Wachovia Finet Hiring Talent
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My team has been doing some comprehensive due diligence on going the independent route. We had no idea where to start so called a recruiter and she pointed us to LPL and Raymond James, as well as some smaller b/d's. We also looked at the RIA model, but the risks to us outweighed the rewards.
Nobody ever informed us that Wachovia was in the independent model at all. We inquired about their platform and were enchanted enough to get some information and talk to their recruiter.
Recruiter I thought, that is. If anyone is in the west coast like us, you need to talk to the FINET guy who they have. This guy is unbelievable! Even if you are just looking to get some information on independent in general, you might want to consider talking to him (Craig Avery) as he seems to have a solid grasp on the industry, the competition, and the process.
Our team is still on the fence about what to do (ie, take a big check or go out on our own) but if you are looking- check out Wachovia's site (I think it is www.wsfinet.com). Hope this helps.
TSA
OK...it's obvious you're a shill for Wachovia. We'd have a whole lot more respect for you if you were at least honest about it.
I’ve seen the Wachovia deal inside and out.
Create the RIA, trade portfolios like you should (i.e. in groups and models),
and own the RIA yourself.
You won’t regret it.
Call Fidelity. Call Schwab. Make the appointment to talk to their RIA people.
True ‘wealth advisors’ don’t affiliate with a B/D who acts like an RIA.
C
Last time I spoke with your wonderful West Coast Guy for Wachovia, he sounded like a used car sales person to me.
Thanks for the feedback. Shilling for Wachovia- impressed yes- but nothing else. I’ve been an active reader of these pages for a couple of years and only recently started to participate- seems to me EVERYONE here has STRONG opinions of who they think is best, or what they think is best. No surprise- look what we do for a living, or at least most of us. To reply to “biasrecruiter”, that says it all. When someone is paid to push to the highest bidder, which MOST recruiters do, that’s the used car saleman. I have no personal love for recruiters who get paid by the firm they place to- that revisits a conflict to me as big as B share mutual funds being pushed 5 years ago and even some firms like ML incentivising the FA to use theirs. Regardless of my opinion, thanks for yours.
"Captain"- as far as I know, Wachovia does not offer an RIA, but I did read they were thinking about it. For someone who knows them "inside and out" you sure don't know much.
[quote=WealthAdvisor]
"Captain"- as far as I know, Wachovia does not offer an RIA, but I did read they were thinking about it. For someone who knows them "inside and out" you sure don't know much.
[/quote]
Read that again, it's precisely his point that they don't allow it. He's telling you to just go out and create and own your own.
Point taken- my apologies Captain. What about the risks of RIA, ie. Chief Compliance offer, my mutual fund trails (20% of my biz), and SEC accountability to?
I’ve often heard Wachovia referred to as “pseudo-indy” when compared to RJ/LPL. I assumed this included lower payouts and less freedom. For the record, what is the payout percentage for Wachovia…is it in line with the 90%+ offered by RJ/LPL?
No, I was correct, but no offense taken. The whole RIA thing is a rather
confusing topic and isn’t totally understood the first, or the second go
around…
So, it works like this…
You start your own RIA, rather than join someone else’s (Wachovia has
one, Raymond James has one, etc.) In each case where you join a
pseudo-indpendent platform, you are becoming a Registered Advisory
Representative of the RIA you were joining. Again, you are joining an
existing RIA, and not forming your own.
The compliance issue is a non-event. First of all, you are compliant from
the minute you form your own firm…Why? Because you paid an attorney
to provide you with the proper systems, policies and procedures and you
don’t really have any clients, yet. From that point on, it’s just a matter of
following the rules. Our firm will spend $10,000 per year in compliance
consulting fees, and they are well worth it. Once you get going, you hire
the consultant to advise you as to the best way to set up your files, what
information you need to retain, things you should keep vigilance over,
and what issues you’ll need to have tidy before an audit. First-year firms
will be audited, quite surely, within the first year, and then, perhaps,
every two to three years.
On the compensation and trails. For the last quarter, I’ll bill $175,000
from my client accounts. Once we submit the data to Fidelity, the funds
show up within our master account within 10 minutes. We keep 100%,
and then pay our expenses from those funds. Expenses are roughly
$30,000 per year, per partner for my group.
Trails… we do NOT collect trails any longer. If there is a 12b-1 which is
paid by the fund company, our custodian (Fidelity in this case) will collect
it, and we don’t see a dime. Since we did fee-based business within our
old firm, and also had the same arrangement, it doesn’t bother us. We
do, however, have a higher propensity to use NON-12b-1 fund at this
point through our recommendations and fund models, since the client
shouldn’t be obligated to pay the 12b1’s if there are better options out
there.
SEC Accountability - yes, you are accountable, and they will coming
knocking at some point. Again, they will most likely visit within 12
months of you opening your doors, and then not again for a short while.
Firms which offer performance-based compensation, collect trails AND
advisory fees, have referral compensation arrangements with non-
registered 3rd parties, and also are wrap program sponsors will get a
special look on behalf of regulators. Firms like that are more likely to be
visited more often, and the subject of further scrutiny.
Compliance isn’t as much of a time consuming issue - I expected it to be
a lot more complicated. But, if it’s handled right, and you seek the proper
guidance and counsel, I don’t see where it will kill you. If you are a single
individual, it can be a bit daunting… but, you DO have the ability to
outsource much of the compliance to a third party… I’d suggest a good
look at something like that.
In the end, I wouldn’t have done it differently. You will find that joining
another RIA will be expensive in terms of what they retain, and I really
don’t see the big benefit if you have the experience, passion and the
understanding of the general concept of RIA formation.
You own it, you operate it, and can do it your way.
Best decision I’ve ever made, truly.
I looked at RJ, Wachovia (again, I know that platform inside and out), US
Fiduciary, Leonard and Co, AIG Advisors, and many others. Too
expensive in my opinion.
C
[quote=WealthAdvisor]
“Captain”- as far as I know, Wachovia does
not offer an RIA, but I did read they were thinking about it. For someone
who knows them “inside and out” you sure don’t know much.
WA -
The thing is… Wachovia (through both the full service and the FINET
portions of their firm) DO offer an RIA. But, again, you join THEIR RIA
program as a registered investment advisory representative, rather than
forming your own. You play by THEIR rules, use THEIR software platform,
play the game using THEIR payouts, you pay THEIR ticket charges, and
may only sell your practice to THEIR advisors (in some cases), etc.
Once you form you own RIA, you can use Fidelity, Schwab or whoever as
your custodian.
But, my original comment was intended to point out that most firms
which are set-up as broker/dealers, have a fee-based advisory service
also. At that point, they (the BD) have created an RIA that you are joining.
Merrill Lynch, Wachovia, Smith Barney, RJ, etc., all have one.
It’s also where there has been tons of grey area… A while back, there was
scrutiny since many firms offered a fee in lieu of commission account…
THAT type of account was under the scrutiny of the NASD, and not the
SEC, since it regulated, basically, as a commission-based account. The
big deal lately has been how many firms (take RJ, for instance) has
unwound many of the fee in lieu of commission accounts, and now called
them ‘Advisory’ accounts… that’s because they are now a part of the RIA
portion of the firm, and it’s called fee for ADVICE (which the SEC
regulates), rather than fee in lieu of commissions (which the NASD
regulates).
Then you begin to get all the disclosures that ‘the financial projections
aren’t to be considered a financial plan’ - as firms are trying to make sure
that their retirement planning software isn’t a ‘Financial plan’ - that would
be another layer of crap, regulation, etc., that most firms don’t’ want to
deal with at this point.
It’s been a loosely interpreted rule known as the ‘Merrill Lynch rule’ that
has been a huge grey area, as of late.
Complicated.
C
If my information is correct, payouts are pretty solid, but won't go as high as RJ and definitely won't approach what LPL is doing. The downside to FiNet is that the payout scale - I believe - is readjusted each month based on the previous month's production, thus giving the FA a moving target. Keep in mind this may be inaccurate, but from my understanding, that is the way they work.
John Peluso, Jr. heads up the group and is a good guy and knows how to run a solid business. He is someone that I've known previously and is very committed to growth. Some of the others that work for him are weak in comparison.
Gee- all I was pointing out was that they guy I talked to from them really impressed me and I do hear great things about Peluso. I don't know much about his background except from what I read on his bio on their website, which is how I found out who to talk to for California.
Anyway- if anyone is looking at them, hope you have as much luck as I did.
vbrainy- you have got to be kidding me. How is my comment a paid advertisement for Wachovia, when the comment above is a comprehensive case for RIA? Who’s your Kool-aide?
Your comments are like a paid advertisement because they have zero substance. WHY are you impressed? WHAT can they do for you that no one else can? WHY do you feel like their platform is superior? Exactly what is the payout, ticket charges, etc.? How do you deal with the monthly adjustable grid?
Give us some hard evidence without all the platitudes and I'll stop believing that you're a company shill.