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Wachovia Finet Hiring Talent

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Oct 9, 2006 4:49 pm

Not to start a fight or anything but I do disagree with the idea of FINET being the same as RJ or LPL and even Commonwealth for a few reasons.  It does appear that they are trying to fix or address these but...in my opinion it's part of the issue of being tied with a bank.

For one they do not allow you to establish your own RIA and as such are tied to using their own financial planning software, from what I have seen (granted somewhat limited) is pretty darn weak.  Furthermore, this forces me to do fee planning as they determine not me.

Their insurance platform is weak in terms of support and staff as well as the platform - maybe you can dispell this and explain how a Finet advisor can do insurance business there Craig?

One of the biggest issues I see is any portion of your business that might compete with the mother ship, they will work to shut you down.  Like mortgage business away, or even bigger, say a wach. securities client or bank client that you wish to make your client - uh....it won't happen. 

These are few things that I see as what keeps them still at the pseudo arena v true indy arena regardless of it being Finet or Profit formula.

Oct 9, 2006 6:24 pm

I have no objection to disagreement- and I welcome anyones response because I have no idea what FiNet does and does not allow in the RIA arena because we were not interested in it, so didn't explore it except to work under theirs.

Insurance- I know we can do anything we do at ML with them and we don't use a general agent so a non-issue for US.

The financial planning software they showed us was excellent, at least compared to what we have or have seen. *NOTE: have not looked into any third party software

Our recruiters name is Craig, not mine. When I am independent, I will then post my name proudly. IndyOne- see what you started

Lending- they told us the only thing we didn't get paid on was mortgages but that is was a legal issue they think will be resolved by beginning 2007.

Thanks for your feedback- I think the sticking points for us are the same as many, but also different for many. This depends on how you do business in my opinion.

CSMELMIX- are you independent? if so, who did  you choose? why? are you a FiNet owner? seems you know quite a bit about their platform?

Oct 9, 2006 8:25 pm

Oh I'm sorry, I thought you were Craig - I should have read the stuff closer. 

I am indy - a former clone...I joined LPL coming on 6 yrs.  I just like the fact of their complete independence compared to the others I looked at and how they demonstrated they could support my business.  To me, it wasn't even close - other firms I looked at had competing profit center w/i their model like Wachovia that inevitably would compete for dollars that could be reinvested back into the b/d and help improve their ability to support me.  FF to where I sit now, it has proven to be dead on - looking at RJFS, especially with all their recent changes, seeing so many others get bought out by product vendors and the many other smaller ones being dependent on 3rd party clearing....I couldn't be happier with the decision. 

Best of luck to you on your indy move!

Oct 10, 2006 2:49 pm

Thanks for the feedback- I appreciate it. Like I've said a few times in here- different b/d's are going to fit each of us better depending on how we do business, what we want, etc. I still think that if someone is looking- and establishing their own RIA is not worth the risk for them, or they don't have the type of business to do that- then the main runners from my viewpoint are LPL, Raymond James, and Wachovia FiNet. They all their pros and cons but at the end of the day- you have to do your due diligence and you have to visit them on site and dissect them before you make the huge leap.

I am getting excited about this . . . and in some respects, getting butterflys too

Oct 11, 2006 12:18 am

Now that I’ve done it (i.e. the RIA route), I’ll ask this…



What’s the perceived risk of starting your own RIA vs. being independent

through another B/D…?



As much as I try to fight it, I just can’t think there is a better way than an RIA

when you are doing the numbers.



I just don’t ‘get’ working for someone else’s RIA…



It is exciting, that’s for sure…



C

Oct 11, 2006 4:28 am

Captain-

I think you pose an interesting question. I don't know what your business mix was before moving, what you production was, what you gave up (if anything), etc. so it's hard to say. Surely, if you want to outsource everything, run a hedgefund, or the like, I think it's the model- but I'd rather the b/d take the risk off my back and give me more time to leverage their platform to get done what I want to get done to serve my clients, and pull a bottom line profit margin of 60-70%. No worries about multiple custodians, SEC audits, chief compliance roles, third party planning and performance softwares, and so on. NOW, that's okay for some, just not me.

I also am not willing to give up my licenses because I still do some business which requires it, and quite honestly, holding my license at one place, and then having an RIA somewhere else, just sounds like a lot of work to me- BUT I EMPHASIZE, that's just me (and my team). I want to keep it simple and a turn key platform accomplishes that and if I want to, can migrate to a dual platform of First Clearing and an RIA model (but that's not in the plan for now).

Thanks for the input-

Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.

Oct 11, 2006 3:55 pm

[quote=WealthAdvisor]Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.[/quote]

Absolutely...but I think that you'll find the freedom to run your business with very minimal interference is as big a benefit as anything, though I'm not complaining about the money, that's for sure.

Oct 11, 2006 9:32 pm

[quote=Indyone]

[quote=WealthAdvisor]Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.[/quote]

Absolutely...but I think that you'll find the freedom to run your business with very minimal interference is as big a benefit as anything, though I'm not complaining about the money, that's for sure.

[/quote]

I think you're lying.  Prove it.

Oct 12, 2006 1:07 am

Which one of us is lying there Ms. Grammar Police? Who are we proving this too anyway? Are you questioning the cash flow piece, the freedom, or do you just hate your professional world and feel better throwing out pathetic accusations to participants (be it me, IndyOne, or anyone else). Nobody has anything to prove to you, for if you are independent and don't understand increases in cash flow, you are mismanaging something- and if you are questioning freedom with minimal interference, then you might just be high maintenance (which is why I referred to you as Ms., Ms.). Do something useful rather than 6 word blogs- like counting how many grammatical errors I made in this response-

Oct 21, 2006 1:07 am

[/quote]

Hey smart guy....how about you apply a little common sense to the equation?  There is a REASON why FiNet is offering a 'transition package' that is twice as rich as LPL.  They have to do so to attract advisors.  Yet, despite this greater incentive, they still haven't been near as successful recruiting as LPL over the last 2-3 years.  Hmmmmm.  Wonder why?

FiNet means that you're working for management with a wirehouse mentality, but you have an indy cost structure.  With wirehouse compliance people.

FiNet offered me a 25% deal, part outright signing bonus part loan which was paid via a reduced payout.  I turned them down, and was happy for it.

Ask them how many times they've tweaked their comp structure in the last five years.  See if they give you an honest answer.
[/quote]

Let me respond to you points above to provide some clarity-

FINET started in 2001. The intent of starting FINET was to bridge the gap between the full-service retail side of Wachovia Securities (PCG) and the First Clearing Correspondent Group/Independent Brokerage Group (IBG) owned by Wachovia Corp.

Since First Clearing already had a relationship with over 100 b/d's it clears for, it was logical for Wachovia to create it's own b/d serviced by First Clearing- thus the birth of FINET.

To create FINET and merge the benefits of First Clearing with the Wachovia brand recognition many wirehouse brokers are looking for, FINET was created by one of the heads of the IBG, John Peluso Jr. He built the infrastructure to support FINET by recruiting talent from IBG, PCG, and the outside.

Most of the management at FINET has business owner or independent experience. The national guy came from a series of independent firms, Keith Gregg, as did many of the operations and supervision team. The talent pool to create FINET was fairly rich considering all the areas Peluso could pull from.

Currently, the Regional Directors of FINET come from independent firms to include one FINET business owner, Schwab, RJ, JWG, etc. The CAO is from First Clearing, as is the Ops Managers.

The management team at FINET is totally separate from the PCG side and operates under a different b/d totally. The only overlap is that FINET taps the core resources of the larger firm, from research, to products, services, and technology.

The "comp structure" started as a mirror of LPL and RJ, and then minor changes were made over 2-3 years to incentivise the way FINET believes the business is going as it relates to a best fit with them and the philosophy of "don't be all things to all people". So, ticket charges were raised, but admin fees for advisory business was lowered 50%.

The overall profitability after ticket charges, admin fees, technology, E&O, and a couple of other fees, are within .4% of both LPL and RJ. Th local expenses are on the owner and are to be managed by them, as it is with LPL and RJ.

LPL and RJ are fine firms. Many of you have used them and they absolutely have momentum in recruiting based on the fact that both firms started on the independent side whereas FINET is only 5 years old. Each firm has its pros and cons for association and I have yet to meet too many that don't see any of the solutions as a big improvement to the retail wirehouse world.

That being said- don't shoot something down until you understand the facts, or it just becomes rumor. Clearly 500 FA's with the highest FA productivity of the three mentioned can't all be wrong. And no, I am not a shill for Wachovia, I represent it- and don't apologize for that. If  you don't have passion for what you do or who you represent, whether yourself or the firm you work for, then you should find something else to do (not directed to anyone, just an opinion), and as Roosevelt once said back in 1910 (some of you might remember this speech personally)-

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."