Should I go Independent?

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Sunchaser's picture
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Joined: 2010-09-08

Here is where I am today:I have been an FA since 2001.  I started from scratch and have done fairly well.  Today I serve about 225 households and care for about 45 mil.  My clients are spread out over 25 states, in large part because I have earned the trust of my clients out-of-state children.  According to the surveys of my clients, people think very highly of me.  I place in the top 10% of my firm.  I have built a relationship-based, planning-oriented practice and have been a CFP® certificant for several years.  Revenue grew every year through 2007 when it hit about 300, but this year it will be around 250.  My asset mix is 55% funds, 15% bonds, 10% stocks, annuities 15%, the rest is cash.  My biggest account is 2 mil.  I have lots of accounts that are 400-800.  I have never imposed any account minimums so I have quite a few small accounts as well, but they are almost all investing each month.Recently I have been second guessing my choice of employer.  The new emphasis on revenue, and the concerning movement of money into a relatively new fee based platform, has left me wondering if I should leave.  The idea of being independent is enticing for several reasons.  I would no longer have the possibility that I will dip below a company sales goal.  A year ago, I could get clear down to 14 a month and simply be a dissapointment.  Going forward, if I am below 18 I will have 4 months to get back over 18 or be fired.  I have every intention of growing my practice, and am not content with 18, but the possiblity exists that we could have another major bear market in which my time is consumed by defensive call taking, and my numbers will go below 18.  I don't want to be forced out.  I would rather go now.  I am confident that these new sales goals will result in many FAs creating a "solution" for a client just to hit their number...so there is greater risk of being drug through the mud they are creating. I could transition my practice to be a RIA exclusively, but charge a reasonable fee.  (My current company has a wrap account that I believe is too expensive -1.35%- but if I discount it down to anything less than 1.15% they cut my net.)  I would have multiple platforms to offer a fee based account, and could charge hourly or per plan.  Maybe this would go a long ways to helping me fell more like a competent advisor instead of simply a salesman.  Or I could just keep acting as broker and deal with the occasional slimy feeling.According to the numbers an independent b/d shared with me, if all things were the same, I would net about 25 more a year than I currently do.  Of course, the numbers will not all be the same, as not all of my accounts will follow.  I wonder about the out of state clients.  It would seem they would be less likely to follow.  My biggest account is 2 mil.  I have lots of accounts that are 400-800.I like the idea of creating a team of advisors.  FAs, attorneys, CPAs all under one roof.  As an independent, this has potential.  There is zero possibility of this arrangement occuring now with my employer.My employer intends to add several more offices to my town. Already, they have more offices than we have gas stations.  I can't help but think that the addition of more offices, occupied by inexperienced advisors, is going to perpetuate the perception that my company is for the little guy, who is not in need of sophisticated planning.  I want to be an advisor that is considered competent, not simply a stock broker.I love the idea of owning my business.  I think people think more of businessmen who are independent.   Am I mistaken?  I think more of a CPA with his own name on the door than one with H&R Block...So in my way of thinking I will be better posiitoned to gather assets.  BTW, I opened over 120 accounts (not households) last year so I am still growing.I would be grateful for your thoughtful input.  I would appreciate any suggested resources as well.

roadlesstraveled's picture
Joined: 2010-09-08

YES!  As soon as I felt more valued as a salesperson rather than a good advisor I made the decision to leave.  The best resources I've talked with are Fred van den abbeel at Trade-PMR and Peter McPhee (consultant in making the transition).  They've answered my questions and are helping me make the transition.  I'm days away from my resignation and starting the filing to be registered with my State.   I've got my passion back and am very excited about the new opportunity and the options are wonderful.  Told family and friends and they are all eager for me to change and get started.  I did look at the hybrid model but after conversations with local attorneys and cpas they all agreed that commission models are difficult to refer clients to.  They'd much rather deal with a fee based RIA.  If you start questioning your place in the empire, it's time to leave. 

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

OK, first, let's start with this:  Hi, my name is Sunchaser and I'm with EDJ.  You don't like Advisory Solutions, but you are OK with going all fee based?  My personal opinion is that the entire industry has been brainwashed, like the attorneys and CPAs you've been talking to, into thinking that If you are an RIA or run a 100% fee based business it is automatically better for the client.  There are plenty of situations where it might be better for a client to be transaction based rather than fee based.  You probably recognize that in your own business right now.  I don't believe there is a perfect solution for all clients.  It is absolutely possible to put a CPA, attorney, and an EDJ office in the same building.  I know of at least two in my area and there are probably many more out there that I don't know about.  Now, can you all share the same office?  No.  But do you really want to or are you just looking for the referral leverage that arrangement might give?  It might take some planning, but Jones will let you move your office into a professional building where you and your CPA/Attorney friends can set up shop.  The idea that bringing more new Jones FAs into your town will make all of you look less professional is way off base.  Those new folks have nothing to do with you.  So what if they fail.  That just makes your success and your expertise all that much more evident to the folks in your town.  If you're that concerned about who they bring in, do a GKN plan and control that yourself.  If you don't want them to open a new office, share an office with your GKN permanently.  It would be good for you and for Jones.  You have plenty of assets to do it and you wouldn't miss the income from the assets you give away.  You're already above the new minimums Jones is putting in place.  I'd guess if you're in a small town with not that many gas stations, you're probably profitable too.  So, you really shouldn't have to worry about the minimums.  Even if you only do $250K a year, you're fine. Jones has always been about creating revenue, BTW.  It's not a new focus.  I think the focus you are seeing has just come with more changes, positive ones in my opinion, so it looks like there is a bigger focus.  Do you really want the company you work for to try to avoid being profitable?   With all that said, if you believe going indy is right for you and your clients, then you absolutely should.  Your not going to get a lot of negative feedback from anyone on this forum about it.  Like you said, there are a lot of reasons it might be better for you to be on your own.  Whichever way you decide, good luck.    

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

Spiff,To be honest, I think you are being a homer on this one.  I don't think his primary issue is with wanting the team, or wanting to go all fee-based (he even acknolwedged that FA's are finding "solutions" to convert their clietns to fees), or the issue with so many offices, or the issue with the revenue goals.  It's ALL of those things wrapped together.  It's the model that is at issue here.  Nobody should fault Jones or any wirehouse for wanting to make a profit or implement high standards.  It's just part of the business.  But if you don't want to be subjected to those minimums, then that creates an issue for you.  Having 10 offices in your town might not really inhibit your growth, but what if you don't want to just be one of those 10 green offices with revolving doors?.  Commissions are not "bad", but perception is now reality in the marketplace.  If you think your service is worth 1% (which many RIA's charge), then why shouldn't you be able to charge 1%, and actually have a reasonable payout?Spiff, Jones is trying, but honestly, the model is very dated in many respects.  It is very good for the advisor that can work within narrow boundaries established by others (and I am not referring to compliance related issues).  Some people would like to craft a practice that is more than just another green office with mutual funds for sale. 

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

This guy has already made up his mind.  I'm not sure why he even came on here to ask the question.  He's now looking for justification in his own mind for leaving Jones.  I'm not bleeding green on this one, just pointing out that what he perceives as very good reasons for leaving Jones aren't really all that good.I have ZERO sympathy when I hear complaining about putting new EDJ guys in a town.  When you get to twelve within a mile radius, we have have that debate.  Whining about the new guys simply distracts you from your own focus.  What's the difference in being one of 3 EDJ guys in a town and being one of 6 LPL offices in town?  Unless you do options or something completely different, you're still just one more financial planner in town.  I disagree with you that our model is dated.  Our model isn't any more dated than the Wachovia office down the road from me or the Amex office a few miles away.  They're working under primarily the same model they have for decades, just like Jones.  They're not doing anything incredbly new and unique.  I guess you could make an argument that the entire brokerage business model is dated, but then who says that it really needs to change?  We all know that fee based business was a product of a brokerage firm trying to make a bigger profit, disguising it under the auspices of being better for the client.  I've liquidated enough wrap accounts in my days to tell you that it's not always in the clients best interest, but it's almost always better for the FA and ultimately the firm.  Like I said before, we've been successfully brainwashed. Back to the OP - he would probably feel much better if he went indy.  He's not going to get over the nagging feelings of having to look at his production chart, or seeing the emails from Adivsory Solutions announcing another billion has been invested in the program.  Jones is going to eventually add two or three new offices in his town.  That's going to bug him.  Jones won't be raising our payout to match LPLs or RJ's.   Many of his issues with Jones seem to be more issues about his own insecurities than what Jones is or isn't doing for him.  If he thinks he would be able to better gather assets if the name on the door was Sunchaser's Investments, Inc. then he probably will. 

Kaner's picture
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Joined: 2010-06-17

Spaceman Spiff wrote:The idea that bringing more new Jones FAs into your town will make all of you look less professional is way off base.  Those new folks have nothing to do with you.  So what if they fail.  That just makes your success and your expertise all that much more evident to the folks in your town.  If you're that concerned about who they bring in, do a GKN plan and control that yourself.  If you don't want them to open a new office, share an office with your GKN permanently.  It would be good for you and for Jones.  You have plenty of assets to do it and you wouldn't miss the income from the assets you give away.    Spiff, I have never heard of a permanent GKN plan where the FA's stay together in one office.  Though it makes a lot of sense!  I participated in a GK and this option was never offered.  Is this something new?  I have observed one situation in particular that a father/son wanted to stay together but were forced to split.  The details of this situation were especially distressing to me seeing how the firm went out of its way to spend substantially more money than it needed to.  The splitting into two offices will not generate a dime of more production yet will double expeneses.

Smooth Transition's picture
Joined: 2010-08-30

Please give me a ring would love to talk to you about some of your options. Vito Ameno 908-902-1998

Spaceman Spiff's picture
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Kaner wrote:Spaceman Spiff wrote:The idea that bringing more new Jones FAs into your town will make all of you look less professional is way off base.  Those new folks have nothing to do with you.  So what if they fail.  That just makes your success and your expertise all that much more evident to the folks in your town.  If you're that concerned about who they bring in, do a GKN plan and control that yourself.  If you don't want them to open a new office, share an office with your GKN permanently.  It would be good for you and for Jones.  You have plenty of assets to do it and you wouldn't miss the income from the assets you give away.    Spiff, I have never heard of a permanent GKN plan where the FA's stay together in one office.  Though it makes a lot of sense!  I participated in a GK and this option was never offered.  Is this something new?  I have observed one situation in particular that a father/son wanted to stay together but were forced to split.  The details of this situation were especially distressing to me seeing how the firm went out of its way to spend substantially more money than it needed to.  The splitting into two offices will not generate a dime of more production yet will double expeneses.I wouldn't go as far as to say there are a lot of two man offices, but it's getting to be more common.  I had to renegotiate my lease recently, at the same time as a buddy of mine here in town, and the leasing coordinator mentioned after the fact that we should have negotiated for a two man office.  I know Jones used to be very adamant that there was only to be one FA per office, but I think they're realizing exactly what the rest of us already know...when you save money on expenses, you put more money into profits. 

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

Spiff,I hear what you are saying.  My point is, our firm, and the "brokerage" model, is not necessarily for everyone.  For many, being an independant advisor or planner, or an RIA firm are a better fit.  Do you think Ken Fisher or Ron Carson or Robert Fragasso would have been able to accumulate billions in assets at Jones?  The model just doesn't dictate that.  You CAN accumulate billions at a wirehouse, but then there are ther things that even a wirehouse prevent you from doing.  Personally, I see the brokerage business (and more so Jones) as a potentially very high-paying job, but not as a busienss you are building.  You are building a revenue stream for someone else, under someone else's rules, and that someone else owns.  You may get paid very well for it, and you may be your own boss, but it is far different when you own the thing.  Just trying to play devil's advocate here.  The guy comes on here asking some reasonable questions, with some reasonable ideas, and all you can say is that basically he's an idiot and a whiner for wanting to leave Jones.  I have heard some pretty dumb arguments for wanting to leave Jones, but his concerns are pretty valid, IMHO.  

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

I don't generally disagree with you, but in this case I do.  And that's OK.  What Suncatcher hasn't talked about is how he feels about the extra responsibilities he takes on when he goes indy or RIA.  Is the extra payout worth the work of being an actual business owner?  He mentioned that an independent B/D told him if all things remained the same, he'd net about 25% more.  Right now he gets to come into his office, turn the computer on and start his day.  No thoughts about payroll taxes, software integration, compliance, etc.   How good is he at hiring, real estate negotiating, payroll, computer hardware research, etc?  Those are all things that are part of being the actual business owner that he's not had to do at Jones.  Is that extra $25-30K worth the extra work?  That's assuming he takes enough clients/AUM to get back up to $300K next year.  All of the things he's mentioned that are bugging him really don't affect him.  So what if Jones launched Advisory Solutions and he doesn't want to use it.  If he doesn't use it, who cares how expensive it is.  Who cares if Jones puts another office or two in town.   Do some recruiting of your own to make sure the new folks aren't completely incompetent.  Who cares if Jones is raising the standards.  You're already doing more than that right now.  And if he's in a small town, he's probably profitable anyway, so they don't really apply to him.      If he wants to take his business to a purely financial planning, fee only, RIA platform, then he should just do it.  Don't make bunch of namby pamby criticisms about your employer to make yourself feel better about leaving.  It's entirely possible that he's outgrown Jones and there isn't a benefit in working with them any longer.  Great.  Move on.  Congrats and good luck.    Oh yeah, Sun - there are people that read this forum that can probably figure out who you are pretty quickly.  There aren't more than a few hundred CFPs in the field, fewer who started in 2001, and even fewer with $45 mil in AUM.  It might take a little work, but if I still had access and the time I could probably send  you an email on your @edwardjones.com address.  Just a little fair warning that you might want to be careful divulging too much info on here considering the topic of your post. 

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

Spiff, did you have too much coffee today?

tenthtee's picture
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Joined: 2006-11-16

" I could transition my practice to be a RIA exclusively, but charge a reasonable fee.  (My current company has a wrap account that I believe is too expensive -1.35%- but if I discount it down to anything less than 1.15% they cut my net.)  I would have multiple platforms to offer a fee based account, and could charge hourly or per plan.  Maybe this would go a long ways to helping me fell more like a competent advisor instead of simply a salesman.  Or I could just keep acting as broker and deal with the occasional slimy feeling. "I feel the pain, as I have struggled with the RIA question, and what Space says about small biz. Not so sure any more that being b/d affiliated, selling insurance and annuities, being able to accept commissions (or work fee based at wrap) is slimy. Are you, really?I kind of feel like the "virtue" of RIA is contrived, and I say that after a lot of experience and having the option to convert at personal profit. (Or at least, break even.)   

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

I agree that the virtue of "fee-only" is contrived by the CFP coalition.  For me, it is more about simplicity.  Simplicity of execution as well as in message.  That's why I have been pushing most new business into advisory accounts.  I haev become tired of managing 200 completely different portfolios.  I have portfolios with 10,000 in it, and portfolios with 1.5mm.  I haev stock portfolios, bond portfolios, fund portfolios, some with UIT's, some with CD's, some with annuities, and some with damn near every product mixed in.  I simply can't keep up.  I can't review every portfolio as much as I'd like.  And the problem is, my best clients now have the easiest portfolios to review, and my smaller, and sometimes mroe difficult clients now have the hodge-podge of potrfolios.  If I were strictly a product-focused broker, this may not be a big deal.  I knwo many brokers with 1000 clients that aer transaction focused, and seem to have no problem handling it.  Me, I just can't do it.  I would rather have 150-200 clients in model portfolios (my OWN models), where I can spend time focusing on managing the models, not 200 different unique portfolios.But I don't look down on people that sell other products - insurance, annuities, etc.  I just don't want to be all things to all people.  I think this is where the RIA model is very attractive.  It tends to be cleaner and simpler for the firm, and easier for clients to understand. 

tenthtee's picture
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Joined: 2006-11-16

On the esoteric side, I wonder if having some kind of b/d independence is like having the proverbial girlfriend who will tend to your every need and desire ( even now appreciating what b/d really does behind the scenes to deal with the general public) - but when you marry her (go solo RIA or take or joing an RIA partnership) - the mystic vanishes. I'm just saying, if you're a type A, go for it, don't be ambivalent (like me). For a small shop, there is no question that the potential to meet every need (insurance commissions) is a net, even if you don't focus on it. Perhaps you should consider independent b/d.

tenthtee's picture
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Joined: 2006-11-16

B, good point about simplicity. Clients want solutions. I've done the whole gamut. B shares, C shares, wrap, brokerage research - pretty much turned my nose up at annuities (why fight it?). Now I'm asking myself, am I a good planner, and review DI insurance, LTC, life - in the context of life planning, and even the new generation of guaranteed lifetime withdrawal benefit riders, which of course have to go on to annuity contracts. The world has changed a lot in the last few years, I'm optimistic beyond November, but clients want simple diversified solutions and we all have to be vigilant about imposing our color of reality on clients.

BigFirepower's picture
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Joined: 2010-07-09

Sunchaser wrote:Here is where I am today:I have been an FA since 2001.  I started from scratch and have done fairly well.  Today I serve about 225 households and care for about 45 mil.  My clients are spread out over 25 states, in large part because I have earned the trust of my clients out-of-state children.  According to the surveys of my clients, people think very highly of me.  I place in the top 10% of my firm.  I have built a relationship-based, planning-oriented practice and have been a CFP® certificant for several years.  Revenue grew every year through 2007 when it hit about 300, but this year it will be around 250.  My asset mix is 55% funds, 15% bonds, 10% stocks, annuities 15%, the rest is cash.  My biggest account is 2 mil.  I have lots of accounts that are 400-800.  I have never imposed any account minimums so I have quite a few small accounts as well, but they are almost all investing each month.Recently I have been second guessing my choice of employer.  The new emphasis on revenue, and the concerning movement of money into a relatively new fee based platform, has left me wondering if I should leave.  The idea of being independent is enticing for several reasons.  I would no longer have the possibility that I will dip below a company sales goal.  A year ago, I could get clear down to 14 a month and simply be a dissapointment.  Going forward, if I am below 18 I will have 4 months to get back over 18 or be fired.  I have every intention of growing my practice, and am not content with 18, but the possiblity exists that we could have another major bear market in which my time is consumed by defensive call taking, and my numbers will go below 18.  I don't want to be forced out.  I would rather go now.  I am confident that these new sales goals will result in many FAs creating a "solution" for a client just to hit their number...so there is greater risk of being drug through the mud they are creating. I could transition my practice to be a RIA exclusively, but charge a reasonable fee.  (My current company has a wrap account that I believe is too expensive -1.35%- but if I discount it down to anything less than 1.15% they cut my net.)  I would have multiple platforms to offer a fee based account, and could charge hourly or per plan.  Maybe this would go a long ways to helping me fell more like a competent advisor instead of simply a salesman.  Or I could just keep acting as broker and deal with the occasional slimy feeling.According to the numbers an independent b/d shared with me, if all things were the same, I would net about 25 more a year than I currently do.  Of course, the numbers will not all be the same, as not all of my accounts will follow.  I wonder about the out of state clients.  It would seem they would be less likely to follow.  My biggest account is 2 mil.  I have lots of accounts that are 400-800.I like the idea of creating a team of advisors.  FAs, attorneys, CPAs all under one roof.  As an independent, this has potential.  There is zero possibility of this arrangement occuring now with my employer.My employer intends to add several more offices to my town. Already, they have more offices than we have gas stations.  I can't help but think that the addition of more offices, occupied by inexperienced advisors, is going to perpetuate the perception that my company is for the little guy, who is not in need of sophisticated planning.  I want to be an advisor that is considered competent, not simply a stock broker.I love the idea of owning my business.  I think people think more of businessmen who are independent.   Am I mistaken?  I think more of a CPA with his own name on the door than one with H&R Block...So in my way of thinking I will be better posiitoned to gather assets.  BTW, I opened over 120 accounts (not households) last year so I am still growing.I would be grateful for your thoughtful input.  I would appreciate any suggested resources as well. You sound like a good candidate for indy. The many states of licensing, is expensive. Analyze carefullly who goes with you, maybe, and not, assign a math ratio. If the number is nort of 30m, good. If it is just you, then find another indy looking to share costs, as an office for you solo is quite expensive once you add everything up. Also, what kind of legal issues might there be with current employer? I'm in the middle of a legal issue, from going indy in 2009. Again, you truly sound like you are the right kind of person for it, and you are just about at the size where it will work. You're just a wee bit on the fence of that, and sounds like you know it. But, it's inevitible, isn't it...?

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

B24 wrote:Spiff, did you have too much coffee today?No coffee, but I started my day with a big Coca-Cola and then started my afternoon with a big diet Mt. Dew.  So, there has been an abundance of artificial energy in my system today.  That and there just hasn't been a good I love EDJ conversation on here in a while.  Actually, there hasn't been a lot of good anything here in a while.   

Sunchaser's picture
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Joined: 2010-09-08

Thanks for the input so far. Spaceman Spiff you made many statements that warrant feedback, so here goes: "You don't like Advisory Solutions, but you are OK with going all fee based?"Yes because advisory solution is based on a menu of funds.  A RIA using an open architecture platform could offer bonds with no markup, do stock trades with little expense, and use virtually any funds in the universe.  AS is also too expensive IMO.  5 years ago a Jones broker would talk all day long about the unreasonable long term costs of WRAP accounts."Just a little fair warning that you might want to be careful divulging too much info on here considering the topic of your post."If my company knew I was considering leaving, what are the consequences?  Seems to me that on any day, a quarter of the FAs at any company are considering a change.  According to the surveys Reg Rep have released, something like 50% are considering a switch right now.  Why would a company need to hunt down an FA who made this post?  Excuse the sarcasm, but this is a free country we live in and an FA has every right to leave his company.  Near as I can tell, my company's bean counters wouldn't shed a tear if I left anyway.Perhaps that is the larger issue.  It feels more and more that my value to my company is entirely based on the revenue I generate.  "I have ZERO sympathy when I hear complaining about putting new EDJ guys in a town."My point about another office is insignifigant compared to the larger issues of sales pressure and flexibility and I shouldn't have even included it in my post.Before you get going about pressure as an indy, I believe that self-imposed pressure is a whole different kind if pressure than pressure from "the man".I certainly do not intend this to be hurtful, but I don't get how you Jones guys can post on this all day long.  How are you able to play around on this site and still be productive each day?I hope a few more folks who made the switch to independence will post about their experience.  I just rarely hear of someone that went independent but then later returned to the mother ship...

loneMADman's picture
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Joined: 2010-05-10

Great discussion!  Sunchaser sounds like an entrepreneur in the making, so why fight it.  Go RIA!  Everyone needs to find the ecosystem in which they will be most successful.  I happen to think that RIA is also the model that makes clients most successful, so good for Sunchaser.  But that was not the primary subject of this topic.

Sportsfreakbob's picture
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Joined: 2008-08-24

Sunchaser - do it!I was not at EDJ, I was at a wire. small book, producing manager, was doing about 300k when i left. My experience - i serviced the crap out of my clients for 6 months before my exit, and brought every one of them except for 2 that i didn't care about, with me.You sound like more of an entrepeneur than an employee type. Which points to Indy.One thing i will say i am sorry about, is that i didnt talk to a guy like Fred at Trade-PMR when doing my due dilli. I went Indy B/D, never really considered RIA, and i should have, as i am 70% fee based.Do your due dilligence. You only want to make one move, because if you make a mistake, and want to make another one, clients will be less inclined to follow you another time. Also, making a move will be a great opportunity to prune your book of the smaller accounts, which you should do.Spiff - i have never seen anyone so covered in Kool Aide in my many years on this and other forums, but as long as you're happy, thats all that matters. 

spamfilter's picture
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Joined: 2010-05-22

Sunchaser wrote:"Just a little fair warning that you might want to be careful divulging too much info on here considering the topic of your post."If my company knew I was considering leaving, what are the consequences?  You DO NOT want to be on their monitoring radar.  How about this for a consequence.  The word gets out that you may be thinking about a move and Compliance Investigations starts watching every move you make.  Two days before you plan to resign they launch an "investigation" into your business practices.  It could be anything.  They could say that you submitted a high level of expenses in office supplies through paybills over the past twelve months so they feel the need to go back and review everything.  Then you would have big problems in resigning with an ongoing compliance investigation.  If you decided to resign anyway your license transfer process would be slowed down.  If they found something "significant" it could affect your employment at your new firm.  I know that many of the high-browed Jones people will disagree with me here but it does not matter how high your ethical standards are, Compliance can find something if they want to. I can tell you for a fact that the higher ups at Jones are sick and tired of losing people to the independents.  They have increased their monitoring of boards such as these as well as the websites you visit at work.    

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Joined: 2006-08-08

Sun - You are correct that Advisory Solutions is built on a menu of funds and ETFs.  That's it.  I'm sure you've heard, like I have, that they are upgrading it to include other assets, including all of the ones you mentioned.  5 years ago Doug Hill was the Managing Partner.  Doug, like his Bachmann HATED fee based accounts.  Doug also hated annuities.  Today our clients have a choice whether they want to pay us a fee and hand the day to day management of their Advisory accounts.  So, if they want they can use Advisory, MAP, or the EDJ Trust Co. if they choose to go that route.  It's not like AS was the very first foray into the fee based world for Jones.  It's a startup program for the masses, unlike MAP and the Trust Co.  New management allowed it to happen.  Is it expensive.  Sure, it's more expensive than owning a few American Funds, but we could debate all day long about how much better is for those clients who have it.  This open architecture you desire, from what I've heard, is right around the corner at Jones.  Look, I'm not trying to convince you to stay at Jones.  In fact, I'm pretty sure you've already decided to leave, you just need to get someone besides yourself to tell you it's OK.  You can't really call your RL and ask him whether you should go indy or go RIA.  You're not the first guy to come on here and ask for advice on leaving Jones.  At least you're not coming on here asking how to get out of repaying training costs or whether you should take deal X or deal Y based on the upfront bonus.  You actually have some legit thoughts on why another model might work better for you.  So, take the other guy's advice and just do it.  But make sure you do a ton of homework before you do.  And once you make the jump, please don't come on here for years afterwards telling everyone how bad a company Jones is.  If you want the opinion of someone who has made the jump and is vocal about it, in fact I'm suprised he hasn't chimed in, you should PM BigCheese.  Bob - the kool aid runs deep in my veins.  Along with the Coca-Cola and Mt. Dew.  And yes, I'm very happy at Jones.  Just waiting for the call from Weddle to ask me to come the home office and become the firm's first GP in charge of propaganda.   

Sportsfreakbob's picture
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Joined: 2008-08-24

Spiff - i wish you the best. Keep your mind open. The possibilities are endless.  When i took my blinders off, i was blinded by the light.

spamfilter's picture
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Joined: 2010-05-22

Spaceman Spiff wrote: What Suncatcher hasn't talked about is how he feels about the extra responsibilities he takes on when he goes indy or RIA.  Is the extra payout worth the work of being an actual business owner?  He mentioned that an independent B/D told him if all things remained the same, he'd net about 25% more.  Right now he gets to come into his office, turn the computer on and start his day.  No thoughts about payroll taxes, software integration, compliance, etc.   How good is he at hiring, real estate negotiating, payroll, computer hardware research, etc?  Those are all things that are part of being the actual business owner that he's not had to do at Jones.  Is that extra $25-30K worth the extra work?  That's assuming he takes enough clients/AUM to get back up to $300K next year.  Is the extra payout worth the work of being an actual business owner?  An "actual" business owner?  I don't know too many guys that are willing to start at or close to zero every month to be an employee.  Most Jones guys already think of themselves as an "actual business owner".  We certainly take just about all the risk of a business owner.  Why not get the reward."Right now he gets to come into his office, turn the computer on and start his day.  No thoughts about payroll taxes, software integration, compliance, etc.   How good is he at hiring, real estate negotiating, payroll, computer hardware research, etc?"Payroll Taxes-you should already be using a CPA.  This is just one more thing for them to do.  You do not have to "think" about it.  Your CPA does that for you.Software integration-You buy a computer, hook it up to the internet and log on to Branchnet or whatever your B/D uses.  Then you can add services and software as business conditions dictate.  Most of the software needed will be offered by your B/D.  Compliance--At Jones you don't have to think about compliance?  The compliance picture does not change if you use a reputable B/D.  Your trades are still reviewed, you still get calls or emails if your compliance officer needs clarification and yes they may even reject an order.  The myth that if you are independent, you are on your own as it relates to compliance simply is not true.How good is he at hiring--At Jones don't you have to interview the office administrator?  The one big difference if you are independent is that you can fire them if needed.Real estate negotiating--It is pretty simple.  You find a property that you like and ask the owner, "how much is my monthly rent?".  From that point you either say "wow, that is cheap where do I sign", or you say, "would you be willing to take 'x'?".  From that point you write out check at the agreed upon time.Payroll--This one goes back to your CPA.  You don't have to be an expert in payroll.Computer hardware research--It is not as if this is something that takes part of your daily time.  You find a computer that you like and upgrade as new technology is available and needed.Spiff, I didn't write all of this just to poke at you.  I have heard all of this stuff for years as the "reasons not to leave Jones" and have found that it is just not true.

tenthtee's picture
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Joined: 2006-11-16

Drinking Kool-Aid with the boys in the dining hall is still a nice option, you gotta admit. You wake up, go to the dining hall, go swimming and fishing, back to the dining hall, go take a nap, go to the rifle range and shoot some skeet, take the canoes out on the lake, go back to the dining hall for dinner, and hang out with your friends some more. I miss Kool-Aid.

loneMADman's picture
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Joined: 2010-05-10

spamfilter wrote:Sunchaser wrote:"Just a little fair warning that you might want to be careful divulging too much info on here considering the topic of your post."If my company knew I was considering leaving, what are the consequences?  You DO NOT want to be on their monitoring radar.  How about this for a consequence.  The word gets out that you may be thinking about a move and Compliance Investigations starts watching every move you make.  Two days before you plan to resign they launch an "investigation" into your business practices.  It could be anything.  They could say that you submitted a high level of expenses in office supplies through paybills over the past twelve months so they feel the need to go back and review everything.  Then you would have big problems in resigning with an ongoing compliance investigation.  If you decided to resign anyway your license transfer process would be slowed down.  If they found something "significant" it could affect your employment at your new firm.  I know that many of the high-browed Jones people will disagree with me here but it does not matter how high your ethical standards are, Compliance can find something if they want to. I can tell you for a fact that the higher ups at Jones are sick and tired of losing people to the independents.  They have increased their monitoring of boards such as these as well as the websites you visit at work.     That's chilling.  Another reason I hadn't thought of before for why I would never go to work for someone else in this business.

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

spam - my point was that taking on the role of the business owner is going to involve more than what he does right now.  I didn't say any of it was difficult, but he doesn't have to think about any of it right now at Jones.  For some guys the extra 25% payout isn't worth the other things you might have to deal with.  I guess you can look at it as a fair trade for leaving Jones - no more Segment meetings, Summer Regional meetings, no more Div Trips, no more mentoring, no more volunteering.  So you do have that time to devote to other projects.  I didn't take your responses as you making fun of me.   It's a legit conversation that I think someone leaving needs to have with people beyond the recruiter at whatever B/D they're looking at using.   

CIBforeveryone's picture
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Joined: 2005-07-12

Spamfilter speaketh the truth.Spiff is correct that you will now have the time you've been spending volunteering to earn LP or attending regional meetings to devote to new responsibilities as an owner (which Spamfilter summarized 100% correctly) and just spending time doing whatever you want.RJ as about as close to Jones as you can get and still be Indy if you like, in terms of more strict compliance and some form of "firm culture" (i.e. annuity cost control, etc) or LPL/RIA let's you be as free as a bird. I feel pretty free as a bird with RJ except for them looking out for themselves on things like annuity and RIA compliance, which I think is a fair trade, and I do receive some benefit from.Also RJ would let you transition to RIA and still have them as a custodian, so it would be a transparent move to your clients. You could build your own brand as an Indy Contractor rep, then do RIA down the road if you wanted to without "switching firms."    

Sportsfreakbob's picture
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Joined: 2008-08-24

CIB - My understanding is that to transition to RIA with RJ we need $50MM in fee based assets. Comment?I find RJ not too different from the wires in terms of compliance. It is a PITA but i will say, in the long run it probably protects me as well as the firm. And the support is great.

CIBforeveryone's picture
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Joined: 2005-07-12

I don't know the answer to your question because I am not RIA. That number wouldn't surprise me, though. RJ typically doesn't want small producers on their own.For those lurking, when it comes to compliance I have never had something I wanted to do that has been disallowed because of compliance. And I certainly get FAR fewer inquiries than I ever did at Jones.

lovindaindy's picture
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Joined: 2009-05-07

You guys are sissies.  Really?  "I don't want the responsibility of business ownership".  Which is crap, because when you joined Jones, you thought you would be running your own business.Go RIA, it's really the only option.All of it is easy. 

RWM's picture
RWM
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Joined: 2010-06-08

Lovindaindy is right !  Stop whining..think about the people in your community that open a small business...are you not brighter than them...Edward Jones is a joke.  It is the worst of both worlds.  You have the stress and loneliness of being alone and covering you local costs every month and a bunch in inbread idiots telling you what you have to pay for a paperclip. That model is dead and will be gone in a decade.    Look at Wells Fargo Advisors FINET, Raymond James, or LPL.  You are already doing the hard stuff.  Finet will write the biggest check and you can use your own name or Wells Fargo Advisors for name recognition.  Raymond James has a great culture and LPL has great technology for planning (Emoney).   Be careful with an RIA.  Make sure you use a platform that allows you dual relationship so you can keep your trails. All those issues you scared about: payroll, staff, leasing, accounting, compliance are second nature after 6 months.  You have the tools to find and retain business.  That's all you need regardless of your BD. Good Luck 

lovindaindy's picture
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Joined: 2009-05-07

Trails and B/D's are dead.If you are not on the fee-only bandwagon, you are a dinosaur.RIA is totally the way to go.  Remove FINRA's foot from your throat.  What people don't understand about the RIA model is that you can basically charge however you want (flat fee, hourly, AUM, fee per transaction) as long as it is disclosed on your ADV.Wake up! Why let someone take 10-20% of YOUR revenue.  These indy B/Ds are no different.  They want to make money off of your work.  Screw them!

LockEDJ's picture
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Joined: 2009-07-06

Spaceman Spiff wrote:Oh yeah, Sun - there are people that read this forum that can probably figure out who you are pretty quickly.  There aren't more than a few hundred CFPs in the field, fewer who started in 2001, and even fewer with $45 mil in AUM.  It might take a little work, but if I still had access and the time I could probably send  you an email on your @edwardjones.com address.  Just a little fair warning that you might want to be careful divulging too much info on here considering the topic of your post.  Thank you Spiff ... for coming out and stating for me the single very reason for leaving Jones. Why in the world should someone - that has been in the field for ten years and is a valued producer at Jones ... need to be worried about being "called out"? Has he done something terribly wrong for opening his mind and thinking this might now be the right place for him? You are simply being an asshole, but the thing of it is, you are accurately reflecting a part of the culture for your company. Good for you. Sunchaser, good luck in your future venture. You are going to make scads of money. I wouldn't be so quick to give up transactional, by the way ... it's been a boon to my clients and some of them really do need that venue. Not to mention, you won't believe what Big Green's been keeping from the insurance companies and redirecting out of your pockets. Leave Jones honorably, do the right thing and things will work out in ways you couldn't imagine. Feel free to pm.

LockEDJ's picture
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Joined: 2009-07-06

Post script: I believe in Edward Jones. (Anybody that says a model that continues to grow and win awards is "broken", has chosen to spew venom without thought.) I believe that they don't monitor these sites to "out" or prevent advisors from leaving; while they surely monitor these sites it strikes me it's more likely for research. Maybe Spamfilter is right and I'm just too naive for words, but it seems from the perspective of tracing the whereabouts of 12000 employees this would be a pretty poor source of information. However, you can aggregate data like the whereabouts of 12000 computers and get significant usable information about your staffing. I don't think anyone in HR would get any promotions preventing one Seg three guy from leaving Edward Jones. Notably, I've never seen a really big producer lurking on these sites asking questions about leaving Jones; it's always newbies and $300K people. Hardly what keeps St. Louis awake. Like I say, I believe EDJ is a good model; I think they honestly try to do what is honorable and extend that to their employees so long as their employees don't do wrong. At this point in my life, it just turned out to be not the proper fit for me.

RWM's picture
RWM
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Joined: 2010-06-08

I agree with Lovindaindy commnents about fee only consultants and RIA's.  It's just that many of us former BD employees want to have some support (compliance, technology, advertising,  and are willing to pay 15% for it).  It's a business decision that free's up our most precious resource ...time.   The transition to RIA will eventually come.To see what a bunch of clowns you work for ...leave Jones and see how they act.  They will chase down every client with vengence and you old peers cary out there wishes.."The Firm" with a dash of "Amway"..   

spamfilter's picture
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Joined: 2010-05-22

LockEDJ wrote:Post script: I believe in Edward Jones. (Anybody that says a model that continues to grow and win awards is "broken", has chosen to spew venom without thought.) I believe that they don't monitor these sites to "out" or prevent advisors from leaving; while they surely monitor these sites it strikes me it's more likely for research. Maybe Spamfilter is right and I'm just too naive for words, but it seems from the perspective of tracing the whereabouts of 12000 employees this would be a pretty poor source of information. Reviewing this forum is only one of the tools that they use. The main tool that they will use is what filters back through other FAs, BOAs and the like.  They are listening and are looking for cues that someone may be looking for an exit.  You never know what innocent statement will get you "under review".However, you can aggregate data like the whereabouts of 12000 computers and get significant usable information about your staffing. I don't think anyone in HR would get any promotions preventing one Seg three guy from leaving Edward Jones. Notably, I've never seen a really big producer lurking on these sites asking questions about leaving Jones; it's always newbies and $300K people. Hardly what keeps St. Louis awake. While it may not keep them awake, they do not like to lose the $300K people.  Especially when they lose several in one market.  You must remember that a $300K producer is pretty close to average at Jones.Like I say, I believe EDJ is a good model; I think they honestly try to do what is honorable and extend that to their employees so long as their employees don't do wrong. At this point in my life, it just turned out to be not the proper fit for me.

LockEDJ's picture
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Joined: 2009-07-06

Reviewing this forum is only one of the tools that they use.
The main tool that they will use is what filters back through other
FAs, BOAs and the like.  They are listening and are looking for cues
that someone may be looking for an exit.  You never know what innocent
statement will get you "under review".
Maybe so. I know that they had ample reasons to consider I was leaving, and nobody got me "under review" . I suppose I prefer to not live my life paranoid or you might say, blissfully unaware of the dangers.

Independent's picture
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Joined: 2006-08-15

Hi Sunchaser, It looks like you have the base to go independent and build from there.  Many Jones reps have too many accounts to truly service and provide value, whereas you have kept your numbers in line to where moving your book would be doable.  I never could figure out how a rep could do a good job for over 1,000 people with only a couple thousand hours to work each year.   Whether you decide to affiliate with an independent broker/dealer or go the full RIA model is up to you.  The cost to register in all 50 states is a bit over $5,000, so you might be looking at half that amount for registration fees.  I would look at a few different firms, have them run an analysis of your expected net pay based on your current production levels and make an educated decision.    One of the best informational sources out there is a book called Going Independent that is free at www.cantella.com  There are some worksheets in the book to help you figure out the cost of this whole process to see if it makes sense for you.     If you do decide to hit the bricks, make sure the top half of your book receives exceptional service prior to asking them to join you. 

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