Possible to start with an Independent?
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The more I lurk in these forums, the more posters I see that are unhappy with their present wirehouse employer and recent events, like MER’s dumping of the protocol. I’ve sat for 4 interviews with MER and it has gone well so far, and I got a call from EJ this morning to let me know I’ve passed my interviews with them and was ready to move onto the 25 survey doorknocking test.
But with all of the recent changes, like MER lowering the grid numbers for anything but the highest producers, I'm wondering... Is it possible to start with an independent outfit in this industry, like LPL? Do independent reps/offices take on newbies in exchange for a portion of their production in the following 2 or 3 years? I ask because having spent 5 years in the mortgage industry, I know that the best way to make money is to get yourself to a point where there isn't a manager/company skimming 60% of everything you produce right off the top. I started as a phone monkey without even a computer at my desk and within 3 years had my own licenses and brokerage. I'd need support in getting my licenses and a small salary to keep a roof over my head as I started out; but I'd be willing to trade a chunk of my production in the following years for it. Do independents offer such a thing, or just wirehouses?Why are you looking to switch careers? You maked it sound like you real good with the mortgage business, why switch?
The industry is very slow, obviously. That means that the only people left that qualify for a mortgage are AAA paper deals. People in that bracket can walk into any bank and get a great loan. I can get them something slightly better, but there’s very little profit in it.
I can still get business, just not enough to be worth it. Plus, the client base has no loyalty whatsoever. You can work with a guy for 3 months to repair his credit - but he'll throw you under a bus 48 hours before closing if another broker shaves 50 cents off his closing costs. It's a very cutthroat business. If I had it to do all over again, I'd have become and FA and started building a book of business 5 years ago.I think you could find someone willing to hire you, but i think a salary maybe out of the question. Most advisors who hire someone on(myself included) already take a portion of their production(both as a hedge and a way to cut down expenses) but the risk to add another producer to my business AND have to pay him a salary isn’t worth it. Because there are plenty of advisors out there(banks,edj,wirehouse) who are looking to move and already have their licenses and proven production, so the risk isn’t as big.
Well, a salary would be a must until my numbers were good enough that I could forego it. I was thinking something along the lines of like being an indentured servant and giving up 50% or 60% of my tickets until I had paid back whatever salary I drew twofold.
So if I drew a $50k salary for a year I would continue to give up a chunk of my business until my mentor had been repaid $100k. Or sumpn along those lines. Plus it would give me an incentive to get off the salary and start paying him back asap. At which point I'd become another independent agent in his office, paying my share of the E&O insurance, etc. I guess my real goal here is to avoid having to drag my clients away from a wirehouse if I ever decided to go Indy down the line. The independents all seem to be much happier than the wirehouse guys, and I know firsthand where that comes from. The day I closed my first loan and didn't have a"manager's" hand pickpocket 55% of it was one of the happiest days of my life.The problem is most indy guys came from somewhere else (wire,bank,regional,EDJ, etc) I don’t think you will find somebody willing to give you $50K/year with no licenses,experience or book. Too much of a risk… I don’t even know if you would get that anywhere, maybe a wirehouse, but I don’t think too many of them are hiring.
No, I understand the risks to the employer. I realize that a huge wirehouse has more cushion for error than does an independent guy. I was just wondering if one of the bigger independent operations like LPL had some kind of program like that for guys that have proven they can operate in a 100% commission based environment and have years of experience in finance and sales.
Potential,
90% of people fail in this business. Even though you are a "phone monkey," you may fail or decide you don't like the business. Work for a wirehouse for three years and then jump ship. You are not going to find a deal where you get to be independent and draw a signficant salary Best of LuckI second Henry's opinion. NO independent will offer you any salary more like a 50-80 percent payout depending on what you bring to the table. The better move is get some training find out if you like the industry or want to be in it. If you do and you have some numbers going to an established Indy for a solid payout can be a good move if you don't want the added pressure of running your own business.
Thanks for the insight, fellas.
I was just on the horn with RJ, seeing what they have to offer. The website would lead one to conclude they have some sort of paid training program like ML or EJ, but in speaking with someone at headquarters, she wanted to put me in touch with someone on the "traditional" side, saying I would need to take on a back office job first or something like that. I'm waiting to hear back from the traditional guy before I can confirm that. But it doesn't sound like what I was looking for.[quote=Potential]
Well, a salary would be a must until my numbers were good enough that I could forego it. I was thinking something along the lines of like being an indentured servant and giving up 50% or 60% of my tickets until I had paid back whatever salary I drew twofold.
So if I drew a $50k salary for a year I would continue to give up a chunk of my business until my mentor had been repaid $100k. Or sumpn along those lines. Plus it would give me an incentive to get off the salary and start paying him back asap. At which point I'd become another independent agent in his office, paying my share of the E&O insurance, etc. I guess my real goal here is to avoid having to drag my clients away from a wirehouse if I ever decided to go Indy down the line. The independents all seem to be much happier than the wirehouse guys, and I know firsthand where that comes from. The day I closed my first loan and didn't have a"manager's" hand pickpocket 55% of it was one of the happiest days of my life.[/quote] You just outlined the captive broker model at wires. Jones, regionals, wires, whatever you want to call them - this is their business - they pay you a salary to train you and get you going. They can afford to because of the law of large numbers. An indy office with 4 brokers and a few assistants doesn't have an extra 50 G's plus benefits lying around each year to pay someone to MAYBE make it (like a 10% shot). Too much downside, not enough upside. The only way you could do it is if you agreed to be the office assistant that they were going to hire anyway, and so you grew your book while drawaing a salary. Tough gig, though. I think your best bet is to take a captive role somewhere and build a book.Thanks B24. Yeah, I know I was asking for the best of both worlds. It looks like it’ll be EJ or ML. I’ve recently got the ball rolling with D&B, too, so I might see what they have to offer.
I am in the same situation and I would rather work with an Indy. But my problem is that I am looking for the additional income for about 3-4 months so that I can stay a float personally and business expenses. So here is my plan and let me know what you all think.
I have spoke to an independent who is very interested with me that wants me on board but will not be able to pay me a salary. The firm will only deal with a certain net worth or certain type of client. It will take me 3-4 months to close on a client that will fit the mode, but once closed I will have what I need to get started and enough to live off of until the next client. I have interviewed with EJ, Ameriprise, Northwestern Mutual and others. Most of the companies have paid training. Since I have my L&H, 7, and 66. I can generate some income from training and selling a couple of products to family and friends (of course the product has to be good, I am not a crook). I plan on doing this while I court my high networth client. This opportunity will help me relocate my family to a better region and it will help me get the business that I want to get into.
There are many small indy firms that would do such a deal, but the starting salary may be a bit lower than you need,
I’m indy & in the past I might have told you that there were a few folks, including myself, where that might be a possibility. But in the current economic climate, I’m looking to add someone, but I’m figuring that there are a fair number of people already with clients & some success or at least experience in the industry who I could bring on board. They might need a draw for a few months during transition, but after that, they would be up and running.
Granted, they aren't necessarily "keepers" at a wirehouse or just want out of that environment, but I don't have to take much financial risk to bring them on-board. This is an industry with a huge fail rate (some of which I believe is the industry's fault). Yes, you have some sales experience, but not sure anything else compares with financial services, as it is an on-going sales relationship, which doesn't really exist in other industries. Chances are you wll fail & with my small indy practice, I can't take that risk & pay you a salary. An indy BD (broker dealer) has no interest in you. So you're looking for someone like me, an indy office. You talk about being an indentured servant & giving me half your gross. But I'd be looking at 40-50% of your gross anyway (at the lower levels of produciton), if I'm paying your rent, your registration costs, errors & emission insurance, phone, computers, bookkeeping, payroll taxes, and on-and-on-and-on. Plus you're looking at doing this at a time when almost every advisor and office has reduced revenues, just because the value of assets managed is down. Continue to interview the traditional entryways to the industry, as that is most likely your only option.I don’t mean to be a pessimist…but I’d be surprised if you were hired by ML. I read that they just laid off around 400 new brokers. BAC is breathing down their necks.
[quote=TheLongHaul]I am in the same situation and I would rather work with an Indy. But my problem is that I am looking for the additional income for about 3-4 months so that I can stay a float personally and business expenses. So here is my plan and let me know what you all think.
I have spoke to an independent who is very interested with me that wants me on board but will not be able to pay me a salary. The firm will only deal with a certain net worth or certain type of client. It will take me 3-4 months to close on a client that will fit the mode, but once closed I will have what I need to get started and enough to live off of until the next client. I have interviewed with EJ, Ameriprise, Northwestern Mutual and others. Most of the companies have paid training. Since I have my L&H, 7, and 66. I can generate some income from training and selling a couple of products to family and friends (of course the product has to be good, I am not a crook). I plan on doing this while I court my high networth client. This opportunity will help me relocate my family to a better region and it will help me get the business that I want to get into.
[/quote]
You want honest advice? If your cash flow situation is such that you “cannot stay afloat personally” for 3-4 months without no income, you should seriously reconsider even entering this business. It can be lucrative in the longer term … if you are not among the 90%+ of new news who fail and wash out in the first few years. That’s a very big if.
Here’s the thing: people read these statistics and think that all these other people must have failed because these others weren’t quite as <insert whatever rationale you wish here> as they themselves are. Those of us who have been in the business a long time and have seen the teeming masses appear, launch and quickly disappear know this: most never gave themselves any real chance of making it because they never had the ability to survive the early months without making $X.
Many are not fired - they choose to quit because they realize they are making virtually nothing, and are not prepared for this tough - but predictable - situation. I’m convinced some of these guys - not many by any means, but some - would have made decent FAs and eventually enjoyed a good income had they simply been able to tough it out a few more months until the fruits of their prospecting labors really started to come through. But they didn’t have the cash to live on, and they had to throw in the towel when they were perhaps just on the cusp of breaking through.
In the early months/years almost everyone struggles financially - including many of those few who ultimately succeed. You need a financial cushion going in to give yourself the the opportunity to survive. If you don’t have the fuel to make it to your destination, or have an extra gallon or two of gas ready just in case, why even begin the journey?
Excellent advice. One question: is this market such that the timing for a new FA is better, worse, or the same as say 2 years ago? Reason for the question: when I was taking my surveys for Jones a month or so ago I received quite a bit of feedback from non-industry types that this may very well be an excellent time to enter the market as there are so many people out there now lacking trust in their current FA and they are truly confused and they most likely are in need of a new plan to increase their income. Is this a fair assessment? Your input is valued.[quote=TheLongHaul]I am in the same situation and I would rather work with an Indy. But my problem is that I am looking for the additional income for about 3-4 months so that I can stay a float personally and business expenses. So here is my plan and let me know what you all think.
I have spoke to an independent who is very interested with me that wants me on board but will not be able to pay me a salary. The firm will only deal with a certain net worth or certain type of client. It will take me 3-4 months to close on a client that will fit the mode, but once closed I will have what I need to get started and enough to live off of until the next client. I have interviewed with EJ, Ameriprise, Northwestern Mutual and others. Most of the companies have paid training. Since I have my L&H, 7, and 66. I can generate some income from training and selling a couple of products to family and friends (of course the product has to be good, I am not a crook). I plan on doing this while I court my high networth client. This opportunity will help me relocate my family to a better region and it will help me get the business that I want to get into.
[/quote]
You want honest advice? If your cash flow situation is such that you “cannot stay afloat personally” for 3-4 months without no income, you should seriously reconsider even entering this business. It can be lucrative in the longer term … if you are not among the 90%+ of new news who fail and wash out in the first few years. That’s a very big if.
Here’s the thing: people read these statistics and think that all these other people must have failed because these others weren’t quite as <insert whatever rationale you wish here> as they themselves are. Those of us who have been in the business a long time and have seen the teeming masses appear, launch and quickly disappear know this: most never gave themselves any real chance of making it because they never had the ability to survive the early months without making $X.
Many are not fired - they choose to quit because they realize they are making virtually nothing, and are not prepared for this tough - but predictable - situation. I’m convinced some of these guys - not many by any means, but some - would have made decent FAs and eventually enjoyed a good income had they simply been able to tough it out a few more months until the fruits of their prospecting labors really started to come through. But they didn’t have the cash to live on, and they had to throw in the towel when they were perhaps just on the cusp of breaking through.
In the early months/years almost everyone struggles financially - including many of those few who ultimately succeed. You need a financial cushion going in to give yourself the the opportunity to survive. If you don’t have the fuel to make it to your destination, or have an extra gallon or two of gas ready just in case, why even begin the journey?
Matt, I ehar the arguments both ways. What it comes down to is you. Either YOU will make it or YOU won’t. The market won’t dictate it. If I had my choice, I would start now instead of 1999 when nobody “needed” help.
Good stuff. Thanks.Matt, I ehar the arguments both ways. What it comes down to is you. Either YOU will make it or YOU won’t. The market won’t dictate it. If I had my choice, I would start now instead of 1999 when nobody “needed” help.