The Future of Registered Reps

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BigFirepower's picture
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Joined: 2010-07-09

Since I got in this business back in 1992, the "future" has been managed accounts.Well, I'm "taking it back".The future is commissions, transactions, smaller margins, larger asset pools, experience vs youth, old vs new, customer service over consulting, small over big, general securities vs packaged product.  I know this is "revolutionary" thinking, but just like being a contrarian investor, you can't run with the crowd. The New Era, is about Old School.

Spaceman Spiff's picture
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Joined: 2006-08-08

Dang it.  I was just getting into managed accounts and fee based assets.  Now you're telling me the future is the way it used to be?  I think it's funny how the industry changes based on the things FAs are trying to sell against.  Mutual funds came about because brokers were trying to sell against individual holdings.  Then ETFs came out because brokers were trying to sell against mutual funds.  Each time there was an explanation like better diversification, lower costs, better management, less management, blah blah blah.  Somewhere along the way someone said commissions are bad but fees are good.  Now clients have had a decade, a flat one at that, of fees and they're wondering what's wrong with a commission based system.  Personally, I like the diversity.  You can grab something out of each new iteration of our industry and build on it.  For active stock traders fee based is a great platform.  For buy and hold folks, ETFs in a commission based account are a great option.  But then so are A shares with a good company.   You can combine the ETFs with mutual funds, put them both in a fee based account and be in great shape.  Or you can say screw it all and throw the money in a 6.5% BAB for the next 30 years and be happy as a clam.  You just have to be able to sell your "new" philosophy to your clients. 

BigFirepower's picture
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Joined: 2010-07-09

"consulting" is like leasing a car, the cost that keeps on costing. Customers understand that or at least feel that way. I see all sorts of brokers either not succeed, fail, or never get the really big money from a client, because the client has decided that broker is "x", and not necessarilly the place for "all of their money". This job, is sooo much easier, when you get ALL of their money. So, never, ever, give a cleint a reason to not give you all of their money. That equation is part service, part costs, part knowledge, part trust, and the personal connection you have with them. I'm not saying that all fee based business is bad, but it is over sold, used excessively these days. Many clients, maybe most, would rather do it the old school way. I've especially found the fee element be very difficult to approach because of the lost decade, and very low interest rates.

Times7's picture
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Joined: 2010-10-26

The future is commissions, transactions, smaller margins, larger asset pools, experience vs youth, old vs new, customer service over consulting, small over big, general securities vs packaged product.A profound and timely comment, on many levels. I have been doing a ton of CE to renew all of my licenses by year end, and it reminds me of why I wanted to become a professional in this industry.I was viewing a YouTube clip of Dave Ramsey reaming a professional for questioning Ramsey about recommending only term insurance being appropriate ever for anybody. Ramsey was running the guy down as being a schlock who is only pitching permanent insurance to make a commission and ignoring (Ramsey) reality. I think Lao Tzu said something like, " those who don't know speak, those who speak don't know". Meaning comes from engagement, engagement with clients and prospects is what makes me happy. I always tell new clients that most people don't want to move all of their money over right away, but that most clients have eventually moved all of their money and it is about them being comfortable and in control. I would rather aim at 170 rounds of golf in 2011 and have people come to me and be their humble servant, than try to define myself by chasing down shadows, making more money, justifying myself, paying more taxes, increasing my ego. Keeping the number 170 in my mind is the best idea I ever got from this board. Playing 3060 holes reminds me in 2011 reminds me that there is just about one golf hole to pair up with every significant critical business activity for 2011 ( one phone call to review a portfolio, one meeting to review retirement planning, one long term care insurance proposal, one follow up call to introduce my services to a warm cold prospect, one hour of continuing education credit ...). Here is my business plan for 2011: 3060 x series 7, insurance, CFP CE, new CLU x more fun (rafting, fly fishing, guitar, beach time).

BigFirepower's picture
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Joined: 2010-07-09

Good post 7. Clients truly enjoy getting to know their advisor, their firm, the staff. Our 3 person office gives the customer something to be connected to. One day I'll post some pictures on the internet what our office looks like. We're really big on atmosphere. Furniture, pictures, family photos, books, trains, little knicknacks, the whole thing just tells a big story about what/who we are. Our pictures include mountaineering (biz partners hobby), trains (near the tracks and part of our biz logo), old historical pictures of the town we're in, a few old pictures and paintings of Wall Street, and a variety of Founding Fathers/Declaration of Independence stuff. I think we have about 60 large framed items in our 1100 square feet. Cost us about 6-7 grand, even with significant discounts, but it sure looks nice in here. Our typical client comes in about 4-6 times per year. Not all of that is revenue producing, some of it is service or just chit chat. Then we call them and mail them stuff. We really have done a good job of personalized cards and notes too. As a transaction based rep, I MUST be on top of it, otherwise I die each month. That keeps me sharp. If I got paid regardless, like others, my contact ratio would decline.

series7taxguy's picture
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Joined: 2010-07-16

BFP, do you mind telling us a little about how your transactional charges lead to your total production and how this would compare to a fee-based account? Say, for exmple, a fee based advisor brings in a 250k account and charges 1%. The income is obvious. In order to do the same in a transactional environment (excluding packaged products, I assume?) you'd need to charge $100 for 25 commissions, more for a smaller number or less for a higher number, etc. Let's just assume ticket charges are the same at your BD for fee based or transactional and the activity is the same, for the sake of argument. I'm just curious how you're making it work monetarily? I have some transactional clients as well, but the only ones that aren't howling about full-service commission rates are the ones who are old enough to remember that as the norm. They're not going to live forever... I especially disaprove of fee-based advisors selling someone out automatically to fit a model that's predetermined, often leading to liquidation of appreciated positions that might be heavily concentrated at a disadvantageous tax situation. I suppose in short I'm asking how you're making the money work in a transactional environment in 2010?

BigFirepower's picture
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Joined: 2010-07-09

80% of production, comes from transactions. The other 20% from trails. Compared to the 90s, I NEVER get into big arguments about costs/fees. Certainly, my clients over the years can fully see the value in working with us. We are very service oriented, and spend probably 70% of our client inter action regarding service/account structure/other issues. Amazing, but if you really care about a client, there is just so much more to this than what stock or bond to buy, whether the xyz fund is good, or whether the stock market is cheap or expensive. We are very cash flow oriented. Somehow, or someways, we seem to always do about 80 beeps of production on a 12 months go forward basis, granted, some years it might be 70 beeps. But, where I'm at, in a managed account you lose 20 bps for Admin, so if I charged 100 bps, I'd make......80 bps. So, wth is the upside?And boy, if I sat with a newbie household/prospect, and said I'm going to charge you 1%... that is going to lose half the people sitting in front of me, right off the bat. Folks need to see the value first.  

Barack Owebama's picture
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Joined: 2011-01-02

BigFirepower wrote:Since I got in this business back in 1992, the "future" has been managed accounts.Well, I'm "taking it back".The future is commissions, transactions, smaller margins, larger asset pools, experience vs youth, old vs new, customer service over consulting, small over big, general securities vs packaged product.  I know this is "revolutionary" thinking, but just like being a contrarian investor, you can't run with the crowd. The New Era, is about Old School.  wrong. show me ONE acct you beat S and P over a 10 plus year period with old school call the damn client commis based acctdiscretionary fee based is THE only way to go  (duh)leverage timeclear vision making people money  (hard enough without having to call a stupid client for his/her opinion) commis conflict of intereston same side of table as clientdiscretionary fee based that YOU run is the ultimate way to run ur biz  (pspm.gpm.pim.pmp etc)old school is BS school for stubborn MF like you 

BigFirepower's picture
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Joined: 2010-07-09

Just curious, why would you refer to me as MF? Bo, this isn't the yahoo sports commentary pages...And trust me, the reason why I took serious coin after going indy 30 days after the 3/9 lows, had something to do with keeping the client happy, providing decent returns while managing risk.   

Spaceman Spiff's picture
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Joined: 2006-08-08

Owe - so, you're saying that because BFP likes to run a commission based account and you like to run a fee based discretionary account, you'll outperform him?  Really?  That may be one of the dumbest things I've ever seen written on this forum.  What kind of logic do you have to back that up?  Sounds like you're calling him out based on your personal preference, not based on any actual evidence.  Time to put up or shut up. 

BondGuy's picture
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Joined: 2006-09-21

series7taxguy wrote:BFP, do you mind telling us a little about how your transactional charges lead to your total production and how this would compare to a fee-based account? Say, for exmple, a fee based advisor brings in a 250k account and charges 1%. The income is obvious. In order to do the same in a transactional environment (excluding packaged products, I assume?) you'd need to charge $100 for 25 commissions, more for a smaller number or less for a higher number, etc. Let's just assume ticket charges are the same at your BD for fee based or transactional and the activity is the same, for the sake of argument. I'm just curious how you're making it work monetarily? I have some transactional clients as well, but the only ones that aren't howling about full-service commission rates are the ones who are old enough to remember that as the norm. They're not going to live forever... I especially disaprove of fee-based advisors selling someone out automatically to fit a model that's predetermined, often leading to liquidation of appreciated positions that might be heavily concentrated at a disadvantageous tax situation. I suppose in short I'm asking how you're making the money work in a transactional environment in 2010? For us fixed income guys the ROA isn't 1%. It's usually much less. Not, that it can't be higher. There is no way to trade ones self into an even dollar amount position relative to fee guys. That's a benefit to the client and part of the competive advantage offered by transactional advisors. it's part of the value proposition made to prospects and clients. After-all, as a client would you rather pay 1% or .5%? The answer is obvious.  Still, one has to make a living. How to do that? The key is more assets. The combo of less trades and more assets will get the job done. It's just simple math. To achieve a certain income at a certain ROA requires X assets. That,  X is a higher number for fixed income guys is just another business challenge to meet. More prospects with more money is the answer. Looking for prospects that can invest seven figures is the key. They open for six figures and have plenty of dough to take advantage of opportunities as they present themselves. ie, they become good bond buying clients.  Considering my AUM, I make less than every fee guy at the same level, and most  fee guys with half as much. My choice. And, but one of the many ways to get it done in this business.

BigFirepower's picture
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Joined: 2010-07-09

Well said BG. You sell vanilla at a low margin, but in high volume. AUM is the answer to all problems. I don't think any other measure is a greater indicator of your current and future success. I can just imagine you in an appointment where a big portfolio is in front of you, managed account, the typical lack of service and contact...

Barack Owebama's picture
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Joined: 2011-01-02

Spaceman Spiff wrote:Owe - so, you're saying that because BFP likes to run a commission based account and you like to run a fee based discretionary account, you'll outperform him?  Really?  That may be one of the dumbest things I've ever seen written on this forum.  What kind of logic do you have to back that up?  Sounds like you're calling him out based on your personal preference, not based on any actual evidence.  Time to put up or shut up.  well.    i remember the exact moment i figured out I need to find a new way to do biz or quit. i was looking at my holding pages  (old school circa 1989ish)   we posted trades to a book.I saw that i was letting my losers run and selling my winners.why?  well   duh.  human nature.having to call a client and "convince" them to buy a name. (adding their greed,fear and stupidity to the equation).they pay a comis.something negative happenes with the name.   scared to call clientjust paid a commis.not clear vision.hold broken crap namesget a winner.   sell it too earlyeasy to call clientfeels goodyou make moneyi NEVER made people money  EVERhad 15 small winners and 3 dog with fleas BS names down 60%so i moved to fee based.then yers later went to fee based that I run.no clients to callno commisclear visionpull triggerdo the righjt thingsame side of table of cleintnow i make people money its hard as hell to beat the s and p over the long with clear visionits impossible if you have to call clients and have conflict of interest commis on each tradeDUH   

BigFirepower's picture
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Joined: 2010-07-09

Bar, you provide a real and legit reason to switch. Unfortunately regulators think that keeping winners, doing the right thing, is reverse churning... Duh...I assume you must meet certain contact criteria, etc? 

Spaceman Spiff's picture
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Joined: 2006-08-08

You didn't read the part where he said - "no clients to call"I'm not saying that the way he runs his book is wrong.  I think a purely discretionary trading platform with zero interaction with clients would be a nice change of pace. But then I don't want to run a mutual fund.  Which is in essence how Mr. Owebama runs his business.  But he said "old school is BS school for stubborn MF like you", no so subtly implying that your way of running your biz IS wrong.  Since I run my biz the same way you do, by extension, the way I run mine is wrong too.  That's the part that I thought was dumb.  Just because he doesn't like talking with his clients and making decisions with them, not for them, doesn't mean the old school way is wrong.  And I completely disagree that you can't beat the S&P without a fully discretionary setup.  That's just stupid.    I personally think that there a lot of people out there that have been in fee based accounts for the last 5-10 years who have seen zero growth on their accounts, but yet see the management fee coming out every year.  Seems their FA has made better money than they have.  Makes an investor kind of bitter.  And makes easy pickings for us old fashioned commission based guys. 

Times7's picture
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Joined: 2010-10-26

I think he makes a good point. Of course you call them, but if you just set the asset allocations right and protect them from themselves, they are better off.Fee based is more about paying the rep more (kind of necessary) and maybe less waste in 12b1s and such, versus charging the client more. For example, probably most of us wrap total financial planning into the wrap service. Well, I'm "taking it back".The future is commissions, transactions, smaller margins, larger asset pools, experience vs youth, old vs new, customer service over consulting, small over big, general securities vs packaged product.   I just had to bring this back and relish it. Remember when women took back the night in the 70s?In the 80's, the military took back the country.In the 90's, Technology took over.In the 10's, government prevailed. In the twenty  teens, maybe it will be old age and treachery. Maybe this business doesn't suck. Oh, I forgot, it's too cold and wet to golf.  

BigFirepower's picture
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Joined: 2010-07-09

I'm hoping the next 10 yrs are about hot babes, doom metal riffs, rising stock prices, and everyone packing heat. Break out the sticks, Big Fire's going break 60 this year! Hey, I shot a 67, how hard could 59 be...I try to extend Bar some courtesy, even though...By definition, I must find VALUE, not transactions constantly. Gather more assets, find avenues of opportunity, learn, read, think, defense, offense.... All the stuff this industry has largely overlooked for years. I have positions on my book that are many many years old, I'll generally keep a stock until it's a big winner, or hits zero. I'd say my average holding time for stocks is about 4-5 yrs.

Times7's picture
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Joined: 2010-10-26

Might want to wait until your birthday before you try to shoot your age. At least I know for sure I'm shooting blanks. We should, like, rebrand ourselves man. Bigger branding  bang for all those b/d charges:HIRE A REGISTERED REP STOCKBROKER TODAY : Old Guys packing heat, wiley MOFS with smoking sticks They will take you out into orbit on a wild ride, enjoy compounded growth while Earthlings  suck up a limited supply of high quality blue chips, exploding mid caps, and exciting small cap ideas.  

BigFirepower's picture
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Joined: 2010-07-09

You should have been with Pink Floyd, you missed your calling.

jamesbond's picture
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Joined: 2005-03-21

Lets all just be honest here. The reason that firms have pushed fee based accounts is because a predictive cash flow is better for the firms than depending on commission based transactions over the long term. It really has nothing to do with the clients.  On the flip side, each person needs to decide how they want to be paid, either a recurring fee or  per trade. I would bet over time, the  average commission based client would end up paying less. But to each his own. Either way, whether you call it a fee or not, in the end it is still a commission.  

Times7's picture
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Joined: 2010-10-26

 I have recently picked up playing the guitar. Michelangelo was appointed architect of St. Peter's at the age of 71.If my attempt at guitar fails, maybe I'll start trying to shoot my age around the age he died. And then there is always sheepherding. Probably solo, though.

BigFirepower's picture
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Joined: 2010-07-09

James, I agree with you. Some of the old school churn burn, extra juice nasdaq point spreaders just found a new gig. And, NASD and Finra were'nt stupid, caught on quick. But, there's a right way to do it, and like all else, maybe 30% do...I'd like predictive revenue, but so would my clients.

Times7's picture
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Joined: 2010-10-26

Yeahbut, James. Clients don't "get" separate planning fees. Advice needs to be delivered steadily over time. What's good for the advisor is good for the client. A monthly deduction from an account to cover services is very different than an invisible commission. Sorry. Better for the industry for the client to know what they are paying, and let them walk if they don't see or receive value. I'm not against commissions or getting paid, they just make me feel cheesey. Considering the various stories clients get from various advisors, I seriously doubt commissions are better. Maybe for the typical Jones client. Buy a car, pay a commission. Lease a car, pay as you go. We should be very clear about the difference.

Barack Owebama's picture
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Joined: 2011-01-02

Spaceman Spiff wrote:  I think a purely discretionary trading platform with zero interaction with clients would be a nice change of pace. But then I don't want to run a mutual fund.  Which is in essence how Mr. Owebama runs his business.  yes you do.leverage your time.get clients away from focusing short term on the marketand making people moneyHELLLLLLLLLLLLLLLLLLLLOOOOOOOOOOOOOOOOOOOdrink the GD Koolaidget off you're butt and convert your peeps.AGAIN...................SHOW ME HOW YOU GUYS BEAT THE INDEXES OVER THE LONG RUN CALLING MR JOE CLIENT AND COMIS TRADING??you gotta decide of you're in this thing for the long haul making people money or if you want to fight each month to make a living wasting your time.the conversion process aint easyyou WILL take a pay cut in short run trust me, i generated much more then 1ish % back in the day trading stocks.man up.     the efforts you put in will pay off like a GD miricle once you get a revenue stream goingthink?   the levrahge of your time is incrediblewill you lose some peep?   yepin the long run will you better off?  duhget out of the 80's  move on with your life(space-u know by now this is shania, right?)    

Barack Owebama's picture
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Spaceman Spiff wrote:YBut he said "old school is BS school for stubborn MF like you", im sorryi was insensitivehows this:"old school is BS school for stubborn dumb a%$'s like you"i should have NEVER called you a MF-sorry

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Joined: 2009-07-14

There is no way to determine which is "better" for the client. commish biz should be "cheaper" in markets with low volatility. There is less of a reason to buy/sell if the market is trending up. Fee based should be "cheaper" in highly volatile markets because of the increased trading activity to mitigate the volitility.IMO, advice should be a fee of the client's net worth since proper advice can only be given based on the client's total financial situation and they should pay a commish to buy/sell products to implement that advice.Even this will have its pros/cons. The important thing to remember is which set up allows you to deliver the most value to the client? The fee based push is the industry's way to commoditize more of the business. I see some day that we will all be solicitors/relationship managers and the back office will do everything else.

Spaceman Spiff's picture
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Joined: 2006-08-08

Yes, I know you're Shania.  It's not that difficult to put together a portfolio of funds or stocks that have outperformed the S&P over the last 10 years. You don't seriously think that fee based guys have cornered the market on out performing the S&P do you?  So, here's how we beat the S&P over the last 10 years with a really boring buy and hold, commission based, call the client portfolio.  I'll use one of the portfolios that Jones has as an example in our Morningstar hypo system.  All American Funds, $100k.  That would have been incredibly typical for me when I started.  AMCPX - 10%, AHITX - 5%, ABNDX - 15%, CWBFX - 5%, CWGIX - 5%, AEPGX - 10%, ANCFX - 10%, AIBAX - 10%, AIVSX - 10%, ANEFX - 5%, SMCWX - 5%, AWSHX - 10%.  Client pays $3400 in commission to me on the front end because we buy A shares.  I didn't even rebalance this portfolio or tweak the funds that I know would have juiced the return.  Ran the hypo for 10 years ending 12/31/2010.  How much do they have today?  $156,638  How much is the S&P worth over the last 10 years without any commission or fees taken out?  $118-119K. I can repeat that hypo with lots of other fund families.  Like I said before, it's not difficult to beat the S&P.  Let me be clear, I don't think that running a fee based, discretionary platform is bad.  I also don't think that running a fully commision based practice is bad.  They both have merit.  I don't think that you have to make a choice to be a fee based guy to make it in this business long term.  I've survived a long time on just commissions.  It sucks starting over every month at zero, but that's just the breaks of the game.  I assume if things stay the same, I'll have a business that is some fee based some commission.  And I can make a decent argument for both sides of the coin. 

jamesbond's picture
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Joined: 2005-03-21

I laugh when someone who has a strictly "fee" based business feels they are giving any more advice or providing more service than someone who has a strictly commission based business. Each model has it's good and bad points, but for you to think you work any harder, provide more advice, or provide better service because you charge a fee is a joke. I know plenty of old school brokers who have always had client reviews, rebalanced accounts, etc, and didn't churn accounts.  In my opinion, neither model is superior to the other in any part.

Barack Owebama's picture
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Spaceman Spiff wrote:Yes, I know you're Shania.  It's not that difficult to put together a portfolio of funds or stocks that have outperformed the S&P over the last 10 years. You don't seriously think that fee based guys have cornered the market on out performing the S&P do you?  So, here's how we beat the S&P over the last 10 years with a really boring buy and hold, commission based, call the client portfolio.  I'll use one of the portfolios that Jones has as an example in our Morningstar hypo system.  All American Funds, $100k.  That would have been incredibly typical for me when I started.  AMCPX - 10%, AHITX - 5%, ABNDX - 15%, CWBFX - 5%, CWGIX - 5%, AEPGX - 10%, ANCFX - 10%, AIBAX - 10%, AIVSX - 10%, ANEFX - 5%, SMCWX - 5%, AWSHX - 10%.  Client pays $3400 in commission to me on the front end because we buy A shares.  I didn't even rebalance this portfolio or tweak the funds that I know would have juiced the return.  Ran the hypo for 10 years ending 12/31/2010.  How much do they have today?  $156,638  How much is the S&P worth over the last 10 years without any commission or fees taken out?  $118-119K. I can repeat that hypo with lots of other fund families.  Like I said before, it's not difficult to beat the S&P.  Let me be clear, I don't think that running a fee based, discretionary platform is bad.  I also don't think that running a fully commision based practice is bad.  They both have merit.  I don't think that you have to make a choice to be a fee based guy to make it in this business long term.  I've survived a long time on just commissions.  It sucks starting over every month at zero, but that's just the breaks of the game.  I assume if things stay the same, I'll have a business that is some fee based some commission.  And I can make a decent argument for both sides of the coin.  spacemy brother.......................hello................................... YOU DONT GET PAID............................................THE FUND DOES.HELLLLLLLLLLLLLLLLLLOOOOOOOOOOOOOOOOOOA GOOD BALANCE OF FUND IS AN AWESOME WAY TO BEAT RISK FREE RATE OF RETURN OVER THE LONG HAULTHE TRICK IS TO DO BOTHUNLESS YOU WANNA BE THE RED CROSS (and guess what?  FA managed fee based accounts BEAT the crap out of the indexes.   at least at 3 large wires where I have seen the numbers)sooooo lets review:client is tied to YOUyou taylor it to YOUR clientyou mak ethem moneyand you get paid yearlyand you charge less then internal fund fees plus its fun running money(and if you're a pussy.  use etf's    you will do well there also)   (I meant trading stocks and bonds (not funds) on a commis per trade basis was REALLY hard to make money for people over the long haul)

Barack Owebama's picture
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Joined: 2011-01-02

plusi forgotyou control cap gains a billion times better then fundsyou add the fukc out of mf value.takes balls to man up and run the money.and if you leavethe tie is TO YOU.not to the stupid funds or products you push.

Times7's picture
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Joined: 2010-10-26

(and if you're a pussy.  use etf's    you will do well there also)I thought men could use these and get away with it.

Times7's picture
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The way it works for me is to charge a higher wrap on small accounts ( or use 12b1s and commissions) - and use ETFs for the real money. This is about delivering advice and service to clients, and keeping the reps in business so they can service the clients, not making money for fund managers and their (wholesaler) employees. I would bet money (but not my time or energy proving) that intellegent tactical asset allocation using indexes can beat the snot out of relying on managed funds. Paying attention to the economic cycle and talking to clients about it is more efficient and perhaps productive than telling stories about funds and relying on someone's nephew manager at the managed company to deliver. I would prefer to take individual security risk out of the portfolio and focus on client's total risk tolerance at any given time and negotiate. People wonder how they can deliver value? But hey, that's just what works for me. ( And keep talking about other risks to achieving goals of "the plan", and hedging those risks. Much more interested protecting the downside and overdelivering on expectations for the potential upside. The downside is real, (aging, death inflation, bag lady, disability ...), the upside is imaginary. ( My neighbor got 15% compounded ...).

Spaceman Spiff's picture
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Joined: 2006-08-08

I completely understand your argument, Barack, and the type of business you want to run.  The difference between you and I is that I don't want to be the money manager.  I want to be the asset allocator, planner, hand holder, funeral attending, question answering guy that they come to when they want to know whether they should buy the red truck or the white sedan.  I don't think you can do both.  You just don't have the time.  So, you've really got to pick which one you want to be and move your business in that direction.  If you're going to be the money manager, then you almost have to run a fee based business.  If you're going to be the planner, you've got to decide if you're going to do it all fee based, all commission based, or a combo of both.  That last one is where I'm at.  My clients are still tied to me.  They still think of me as the guy running their money.  They could give a rip whether I use American Funds, Hartford, Ivy, or Fidelity.  They don't really care if I use ETFs or individual stocks.  It's a non issue for them.  BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. 

dashover's picture
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Joined: 2009-10-07

BFP  Big Fire Power can you email dashover  at   dash(@)dashover.com thxHad a ? and can't figure out pm thx

Times7's picture
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Joined: 2010-10-26

real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way. Amen, bro.  

Sportsfreakbob's picture
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Joined: 2008-08-24

Spiff-it's not just the breaks of the game. You have control. You can run the biz any way you want and you don't have to start from zero every year, you just choose to (unless you work for a broker dealer who has limited platforms.)
With all due respect to BFP and Spiff, Shania is dead on here.

I do discretionary management. I am running a for profit enterprise and expect clients to pay me for my advice whether that advice is to do something or nothing

I talk to my A clients and many of my B clients every month. It's just that I don't talk to them about trades. I talk to them about there kids and their parents. And other stuff that matters to them.

Let me ask you a question - do most of your clients care more that you get them 7 percent on their portfolios, or that you help them make sure that if they had a stroke their family wouldn't be financially destroyed.
Because I am fee based discretionary, if I need to make a change in 20 client portfolios I make zero phone calls and one block trade. That gives me the time to talk to clients about their real priorities.

lovindaindy's picture
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Joined: 2009-05-07

Spaceman Spiff wrote: BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way.  No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.  The "send their wife to the baby shower" is particularly appalling though Spiff (and I know you didn't mean it that way) stinks of Jones Kool-aid, where your wife is supposed to do the "woman" things.  Why don't you go to the baby shower yourself?As for discretionary advisors being sissies, I dunno. They had to ask for the order at some point.  I would say they are merely more efficient.

Barack Owebama's picture
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Joined: 2011-01-02

Spaceman Spiff wrote: The difference between you and I is that I don't want to be the money manager.  I want to be the asset allocator, planner, hand holder, funeral attending, question answering guy that they come to when they want to know whether they should buy the red truck or the white sedan.  I don't think you can do both.  You just don't have the time.   man up.  grab some balls.  quit being a girly man puss.ITS NOT THAT HARDIT DOES NOT TAKE MILLIONS OF HOURS(hellllllo, plus you will have so much extra time have because you dont have to call people "convincing" them of your next move)you are afraid of screwing up.   admit it.  of losing people money.IT AINT THAT DAMN HARDuse the ETF's like times7OR HELLuse your firms models and stock selection/etf selection.   most of these are pretty damn goodor HELL   buy Goldies!!!  these are the smartest MF on the planetthis is so worth itthis will change your gd life.THINKyou can be a better friend,asset allocataor funeral director , candle stick maker because you dont have all the BS sales crap with people 24/7.    You sell them on you.   you run their money with clear vison  you leverage your time  and you gain they trust over the years and you NEVER have the GD conflict of interest Jedi crap to worry about.   you are always on the same side of the table as them.you have one GD goal   make them money.  beat the crowdmake them money, match allocation and risk to them based on your understanding of them, charge a fee lower them stupid mutual funds, control cap gains.duhyou DO want to run the moneyyou think it is some magically thing that only peter lynch can do.    answer me this.  how many funds have bagged you because the manager got stupid?  or left or F'ed up n some way>?

Barack Owebama's picture
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lovindaindy wrote:Spaceman Spiff wrote: BTW, real men cry with their clients at their spouse's funerals, attend their kid's wedding, send their wife to the baby shower, buy the cake for the retirement party, and go to see their best client in the hospital.  Sissies hide behind their three monitors placing discretionary trades for their clients because they're not good enough at asking for the order from new people to make a living the old fashioned way.  No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.  The "send their wife to the baby shower" is particularly appalling though Spiff (and I know you didn't mean it that way) stinks of Jones Kool-aid, where your wife is supposed to do the "woman" things.  Why don't you go to the baby shower yourself?As for discretionary advisors being sissies, I dunno. They had to ask for the order at some point.  I would say they are merely more efficient.No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.EXACTLY!!!!!!!!!!!!al that other saves the whales, i love you crap is an excuse to hope you dont lose the biz cause you aint making people money and they dont respect youits your insecurity    (and dude, i have BEEN there)like ND siad  you first priority is to add GD value THEN, when you do that you hang out with and be friend your COLL clients because you WANT to!not sending cards to teh ass^&*( because you are afraid of an ACAT because your mutual fund jedi is something ANYONE CAN DO 

Barack Owebama's picture
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Barack Owebama wrote: No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.EXACTLY!!!!!!!!!!!!all that  saves the whales, i love you crap is an excuse to hope you dont lose the biz cause you aint making people money and they dont respect youit's your insecurity    (and dude, i have BEEN there)like ND siad  you first priority is to add GD value THEN, when you do that you hang out with and be friend your COOL clients because you WANT to!not sending cards to the ass^&*( because you are afraid of an ACAT because your mutual fund jedi is something ANYONE CAN DO) and the more real it is .....the less of a girly man you are.buy stocks, bonds and cash.   real men manage real stuff for a feewith discretionpackaged bs, funds, etf's,cef are all things you sell because you are afraid to take a stand and put your nads on the line to be right and make people money  they shd stamp "girly man trade" on the confirmreal men hang out with the clients they truly likepussies hang out at funerals with dick heads because the fear ACATS 

Stig's picture
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Joined: 2010-12-17

"No.  This is what friends do.  It's possible that you can be both, but your first duty is to your client, not your friend.  The "send their wife to the baby shower" is particularly appalling though Spiff (and I know you didn't mean it that way) stinks of Jones Kool-aid, where your wife is supposed to do the "woman" things.  Why don't you go to the baby shower yourself?As for discretionary advisors being sissies, I dunno. They had to ask for the order at some point.  I would say they are merely more efficient."-----------------------------------------------------------------------------------------------------------------------------------------------------------I agree completely. Probably a form of guilting his clients into staying when they find a better advisor. 

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Joined: 2006-08-08

I don't have a problem with people running their business either way.  One guy wants to sit behind his monitors and do the trading while another one wants to farm out all of the investing decisions to Goldman and focus purely on the planning part.  Whatever.  Run your business the way you want.  I think you folks are misunderstanding that I think one way is better than the other.  The only thing I think is completely wrong in this scenario is that Shania think's it's more manly to buy individual stocks and bonds than funds.  My clients stay with me for three reasons - first because they're too lazy to go find someone else.  Second, because they like me.  Third, because they like everything else I do for them.  That includes investments (individual stocks, bonds, bond funds, stock funds, etfs, annuities, insurance, LTC, CDs, Advisory and transactional) and the planning.  Shania - you've not mentioned it in this thread, but do you do any of the planning for your clients or do you do only the investments? 

Sportsfreakbob's picture
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Joined: 2008-08-24

Shania think's it's more manly to buy individual stocks and bonds than funds.  That is hysterical.

Northfield's picture
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Joined: 2007-04-10

Spaceman Spiff wrote:My clients stay with me for three reasons - first because they're too lazy to go find someone else.  Second, because they like me.  Third, because they like everything else I do for them.  That includes investments (individual stocks, bonds, bond funds, stock funds, etfs, annuities, insurance, LTC, CDs, Advisory and transactional) and the planning.  I'd have a tough time getting up in the morning if I though the primary reason clients stayed with me was due to laziness!!!!

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Joined: 2009-10-22

spiff you're the biggest tool i've ever encountered on any online forum you're going to be in seg 3 for the rest of your life and you're going to think you're killing it.   feel indebted to edward jones for the rest of your life for  "giving you the opportunity"  you're the guy who has no tolerance and has 2 glasses of wine at the regional meetings and falls in love with everyone because they're your "friends" they're just like you they're with edward jones ISNT IT GREAT THAT EDWARD JONES BOUGHT THIS WINE FOR US people like you make me sick your "financial planning" method for your entire book made of $30k avg households is a joke. if you moved real money and your clients met real producers, they'd eat you for breakfast

gethardgetraw's picture
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Joined: 2009-10-22

"...attend their kid's wedding, send their wife to the baby shower," if you showed up at my kid's wedding or my WIFE'S BABY SHOWER i'd think youre mentally ill  i dont want my broker taking pictures of my daughter in law on her wedding day or fondling my newborn baby. showing up in a suit with your edward jones name tag, grabbing the knife and trying to cut the first slice of cake of my wedding cake in front of my entire family wtf is wrong with you 

anabuhabkuss's picture
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Joined: 2005-05-02

Barack Owebama wrote:(and guess what?  FA managed fee based accounts BEAT the crap out of the indexes.   at least at 3 large wires where I have seen the numbers) (I meant trading stocks and bonds (not funds) on a commis per trade basis was REALLY hard to make money for people over the long haul) you're breaking character, there. Be careful ruins the illusion hurts my feelings.

BigFirepower's picture
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Joined: 2010-07-09

Since, this thread has become an uncivilized debate, I'll come back and restate my case. The future, is old school. Old school hard work, analysis, equity picking, doing your homework, showing up early, leaving late, giving a damn about the client, rolling up your sleeves, and being a decent civilized person in your chosen profession. This new age crap didn't work, it never had a chance, and nearly ruined our entire financial system. Fine, you want to do old school, but charge a fee? Ok, so do it. But, this idea we charge a fee to "make more/do less" is a hollow and shallow existence, road to ruin. And if a firm doesn't let you do it old school, then leave, find a better place to work. I have zero respect for a firm that micro manages what a rep sells, because that is NEVER in the best interest of the client. And, folks, keep it civil.... 

Barack Owebama's picture
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Joined: 2011-01-02

Sportsfreakbob wrote:Shania think's it's more manly to buy individual stocks and bonds than funds.  That is hysterical.My team sucks.    Im on jets bandwagon.    Rex=GodI love the guyrevis=best cover corner ive ever seen-ever.  (what he did in indy was beyond words)wrong team favored in foxboro.    should have mortgaged house jets plus ninethat defense gets no love.   so underatedryan vs peyton and brady=briliantu see tommy boy with 5 seconds and NO one open?  pricless   i hate that annoying ahSteelers will be tough for jets.worst machup they could have.Troy was out in first gameben is freaking moneythe problem?   cant run on pitts.   too much on Sanchezyou can get a W.....but you'll need some luck.  plus 2 in T/O orspecial team TDor 3 plus 30 plus plays for sanchezid love to see rodgers vs rex...........so tough to go against Ben in this spotwhat a gamei love the MF NFL (i could see pitts in a blow out.   sorry.  bringing tough love)  

Barack Owebama's picture
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Joined: 2011-01-02

PSwhat the fukc is a Seg 3?has to be Jones lingo.      you guys have more inside buzz words and jedi.that firm is like Waco or Scienctology.    

Sportsfreakbob's picture
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Joined: 2008-08-24

Good analysis Shania - i need you back where you belong, helping me defend my boys. Although lately, i haven't had to.I think we will give Pitt a serious serious game on Sunday. Troy is back, but not at 100%

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