How did you go independent?

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Streetbroker's picture
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Joined: 2009-08-21

I'm looking for insights as to how you started your practices.  What did you need in terms of budget?  I have limited resources as I've been out of work for about 6 months and my savings are drying up.  I've gotten offers from insurance broker dealers but I am a bit unsure if the overall compensation packages are the best avenue for me.
 
Any of your stories would greatly help me make a huge decision.  I am in the NYC area.
 
 

CALI123's picture
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Joined: 2009-01-30

What's your background? Starting with no budget is hard - too much money wasted on the learning curve. You might be able to do it if you had built a book before.Best bet might be to go work under a RIA/Indy who will give you a budget.

Streetbroker's picture
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Joined: 2009-08-21

I worked at a Discount firm for the last 5 years.  I have a total of 8 years in the industry but mostly always as a salaried rep.  Want to make a go at really doing this business for the first time.
 
I would probably only bring over a little more than $1.2mil or so with me.  The few clients I like.  I am basically starting from scratch with my ideal clients.
 
I will search for RIA's for sure, thanks for the suggestion.

B24's picture
B24
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Joined: 2008-07-08

You would probably need to offer some hourly financial planning services to start and get some fees rolling. 
 
I can't stand the guy, but you should look at Mike Patton's blog at Investment Advisor Magazine for some direction on what it's like to start cold as an RIA.

chief123's picture
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Joined: 2008-10-28

Streetbroker wrote: I'm looking for insights as to how you started your practices.  What did you need in terms of budget?  I have limited resources as I've been out of work for about 6 months and my savings are drying up.  I've gotten offers from insurance broker dealers but I am a bit unsure if the overall compensation packages are the best avenue for me.
 
Any of your stories would greatly help me make a huge decision.  I am in the NYC area.
 
 

Not to be rude, but if you have been out of work for 6 months, what makes you think you can take clients with you(from where). I think you would need 3-6 months living expenses plus business expenses to a make a run with no book

Sportsfreakbob's picture
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Joined: 2008-08-24

If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie.

Omar's picture
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Joined: 2009-03-19

Sportsfreakbob wrote: If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie.

I agree, sounds like you need to build many more relationships before you can make the jump.   A bank program that provides a salary + referrals may be the way to go.

Moraen's picture
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Joined: 2009-01-22

Were you out of work because of an injury, or family emergency? If not, why didn't you start six months ago?

army13A's picture
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Joined: 2009-03-21

Omar wrote: Sportsfreakbob wrote: If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie.

I agree, sounds like you need to build many more relationships before you can make the jump.   A bank program that provides a salary + referrals may be the way to go.It seems that the consensus that for a new person in the business, the bank route is the best way to go? Is there a way to fail at the bank platform? I'm not trying to be a jerk but if you're at a bank where you're getting referrals, licensed bankers making sales for you and you have the bank customers you can call on, is it possible to fail out? I have buddies that get lists of all the cd's that are maturing every month and just call on them.  I just can't see how it would be possible.  It seems like you have to be a complete slug to not make a decent living in the bank and if you really bust your hump, you can jump to indy like Omar did.  I know there are plenty of people doing 1 mil production at a bank.  Am I missing something?

Squash1's picture
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Joined: 2008-11-19

I think if you have a background in the industry are willing to put in the hours, then you could start from scratch and have 6-9 months savings, then you could probably be fine.

Streetbroker's picture
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Joined: 2009-08-21

Not to be rude, but if you have been out of work for 6 months, what makes you think you can take clients with you(from where). I think you would need 3-6 months living expenses plus business expenses to a make a run with no book
 
No offense taken.  The clients have transferred their assets elsewhere and have been trying to reach out to me.
 
This is a long shot with little working budget but I thought I would get some insight from those who have done it anyway.

Omar's picture
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Joined: 2009-03-19

army13A wrote:
Omar wrote: Sportsfreakbob wrote: If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie.

I agree, sounds like you need to build many more relationships before you can make the jump.   A bank program that provides a salary + referrals may be the way to go.It seems that the consensus that for a new person in the business, the bank route is the best way to go? Is there a way to fail at the bank platform? I'm not trying to be a jerk but if you're at a bank where you're getting referrals, licensed bankers making sales for you and you have the bank customers you can call on, is it possible to fail out? I have buddies that get lists of all the cd's that are maturing every month and just call on them.  I just can't see how it would be possible.  It seems like you have to be a complete slug to not make a decent living in the bank and if you really bust your hump, you can jump to indy like Omar did.  I know there are plenty of people doing 1 mil production at a bank.  Am I missing something?

Army,

Many bank programs provide new Advisors with what they need most when getting started....new prospects. If you can work the program to your advantage by having multiple referral sources, you can build a nice book.

Problem is, there are a lot of bank programs where the bank interests and the Advisor's interests are not aligned, causing the Advisor to not get the referrals needed to succeed. Also, bank programs tend to have worse grid payouts and they nickel and dime you to death. In the bank program that I worked for, I saw plenty of new and experienced Advisors fail. In almost all cases, they were unable to get their banking partners to play ball.

army13A's picture
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Joined: 2009-03-21

Omar wrote: army13A wrote: Omar wrote: Sportsfreakbob wrote: If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie. I agree, sounds like you need to build many more relationships before you can make the jump.   A bank program that provides a salary + referrals may be the way to go.It seems that the consensus that for a new person in the business, the bank route is the best way to go? Is there a way to fail at the bank platform? I'm not trying to be a jerk but if you're at a bank where you're getting referrals, licensed bankers making sales for you and you have the bank customers you can call on, is it possible to fail out? I have buddies that get lists of all the cd's that are maturing every month and just call on them.  I just can't see how it would be possible.  It seems like you have to be a complete slug to not make a decent living in the bank and if you really bust your hump, you can jump to indy like Omar did.  I know there are plenty of people doing 1 mil production at a bank.  Am I missing something? Army, Many bank programs provide new Advisors with what they need most when getting started....new prospects. If you can work the program to your advantage by having multiple referral sources, you can build a nice book. Problem is, there are a lot of bank programs where the bank interests and the Advisor's interests are not aligned, causing the Advisor to not get the referrals needed to succeed. Also, bank programs tend to have worse grid payouts and they nickel and dime you to death. In the bank program that I worked for, I saw plenty of new and experienced Advisors fail. In almost all cases, they were unable to get their banking partners to play ball.
 
Nickel and dime? In what respects? I thought as employees, you get everything taken care of. 

Omar's picture
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Joined: 2009-03-19

army13A wrote:Omar wrote: army13A wrote: Omar wrote: Sportsfreakbob wrote: If you don't have savings to last a year, and you dont have a book, i dont see how you can get this done. Go to a bank, where they might pay you a salary (some banks do) and start there, regroup, build a book, make sure your relationships are strong, then go Indie. I agree, sounds like you need to build many more relationships before you can make the jump.   A bank program that provides a salary + referrals may be the way to go.It seems that the consensus that for a new person in the business, the bank route is the best way to go? Is there a way to fail at the bank platform? I'm not trying to be a jerk but if you're at a bank where you're getting referrals, licensed bankers making sales for you and you have the bank customers you can call on, is it possible to fail out? I have buddies that get lists of all the cd's that are maturing every month and just call on them.  I just can't see how it would be possible.  It seems like you have to be a complete slug to not make a decent living in the bank and if you really bust your hump, you can jump to indy like Omar did.  I know there are plenty of people doing 1 mil production at a bank.  Am I missing something? Army, Many bank programs provide new Advisors with what they need most when getting started....new prospects. If you can work the program to your advantage by having multiple referral sources, you can build a nice book. Problem is, there are a lot of bank programs where the bank interests and the Advisor's interests are not aligned, causing the Advisor to not get the referrals needed to succeed. Also, bank programs tend to have worse grid payouts and they nickel and dime you to death. In the bank program that I worked for, I saw plenty of new and experienced Advisors fail. In almost all cases, they were unable to get their banking partners to play ball.
 
Nickel and dime? In what respects? I thought as employees, you get everything taken care of. 
 
Depending on your comp plan you may get hit with small ticket minimums and small trailer holdbacks.  In other words if the commission and trails aren't big enough, the bank will keep them.  This is money you earned and it can add up.

chief123's picture
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Joined: 2008-10-28

Streetbroker wrote: Not to be rude, but if you have been out of work for 6 months, what makes you think you can take clients with you(from where). I think you would need 3-6 months living expenses plus business expenses to a make a run with no book
 
No offense taken.  The clients have transferred their assets elsewhere and have been trying to reach out to me.
 
This is a long shot with little working budget but I thought I would get some insight from those who have done it anyway.

You could probably pull it off, but might want to look into getting a 2nd job at night(after 7pm) or on weekends doing something to keep some income coming in.

Streetbroker's picture
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Joined: 2009-08-21

Not a bad idea.  I am still looking at insurance broker dealer houses like AxA & Guardian seriously in the interim.

Leverage's picture
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Joined: 2009-09-22

Streetbroker wrote:Not a bad idea.  I am still looking at insurance broker dealer houses like AxA & Guardian seriously in the interim.
 
Unless you want to be a life insurance agent, stay away from them.

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