FiNet? Option?

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Jun 25, 2010 4:26 pm

Not sure where to put this and have not seen much chat about it...

I am as fed up as ever with WFA/Wachovia... They ruined AGE and now are making this new bastard of a firm even worse... I would like to just cut ties and go independent, but I owe the firm 75K in retention. I am considering FiNet.

30M and $300K producer (Yes low), but 75% reoccurring rev... Easy business model with 150 clients. (Yes, many small clients, but profitable)

Any words of advice from those of you out there. I figure I'll go FiNet, get back to building a practice (Which is very difficult here.) then go completely indy once I save enough to pay back my retention and/or enough years have

gone by...
Jun 26, 2010 11:36 pm

There are far worse options. Watch your overhead, do with as little expense as you can until your transition is done.

Jun 27, 2010 4:17 pm

You have to set up a due diligence meeting first anyway so just check it out.  Call them and go through the process.  I think it is a great option.  I went to the due dili meeting about a year and a half ago and ultimately decided to stay PCG for now, but if I go indie I will be going FiNet.

Jun 27, 2010 9:13 pm

If you leave WFA for FiNet, do you have to sign a contract stating that you will remain at FiNet for a period of time?  If so, how long?  Thanks.  Personally, I think there are far better options than FiNet, but it is nice to transition without anyone calling on your clients.

Jun 27, 2010 9:42 pm

no, you don't have to.  The only catch is that if you have money you owe PCG, you will still owe it to FiNet so if you then leave FiNet you would have to have taken care of that.  (Such as 4front money, etc.)

Jun 28, 2010 8:41 pm

If you go FiNet, you will still hate the company.  You have to ask yourself why you really want to leave.  If changing the comp structure and getting rid of your manager won't change what you hate, don't go.  Your clients are going to see 2 moves in a few years time as very unsettling.  Also, they are still going to see WFA plastered over everything.  The longer that they get comfortable with the firm, the harder it will be for you to take them and leave.

We looked very hard at going Indy, but ultimately decided to go to Stifel earlier this year.  We had a few top clients who could tell that we were unhappy ask us directly if we were going Indy.  They were very uncomfortable with the "Bernie Madoff" image of Indy's.  You and I know that they are wrong, but it made us very nervous about going indy.

Don't worry about the note.  Every firm that you would move to would pay you enough to get out of that note and then some.  If you liked Edwards (as we did), you will like Stifel or RayJay.  If you hate WFA, cut ties and leave.  Do it once and do it right.  It is way too much work to do twice.

Jun 29, 2010 1:59 am

Just curious - what are you fed up with?  What do you hate?

Jul 1, 2010 10:05 pm

Thanks for the advice guys...I do plan on doing my due diligence and I have thought about SN as well. I looked real hard at Oppenheimer but the local manager couldn't give me exact details on some services/products I use, also I get this feeling they are being built to be sold.   Not sure why, just a hunch.

Great point about changing twice….

QB, hmmm, what do I hate? Just about everything. But for me, it is mostly about philosophy. I was hired in the late 90's and believed in AGE. Believed in what we did. Loved (And I mean loved) our uncle Ben. Sure, the place changed when he stepped down, but the lies upon lies about why we were sold soiled me. I lost trust. I keep waiting for them to regain it, but honestly, the WB guys are friggin morons… The nightmare and I mean nightmare merger cost me clients and prospects because of the poor name of Wachovia, the bank and because of how bad our service standards fell. I had 2 prospects say yes, then said no because they went through the First Union merger and wanted nothing to do with WB.

After the merger, we were left with no systems (Still don‘t really), no contact management system, (Finally, we have one and it is very cumbersome…referred to a “click station“) and far less support with four times the compliance. The company is run out of little hubs with people that have no clue what a client is, yet what they need/demand... The big reason Danny wanted us was for our service model, then he changed it all. I don't know anyone in corporate any more. I have to call 1-800 #'s and half of the people there don't know their own job. I use Excellence First all the time, but I'm giving up because it is always us in the field who are wrong. When we are right, yes they know and are working on it, but nothing EVER gets accomplished. Very little changes. It is hard to grow in an environment like this.

Our payouts were cut for average producers. I now make some $16K less. We used to get 4 to 8 profit sharing (Not bad from a non-profitable company? Like those are ever "bought“)... Now, we get 1%. WF is demanding our AGE contributions in our old 401k... They then give us very little investment choices. Yes, we can pick models, which have two proprietary funds in them… Clients are nickel and dimmed to death as are advisors with transactional fee's and minimums and we spend weeks on our yearly "account maintenance fee's“ Did I mention that they had no mechanism to pay “commissioned employees“ My taxes are going to be a mess this year! ...yada yada yada.... I could be more concise and go on and on , I'm just rattling off the top of my head.

I will say, on a good note, clients are comfortable with the Wells name and do like Envision. I like Envision very much, but there are many programs out there like it and soon everyone will have it or something like it.

ahhhhh, that felt good...sorry to ramble...  I guess when/if I do leave I will be a "regretable".  Shame, I never view clients that way...  

Jul 1, 2010 10:14 pm

Funny I don't like envision at all.  I think it is a poor program, but think the firm has improved dramatically since the merger mess.  Still not on the level of AGE, but much improved!

Jul 1, 2010 11:09 pm

Agree it is improved...but that is like saying we are the shortest midget in the room.

At AGE, I felt like it was worth giving 57% of my gross to corporate.  Now I get 1/2 the help and 4 times the compliance and I give them 63% of my gross.   Now, if I go FiNet, I keep 85% (Say 60% after expenses).  If the work is going to funnel from corp to the producers, I might as well get paid for it.  And the hub concept just isn't working in our region.  It should and it can, but it comes down to people.  Not sure we have the right people.

Jul 2, 2010 4:15 pm

I was never at AGE so I can't speak to the anguish all AGE folks seem to feel over the mergers.

But I am w/Finet and can comment a bit on my experience.

Back office, operations, product supprt, technology support, etc, are all the same people. Smart Station is the same although you'll be accessing it through your own machines w/o WF oversight.

What is different is compliance, some marketing and general problem resolution. Finet has its own team of about 50 that operate w/i the st louis complex. They handle these functions.

They try to promote an indy culture. Sometimes they suceed. Sometimes it feels very wire-like. Ludeman, for example, seems to be quite clueless that Finet FAs are independent and he is just a vendor. But Peluso and the top Finet guys seem to get it.

Payout is 80% to 90% before your local expenses. In line with other indys. What I found in my DD was that each indy tends to be more competitive in a certain product space. For me - PIM based - Finet was very competitive. You need to figure that out for your own practice.

You can make significantly more than you do now, but you need to be realistic about your local overhead. Assume a minimum of $6 - $8k per month if you want to replicate the support and office environment you have now. If you want to go it alone with no support in a shared or executive office maybe $3 - $4k. But you get what you pay for in efficiency, client experience and your own self satisfaction. I think $300k would be the min production needed to do more than just break even with the employee model.

I have found Finet to be an honorable and capable Vendor and after 2 years with them quite satisfied. 

But you would need to be ok with continued association w/Wells. Your experience may have left you too bitter to stay with them in any capacity and, if so, you might be better in a completely different platform and environment.

Hope it helps. PM me if needed. 

Jul 2, 2010 8:07 pm

Muck, I sent a PM, but check out Woodbury if you're thinking indy.

Good luck!

Sep 11, 2010 5:42 am

Northfield is correct-don't listen to the angry AG Edwards FA's.  If your doing fee based business FINET deserves a look.  You can use the WFA name to avoid the Bernie image.  To move it is now a positive consent by "household" .  One signature fax or scaned moves the whole household. Very easy.  You bring 90% while sitting in your old branch.  It all comes over over one weekend and you are open Monday. As a PCG first year you pay an additional 15% to the old branch which is huge so keep your costs down.  The support is improving daily. 

The more important question is do you want to be a owner or an employee.  Issues like health insurance, upfront costs, leases, accounting, compliance, and sfaff are now all on you.  You have to be a cheap controll freak to be successful the first few years (or have a partner/sfaff member who is).

Try and bring a partner and TAKE THE 9 AND 10 OR 24 BEFORE YOU LEAVE. 

Do not go indie for a higher payout alone.  Do more production or go to SF or Ray Jay. 

Good Luck.