[quote=registerme]

Who is going to be doing a majority of the research, etc.  Since they are the FA, and you are simply an associate, this doesn't seem too far off.  They are still the main point contact, and you are still young and new to the business.  I am sure you'll have to use their credentials to get clients to actually give you their money.  Most people don't want to give money to a new kid, they want someone with a little more experience.  I actually think this isn't bad, and if you are lucky and stick with these guys, you can totally take their book one day if they ever plan to retire.  Maybe I am wrong, but a 20/80 since you are so new and working for the FA essentially, this seems about right... I am sure there are some other brokers that would pay out more, but you have to remember that you're still using their name, and their knowledge to land these clients.  It takes a while to actually get your own book going.

[/quote]

That's 20% before it hits the grid?

Yeah, my opinion is that this is beyond horrible, but it depends on your goals and what you want to do. I wouldn't even take 80/20 or 90/10, let alone 20/80. If you're the one prospecting, you should get 100%.

You have a series 7, go somewhere where you don't have to share. Yes, inexperience and knowledge is a detriment, so prospect in a way that's limits, if not completely eliminates this. In other words, keep it simple and find products that fit what buyers are looking for. When someone buys a CD at the bank they don't examine the teller's experience and age, yet they deposit large chucks of money for an exchange of interest rate. I'm not saying sell CD's obviously, but keep it simple and sell something like fixed income. It's not all that complicated. Down the road when you have experience, you'll also have buying clients to call on.

I don't think they will give 100% because he is getting part of the benefit working for 2 other FA's who already have a book.  He is learning the ropes from other guys.  Plus, he will be asking their opinion (I am sure) about what to invest.  If you are 100% doing all the work, and not asking their advice on what to do with the clients okay, sure you should get 100%. But I highly doubt thats how this is going to work, especially since you already have been working for these other established FA's.  I need more input on the situation, perhaps?   I am a financial associate and if I brought someone here, I wouldn't expect 100%.  I wouldn't be making all the decisions and without the FA in the first place, I wouldn't be making a salary.  You have to also remember that most FA are on commission ONLY.   You are making a salary + an over ride already on what THEIR book brings in.  If you bring people in, you are simply adding to their book.  It is a team, not a every man for themselves (at least how you explained it in the first place). 

[quote=registerme]

I don't think they will give 100% because he is getting part of the benefit working for 2 other FA's who already have a book.  He is learning the ropes from other guys.  Plus, he will be asking their opinion (I am sure) about what to invest.  If you are 100% doing all the work, and not asking their advice on what to do with the clients okay, sure you should get 100%. But I highly doubt thats how this is going to work, especially since you already have been working for these other established FA's.  I need more input on the situation, perhaps?   I am a financial associate and if I brought someone here, I wouldn't expect 100%.  I wouldn't be making all the decisions and without the FA in the first place, I wouldn't be making a salary.  You have to also remember that most FA are on commission ONLY.   You are making a salary + an over ride already on what THEIR book brings in.  If you bring people in, you are simply adding to their book.  It is a team, not a every man for themselves (at least how you explained it in the first place). 

[/quote]

Yes, I know the reasoning behind it, I just personally don't think it's justified, but of course it completely depends on his goals. However, you brought up a great point about salary, if they're paying him a decent salary to do all of this and then 20% on top, that greatly changes things, might even be a good opportunity in that case.

Thanks for the feedback, it's a tricky situation because my role is a hybrid right now. I should probably clarify how I am paid right now, I get 1. base salary 2. Quarterly Bonuses (up to 3k) which are dependent on my performance taking care of our book, having things run smoothly etc 3. Commision (80-20 split) for that 3 Million of lower tier clients I solely take care of, though it does not produce much honestly. I am not getting any specific % for their current book of clients we have.

I do most of our MF research, although they do have specific investments and insights from time to time. The main advantage clearly to working with them is being part of a "wealth management team" as well as having their expertise to close higher level prospects. Also clearly do not have to pay for any overhead in the office. In general, any new relationship I brought in, I would mainly be responsible for updating on the mkt, making reccomendations, scheduling meetings, but at the same time they could accompany at meetings and the client would be able to call any 3 of us with questions.

Just doing some math this morning I was surprised at the amount of assets i would need to have on "my" book to make $33,000 (what i made last yr)..after all the splits (including RJ 20% off the top) I would need 20.6 million in assets (assuming 1% trail or Fee). I know there are many variable for this, just some very general math.

I guess i need to figure out how associates in a small firm like mine are typically paid, whether its more in salary, bonus or highter commission %

I am not sure, it seems like you need to venture to a bigger firm ha.  I work for a pretty big firm.  We are really known for our "banks" we have a ton of subsidary banks.  Wealth Management is part of the big picture but not the entire picture.  I make 40k salary + 1% override on my boss' book- which is about 6k additional a year.  I also get a small bonus.  We really haven't talked about what I would make if I brought clients in, becuase I haven't been able to do that yet.  It is REALLY difficult.  I would be fine with 20/80 on any clients I bring in because I would be using his expertise quite a bit. Honestly... I am OK staying on salary and making the over ride because I don't need that pressure.  He is 100% commission.  No thanks.  It seems like eventually if you bring enough people in, you can argue for more money, but I really think what you've got going is good.  It will be really difficult for you to bring in enough clients (20 million in assets).  I mean how do you expect to get these people to just give you their money when you are so new to the industry?  It seems like you being part of their team is really what is best because it is putting you in a position to one day take over a lot more.  Its baby steps in this industry and people forget that.

[quote=Bear Bullion]Just doing some math this morning I was surprised at the amount of assets i would need to have on "my" book to make $33,000 (what i made last yr)..after all the splits (including RJ 20% off the top) I would need 20.6 million in assets (assuming 1% trail or Fee). I know there are many variable for this, just some very general math.

I guess i need to figure out how associates in a small firm like mine are typically paid, whether its more in salary, bonus or highter commission %[/quote]

Yeah that's crazy, that's why I say, you'll have to figure your goals. If you want to be an Advisor..

20.6 million in fee assets should bring 150k but likely closer to 200k+ annually.. Slip to a new b/d, or stay and earn salary. It's pretty unrealistic for the first year of course, but it shows you certainly don't need 20 ml in assets for 33k.

Prospecting is hard if you're not extremely motivated. Having a salary with a touch of commission makes it brutal to stay motivated to prospect, just my opinion though and tossing ideas.

[quote=KingBobby]

[quote=Bear Bullion]Just doing some math this morning I was surprised at the amount of assets i would need to have on "my" book to make $33,000 (what i made last yr)..after all the splits (including RJ 20% off the top) I would need 20.6 million in assets (assuming 1% trail or Fee). I know there are many variable for this, just some very general math.

I guess i need to figure out how associates in a small firm like mine are typically paid, whether its more in salary, bonus or highter commission %[/quote]

Yeah that's crazy, that's why I say, you'll have to figure your goals. If you want to be an Advisor..

20.6 million in fee assets should bring 150k but likely closer to 200k+ annually.. Slip to a new b/d, or stay and earn salary. It's pretty unrealistic for the first year of course, but it shows you certainly don't need 20 ml in assets for 33k.

Prospecting is hard if you're not extremely motivated. Having a salary with a touch of commission makes it brutal to stay motivated to prospect, just my opinion though and tossing ideas.

[/quote]

You are 100% right, it is hard to stay motivated when most of you pay is coming from a salary/bonus, and you are getting very little in the way of commission for new assets brought in. I think the best point you guys have brought up is I have to figure out my goals, long-term and short-term. Long term I think there is a great opportunity, to either become a partner or have the ability to inherit the book. Question remains, is it worth it in the short term for this possiblity.

I know someone at my firm was an associate to a team, and is now on her own.  She seems to be struggling a lot because she says its completely different trying to get her own book.  Unfortunately I can't give a story yet, if she makes it or not, but I guarantee you'll succeed either way if you're driven enough!  Good luck figuring out your goals, I think you are SPOT on that you need to really figure out if waiting is worth it. I think you should maybe communicate some of your questions/concerns with someone at your firm, perhaps someone else has been in a similar cross roads? Or do you not feel comfortable doing that, yet?

[quote=Bear Bullion]

I need some advice and input on payout for new advisors. I have been working at a RJ branch (Independent Contrator Division) for the past 3 years. Initially i was hired strictly as an admin, since then I have moved up pretty fast earning my 7 in 2010 and 66 in 2011. I am at an awkward crossroads now when it comes to pay. I work with 2 other advisors taking care of our book of clients ~$120 million. Right now I am doing multiple jobs including office management, regular admin, as well as doing the client service / FA work for our book of clients and I even solely take care of around 3 million combined of our lower end clients. I prospect on my own when i have time, which is not very often honestly.

Net last year including bonuses i made around 33k. Going forward I want more time to become a FA and bring in my own business. My main question specifically is payouts of new business brought in, the advisors i work with proposed a 80%/20% split (20 for me). The split seems kind of low for new business brought in, but i have no other experience to base things on. Anyone have any advice, been in a similiar situation, or worked as a junior FA? What are typical setups for these situations? Thanks,

BB

[/quote]

Don't even think about a 80/20 split. Your better off venturing on your own: jump in the water and see if sink or swim. Will these guys be coaching/ teaching you along the way. If not your wasting your time they will use you as there called caller burn you out and keep your clients. Try getting into a training program at a minimum keep an open dialogue with you branch manager and let him know your looking to move up. Don't let them tell you they'll talk to the manager for you.

Not knowing if you are in a larger urban area or smaller rural area, I would encourage you to look for similar independent firms or teams that might consider taking you on as a junior partner or an independent firm where you would be on your own if you can afford it.  My next comment is offered respectfully and not meant to be condescending but you are being way underpaid for what you are doing, especially if you are doing all of the work you described.  Sales assistants at wirehouse firms are making more than that with only singular responsibilities.  If these guys have $120mm in AUM, that should translate to approximately 800m to 1.2mm in income as a guess.  They are getting you very cheaply.  I realize you are relatively inexperienced but you now should have some perspective for what it takes to be successful.  I think you can use that to your advantage.  I would also say that, if you like the firm and advisors you are working with, do some research in your area to find out what others are being paid and attempt to negotiate a better deal where you are, i.e. higher salary, bigger bonus, better payout or more assets to manage.  Good luck.

Thanks again everyone for your input/advice on this topic. This is a tough situation for one because I have been with this Group since I graduated college, and my knowledge of how things work outside of our Group and our Broker/Dealer is limited. One thing to note is that both Advisors will be helping/coaching/going to meetings with me along the way to help close business.

That being said had a meeting last week and things are still in flux, with no clear cut plan. I presented my concerns about pay, commission split, salary, and addressed what exactly do then envision for me (meaning am i still working with our current book of clients, or being more on my own)

A few scenarios have been discussed, with the main theme being I need more time to prospect/ take care of current book and do less of the Admin / Sales asst roles. For the next 30 days they are interviewing potential admin or sales asst candidates. Once that is established I will have a better idea if i am handing more of the Sales Asst/ Junior FA roles or more of a Full Time FA. The one piece established is the commission will work on a sliding scale, meaning once i hit certain bench marks in assets my commission will raise from 20-25% 25-30% etc..

My question for now: Does anyone have experience working with a sliding commission scale like i described? What are typical benchmarks, 5mil, 10mil in assets etc? Although i do not work in a wirehouse does anyone know what a New full time FA is expected to bring into the firm Year one (Assets & Revenue)

-BB

[quote=Bear Bullion]

Thanks again everyone for your input/advice on this topic. This is a tough situation for one because I have been with this Group since I graduated college, and my knowledge of how things work outside of our Group and our Broker/Dealer is limited. One thing to note is that both Advisors will be helping/coaching/going to meetings with me along the way to help close business.

That being said had a meeting last week and things are still in flux, with no clear cut plan. I presented my concerns about pay, commission split, salary, and addressed what exactly do then envision for me (meaning am i still working with our current book of clients, or being more on my own)

A few scenarios have been discussed, with the main theme being I need more time to prospect/ take care of current book and do less of the Admin / Sales asst roles. For the next 30 days they are interviewing potential admin or sales asst candidates. Once that is established I will have a better idea if i am handing more of the Sales Asst/ Junior FA roles or more of a Full Time FA. The one piece established is the commission will work on a sliding scale, meaning once i hit certain bench marks in assets my commission will raise from 20-25% 25-30% etc..

My question for now: Does anyone have experience working with a sliding commission scale like i described? What are typical benchmarks, 5mil, 10mil in assets etc? Although i do not work in a wirehouse does anyone know what a New full time FA is expected to bring into the firm Year one (Assets & Revenue)

-BB

[/quote]

Look up Broker Dealer top 50. It's on financial-planning I believe. Many scale from 50 up to 90-98% or so. Doesn't take much to get up to 80+ % for most. Production minimums typically ranges from 0-250.  

Seems kind of dumb from the senior broker's standpoint too.  How motivated will you be to grow HIS book, if he's only giving you the crumbs that fall off his table?  Paying somebody only 20% is the best way to get them to leave a firm, which is why the big wires are paying their low-end producers that.  They want them gone.

Nothing wrong with asking for 50/50, at a minimum.  But I would start laying the groundwork, right now, for an exit.  Get to know your advisors' C book really well, then make a leap to an indy firm in about a year.  Try to get as many of them to come with you as you can.  After all, you were the guy helping them anyway.

Yeah this is all seeming even more weird.... Good luck but usually your hunch is right and I agree with the guy above.  Start setting yourself up to go elsewhere.  Make sure you are learning all the in and outs.  Then you'll be able to really sell yourself to a different broker and work as your own business and usually a nice sign on bonus comes with that, as well!