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Nov 9, 2009 2:43 am

Financial Advisor Associate - trainee at SB

Nov 11, 2009 6:00 pm

I spoke with an MSSB FA yesterday.  All accounts under $100,000 are subject to no commission on tickets.  For managed accounts, payout is 10% under $50,000; 15% from $50k to $74,999; 20% from $75,000 to $100k.
I’m also close to FA’s in Los Angeles, who told me that there are several FA’s taking early retirement.  The legacy package with a 5-year payout based on trailing 12 will actually be more of a benefit than trying to rebuild the part of the book that the firms are now taking.
As a new Indy, I think it’s crazy.  A $100,000 account was an account that was $170,000 just a year or two ago, not even including withdrawals.  And in small markets like I came from, there just aren’t that many people with those account sizes.  So the firms will be beating themselves up trying to get the same accounts.  And the rest of us grab the rest.

I wonder how many households in, say, Des Moines, Iowa would take kindly to hearing that their $95,000 IRA isn’t worth fooling with?

Nov 11, 2009 6:42 pm

Wirehouse guys are whinning again!

Why am I not surprised!   One week they are on here bragging the next whinning!   I do not feel sorry for them, they have had several years to get out and yet they fall prey to next deal  (bone) the firm throws them.   It is tough to move a book agreed, but at this point they are like frogs in boiling water they just stayed in the pot and just now noticed the water is hot.      
Nov 11, 2009 7:47 pm

Greenbacks:

"Wirehouse guys are whinning again!"   Winning is spelled W-I-N-N-I-N-G!  There's no H in winning.

Bodysurf, you are wroing on many counts.  Why do you post innacurate, secondhand, lost in translation information.  You have stated "I spoke with an MSSB FA yesterday.  All accounts under $100,000 are subject to no commission on tickets.  For managed accounts, payout is 10% under $50,000; 15% from $50k to $74,999; 20% from $75,000 to $100k."   First, it is a small household policy not a small account policy.  The decrease in payout is applied to households under $100,00.  How many relationships do you really want that don't have $100,000 for all family members and their accounts?  Next, there are many exceptions to the policy.  The following products/accounts are at full grid regardless of household size:DVP, Futures, Insurance and annuities, new households (last 6 mos.), 529 plans, AI, Retirement plan trusts, SAR-SEP, SEP/IRA, SIMPLE IRA's, VIP/RPM accounts, mutual fund wrap and managed accounts @ 10% if household less than $25,000 otherwise full grid.   The bigger issue is the lowered grid at under $400M.  At $375M it amounts to 38%.  That's 2% less on tier 1 and 1% more on tier 2 (transactional) business.  This is easily offset by opening three $1,000,000 household during the year ($5,000 bonus each).   There are always good and bad changes to comp which generally favor top producers and larger client relationships.  If you carefully go through it you can find enough loopholes to make a good living and continue to build that pension.    
Nov 11, 2009 8:05 pm

How many relationships do you really want that don’t have $100,000 for all family members and their accounts?
* * * *

I’ll take all the ones you don’t want.  The reason you think a $90,000 relationship is garbage is because you’re not getting paid for them.  I am.  What’s more, I would rather have 10 $75,000 accounts than 1 $750,000 account.  I manage them all the same way, and I know that the smaller accounts are off limits to the big wirehouses.

And no, you’re wrong.  A managed account between $25k and $100k is not at full grid.  Ditto for your TRAK program.  In the past, you used to get paid for IRA and FMA fees.  Then they changed it to say it counted for phantom gross–to hit breakpoints–but paid nothing.  Now, you don’t even get that.

I wish you the best at MSSB.  I’m going to be picking up a 3.5% position in MSSB at options expiration next week, given how much more profits the first is sure to pick up, courtesy of its sales force.   Morgan Stanley will be a money machine to its stockholders.  For its brokers, not so much.  So, thank you, in advance.

Nov 11, 2009 8:07 pm

BTW–your “new household” exception only applies when the client eventually sends in enough money to go over the $100,000 minimum.  I was at SB for five years.

Nov 11, 2009 8:27 pm

Maybe that’s true for legacy SB.  I couldn’t say, I’m legacy MS.  Managed is at full grid over $25,000.  If you have 10 $75,000 accounts vs. one $750,000 account don’t you need to make 10 times as many phone calls (if they answer your first call), record 10 times as many conversations in your notes, and review 10 times as many accounts every quarter.

  My experience was that I started with a lot of smaller accounts...and they loved me so much I got lots of smaller referrals as well.  I eventually had to change or I would've gone nuts.  Call me lazy if you like but I prefer a smaller number of households...that allows me to be more attentive to their needs.  Then I'll happily take the occasional referral from them.   I still have many of the small households that I like.  I'm talking about the ones that feel almost like family.  I don't want to fire them.  But we're so expensive for them I end up covering a lot of their fees.  With new relationships I just send them somewhere else.  It's better for them and better for me.