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Nov 15, 2009 2:12 am

Anyone know how long the Merrill and Morgan deals are (forgivable loan period)?  They are throwing up some ridiculous all in packages, but I am curious what kind of time you have to serve for those.

Nov 15, 2009 9:13 pm

It's nine years on the forgivable loan. 

Nov 15, 2009 9:45 pm

Ever wonder why some bonds pay ridiculous coupons?

Why do they pay these deals to get FAs to join their junk firms?

Because they have too! Indentured servitude to captors with a keen skill to get you in and then figure methods to earn $ off you and your clients. You end up financing your own 9 yr. deal. Be sure to spend a few grand and have your attorney explain the fine print.

Nov 15, 2009 9:53 pm

The fine print is very simple. But not what you will find with the help of an attorney. The fine print is that you are owned. And if they want to reduce your payout a year after you join, they can. If they want to decide not to pay you on HH;s under 250k, they can.  You are owned.

For some its worth it. If they are doing $1MM and are willing to sell their business for 1.4MM, with a chance for more on the back end, then its a personal decission. For bigger producers who want to retire in 9 years, it might be worth it.
Nov 15, 2009 10:06 pm

It’s a sale paying ordinary income in a rising income tax environment. The more rev you do, the more it makes sense to control your own expenses as they stay somewhat fixed. I think guys in the middle tier can get some cash and build their book by switching wires because they don’t have the rev. to cover their own expenses, but guys over $1MM - crazy not to be the OWNER.

(You then only have your self to blame if the resources suck).   

Are your larger clients employees or Owners? Do you trust Sr. Mgmt. or you? Will you grow? If yes, your giving away your own equity. If you are a bigger producer who won’t grow, I agree with Sportsfreakbob. Take the check and live with the nonsense. Just Ask the long term guys at SB who are getting pension adjustments…

Nov 15, 2009 10:56 pm

Agreed. The 100% upfront deals for 5 years from a few years ago sounded a lot more livable than 140 for 9. Indy numbers blow either away though over longer periods of time.