[quote=joedabrkr] [quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]

For most truly professional advisers, the IPO game is a complete waste of time....
[/quote]

The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.

You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play.  It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.

Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.

[/quote]

There's a glaring flaw or two in your analysis Newbie....

For starters, remember that investment bankers are not the adviser's friend.  Their job is to get shares of the client company sold for as high a valuation as possible.  Not really a question that is open to debate...it's the duty they have to their client-the company going public.

Too, as you alluded, the deals you really want you almost never get enough shares.  Yet, to get a sufficiently high "index"(or whatever variation they have at "your" firm) you must participate heavily many or all of the other deals with aren't as hot, or perhaps even SUCK.  Consider, for example, new issues of closed end funds. How many of those are actually a good deal....in the best interests of the client?  Most of them you could easily pick up for 10-15% less once the syndicate bid drops out in about 90-120 days.  (Speaking only generically and hypothetically, of course.  Not making ANY recommendations for action!)

Last but not least, consider that when you're partipating in the IB process as an advisor, providing "distribution", what you're essentially doing in the case of a true NEW IPO is helping clients purchase shares in companies that are unseasoned.  Often these companies are managed by staff with little or no experience in running a publicy traded firm.  Those who have had insight into this process know that running a public company versus private firm is another league entirely with another consituency(shareholders) to serve.  Why mess around with that stuff when there are so many good quality companies out there with established track records as public firms?

Just one man's opinion....
[/quote]

Interesting how Newbie never responded to this one....maybe he didn't have a good rebuttal?  Or too busy trading insults with Metellnoname?
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//–> [/quote]

I'll put in a rebuttal.

If you participate in every deal and flip 30 or so days out, your average should be quite good. If you look at the average performance of all IPOs (www.ipohome.com), you will see that almost every bank's deals (on average) do quite well relative to their peer group. If you have the clientele (hedge funds, money managers), you can sell every deal and as much as you can get. They will buy into every deal and never complain.

Syndicate is very good business. There just isn't that much of it for most brokers.

[quote=san fran broker][quote=joedabrkr] [quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]

For most truly professional advisers, the IPO game is a complete waste of time....
[/quote]

The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.

You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play.  It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.

Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.

[/quote]

There's a glaring flaw or two in your analysis Newbie....

For starters, remember that investment bankers are not the adviser's friend.  Their job is to get shares of the client company sold for as high a valuation as possible.  Not really a question that is open to debate...it's the duty they have to their client-the company going public.

Too, as you alluded, the deals you really want you almost never get enough shares.  Yet, to get a sufficiently high "index"(or whatever variation they have at "your" firm) you must participate heavily many or all of the other deals with aren't as hot, or perhaps even SUCK.  Consider, for example, new issues of closed end funds. How many of those are actually a good deal....in the best interests of the client?  Most of them you could easily pick up for 10-15% less once the syndicate bid drops out in about 90-120 days.  (Speaking only generically and hypothetically, of course.  Not making ANY recommendations for action!)

Last but not least, consider that when you're partipating in the IB process as an advisor, providing "distribution", what you're essentially doing in the case of a true NEW IPO is helping clients purchase shares in companies that are unseasoned.  Often these companies are managed by staff with little or no experience in running a publicy traded firm.  Those who have had insight into this process know that running a public company versus private firm is another league entirely with another consituency(shareholders) to serve.  Why mess around with that stuff when there are so many good quality companies out there with established track records as public firms?

Just one man's opinion....
[/quote]

Interesting how Newbie never responded to this one....maybe he didn't have a good rebuttal?  Or too busy trading insults with Metellnoname?
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//–> [/quote]

I'll put in a rebuttal.

If you participate in every deal and flip 30 or so days out, your average should be quite good. If you look at the average performance of all IPOs (www.ipohome.com), you will see that almost every bank's deals (on average) do quite well relative to their peer group. If you have the clientele (hedge funds, money managers), you can sell every deal and as much as you can get. They will buy into every deal and never complain.

Syndicate is very good business. There just isn't that much of it for most brokers.

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//–>

[quote=joedabrkr] [quote=san fran broker][quote=joedabrkr] [quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]

For most truly professional advisers, the IPO game is a complete waste of time....
[/quote]

The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.

You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play.  It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.

Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.

[/quote]

There's a glaring flaw or two in your analysis Newbie....

For starters, remember that investment bankers are not the adviser's friend.  Their job is to get shares of the client company sold for as high a valuation as possible.  Not really a question that is open to debate...it's the duty they have to their client-the company going public.

Too, as you alluded, the deals you really want you almost never get enough shares.  Yet, to get a sufficiently high "index"(or whatever variation they have at "your" firm) you must participate heavily many or all of the other deals with aren't as hot, or perhaps even SUCK.  Consider, for example, new issues of closed end funds. How many of those are actually a good deal....in the best interests of the client?  Most of them you could easily pick up for 10-15% less once the syndicate bid drops out in about 90-120 days.  (Speaking only generically and hypothetically, of course.  Not making ANY recommendations for action!)

Last but not least, consider that when you're partipating in the IB process as an advisor, providing "distribution", what you're essentially doing in the case of a true NEW IPO is helping clients purchase shares in companies that are unseasoned.  Often these companies are managed by staff with little or no experience in running a publicy traded firm.  Those who have had insight into this process know that running a public company versus private firm is another league entirely with another consituency(shareholders) to serve.  Why mess around with that stuff when there are so many good quality companies out there with established track records as public firms?

Just one man's opinion....
[/quote]

Interesting how Newbie never responded to this one....maybe he didn't have a good rebuttal?  Or too busy trading insults with Metellnoname?
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//–> [/quote]

I'll put in a rebuttal.

If you participate in every deal and flip 30 or so days out, your average should be quite good. If you look at the average performance of all IPOs (www.ipohome.com), you will see that almost every bank's deals (on average) do quite well relative to their peer group. If you have the clientele (hedge funds, money managers), you can sell every deal and as much as you can get. They will buy into every deal and never complain.

Syndicate is very good business. There just isn't that much of it for most brokers.

[/quote]

In theory that sounds great.   But don't forget that for the 'hot' deals allocation is limited and yet for the dogs it's all you can eat.  I suspect that might hurt your real world returns.

Too, with most firms if you keep flipping out of deals after 30 days you might see the syndicate department make a call to the branch manager to cut back your allocation, too!
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//–> [/quote]

It depends upon the ratio of dogs to purebreads in your firm's pipeline. Dain Raucher is a little different from Credit Suisse. Most firms don't have a problem with flipping after a certain period of time. If you don't want the credit for flipping - then simply have the shares DTC-ed out. How many PIGS does a Merrill Lynch have anyway?

I had a friend who just interviewed with SB.  They provide a 2 year base, not 2.5.

I had a friend who just interviewed with SB.  They provide a 2 year base, not 2.5.

[quote=mrcl] I had a friend who just interviewed with SB. They provide a 2 year base, not 2.5.

[/quote]



This is not really correct. You get the full base while you are training. THEN, you get the 100% base for two years of production. So that right there does equal to 2.5 years of full base.



Then, you also get a declining base for months 25-30.

[quote=mrcl] I had a friend who just interviewed with SB.  They provide a 2 year base, not 2.5.
[/quote]

This is not really correct. You get the full base while you are training. THEN, you get the 100% base for two years of production. So that right there does equal to 2.5 years of full base.

Then, you also get a declining base for months 25-30.

As a new advisor, is it a good idea to join Morgan Stanley now?  Not sure if anything has changed in terms of comp, culture, etc. since this post was posted 2 years ago.  Any insight would be helpful.

There are many great posts on here, thank you all for adding some insight, some of you just made me laugh!

i’m a mid-career professional and I was told by the VP that he would put my salary at 60K. Aslo, you should consider that the higher salary comes with a higher expectation to produce.