The 5 MM gives you about a year’s headstart. Don’t even think about what net income 5M will provide, because it’s not enough…The first 3 years in the business will be very tough, prepare yourself now.

Prepare yourself for long weeks and long weekends. Prepare yourself for CONSTANT stress- even when you are not in the office you are thinking about your business and how to make it sustain, grow, and reap rewards.... Prepare yourself to PROSPECT 90% of the time..

As for the Goodnight, I adont work for EDJ. But if anyone was given 5MM, it would provide a semblance of a captive base to then mine for other business, referrals, etc.

Good luck.

Run the other way.  Look at some of the major firms, they'll pay better over the first few years and will promote long-term thinking, not just a transaction.  Morgan Stanley, Merrill Lynch, Smith Barney are all pretty similar.

If you personally know(family member, personal friend etc) the rep offering you the goodnight then consider it.  You take a salary cut for taking it, and usually get non rev/referral generating crap that the old ir doesn’t want.  Be skeptical at best. 

You need to ask what Revenue that $5m in assets produces on a yearly basis.  It is not much good to have a bunch of clients who are not paying you.

I just inherited $500k in assets.  But, they were transactional.  I won't make any money unless I can change their investments.  And I won't do that unless it is the right thing for my customers.

Sorry, I am typing fast during my lunch.  If you are inheriting a bunch of customers who bought A share mutual funds, you are not going to make more than 25 basis points, you can't live on that.

I looked at EDJ earlier this year myself. I came to the conclusion it I was going to pay for all the stuff associated with running one of their offices I wanted a larger cut of the pie, like the whole pie. I am going to LPL withing the next two weeks and joining an existing indy firm. I am paying a 10% override and will pay $1,100 per month in rent and for ALL expenses after the first 90 days. Just food for thought before you make the jump.

I would look very carefully at the Goodknight sponsorship, find out how the assets are distributed. If they are a bunch of dead annuities and accounts just holding mega cap stocks and not producing a management fee or any trails I dont know if I would take it.

Thank you to everyone who has responded thus far...the comments are surely food for thought.

Just curious about other firms...do you need to have a book or experience to be considered at some of the other firms?...I have neither.

[quote=giff74]

I looked at EDJ earlier this year myself. I came to the conclusion it I was going to pay for all the stuff associated with running one of their offices I wanted a larger cut of the pie, like the whole pie. I am going to LPL withing the next two weeks and joining an existing indy firm. I am paying a 10% override and will pay $1,100 per month in rent and for ALL expenses after the first 90 days. Just food for thought before you make the jump.

I would look very carefully at the Goodknight sponsorship, find out how the assets are distributed. If they are a bunch of dead annuities and accounts just holding mega cap stocks and not producing a management fee or any trails I dont know if I would take it.

[/quote]

Giff74- Are you saying that your monthly expenses are going to be 1100 dollars rent plus all expenses after 90 days and you think that will be less than at Jones?

[quote=noggin][quote=giff74]

I looked at EDJ earlier this year myself. I came to the conclusion it I was going to pay for all the stuff associated with running one of their offices I wanted a larger cut of the pie, like the whole pie. I am going to LPL withing the next two weeks and joining an existing indy firm. I am paying a 10% override and will pay $1,100 per month in rent and for ALL expenses after the first 90 days. Just food for thought before you make the jump.

I would look very carefully at the Goodknight sponsorship, find out how the assets are distributed. If they are a bunch of dead annuities and accounts just holding mega cap stocks and not producing a management fee or any trails I dont know if I would take it.

[/quote]

Giff74- Are you saying that your monthly expenses are going to be 1100 dollars rent plus all expenses after 90 days and you think that will be less than at Jones?

[/quote]

It will with an 80% payout on fee business and a 65% payout on securities comissions......

[quote=joedabrkr][quote=noggin][quote=giff74]

I looked at EDJ earlier this year myself. I came to the conclusion it I was going to pay for all the stuff associated with running one of their offices I wanted a larger cut of the pie, like the whole pie. I am going to LPL withing the next two weeks and joining an existing indy firm. I am paying a 10% override and will pay $1,100 per month in rent and for ALL expenses after the first 90 days. Just food for thought before you make the jump.

I would look very carefully at the Goodknight sponsorship, find out how the assets are distributed. If they are a bunch of dead annuities and accounts just holding mega cap stocks and not producing a management fee or any trails I dont know if I would take it.

[/quote]

Giff74- Are you saying that your monthly expenses are going to be 1100 dollars rent plus all expenses after 90 days and you think that will be less than at Jones?

[/quote]

It will with an 80% payout on fee business and a 65% payout on securities comissions......

[/quote]

Sorry guys, that was clear as mud. They offered me a deal of 15% override and $1100 per month, which covers all rent and expenses. I negotiated down to a 10% and they will cover my expenses for the first 90 days. I was concerned about coming up with what amounts to a second mortgage during the first few months of being in business. I think I should average something around a ~70% payout. I am sure Joe has a better handle on this as he is already at LPL.

Giff74

10% of gross! Plus rent!

So think about this $200,000 production = $20,000

 Rent per month  $1,100 *12 = $13,200

 So you are paying $33,200 annually to have an office   

I would think you could find a upscale office in most communities for this price! 

And remember with LPL your OSJ has to sign off on the clients if you ever decide to leave that office and start a new one with LPL! I would just start out on your own with LPL  . LPL is a good firm that is who I am with!

If you’re new to the biz, the above sounds like a good deal…if you generate 10k in gross rev, you should keep around 64% (10000-1500 (LPL) - 1000 (existing firm) -1100 (rent)).  That’s dang good.  At 20k/month, it’s more like 70%.  The main diff besides Jones, wirehouses, etc. is that you give up less % of a growing number, so far more $ over your fixed costs fall to your bottom line.

At Ray Jay you would get a salary for 2 years and 10% commission your first year and 20% your second.  But here is the thing, you prospect any way you want (door knock if you want to) and you SELL anything.  EDJ limits you in both of those ways.  Look it is a pain to move a book, so start off at the right place.

First year salary around $28,268 and second year $23,660.  You get bonuses too for hitting your targets which are $4m assets and $50,000 revenue first year.  $10m assets and $150,000 revenue second year.

No charge for mailings, computer, research, copier.  I think EDJ dings you for all of that, but I may be wrong.

[quote=Cowboy93]If you're new to the biz, the above sounds like a good deal...if you generate 10k in gross rev, you should keep around 64% (10000-1500 (LPL) - 1000 (existing firm) -1100 (rent)).  That's dang good.  At 20k/month, it's more like 70%.  The main diff besides Jones, wirehouses, etc. is that you give up less % of a growing number, so far more $ over your fixed costs fall to your bottom line.[/quote]

Thanks for sharing these numbers.  That is exactly how I see it.    They covered this in Econ 101 but Jones guys just dont seem to get it.  Awesome stuff!!!

[quote=Greenbacks]

Giff74

10% of gross! Plus rent!

So think about this $200,000 production = $20,000

 Rent per month  $1,100 *12 = $13,200

 So you are paying $33,200 annually to have an office   

I would think you could find a upscale office in most communities for this price! 

And remember with LPL your OSJ has to sign off on the clients if you ever decide to leave that office and start a new one with LPL! I would just start out on your own with LPL  . LPL is a good firm that is who I am with!

[/quote]

I agree with Greenbacks, with the caveat that getting up and running as your own OSJ and also passing the series 24 is a lot of work on top of moving over your accounts.  I know-I'm still in the midst of doing it!

[quote=joedabrkr][quote=Greenbacks]

Giff74

10% of gross! Plus rent!

So think about this $200,000 production = $20,000

 Rent per month  $1,100 *12 = $13,200

 So you are paying $33,200 annually to have an office   

I would think you could find a upscale office in most communities for this price! 

And remember with LPL your OSJ has to sign off on the clients if you ever decide to leave that office and start a new one with LPL! I would just start out on your own with LPL  . LPL is a good firm that is who I am with!

[/quote]

I agree with Greenbacks, with the caveat that getting up and running as your own OSJ and also passing the series 24 is a lot of work on top of moving over your accounts.  I know-I'm still in the midst of doing it!

[/quote]

I know this arrangement has its ups and downs. However, remember I was giving the bank a much greater cut than $32k a year for my office, believe me!

Secondly as I think Joe will attest getting your very own office up and running is a major undertaking. I have only been in the business for about 4 years, I have enough other things to worry about besides work to the building, painting, plumbing, new furniture, hiring assistants, etc. Plus the 10% override is much better than having the home office do your compliance, they start at like 15% and come down on a tiered system. The $1100/month cover rent, pens, paper, postage, shipping, two office assistants, copies, fax, business cards, e & o, overnight shipping, file folders, you get the idea. I may have been able to do better on my own, but I wouldnt have as nice of an office or LICENSED assistants.

The other plus for me right now is fixed costs. If my copier blew up one month and the fax the next, plus I was still paying rent...well you get the idea. I may not have the best deal out there, but it will be good for me for the next 4 or 5 years until I want to contend with getting my 24.

I figure by the end of '06 I can be hitting some pretty steady $20K months, then $20k - ~12% - 10% - $1100 = ~$14500, then put back about half for insurance, fica and tax and I can still pocket over $7000 a month and itemize the whole year and get a monster return.

Sounds pretty good on paper, plus I just bought some comfortable shoes for b2b prospecting.

[quote=giff74][quote=joedabrkr][quote=Greenbacks]

Giff74

10% of gross! Plus rent!

So think about this $200,000 production = $20,000

 Rent per month  $1,100 *12 = $13,200

 So you are paying $33,200 annually to have an office   

I would think you could find a upscale office in most communities for this price! 

And remember with LPL your OSJ has to sign off on the clients if you ever decide to leave that office and start a new one with LPL! I would just start out on your own with LPL  . LPL is a good firm that is who I am with!

[/quote]

I agree with Greenbacks, with the caveat that getting up and running as your own OSJ and also passing the series 24 is a lot of work on top of moving over your accounts.  I know-I'm still in the midst of doing it!

[/quote]

I know this arrangement has its ups and downs. However, remember I was giving the bank a much greater cut than $32k a year for my office, believe me!

Secondly as I think Joe will attest getting your very own office up and running is a major undertaking. I have only been in the business for about 4 years, I have enough other things to worry about besides work to the building, painting, plumbing, new furniture, hiring assistants, etc. Plus the 10% override is much better than having the home office do your compliance, they start at like 15% and come down on a tiered system. The $1100/month cover rent, pens, paper, postage, shipping, two office assistants, copies, fax, business cards, e & o, overnight shipping, file folders, you get the idea. I may have been able to do better on my own, but I wouldnt have as nice of an office or LICENSED assistants.

The other plus for me right now is fixed costs. If my copier blew up one month and the fax the next, plus I was still paying rent...well you get the idea. I may not have the best deal out there, but it will be good for me for the next 4 or 5 years until I want to contend with getting my 24.

I figure by the end of '06 I can be hitting some pretty steady $20K months, then $20k - ~12% - 10% - $1100 = ~$14500, then put back about half for insurance, fica and tax and I can still pocket over $7000 a month and itemize the whole year and get a monster return.

Sounds pretty good on paper, plus I just bought some comfortable shoes for b2b prospecting.

[/quote]

giff I really think you're heading in the right direction, and it sounds like you've put a lot of thought into it.  I really like having my own OSJ, but it was an awful lot of work getting things up and running.  Focus on getting your assets over and your pipeline full.

Good luck!

I would run the numbers conservatively 1st yr at 100K gross, 2nd yr at 150K and 3 yr at 200K and see how the numbers looked. I would say thinking that you could generate 20K months consistently from scratch being in the business 10-12 months is very optimistic. The thing I like best about all of this is the amount of thought and time you’ve put into it. Good luck!!

Giff74 you will not be able to take the 24 ever  unless your OSJ writes a letter to LPL giving his ok!  You will not be able to move your clients to another branch at LPL no matter how much you gross!

It is all up to your OSJ!   He rules you