Am I just not good at this?

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scrim67's picture
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Joined: 2005-04-28

I am employed by a major bank program in the NE.     I am in my first full year in this business.   In 2005 I am averaging about $12,500 gross revenue/month.   My book is about 6m.    I am building my business mostly around managed money/mutual fund wrap accounts as I believe this to be a great relationship building tool.    I currently have opened 22 of these accounts with total assets of around 1.6m.
A colleague of mine who started around the same time as me  is doing 5x the business i'm doing.   He is not doing managed money striving for the higher payout products like VA's and FA's.   He also works in a very affluent area.   
I do believe he can sell ice to an eskimo but I don't think he is 5x the better broker I am.
I need any words of encouragement.

blarmston's picture
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Joined: 2005-02-26

Scrim-
Keep doing your thing. By using managed money and fee based accounts that continue to pay you as long as the relationship remains, you are annuitizng your book. Your buddy is doing better presently, but he is slapping clients into VA's that pay out higher. Short term, thats great, but he will be unable to continue making money on those clients because he is locking up their money with VA's that have long term surrender schedules. Unless he flips their accounts into bonus VA's every couple of years or allows the client to take exit charges, that money is captive and lazy. Being a relative newbie ( about 5 years in the biz and two months w/ current firm), I understand the attraction of taking the large upfront hit on PC's, but I TRY to remember that this game is long term, and the best way to succeed is to generate a "salary" of annuitized business to sustain your business model in inevitable down years or flat growth years.

noggin's picture
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Best way to get wealthy is to do it slowly... Annuitizing your book is one of the smartest ways to build your business in my way of looking at it. Great post Blarmston.

dashampersand's picture
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Blarmstorm:
I beg to differ with you.  There are VAs out there that will pay a 1-1.25% trail in year 3 or 4 depending on the product.  I'm not saying that this is the best approach merely that it is a different approach.  He compatriot may also believe that it will be easier to move his clients from the bank to indy down the road.

scrim67's picture
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The feedback I received must have inspired me.
Since my plea for help last week I've opened 4 more managed money accounts for a total of 200k.
Now i'm up to 26 accounts with 1.8M in assets.    My trails begin to kick in this summer as I opened my first account last July.   Assets must be in there for 13 months before I start getting paid trails.
For some reason I tend to open accounts in bunches, not unlike HR's in baseball and bananas.
Scrim

Put Trader's picture
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dashampersand wrote:
Blarmstorm:
I beg to differ with you.

Would that be the same Blarmstorm who spouts off like he knows what he's talking about?

troll's picture
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Joined: 2004-11-29

Put Trader wrote:dashampersand wrote:
Blarmstorm:
I beg to differ with you.

Would that be the same Blarmstorm who spouts off like he knows what he's talking about?

Yes that's the same one, unlike yourself, who is cultured, knowledgeable, balanced, and oh so pleasant....

blarmston's picture
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Joined: 2005-02-26

Thanks for the support JoeDaMan, the checks in the mail....

scrim67's picture
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Joined: 2005-04-28

guys,
I wish we wouldn't digress.  
On a positive note opened 4 more accounts today 1 being managed money for our minimum of $25k.
My goal is to have 100 managed money accounts by year end 2006 which I'm figuring would be around 10M in assets.    My trails start kicking in September of this year so I can begin to start seeing the small payoffs to building my business this way.
After having my best month in March of 17k gross April was awful falling back to 7k.   May has gotten off gangbusters as I've done about 10k and it's only May 5th.  
My goals for gross production are:
2005  150k
2006  250k
2007  400k
2008  500k
 
For those who have been in the bank programs and built their business similarly does this seem realistic?    Our managed money program pays upfront 3% on non qualified assets and 2% on qualified assets and then the 1.5% and 1.0% trails kick in respectively after 13 months in the program.
Thanks in advance for any feedback.
Scrim

scrim67's picture
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Joined: 2005-04-28

I'm plugging along.  Here is my update for those who might want to follow my progress.
I continue to build momentum.  Maybe there is a light at the end of this tunnel.
In just the past two days including saturday I've done business with 3 separate new clients who gave me a total of 290k to manage.   
That brings me up to 32 managed accounts with around 2.3M in assets.
Have a great Memorial Day weekend and be safe.

Scorpio's picture
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Joined: 2005-05-22

Scrim,

How old are you if you don't mind my asking?  Sounds like you're
doing well; I hope I have similar success in my first year of
production.  Did you have a network to start with?

scrim67's picture
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Joined: 2005-04-28

Scorpio,
I am 38 years old.  
No network at all when I began.   Spent a few years in mutual fund sales directly out of school and then spent the next ten climbing (albeit too slowly) the corportate ladder on the customer service side of a brokerage firm.
I should do approx 150-175k in GDC in 2005. As previously mentioned I'm doing mostly managed money which doesn't pay as much upfront.   However, over the long run I feel this is the best approach when you consider all parties (clients, myself, my firm)
As I open more accounts and become more persons "trusted advisor" I feel the momentum slowly building week to week.
Scrim

Indyone's picture
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Joined: 2005-05-31

Scrim, I've been in your channel since '99 and am just a bit older than you.  I will lay odds that over the next five years you will take a hard look at going independent, and if you do, you'll go.  After six years in the bank channel, I've reached my limit and am moving on.  You too will get tired of working hard and seeing most of what you produce stay in the bank (as opposed to going to your paycheck).  You'll get tired of the changing comp plans, and all the mandatory meetings, forms, etc.  The only question is whether to go with LPL or Raymond James...which I intend to decide over the next six weeks...

scrim67's picture
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Joined: 2005-04-28

Indyone,
Point well taken.
How will building the majority of my business thru my banks proprietary mutual fund wrap program affect moving my clients to the indy channel down the road?    I've heard it's not easy because you cannot ACAT in kind and would have to liquidate to have these accounts follow me possibly triggering substantial tax bills.
That's why i'm taking the long term approach and will probably stick around for awhile.
Thanks in advance for feedback.

Indyone's picture
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Joined: 2005-05-31

Scrim, I'm surprised that the bank cannot ACAT the positions.  That being said, I believe that there is another way besides the ACAT system to transfer positions, but to be honest, the back office is not my forte, so perhaps I am dreaming.  All I do know is that our bank can ACAT positions out of our wrap program so apparently your issue is bank-specific.  That being said, I hope that your bank finds a way to transfer positions over the next few years.  Not doing so is like holding clients hostage and it's just a matter of time before the first unhappy client gets real unhappy when he/she finds out that he/she is stuck because of large unrealized capital gains.  My guess is that the bank will find some way of accomodating the unhappy client and that will be your ticket.
Also, nothing wrong with building the business a few years so that you can develop rapport with your clients and make them more likely to go when you get your fill.  Just don't sign any more non-competes!
...and by the way, I see nothing wrong with your numbers.  I had a similar profile and grew my numbers less rapidly since I have put about half of my client assets into fee-based accounts.  The best advice I can give you is to start being more selective with who you bring in or you'll get overwhelmed with numbers.  I have quit taking relationships under $100,000 and don't intend to take very many small accounts with me when I leave...

exEJIR's picture
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Joined: 2005-05-12

Scrim67,
First off, congrats on gathering the managed money.  But my question, ...
What approach are you using? 
The reason I ask, I am new to the MM biz and still don't feel comfortable talking to clients about it.
 

scrim67's picture
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Joined: 2005-04-28

Hi,
Let me clarify.
I am building my core business around my firm's mutual fund wrap program which is an investment management account.
We have six models from "preservation" to "aggressive".
I just have my clients talk to me about their own goals, risk tolerance and time frame and present one of our models or more than one if appropriate.
Because it's an investment advisor product (series 65)  I'm required to have at the very least an annual meeting with these clients to see if anything has changed regarding their financial situation.  It really promotes building a quality relationship with my customers and I have a good feeling that a small account today will become a bigger account tomorrow when I become their most "trusted advisor".    In the short time in my banks program the momentum that's building in my branches is almost palpable.
Again, my goal is to gather $500k/mo in this program.   If you extrapolate the numbers over a few years it becomes very powerful and I will have a more than viable business.
Scrim

scrim67's picture
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Joined: 2005-04-28

35 accts 2.4M
updated

troll's picture
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scrim67 wrote:
35 accts 2.4M
updated

 
thanks for sharing.....

blarmston's picture
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Joined: 2005-02-26

Hey joeDaMan, how is the switch to the good side of the Force treating ya??? Need some help with those ACAT's?????

scrim67's picture
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Joined: 2005-04-28

Relationship between my bank partners and myself continue to gel.  
June opened 18 accounts with approx 1.3M in assets.
Totals updated
47 accounts
3.4 M
Have a great yet safe holiday

giff74's picture
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Joined: 2005-06-30

Scrim you have a good thing going with your managed accts. My bank only pays about half that upfront and we WONT do one for less than $100k and even that is frowned upon. Pretty much anything less than $200k is thought of as a transaction, the powers that be are so short sighted.
I hope you can hang in there, I have been bank channel for three years and am getting tired of the multiple beatings from all sides we tend to endure. Retail wants more loan referrals and brokerage wants more production and says we should get the referrals from retail since they have all the money. Its a vicious cycle, I hear the two divisional SVP's have some awesome blowouts between themselves. I think by the first of next year I will be at brokerage; Jone AGE AMEX, someplace more aligned with what I want to do. 

giff74's picture
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Didnt want to sound too negative, if you can put up with the crap that comes with a bank, there is a lot of low lying fruit.

executivejock's picture
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Joined: 2005-06-29

Its interesting to hear the stories and growth from advisors.
I just took my 5th Dearborne Pretest and averaged 85... I am ready to go and test..After exploring my options and numerous offers I have decided to take the route that provides a mentor. An independent firm that is established I think will work best for me..
Now I see the point in focusing on 100k+ clients. If one were to have 100 accounts with 25-50k clients they would end up no time to focus on the 200k+ investors. So inturn their time would be limited and there pontial income would be limited.

menotellname's picture
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executivejock wrote:
Its interesting to hear the stories and growth from advisors.
I just took my 5th Dearborne Pretest and averaged 85... I am ready to go and test..After exploring my options and numerous offers I have decided to take the route that provides a mentor. An independent firm that is established I think will work best for me..
Now I see the point in focusing on 100k+ clients. If one were to have 100 accounts with 25-50k clients they would end up no time to focus on the 200k+ investors. So inturn their time would be limited and there pontial income would be limited.

 
Speaking of time...take a stopwatch with you to the testing facility...let PT know what your elapsed time is to complete the test.

scrim67's picture
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Joined: 2005-04-28

Month end update:
58 accounts 3.8M
I had a good learning experience this month as well as I lost a client.
At end of June I opened an account for an 80 yr old widow with around 100k.  She had a CD mature and needed to reinvest the money.   Because of her age and her risk tolerance we did our "PRESERVATION" model.
Long story short, she comes into my office last week with her son who said the following:
"Didn't you ever hear of the 'rule of 100', my mother shouldn't have 60% in equities,  also there is no FDIC insurance of $100,000"
After correcting him that our PRESERVATION model is only 20% equities and the account, while not having FDIC, has SIPC insurance he apologized for his ignorance but still decided a CD was best for her.
I expect that this will happen on occasion but I am comfortable knowing that I tried to do the best for my client.
On the upside I've had my best morning ever opening another 4 accounts for a total of 220k.   Though taketh and giveth.
Stay cool,
Scrim

maybeeeeeeee's picture
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Joined: 2005-02-24

The PearsonVue testing facility would not allow watches in the test.  Purses, wallets, notes, hats, etc in locker.  Just a heads up.

menotellname's picture
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They have clocks on the walls.  Just note your start and finish times.

scrim67's picture
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Joined: 2005-04-28

Update:
73 accounts    5M assets
August was pretty active for me opening 15 accounts for about 1.2M
My first trails from accounts I opened last year begin to roll in in September.
Hope everyone is enjoying their summer.
Scrim
 
 

Scorpio's picture
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Joined: 2005-05-22

Just curious- Who are you prospecting?  What has been your best approach?

moneyadvisor's picture
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Oh that's easy!.....ya see!..... I have this desk!.......it's out in the middle!.... of the bank floor.......and,..and, really nice old people who are comming into my bank....They come over to me.......You  know, because I'm the most trusted advisor in the whole wide world!!!!, and I open accounts, and do business and stuff!!!!!

scrim67's picture
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Monthly update:   77 accts   5.4M  AUM
September was a bit slow opening 4 accounts for about 400k
I think October should be better.   Hoping to get to 100 accounts by year end.
Have a great October!!!

SonnyTheBull's picture
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Joined: 2004-12-29

Scrim67,
Congratulations! You have been doing exceedingly well. Get those spiffs to put more people in front of you.
Good Luck!!!
Sonny

scrim67's picture
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Joined: 2005-04-28

Monthly update
81 wrap accounts for 5.5M
October was a really bad month for me.  I need to look in the mirror and figure out why:


  • I've learned how much my branch manager partners help drive my business.   In the past two months all (3) my branch managers have left the bank for one reason or another.   Much of the momentum we had built up this year has temporarily evaporated until my new managers come aboard and get up to speed

  • I take alot of responsibility as I didn't make enough phone calls and meet enough prospects eroding my pipeline

  • I injured my back a few weeks ago and while I didn't take any time off to recuperate, maybe I should have as my productivity waned while my back whined!

  • From what I understand October is one of the toughest months for the stock market

 
All the above factors contributed to a down month but I refuse to get discouraged!
I'm still above my personal goal for 2005.
This is a marathon and not a sprint!!!!
Have a great November all
Scrim
 

moneyadvisor's picture
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Joined: 2005-08-02

You gotta love the scrimster.......He reminds me a little of buz lightyear.
Scrim....."To infinity.....and BEYOND"!!!!

scrim67's picture
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I have no kids so I'm not in the loop.
Should I be flattered by the comparison to Mr. Lightyear?
The Scrimster

babbling looney's picture
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Joined: 2004-12-02

I think you are flattered.  It is a very cute story.  Buzz was an endearing, hopeful, optomistic and persistant action figure.
http://en.wikipedia.org/wiki/Buzz_Lightyear

troll's picture
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Joined: 2004-11-29

There will always be slow months scrim-ster.  It's how you react(keep going?  give up?) that is the true test, mi amigo!  Keep the big picture in sight, you're ahead of your goals!
Find a way to build your pipeline yourself so you don't have to rely on your 'branch partners'....perhaps some of those folks you got started a while ago are now ripe to provide you with some referrals....?

maybeeeeeeee's picture
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Joined: 2005-02-24

scrim67 wrote:
Monthly update
81 wrap accounts for 5.5M
October was a really bad month for me.  I need to look in the mirror and figure out why:


  • I've learned how much my branch manager partners help drive my business.   In the past two months all (3) my branch managers have left the bank for one reason or another.   Much of the momentum we had built up this year has temporarily evaporated until my new managers come aboard and get up to speed
  • I take alot of responsibility as I didn't make enough phone calls and meet enough prospects eroding my pipeline
  • I injured my back a few weeks ago and while I didn't take any time off to recuperate, maybe I should have as my productivity waned while my back whined!
  • From what I understand October is one of the toughest months for the stock market

 
All the above factors contributed to a down month but I refuse to get discouraged!
I'm still above my personal goal for 2005.
This is a marathon and not a sprint!!!!
Have a great November all
Scrim
Very good.  Excellent.  What month of production are you in??? How long have you had your license.  Sorry, but what firm or bank are you at?  I like seeing your positive posts.  Keep at it and smoke them all.

scrim67's picture
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Joined: 2005-04-28

I am in my first full year of production.   
I have had my series 7 license for about 15 years but spent a long time in middle management before exploring this side of the biz.
I am on pace to bring in approx 7M in assets this year translating to about 200k in production.    Considering most of this biz is fee based and i'm "only" getting 3% upfront 200k has exceeded my goal of 150k this year.  While my numbers currently lag behind most of my colleagues here, I'm comforted in the fact that if my biz was mixed with annuities and such my 200k would be closer to 350k putting me in line with many of them.    I strongly believe in the long run my fee based biz is best for my customers, my firm and myself.
My trails begin hitting in '06 and as of this moment should be around 70k for 2006.      My overall goal for '06 was 250k but I think 300k is very doable.
scrim
 

moneyadvisor's picture
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Joined: 2005-08-02

Scrim -
I meant only good.....I like the updates, your enthusiasm is refreshing. And your numbers are pretty damn respectable.

scrim67's picture
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No offense taken at all.   I just have never seen TOY STORY.
Maybeeeee,  I also have series 4,6,9,10,24,63 and 65 license which I've acquired over the years.    Not sure they do me too much good but like my dad says "Applied knowledge is power".
One last off-topic update:
If you are familiar with the NFL SURVIVOR pool concept i'm still alive after 8 weeks.   We started with about 1,000 entrants and we are down to 200.    Wish me luck!!!!!!    This week's pick, though I haven't officially made it yet, appears to be JACKSONVILLE!

moneyadvisor's picture
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Scrim,
Is'nt one those licenses good for driving a tractor trailer????

scrim67's picture
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Joined: 2005-04-28

Nope,
That would be the CDL license which I just received the Dearborn books for self study.
I'm backing up....BEEP BEEP

executivejock's picture
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Hey Scrim.. Do you think spending 15 years in the industry really was a good move? Or do you wish you started this position 10 or 15 years ago?         &n bsp;   Good job!

scrim67's picture
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Joined: 2005-04-28

I'm not sure what you mean.   I've spent my entire career in the financial services industry.
I have no regrets about anything.   I tend to not to focus on the past and only look ahead to the wonderful future.
scrim

executivejock's picture
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Good attitude. What I was trying to get to was the fact that some youngsters are not sure where to start in this industry. The fact that you have paid your dues with a career in the industry before becoming a broker is paying off. You know the culture and how to seal the deal!
So I was hinting do you think one should start out as an analysis in the industry or a PFA/broker at 24...?
Sorry for the confusion.

scrim67's picture
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Joined: 2005-04-28

I would keep it simple.
Find your niche on what you have a passion for and do whatever you can to make that your vocation.
Since I'm still relatively new to this game I'm only making half as much when I left my "salaried" middle mgmt, cushy office job two years ago.    Yet, I am atleast twice as happy as my lifestyle is so much more gratifying.
I will most likely reach and surpass my 2003 salary in 2007 at the latest but possibly even in 2006.
By building my practice in the manner of I have chosen I figure I can increast my GDC by atleast 50% a year over the next few years until I hit critical mass.    By that time I can prune where necessary and fine tune to keep building my practice albeit at a slower year over year pace.
The "experience" I have has helped but I would think even more critical is that I had the financial resources to operate my day to day existence in a negative cash flow situation.   I viewed this almost like a startup operation with much of my overhead being paid by my firm.
One change I would like to see for others who want to build a fee based biz is that my firm should have offered more in the way of a 2 year salary as opposed to 3 months.   Firms like mine want the fee based biz but by not providing more of a guarantee many can't survive the first few tough years while building a practice.     If I would've known this 2 years ago maybe I would have negotiated something but I had no leverage anyway.
Scrim

executivejock's picture
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Scrim... For sure some stability to let the employee develop is smart in my eyes. It might be the old school mentality of it was hard for me so it should be harder for you. Some brokers give just enough for the person to survive so they have the inner desire to make more money. 
The fact that I waited a few years to enter the industry is really a plus for me now. At the time I wanted to rush into industry an accept first offer and its a good thing I did not.
For sure you hit this dead on the head. This is like starting a new business. You need passion, dedication and commitment to build something from nothing. The best part of this industry is the fact that one can really not only make a difference in their own financial future, but the lives of others. I love enlightening people about long term strategies, retirement accounts, funds and everything between. What I dont look forward is to the customers like me who with less then 100k in savings have issues with the $50 dollar yearly charge. :)

moneyadvisor's picture
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executivejock wrote:
Good attitude. What I was trying to get to was the fact that some youngsters are not sure where to start in this industry. The fact that you have paid your dues with a career in the industry before becoming a broker is paying off. You know the culture and how to seal the deal!
So I was hinting do you think one should start out as an analysis in the industry or a PFA/broker at 24...?
Sorry for the confusion.

Exec.
You won't learn how to swim by spritzing yourself with water. I am 39, I am in the biz for 3 1/2 years. I almost got in back in 1990 after college. However, the 80's were "over" it was a new world.........There are not many things about my life I would change, that is one of them.

scrim67's picture
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One more piece of relevant info on my later entry into this side of the biz.
About 15 years ago I did take a position as a Financial Advisor with a major wirehouse.   I realized very quickly that once I passed my series 7 there was no way I could continue to be employed by this firm.  The whole experience soured me on being an advisor at a wirehouse and I vowed never to go thru that again.    In the early 90's I don't think there were many bank programs in my area of the country.
For awhile I thought my niche could be as a mutual fund wholesaler but that was not to be and in retrospect I'm glad I didn't go that route either.
Being in my bank program I finally feel "at home" and found something I can see myself doing until I'm ready to hang it up and then play golf and poker everyday!  I just need to get past that point where my biz is viable and everyday I get closer to that point.
Scrim

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