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Mar 10, 2011 8:16 pm

I have been an FA at Jones for 2 and a half years and have been doing very well. I have moved through the Segments very quickly and have about 14M in AUM. A local very large RIA who has a national presence wants me to come be a Wealth Manager at his firm and I would do Wealth Transfer and Investment Advisory. Compensation would be $7,000/Month draw agains future revenue and if it didn't work out and I left I would not owe any of it back. $2k upfront for any expenses. No overhead. Fully paid Medical benefits. 7% Profit sharing, 3% Safe Harbor 401k contribution and 3% Defined Benefit contribution. RIA manages 1.5Billion AUM. Investment Advisory comp would be 30% payout hypothetically charging 1% to clients. Insurance would be 40% of gross TP if I created the opportunity if it comes from his existing referral sources I would net 25% of full TP.Has over 100 CPA firms referring Insurance cases. I am pretty happy at Jones and have been doing very well and I'm in the Top 25% but I feel like this may be to good of an opportunity to pass up. I would have no ceiling on my Comp but I would have a floor that I do not currently have. Would give up some flexibility I'm sure but it would also be nice to be around some colleagues again. Any advice or opinions are welcomed. Thanks. 

Mar 10, 2011 8:50 pm

Take it....

Mar 10, 2011 9:23 pm

I can't see how taking it would be a win for you. You're not making more money.  You'll have to pay Jones $$$ to get out of the conract.   If you are doing so well, stay another six months and start your own RIA or ask for a better deal.

Mar 10, 2011 9:36 pm


The draw is a minimum. The benefit package is much better and the RIA also caters to HNW and would give me greater to access to that market. He is also very busy and said that over time he would perhaps transition his smaller clients ($500k) to myself after he trusts me to treat them the way he would. I could probably transfer 8m from my office and then would have the opportunity to take on some of his clients. I estimate I could grow faster as my market demographic would be HNW clients and I could target anyone in the country vs local town I am in.I'm leaning in this direction, its just hard to give up all the hard work I have done to this point.

Mar 10, 2011 10:16 pm

Well, if you have already made your mind up why ask for opinions?

I get that the draw is a minimum but how much gross do you need to do at 30% advisory fee and 40% insurance to blow by that 7k.  It just seems like a raw deal to me.  He is keeping 70% of your gross to provide an office and some extra medical benefits?

If you want to leave Jones.  Why not start your own firm.  Keep 100%.  Grow it and build those relationships yourself.

Mar 11, 2011 10:02 am

It appears to be at least a reasonable deal.  He's going to basically give you a salary of  $84K a year.  Your job is to net more than that.  So, you've got to gross $280K @ 30% before you start to make more than your draw.  On that $280K he gets to keep the rest.  Not a bad deal for him.  The only risk to him is that you don't make that $7000 a month and he's in the hole for it.  But as long as you gross more than $10K at 70% to him, he's golden.  His big money is made in between the $120K a year and $280K a year. 

What SuperMan is saying makes complete sense.  If you hit $10K a month in your own RIA practice, you'd be well beyond the $84K draw this guy is offering.  To me the only real benefit I see from this deal you've been offered is the benefit package and the comfort of knowing that you've got that floor. 

Him giving you clients at some point in the future could end up being a pipe dream.  Or it might turn out to be the best thing that has happened to you in your career.  Who knows. 

I don't think it's a bad deal.  It's just not a slam dunk. 

Mar 11, 2011 7:46 pm

Thanks for the comments. I have decided at this time to stay at Jones unless he can offer me 50% on Investment Advisory. Thanks.

Mar 22, 2011 12:14 pm

A lot of good comments here.  I would suggest you ask more questions to learn more about the RIA to fully vet the opportunity.

How many other reps does he have?.

What are they producing individually (not on average, but each--you don't want the megaproducer skewing the numbers)

Can you speak with any of his reps?  This could be instrumental in learning much about what they are experiencing:  How much revenue from referals? How much insurance business referred from all these CPAs.

Other factors--do you own clients you develop or bring with you?  

30% seems low unless he's bringing a ton of leads in the door that you develop and collect revenue/fees on.

Try the above and tell us what you find.



Mar 22, 2011 12:18 pm

PS:  What part of the country are you in?


Apr 9, 2011 8:52 pm

Does anyone know what the upfront payout is to move and transidtion assets from one wirehouse to another? A few years ago it was 1% -3% . What about 2011?

Apr 10, 2011 12:22 am

Stick around a little bit longer.  At least until you hit your 3 year anniversary.  That way Jones can't tag you for training costs.  It's okay to keep your eye on other opportunities but keep building your realationships.  I like the idea of you starting your own shop. 

Apr 10, 2011 12:23 am

Stick around a little bit longer.  At least until you hit your 3 year anniversary.  That way Jones can't tag you for training costs.  It's okay to keep your eye on other opportunities but keep building your relationships.  I like the idea of you starting your own shop.  At least that way you could set your own commissions.