Bank Consultants/Advisors/Brokers

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alaskota's picture
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Joined: 2008-02-21

Can anyone explain how a bank gig would differ from working at a wire house? I have been looking at local banks - US Bank and Wells, as places to start out - they don't require that you sell only their brand, they have great foot traffic and internal referrals - what is not to like?Can someone explain if their compensation is much different? I know that the banks have a set salary, but i have to assume they also offer a certain commission as well. Any light someone could shed on this would be much appreciated, as it seems that it would make sense to cut your teeth in a steady environment. For comparison's sake - I turned down Ameriprise but have been offered an interview with Merrill - how would places like these two compare to the banks?Thanks for any insight!

troll's picture
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Joined: 2004-11-29

NOT ALL BANKS ARE CREATED EQUAL!
 
NOT ALL BRANCHES ARE CREATED EQUAL!
 
Go into banks with your eyes WIDE OPEN!
 
Treatment:
How would you feel about being an "evil" step-child within your environment?  That you "steal" their deposit dollars to make your goals? 
 
You're ASSUMING that you'll have "great foot traffic and internal referrals".
 
You've got to WORK at it and EARN it from the tellers who think they're protecting their clients from you.
 
Logistics:
You're still building up someone else's book.
 
You're at the whim's of MULTIPLE bank bureucracies.  You'll have MULTIPLE sales meetings throughout the year.
 
Can you say "Variable Annuity" to enough people?
 
Do you ONLY want to work when the bank is open for business since they WON'T give you a key or alarm code to be in the branch by yourself???
 
Look, I've been there, done that.  Some people like that lifestyle.  But I just couldn't stand it, and I did it for 3 years.
 
You dumped Ameriprise - good for you.
 
The real question is:  Can you prospect?  Will you prospect?  Will you do it effectively and consistently?

alaskota's picture
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Joined: 2008-02-21

Thanks for the opinions skippy - care to name the bank you worked at?Unfortunately I'm new to the city I'm in, so I have absolutely no natural market. I'm also 25, so I don't exactly scream "experienced!" I do have a JD and a desire to excel at this career path - so I'm young and wet behind the ears, but I figure I've got time on my side!

troll's picture
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Joined: 2004-11-29

I was at a credit union in Southern California.
 
Ever thought about selling insurance?  Much better pay, almost anyone can be a qualified prospect and you'll help people in a much more meaningful way.
 
Just something to think about.

Indyone's picture
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Joined: 2005-05-31

As Skip did, I also put in my time in a bank program and have these cautionary bullets to pass along...
 
 - Bank management often displays an appalling lack of understanding of this business and therefore, occasionally acts contrary to your best interests through sheer stupidity.  The bank president who hired me was an exception to the rule...consider yourself lucky if you are similarly blessed.
 - You may have to deal with jealousy and distrust from bank employees who may see you as an overpaid primadonna who's main goal is to steal all their deposits.
 - Not only does bank compensation generally lag other channels, management often sees your compensation grid as an easy place to cut expenses, since you may be perceived as overpaid to begin with.  Expect negative changes to your compensation...particularly if you are very successful in growing the business.
 - Because of the nature of how you often acquire business in a bank setting, it is generally more difficult to take clients with you if you decide to try to leave a bank program when things get messy.
 - Bank clients are generally less sophisticated  and more conservative than usual.  They are prone to misunderstanding risk and despite all the appropriate disclosures, may mistakenly believe their investments are safe or at least safer because they bought them at the bank.  This can cause considerable friction with clients and bank management if an investment goes sour.  Bank management is prone to be protective of their customers, even if it means leaving you twisting in the wind.
 - With a few exceptions (I think a lot of the bank president at my former bank), bank management can be a stupid, stubborn lot, with ridiculous politics and endless meetings and lots of paper (bankers looooove reports).  I felt like I was back in kindergarten at times, having to account for every second on the premises, and having the feeling that my every move was being monitored.
 - As a general rule of thumb, the larger the bank, the more likely (and more pronounced) these negatives are.  When I started, I was under the control of a local community bank and I very much enjoyed the relationship.  As time went on, the aquiring bank that owned my community bank began to exert more and more control and "big bank" policies.  This was the beginning of the end as the difference in management style was night and day.
 
This all being said, as Skip noted, not all programs are created equal and if you are good at your due diligence, there are some very fine community bank programs that are excellent places to work.  Unfortunately, in my opinion, these are the exception to the rule, and it's likely that you'll eventually be disappointed by many aspects of your program.
 
Good luck in your search for a home...

Dark Knight's picture
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Joined: 2008-01-30

I've never been in a bank (started EDJ, now Indy) but I think for an average person a bank is a better way to get started.  If you are good at sales and bringing in the assets go to a wirehouse.  However, wirehouse fail rates are somewhere around 90%.  At a bank I think that number is proably much lower.  However, if you are  a superstar a bank will only hold you back.  Best of luck.  

alaskota's picture
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Joined: 2008-02-21

Thanks Indy - I never really thought about the bank wanting potential assets as deposits over passing them along as referrals. Skip - when you are talking about Insurance, are you talking about working in "financial services" for the insurance co - or as an agent? I saw AIG Retirement advertising that they were providing daily appointments or something, of course - if it sounds too good to be true...

Ashland's picture
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Joined: 2007-03-07

alaskota - I've written a bunch of good things about bank programs. You can use the search function to find them.

There's plenty of bank programs that allow you to eat what you kill & have the same unlimited opportunity that an individual would at a wirehouse or as an Indy. The payout is less, the politics & compliance are greater, and you have to deal w/ more savers than investors at first. Those are the tradeoffs one must accept to know where the money is. In my second year(back - I was in the biz for 8 yrs at Jones & a bank program) I expect that I will touch $12MM - $14MM in assets. Add $4 - $5 MM to wrap which I'm paid the same 1% to the grid I'd be paid outside of the bank, and I should finish the year between $350K - $400K in revenue. My payout will be something in the mid-30% range.

My suggestion - talk to a wholesaler about the different bank programs in your area. They'll be able to tell you where the money's being made & who's making it.

Good luck!

Borker Boy's picture
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Joined: 2006-12-09

What's your background with the law degree, alaskota?
 
Why this business now?

troll's picture
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Joined: 2004-11-29

alaskota wrote:Thanks Indy - I never really thought about the bank wanting potential assets as deposits over passing them along as referrals. Skip - when you are talking about Insurance, are you talking about working in "financial services" for the insurance co - or as an agent? I saw AIG Retirement advertising that they were providing daily appointments or something, of course - if it sounds too good to be true...
 
Insurance IS a financial service!
 
Have you considered Mass Mutual, New York Life or Northwestern Mutual Life?

alaskota's picture
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Joined: 2008-02-21

Broker - my background with the law degree is pretty much the law degree - I've been a professional student my whole life! I was never bent on practicing law - I wanted a degree that would open as many doors as possible so that I'd be covered in the event I finally figured out what I wanted to do. This line of work offers the aspects I enjoy about law - maintaining and developing client relationships, plus I love selling. I've spent time in estate planning firms during my schooling, so I've got a good background in the legal side of things - mostly issues related to taxes and passing assets. Plus, there's more money in telling someone they need a will to protect the assets that I could invest for them, than there is in writing that will!Skip - I haven't looked too heavily into the local insurance firms - the ones you listed are your faves? Any reason why one would be more appealing than another? Ideally a co. with a training program or period would be best so I could hit the ground running. I have no problem learning or passing tests, so I'd love to find a place that will show me exactly what I need to know to be efficient and successful.

alaskota's picture
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Joined: 2008-02-21

Ashland - thanks for the msg - i'll look for your posts. Do you ever see yourself leaving a bank position for something different? Some guys I talked to from the banks actually started at EJ, Prudential, Smith Barney, etc... and all liked where they were at now. I appreciate the AIG warning... it's amazing how many of these companies there are out there, it gets so confusing just trying to remember which ones I've liked and ruled out!

anonymous's picture
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Joined: 2005-09-29

alaskota, I'll echo what Skippy said, but would also throw Guardian into the mix.

Ashland's picture
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Joined: 2007-03-07

alaskota wrote: Ashland - thanks for the msg - i'll look for your posts. Do you ever see yourself leaving a bank position for something different? Some guys I talked to from the banks actually started at EJ, Prudential, Smith Barney, etc... and all liked where they were at now. I appreciate the AIG warning... it's amazing how many of these companies there are out there, it gets so confusing just trying to remember which ones I've liked and ruled out!

Yeah, you're welcome. I don't see myself leaving here. I have a breakaway plan so to speak. A plan to go Independent w/n the bank I'm working for. When I get to about $50MM in assets paying 1% per year I expect to go Independent at the bank I'm at. I'll get a 5% hike to my grid, and won't have the responsibilities of serving a branch. I think I can get there in 5 - 7 yrs & have brought in about $5MM in my first 12 months of being an IAR. I can also bring a junior broker or two in to run the branch relationships while I build the business a different way.

The bank may change its comp plan - that may happen, but in the 7 yrs I've been around this program(was here before, left & returned) it hasn't made significant changes & none of the changes that were made were silly. So, if at the end of the day I'm at $50M in assets w/ $500M in production w/ 200 - 300 clients that I was introduced to primarily through the bank w/ a high 30% payout I'd be happy.

One thing Indy's have over banks is that they OWN their book. That's true. It's something that I've talked to my sales manager about as having an asset is important to me. There's nothing I'd like more than to have my girls take over what I'm building or to be able to sell it & provide for my wife and my kids.

That's too much thought for you right now, though. What you need to know about banks is that 1 - You know where the money is. 2 - You must be a good trainer & team builder as well as a hunter/gatherer as you are in the wirehouse/Indy world. 3 - You know where the money is.

EDJ4now's picture
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Joined: 2006-02-08

skippy wrote:NOT ALL BANKS ARE CREATED EQUAL!
 
NOT ALL BRANCHES ARE CREATED EQUAL!
 
Go into banks with your eyes WIDE OPEN!
 
These top 3 things are key.  Talk to anyone at a wire, and their complaints will be similar.  Same with EDJ.  Not so at a bank.  My issues are very different from those of the guy 3 blocks down the street.  There is a HUGE variation in the way bank programs are run.
 
Treatment:
How would you feel about being an "evil" step-child within your environment?  That you "steal" their deposit dollars to make your goals? 
 
This is a case by case thing for me.  Some guys get that I keep the relationship and actually help the client, some don't get it.  Overall I don't have it too bad, but I have heard others say the opposite.
 
You're ASSUMING that you'll have "great foot traffic and internal referrals".
 
You've got to WORK at it and EARN it from the tellers who think they're protecting their clients from you.
 
Very true.
 
Logistics:
You're still building up someone else's book.
 
This is partially true.  I have some good clients that I probably could not take with me, but quite a few of them will follow.  And you are able to build the book very quickly, so what if you only take 50% when you leave?  It still may be a good deal, especially if you are trying to overcome the objection of being too young and inexperienced.  Is it better to be with a wire or independent and build a book?  Sure, if you survive, and most 25 year olds don't (everyone thinks they will be the exception to this).
 
You're at the whim's of MULTIPLE bank bureucracies. 
 
So far, I'm pretty lucky here.  For the most part, they leave me alone.  The managers at the branches see me as an equal (which I am), and not as one of their employees.  My immediate supervisor does a good job keeping everyone else out of my business, which as Indy correctly points out, they don't understand. 
 
You'll have MULTIPLE sales meetings throughout the year.
 
The meetings are the bane of my existence.  About 10% are of any value, the rest are a waste of time.
 
Can you say "Variable Annuity" to enough people?
 
I sell quite a few of these, other guys in my program sell none.  This varies by program, but in mine they don't really care what you sell.
 
Do you ONLY want to work when the bank is open for business since they WON'T give you a key or alarm code to be in the branch by yourself???
 
At first they didn't want me to have a key, but I insisted on the first day that it was necessary, and by the time I left that afternoon, I had a key.  In hindsight, I should have addressed this ahead of time, but it never occurred to me that they would question whether I needed after hours and weekend access. 
 
This is more a self importance/bureacracy issue.  Seriously, it's a bank.  Everything of value goes in the vault at night.  What am I going to steal, a stapler?
 
Look, I've been there, done that.  Some people like that lifestyle.  But I just couldn't stand it, and I did it for 3 years.
 
You dumped Ameriprise - good for you.
 
The real question is:  Can you prospect?  Will you prospect?  Will you do it effectively and consistently?
 
And successfully?  Most people wash out in the first few years, and probably 95% or higher of the guys who look under 30 don't make it unless they have someone (a team, a bank, or Daddy) sending them regular referrals until they are established.
 
 
A few other points. 
 
The bigger the bank, the bigger the problem with bureacracy.  I don't really know anyone happy in a big program, but lots of us in the small/midsized range have good setups. 
 
I have not had my pay changed in the last 2 years, and my payout is slightly higher than it was at EDJ.
 
Bankers don't understand our business at all, you just want someone who will leave you alone.
 
Good luck.

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