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Aug 4, 2009 12:28 pm

[quote=voltmoie]



My logic might be off, correct me if it is. As I build my client list I’ll have less time to service those with smaller accounts. Why should I put them in C shares if I won’t monitor their accounts and earn my 1% per year? Hopefully I’ll have the time… but will I really? Also, I’d prob. stick them into a Franklin asset allocation fund in most cases. I know the exp. ratio is higher but it seems like I can achieve better diversification for them over the long haul with this model.So, under 25k … A shares. Above 25k C shares which I hope to meet more often with.Again, my logic could be flawed. (I also take into account time horizon.)

[/quote]



Your logic is flawed. Under 25k there is no breakpoint. What if you made a mistake in your fund selection. You are going to cost the client more and they’ll end up making less than your wealthier clients, and receive absolutely zero help.



The upfront sales charge is often billed as a “one-time advisor fee”. If you are not going to service these people, what is the point in them paying the one-time advisor fee. It’s better for them to pay someone $500 to come up with an asset allocation plan and send them to Vanguard.



Aug 4, 2009 12:42 pm
Moraen:

[quote=voltmoie]

My logic might be off, correct me if it is.  As I build my client list I’ll have less time to service those with smaller accounts.  Why should I put them in C shares if I won’t monitor their accounts and earn my 1% per year?  Hopefully I’ll have the time… but will I really? Also, I’d prob. stick them into a Franklin asset allocation fund in most cases.  I know the exp. ratio is higher but it seems like I can achieve better diversification for them over the long haul with this model.So, under 25k … A shares.  Above 25k C shares which I hope to meet more often with.Again, my logic could be flawed.  (I also take into account time horizon.)
[/quote]

Your logic is flawed. Under 25k there is no breakpoint. What if you made a mistake in your fund selection. You are going to cost the client more and they’ll end up making less than your wealthier clients, and receive absolutely zero help.

The upfront sales charge is often billed as a “one-time advisor fee”. If you are not going to service these people, what is the point in them paying the one-time advisor fee. It’s better for them to pay someone $500 to come up with an asset allocation plan and send them to Vanguard.

  I get there is no break point but as my business evolves will I truly be able to spend time with these clients within the Jones model?  Also, I'm not picking five funds for them and saying goodnight.  Running a risk profile on them and then plugging them into something like this FMTIX since who knows when I'll touch them in the future and want some sort of active management.  I sorta view those funds as advisory solutions lite.    Door knocking time....
Aug 4, 2009 12:50 pm

Volt - Have fun knockin’!



I agree with you. The problem is your platform. To be completely honest, as your business grows you will care less and less about these people. Yet they came to you for service (personal, face-to-face service) and now they got an A-share.



The problem is not with you, it’s with the model.