most majors have a structured deal and policy against “buying books” at UBS its paid over 5 years with a 25% advance. The total buyout is based on LOS, aum, % wrap business. you need to be teamed with someone at least a year and have 10yrs of service. you are considered an employee for the 1st 2 yrs which is pretty neat to get those last 401k matches social security / firm benefits quarters in.

It ranges from about 70% - 160%.

so a guy that is like 120% would get 25% day 1 (which is paid back by -5% over the 5 years) and then the other 95% is spread over the 5 yrs as a % of payout. higher the first years then declining the last few. (but its a % of the book so the guy taking over needs to make the book stay the same or grow) firm pays inheriting fa a bonus if book grows.

If you are a t a major firm ask your branch manager they will have a summary plan description.

Thanks for the response.



Can you help me understand this “get 25% day 1 (which is paid back by -5% over the 5 years)” - what do you mean paid back? Is it not the 25% upfront on day 1 and then the remaining 95% (assuming your 120% example) over 5 yrs on a declining grid? Is the book value locked on day 1 for the retiree or revalued each year for his payout?



Thanks again

At Jones, you get paid out over 3-4 years.  Year one you get 75% of net (or 75% of gross paid at net commission rate).  Year 2 is 50%, year 3 is 25%, and year 4 is 10%.  It can be shorter if you have a small book, or didn’t work at Jones very long.  The first 3 years, you are still technically “employed” and registered, and still receive full benefits.  They say you are supposed to work “in proportion to your % of the commissions”, but from what I am told, you spend a few months transitioning your book to the new FA (who is not “new”, but is new to your office - they must have minimum 3 years experience and be meeting production expectations in order to get the book) then basically stop working.  Year 4 is a 1099 “consultant fee” - you are no longer employed.