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Apr 19, 2006 9:52 am

If one were to become a new INDY tomorrow... What would you base your product lines around.. Mostly I am thinking about asset allocation.

Obviously everyone has different needs, but I see some people talk about 6 different portfolios of funds (growth, international, income, small cap, large cap, ect..). Others talk about picking stocks and establishing their own portfolios. Index funds or any other idea?

Working on a game plan... I am sure it will change daily, but I figure having a plan is good. 

Any advice is greatly appreciated...

Apr 19, 2006 10:31 am

If all you are selling to your client's is an asset allocation mutual fund, why do they need you?  They can get that on their own.

Apr 19, 2006 10:52 am

True, but I don't plan on only selling a mutual fund... We provide everything from insurance, retirement, college, business planning, minor taxation to mortgages.

If a customer wants a fund I would like to have options that make sense. I thought the best service is to provide the client as many services as possible. Maybe this question does not make sense?

In the past I heard numerous people (here) talk about different methods of asset alocation that worked. More or less the customer found the simplicity attractive and convenient. Cheers

Apr 19, 2006 11:06 am

No, your question does make sense.  You need to have as many arrows in your quiver as you can.  Your customers need to feel that they NEED YOU and that you are a valuable, irreplaceable resource.

I do use asset allocation models that are provided by my B/D research as a starting point when dealing with a client.  Asset allocation is a basic concept that almost all investment planning is centered around. so I guess I didn't understand your question.

I don't mind asset allocation funds as a part of client's portfolios, but usually with a client that has enough assets you can create and manage the asset allocation yourself with various stocks, bonds, ETFs, mutual funds etc.   I guess I am more of a hands on advisor. 

Apr 19, 2006 12:12 pm

When you say hands on are you talking about specific stocks or you design your own portfolios?

From what I see and hear the general public is clueless when it comes to any method to develop and maintain wealth.

So if an average Joe came to me to roll over a TSP, 403b or 401k with 100k, 200k or 300k assets... Then a experienced like your self would reccommend something deferred? Honestly, I am learning before I talk to clients so any advice is greatly appreciated.

Apr 19, 2006 8:18 pm

I’ll take a crack at this…

First, your advice will be tailored to your audience. And, specifically, that

audience will be changing based on the circumstance of the client

Second, let’s also assume that you know when to use a deferred

investment and when not to use a deferred investment. (the question you

just asked about using a deferred investment could only come from

someone who didn’t know better - don’t take offense to this…)

So, Identify with a specific group - Make an effort to handle the rollover

retirement planning market for a local company. Get your feet wet doing

a seminar or two about the options faced by retirees who retire from the

local company - What are their distribution options? What do people do if

they are under the age of 59 1/2? What are you suggesting for their

401K plan funds, vs. their pension rollover? Get to know the specific

retirement plans of a few local companies… talk to the HR guy, etc.

Know your market.

Sidenote: Lots of advisors have lost deals because they’ve insisted that

the rules governing retirement planning distributions ONLY permit certain

types of distributions. But, if you are 55 in most companies, you can

’bend the rule’ and still make your client happy… just an example… but,

if you don’t know the specifics concerning your target market’s retirement

plan, you don’t get the business.

Once you’ve established yourself, I’d advise you to consider using a

mutual fund approach to investing client funds. You are too new to our

business to even consider using individual stocks. Rely on your firm’s

resources to review mutual funds which would work for certain investors.

build those portfolios within a fee-based investment model. You’ll find

that most investors are hesitant to watch as $15,000 in commissions are

paid up-front. So, unless you work at Edward Jones, you will find that

other options might be more attractive for your clients. The ‘pay as you

go’ fee option allows the client to give you a test-drive.

So, I’d opt to use funds initially… then look to add some additional

resources. Rely on your firm to provide you with some guidance, and

hope like hell that you have a solid training background before you hit

the pavement.

Fee-based, Mutual Funds, meet with your client regularly.

That’s what I would sell. Don’t be too product oriented.

Good luck.


Apr 20, 2006 8:34 am

Thanks... I only ask since I have a 12 years experience with TSP/401k (union/military/government) employees. The government/military is about to have a massive retirement over the next 10 years and I want to be "ready to go. (famous military quote)"

For sure once I am on the front lines (hopefully in May!) I will be dealing with clients issues daily. Also like you state it would be stupid for me to even stress about anything to do with stock picking.

What amazes me is the multiple avenues to make money as a PFA. One can with a mortgage... One can assist with life insurance... One can get fee/trailing income from any time of advising... Business development... Estate planning... College planning...   

To do fee based investment advice you have to pass another exam? Yes, I know act of 1940, but I ask to clear fine line between FA and RR.

Apr 20, 2006 8:55 am

Also when I say deferred I know there are VA's, company plans, IRA, cash out with tax & penalty and other things.... Today I will study these product lines. For sure fee based on most things is the way to go!

Mostly I need to get OJT.. Actually the process of moving this TSP to this VA. Step one through 15. This will come when I am on the front line.

Apr 22, 2006 9:50 am

C shares are similar client doesn’t pay to get in can get out any time after 1 year with no penalty prior to one year 1% penalty you get paid 1% a year.  You have flexibility to change fund families if performance is poor, manager changes, style drift etc…