What would you do?

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Jan 17, 2011 8:39 pm

So here is my situation:  I am currently 36 yrs old, and have been with my firm going on 6yrs (I started there).  I owe no money on a deal, but because I joined Bank of America sometime in 05 i was not privileged to a retention bonus.  This screwed me out of about 200k.  I am saving some money but not at a rate that builds wealth.  I have roughly 70 million in AUM and T12 is 800k.  Now that I am in a Merril office, I absolutely hate it.  Its not that I dislike Merrill, its that I do not believe in the model of advisors growing a book at a good rate and getting their own clients and I think it's a dead model.  I have no interest in cold calling, or asking friends and family to open accounts with me.  I raised 15 million a year consistenly at the Bank and I never had to prospect.    Say what you want but the net result is that I still made 250k a year and I worked half as hard as a wire house broker and did it in 5 years not 20.  In my complex the average net new account with Household above 250k was 1.5, and net new assets average barely 2 million.  That really says allot.   I am thinking about making a move to the Wells Bank Platform (WBS).  I expect to loose 50% of my book and my gross to fall to about 375k-400k  My deal at Wells is a 9yr deal and they are offering close to $1million.   So I ask, what would you do?

Jan 17, 2011 8:48 pm


What about the Wells FINET, it seems like that would be a good fit for you.  They would give you probably 60% upfront on the 800, if you could gross 400K you would keep around 70% minus expenses and you would control your own destiny and I believe the contract is only 5 years.  Just a thought.

Jan 17, 2011 9:28 pm

Its a good suggestion however for me right now that would be thinking small. I like the idea of using all of the professionals in the Private Bank. On the independent side I would have to rely on my self and at this point in my career I do not have the educational experience to deal with sophisticated clients.

Jan 17, 2011 9:40 pm

Go for it if you really want to be in the bank channel.

Jan 18, 2011 11:41 am

Cut, you seem to post this message once a week...

There is much you don't know, and I'll credit you with at least recognizing that, and asking for advice, so you don't make some big mistake. Cut, you only have 6 yrs under the belt, and that would hurt your asset pull. Also, the second you leave, they'll be all over your assets, another problem. 1 mill is nice, but 9 yrs is a darn long time, and you are on the hook for that L O A N. FINRA hearings are dominated these days by promissory note cases...I wonder why?

When you have a lock on say 45m in aum, why would you not go Indy? Oh, that is right, there is no "check".... Fine, but if you take 45m, by a reasonable bps, then multiply by two, you just created a business equity of nearly a million!? Maybe you're not skilled in running your own biz? Fine, then you find a couple like minded guys that are already indy, and you join them, share costs. 

I came from a similar enviro as where you are. The times you had, were good times, but not likely to be repeated. Many of my former colleagues are at Wells, and while it's a decent place to work, they are not bringing in aum like the old days. Also, think to your BAC days, and realize that this late in the game, how good a cluster could you possibly get?? Wells fly in the ointment is that they are multi platform, there's referral confusion/competition there unlike what you're used to.

Hope that helps.   

Jan 18, 2011 9:50 pm

Hey Brother -  I am in the same boat as you. I loved BAI and I'm just going through the motions at Merrill but this too shall pass. I have looked at Finet and other bank channels and I believe it is in our best interest to hang out for a while. This has been a crazy past 18 months but I am staying and I'm going to milk mother merrill as the FA's slowly depart because they hate the bank. I'm going to take Merrill FA accounts. I also believe that we will eventually get our name on the door. I believe they will re-institute a "bank broker" program because we both know that there is absolutely no cross selling going on. Bank of America customers hate the Merrill name and thats if they even know that the bank owns Merrill. Hang in there and build your network of all of your friends who were PB's and business bankers who are now at other banks. They can send you referrals. Be patient and hang onto your existing clients and take some merrill clients. We will end up better off in the long run by staying and making the system work for us.  

Jan 19, 2011 1:36 pm

My only comment - your t-12 is 800K and you're saving "some" money, but not at a rate to build wealth?

Wouldn't that be about 300-400K net?  What are doing with all of it?

Jan 21, 2011 10:24 am

Unless a lot of that T-12 is upfront/1 time business, I can't see why you would leave.  Just relax, work your book, and continue to make really nice coin.  I wouldn't trade half my 800k trail for 1mil on a 9 year contract, not a chance.

Jan 21, 2011 10:53 am

Don't over estimate you retention rate when you move. Most of the money on the mega bank side is very sticky. Also, you have no interest in prospecting but you're willing to move and lose a good portion of your book? Doesn't that seem to suggest you'll have to prospect alot more in the future to build it?

Feb 4, 2011 4:57 pm

I thought pretty hard about this one...Wells has some sort of Private banking arm with a family office and they are "giving away" their referrals to FAs two states away.  They say they really want a former BAI guy because he would understand the model, has a history of partnering etc.

If you built your book at BAI, 50% retention is pretty darn optimistic.  I saw a dozen books leave over the last 2 years and the best guy took 38% - it was tracked very closely.  Even if you take half with you, Wells is basically giving you $110k / per year for 9 years.  Your income will be cut in half for at least the first 2-3 years and you will need to rebuild your book during that time (while spending the majority of that "check").

Since you lived the BAI experience, you know that big banks "enhance" (screw up) the referral programs all the time.  Think about the poor slobs who were the last to be hired into the Premier program.  They were screwed.  And the bank didnt forgive the loans - even though the closed the program - it can happen at Wells (a risk to consider).

On $1mm you need to do approx$40k gross / month starting in month 13 just to pay the taxes on the loan. 

Incidentally, the payout is lower at Wells and SPA, longevity etc. are some nice long trem wealth builders

Sorry to be too negative but I met with then a handful of times and I was intrigued by the program

all in all, the risk to your business isnt worth that number. 

Incidentally, if you play ball for a while, they will offer you more like 150% of your T12 plus an asset kicker