If you leave your book behind the wirehouses typically do NOT come after you. If you go work for a competitor and "attempt" to bring those clients along, you're pretty much hosed and I can't say I blame them since that's what you got that "loan" for---those assets, your clients.

Speak to a real NASD arb lawyer before you walk out the door. By real, I mean someone with 5 years plus specializing in NASD arb only whose track record is .800 or better. Don't sell yourself short by trying to be cheap. That means steer clear of the divorce court lawyers who practice NASD arb on the side.

NOT NOT NOT TRUE!!! they will come after you. PM me if you need more.

Why don’t you read your contract. The answer is in there.

couldn't respnd to your PM.

Hers a quick summary:

Your up-front money is amortized over a certain time frame (ie 4 years), that amortization is then taken out of your offices p&l (expensed) on a yearly basis. If you leave, the amount that is left immediately hits the p&l as an expense, your manager takes the whole hit in that year. He could care less if you leave your book because that amount is an expense that affects his bottom line more than your books revenue affects the top line. Believe me they will come after you. Try selling your book to someone in the office to offset the amount you will pay in arbitration. I tried being a good guy once and I still got a demand notice, good luck to you.

Same here.  Left the book, started over elsewhere.  I told the branch manager I was dead broke and leaving my book.  He was a nice guy but told me the home office didn't care about the book.

  You signed a legal document that says upon termination (for any reason) you owe back the balance.  I left two years into a five year deal and paid back (after negotiation) .46 on the dollar of what they demanded (the pro - rated 3 year balance of the loan).  I think if I had negotated harder I might have done better, but I got to the point where I just wanted it off my back.

Negotiate a one time settlement - don't let them convince you to make monthly payments.  Also make sure they pay the taxes on the settlement (I didn't and got a $25k bill from uncle Sam).  Whatever they forgive (and they WILL forgive some of it) is taxable income 1099.  Good luck.  An upfront check always sounds so great but it is often a heavy anchor.  Next time get a big fat payout or annual look backs.  Live and learn.

you could have told me that earlier

You wouldn’t have come and I wouldn’t get my override

Somebody explain to me how these forgiveable loans work…Does a firm offer you $$ to come over but you have to stay a certain time frame in order to not have to pay them back?

You are given an upfront check based on your assets and production. The money is considered a forgivable loan. Which means every month a portion of the loan is forgiven. If you take a check that amount is forgiven over the length of the loan. Example would be you take a check for 420k and it is forgiven over 60 months. You then pay tax on what is called “phantom” income monthly. So, each month for 60 months you pay tax on the income that was forgiven that month. In this instance $7,000/month would be forgiven and you pay tax on that as if it was income until the entire loan is “forgiven” and has been taxed over the 60 months. I summarized a bit, but this is idea.

They gave you the money up front and you signed a contract to pay it
back.  What in the Heck would make you, or anyone else, think you
do not have to pay it back?  They gave you money and you spent it
before it was really yours.  Pay it back, every penny of it, even
if you have to set up some sort of payment plan. 



As for leaving clients…who cares?  How do you value the clients
you leave and how does that reduce what you owe them?  Those
clients could leave on there own accord any time…they cannot rely on
that.



 

I understand what you are saying rightway and I agree.  I am not trying to weezle my way out of an agreement, but I do think some credence should be given to the fact that they changed the rules on my part way though the deal.  They cut my grid payout and for that I think some consideration should be given on both of our parts for my “failure” to perform to the standard they or I would want.

I agree with dividends. Broken promises means I fight to keep the money.

And…based on BAC’s recent losing precedents in arbitration concerning those broken promises, I’ll take my chances in trying to retain that money should I leave.

I agree with rightway:  a contract is a contract is a contract.  I doubt it says in there "you owe the $ back if you leave, unless you decide we didn't measure up to your standards."  A solution to this "problem" is called due diligence--you ask LOTS of questions of people with many different perspectives.  Seems enlightening (or at least interesting) that someone who uses the handle "rightway" says you should honor a legal contract, but someone who has chosen "ezmoney" doesn't.  Who woulda thought?

The bottom line is that if and when you change firms, you are making a risk/reward decision.  Just because you made it poorly doesn't mean you should get a do over--just learn from it and move on.

[quote=Cowboy93]

I agree with rightway:  a contract is a contract is a contract.  I doubt it says in there "you owe the $ back if you leave, unless you decide we didn't measure up to your standards." 

[/quote]

Again, the issue with me is not that they didnt "measure up to standards."  It is that they changed the measuring stick.  Half-way through my contract they basically decided to cut payout of about 1/3 for my production level.  I have had very nice production and AUM growth since coming here and believe that I have done OK work for the firm.  Is it the best?  No, I understand I am behind the curve a little and this is not an excuse.  I just feel like ceteris paribus from the start of employment I would not consider leaving had their rules stayed the same.

Hey - I say you fight to keep as much money as you can.  The large wire house wouldn't hesitate to cut you loose if you became a liability.  They would have no loyalty to you.

Fight it in any way you can.  You owe it to your family to hold on to as much of that $ as you can.  That's just business.

Ask anyone who paid back $ and they wish they had fought back harder (myself included).

I hired two attorneys: first was a securities lawyer who spent many years at the SEC.  He got me a 50% discount on the balance owed, but I never made a payment.

Then 5 years later, I hired a bankruptcy trustee attorney (no, I didn’t actually file a bankruptcy, it was just a tactic) to negotiate a lump sum payment equal to 10% of the balance owed. So I did. I think it worked out well for me. Hope it works out better for you.

When you hire an attorney, make sure they are highly regarded in their field so opposing counsel takes them more seriously. Just my 2 cents.

I like your style. Good strategy.

[quote=skeedaddy2]I hired two attorneys: first was a securities lawyer who spent many years at the SEC.  He got me a 50% discount on the balance owed, but I never made a payment.

Then 5 years later, I hired a bankruptcy trustee attorney (no, I didn’t actually file a bankruptcy, it was just a tactic) to negotiate a lump sum payment equal to 10% of the balance owed. So I did. I think it worked out well for me. Hope it works out better for you.

When you hire an attorney, make sure they are highly regarded in their field so opposing counsel takes them more seriously. Just my 2 cents.

[/quote]


On a U4, you have to declare any and all settlements that have been made with creditors in the last 10 years.  Did your situation end up on your U4, and if it didn’t, then why didn’t it?  It seems to me that you ended up with two settlements.