number has been reaffirmed by brokers who have been through the program.
These numbers are also about a year old, so I’m not sure how recent cuts by MS impacts the numbers.
It’s difficult to get an apples-to-apples comparison. I understand that some firms exclude new-hires who never pass their Series 7 from the success numbers. Other firms to not.
However, the 50% number is consistent and comes from multiple sources.
I have seen the same thing JoeDa.
Most branch managers and senior broker's I've taked with indicate a 10% to 20% success rate after about 3 years. Maybe 50% within the first couple years.
This seems congruent with the fact that about 90% of all new businesses fail. There's not much difference between being a broker and a new business owner (other than the upfront costs etc...) from a 'creating clients and revenue' standpoint.
I don't personally feel that a big brand name is always a benefit though...although it will help in opening doors for those who don't have age, contacts, experience and/or sex appeal.
[quote=babbling looney] (I too, used to be a professional singer…long long ago in a city by the bay…but I digress.)
[/quote]
Are you Grace Slick?
[quote=Mike Damone][quote=babbling looney] (I too, used to be a professional singer…long long ago in a city by the bay…but I digress.)
[/quote]
Are you Grace Slick?
[/quote]
Ho ho. I'm not THAT old.
I named my cat Steve Perry (although I am sorry to say I’m not a Journey fan). Just seemed like a good fit.
[quote=JCadieux] [quote=joedabrkr] [quote=JCadieux]The success rate for new FAs throughout the industry is about 20%.
The success rate among wirehouse training programs is just under 50%. Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years. You may want ask some questions about the recent cuts before you make a decision.
If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best. However, if most of your network only needs insurance, then insurance may be better.
I'm not sure about the earlier claim that you will make more selling insurance than you will at MS. The average FA at MS makes over $200K.
Full disclosure: I recruit experienced FAs for wirehouses. I do a lot of work with experienced trainees, but do not place people with insurance firms. That makes me biased, so I suggest you take my comments in context.
Good luck and let us know what you decide!
[/quote]
Jeff-is the wirehouse success rate really that high? From what I observed when I was at UBS the failure rate in my branch was much higher.
[/quote]
Some of the wirehouses do better than 50%, and some do not. 50% is an average. Additionally, it's possible that your branch is not representative of UBS as a whole. Some branches tend to hire more people than others, so your office may have a lower than average success rate.
However, I have been told directly by BOMs and training managers at several firms that the industry average success rate is 50%. I have been told that the success rate of individual firms clusters between 50% and 65%. This number has been reaffirmed by brokers who have been through the program.
These numbers are also about a year old, so I'm not sure how recent cuts by MS impacts the numbers.
It's difficult to get an apples-to-apples comparison. I understand that some firms exclude new-hires who never pass their Series 7 from the success numbers. Other firms to not.
However, the 50% number is consistent and comes from multiple sources.
[/quote]
I worked at UBS for along time, even in the good years when it was just plain old Paine Webber. The 50% number doesn't come close to the failure rate I witnessed at two large metropolitan UBS branches. Closer to 80%. My wife's SB branch did somewhat better, but her training class had a failure rate approaching that of my UBS branch. Three years in, only 21 of 72 trainees remained. From the trainees flowing through my current office, looks to be about the same.
Jeff, I'll give you the benefit of a doubt based on your reputation as an excellent resource. My view is limited to a very small sample. On the other hand, maybe the numbers being given are at some early benchmark, one year for example.
[quote=BondGuy]
Jeff, I’ll give you the benefit of a doubt based on your reputation as an excellent resource. My view is limited to a very small sample. On the other hand, maybe the numbers being given are at some early benchmark, one year for example.
[/quote]Thanks for the compliments, BG.
I knew this number would be controvercial. And yes, the number represents the “graduation rate” from the firm’s individual programs. Program lengths generally range from 12 to 24 months.
I’m just passing along a consensus number that I’ve heard from a variety of sources. I find it interesting that everybody tells me all the wirehouses collectively average 50%, but nobody will admit to having a rate under 50%. (Then again, not all of the wirehouses are clients of our trainee practice…).
I’ve interviewed a number of sales manager candidates who claimed that they can document very high success rates among new FAs in their branches. They do this by concentrating on more-experienced candidates.
In my own experience, over 70% of the FA trainees placed by my firm are still with their firms after 12 months. But that’s not a representative sample, since our trainee practice only places current licensed FAs without portable books. I’m sure the overall number is lower when you include entry-level FAs.
I’ve also seen evidence that the success rate varies dramatically from branch to branch, no matter what the level of experience.
[quote=BrokerRecruit]I named my cat Steve Perry (although I am sorry to say I'm not a Journey fan). Just seemed like a good fit.[/quote]
...must have been one ugly cat...
Nah, he just had a nice mullett...
I would tend to agree with all of the assessments. It seems that, at an early stage, the fall-off of trainees is going to be hovering around that 50% mark.
When you break it down and look 3/5/10 years in, that fall-off and success rate drops dramatically, and does so for a variety of reasons:
- they were not successful in hitting the various benchmarks after the first year
- it was a career that they thought they would love, but actually found out that it's more difficult than Hollywood leads on
- it was a difficult transition (financially speaking) that they didn't expect (many think that you can/should make $100k in year one)
- training at their respective firm was poor and they grow frustrated and jaded with the industry overall
Again, just some scenarios I have seen, but it is interesting to see the various success rates as they compare to other firms (SB vs. AMP, for an extreme example).
[quote=BrokerRecruit]
Nah, he just had a nice mullett...
I would tend to agree with all of the assessments. It seems that, at an early stage, the fall-off of trainees is going to be hovering around that 50% mark.
When you break it down and look 3/5/10 years in, that fall-off and success rate drops dramatically, and does so for a variety of reasons:
- they were not successful in hitting the various benchmarks after the first year
- it was a career that they thought they would love, but actually found out that it's more difficult than Hollywood leads on
- it was a difficult transition (financially speaking) that they didn't expect (many think that you can/should make $100k in year one)
- training at their respective firm was poor and they grow frustrated and jaded with the industry overall
Again, just some scenarios I have seen, but it is interesting to see the various success rates as they compare to other firms (SB vs. AMP, for an extreme example).
[/quote]
Your cat has a mullet? That's an interesting image...
[quote=JCadieux]
[quote=BondGuy]
Jeff, I’ll give you the benefit of a doubt based on your reputation as an excellent resource. My view is limited to a very small sample. On the other hand, maybe the numbers being given are at some early benchmark, one year for example.
[/quote]Thanks for the compliments, BG.
I knew this number would be controvercial. And yes, the number represents the “graduation rate” from the firm’s individual programs. Program lengths generally range from 12 to 24 months.
I’m just passing along a consensus number that I’ve heard from a variety of sources. I find it interesting that everybody tells me all the wirehouses collectively average 50%, but nobody will admit to having a rate under 50%. (Then again, not all of the wirehouses are clients of our trainee practice…).
I’ve interviewed a number of sales manager candidates who claimed that they can document very high success rates among new FAs in their branches. They do this by concentrating on more-experienced candidates.
In my own experience, over 70% of the FA trainees placed by my firm are still with their firms after 12 months. But that’s not a representative sample, since our trainee practice only places current licensed FAs without portable books. I’m sure the overall number is lower when you include entry-level FAs.
I’ve also seen evidence that the success rate varies dramatically from branch to branch, no matter what the level of experience.
[/quote]
They all claim 50% success rate, because if they didn’t the folks in the training departments would have to admit to how ineffective they are…
[quote=joedabrkr]
They all claim 50% success rate, because if they didn't the folks in the training departments would have to admit to how ineffective they are.....
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I have no idea what the real success rate (as measured by stilling being in the biz 5 years later) but I wonder if it isn't the case that the training programs do as well as is possible, since the job is just plan hard. There's no perfect way to teach people the different skills required to handle client money well AND GET client money.
Give how important new talent is to every kind of firm in this business, I’d be quicker to be critical of wirehouse training programs if someone else in the industry had a better success rate with their trainees.
[quote=mikebutler222]
I have no idea what the real success rate (as measured by stilling being in the biz 5 years later) but I wonder if it isn't the case that the training programs do as well as is possible, since the job is just plan hard. There's no perfect way to teach people the different skills required to handle client money well AND GET client money.[/quote]
Getting client money and managing client money are obviously two completely different sets of disciplines and skills. What's surprising to me, is that the "team" system, or a "partner" system are so rare in the industry. If it was any other business, you would have a guy outfront doing the sales, and a different guy in the backroom doing the management of the assests. Trying to be a one-man-show almost never works in any business, and I think that's why most FAs fail.
mktsystms- No offense but your posts are getting weaker by the....post.
Actually, you can have a "partner" w/out having an actual business partner. It's called a good mutual fund(s) and SMA's. Gets' the job done.
[quote=The Judge]
mktsystms- No offense but your posts are getting weaker by the…post.
Actually, you can have a "partner" w/out having an actual business partner. It's called a good mutual fund(s) and SMA's. Gets' the job done.
[/quote]herThen you don't have your own brand. You're just another salesman, selling the same thing that tens of thousands of other FAs are selling. What makes your business different, if you're sellling the same product that everyone else is selling?
There is no "brand". If you want one- start a hedge fund.
Most FA's sell (roughly) the same thing. It is what it is. Besides- you are on the outside looking in. Talk to me when you have a billion AUM and are producing well into 7 figures. Like I said, it is what it is.
[quote=mktsystms] [quote=The Judge]
mktsystms- No offense but your posts are getting weaker by the....post.
Actually, you can have a "partner" w/out having an actual business partner. It's called a good mutual fund(s) and SMA's. Gets' the job done.
[/quote]her
Then you don't have your own brand. You're just another salesman, selling the same thing that tens of thousands of other FAs are selling. What makes your business different, if you're sellling the same product that everyone else is selling?
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First, not everyone has the same SMAs or other tools. Second, even if every craftsman had identical tools, they can differ in skill and style.