Need advice about joint venture, am I in trouble?

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Jan 14, 2009 3:56 am

These are certainly tumultous times for anyone in this biz as you already know, but I can’t imagine to tell you how it is to be a new FA… especially with a my firm entering a joint venture with another firm.

  Its been less than 2 years and I'm on par with my company's goals so far.  Better than decent, but not better than great.  I do not know if the book I've built so far has sustainable revenue in the short term.  Asset levels are good, but the fact that much of it is dead assets makes it bad.    If you were in my shoes (less than 2 years in biz, firm in transition) should I be worried about getting instantly launched b/c of this joint venture? I heard ML axed FA's 2yrs or less and similar initiatives made at MS.  I only have a small amt. of time until my salary expires and won't be a financial liability.   I had ML, MS, & BAC try to recruit me early to mid 2007 (before unemployment got worse) and I rejected since my business was on track the way I planned.  Schwaab also called me wanting me to become a lower level FA with a basic salary of 40-50k capping at I believe 150k (in bonus & salary).  I also did not show much interest in the discount brokerage model as a long term career compared to a possible successful wirehouse career, but in bad times like today this really doesn't seem like a bad deal.  I can get my 40-50k salary and learn the business better.  Is that flawed thinking?  What's a good career route for a young man w/out many financial & family commitments so far.   Thanks for your input
Jan 14, 2009 6:20 pm

Just keep building your book at SB and if anything, be motivated by this. There’s nothing you can do about whatever decision they make about FAAs so try not to let that get you out of your game plan.

Jan 15, 2009 3:42 pm

I left SB a couple of weeks ago.  I, too, was an FAA, in the 0601 class.  My numbers were good enough (barely) to consider jumping to an independent firm.  And so far every account I had hoped to bring, except one, has agreed to come over.  It helps some that there is so much confusion at Citi right now, and that plays right into my hands.
Good luck.  If so many of your assets are “dead”, then maybe you’re stuck until your salary runs out.  But if you’re close to month 25, and think you’ve got maybe $125k or more in fee-based gross GOING FORWARD (not trailing 12), it might be worth it to take a good look around.

Jan 16, 2009 12:36 am
Bodysurf,   I kept in touch with less than a handful of people in my training class and have found that many have moved to other firms or careers already.  Sadly, I do not think this is an uncommon story for a lot of other wirehouses out there.  My class wasn't too far from yours at all.  That's great news that you have committed clients.  Loyalty is hard to find in this type of market especially if you haven' worked with them for that long.  What's been influencing your decision to leave if your numbers are "good enough."?   I've been a better asset gatherer than a producer and that's the hardest part.  Im not sure that my feebased biz is good enough to pay my bills in the short term.  That's why Im worried apart from job security.   I know wirehouse FA's hold themselves much higher than discount broker FAs given that being able to succeed at a wirehouse is a much harder hurdle.  Schwab, for example in their FAA equivalent program gives you around 200mm in accts to service/manage & cap you at $150k.  Regular FA's get caped at $350k.  Nothing to really write home to mom about, but certainly not bad at all.  Im sure the pressure is not the same type of pressure we have.
Jan 16, 2009 12:37 am


  Thanks for your comment.  Its definitely distracting, but you are right.  I can't dwell on it.  The damn media retailing the end of our world is not helping and Im reacting to it like how my clients do! lol.
Jan 16, 2009 8:43 am

If you can gather assets, you’ll be fine wherever you go.  You’ll find that an independent shop will pay you a lot more.  Hit my personal email if you’d like and I’ll zip you info on the BD I’m with now.
I saw this as a big opportunity to build my business the way I want.  I love running the money–I manage portfolios of ETF’s and stocks, and do a lot of covered call writing, with about 40% of the portfolios in cash.  We actually were up during the last quarter of 08.
I’m leaving behind a lot of the annuities and bonds, stuff like that I just don’t want to do anymore.  I should have $136k gross to start with, all in managed accounts, with a very high payout that will double my take-home at SB.  My point is, you’ll be surprised how much less gross you’ll need to make a good living as an indie, compared to the 37% payout at SB.
Good luck.