Contract and salary question...

3 replies [Last post]
young_gun's picture
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Joined: 2006-08-21

Okay, here it goes.  Probably my last question of real importance now.  This needs to be answered more urgently than the first.  I went into my office today to pick up the process papers and I am overwhelmed with all the tons of signatures I have to do in order to be officially hired.
Since I am entering this business, I wanted to know how long is the normal amount of time to receive salary until it dwindles to a commission only basis? I was hoping 2-3 years.  But I am thinking they will only offer me a salary for 6mo - 1yr (even though its a 3 yr. contract.)  From what I read so far, this is a tough biz, and I don't have enough money in my savings to last me.  I need salary to give me a pick me up during the intial years.  So please let me know whats the more appropriate time I should expect.
Lastly, in the contract there is a clause where I CANNOT take any of my clients I have collected throughout my employment with this firm and bring them to a new firm.  Is this a normal thing?  Because i always here how you guys say that when you move to another firm the employers always ask how big is your book.  But what good is asking that question if you can't move your book to that firm if the contract says you cant?
Please, I would appreciate if someone can educate me on both issues =)

NASD Newbie's picture
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Joined: 2005-08-01

Imagine that you jump into the Niagara River about a mile north of the falls.
If you swim really hard you can actually make progress in widening the distance between you and the falls.
But you need a lot of time, and if you slow down at all you're going to slide backwards.
Time equates to money.  The major firms--there's that advantage again--know that it's going to take you 24 to 36 months to get rolling and they are willing to invest that in you.  That, more than any other reason, is why you are being honored if you get an invitation from one of them.
Smaller firms are going to offer less.  You cannot conclude that they don't have as much faith in you, instead what you have to conclude is they are not prepared to spend that much money on you.
There are lots of reasons why, but why is irrelevant since you're dealing with reality.
Even if you're paid a salary for a couple of years you better have backup funding for that day when you become a true big boy or girl and have to do it on your own.  That too is a very difficult transition even though you're two or so years into the career.
Waking up one day with no safety net can make a spouse very nervous--lots of apparently stable relationships break up when the safety net is suddenly gone.  It's human nature to live on our income, if you live a lifestyle based on the fact that you're earning $70,000 in the form of a training salary you damn well better have access to enough money to help you stretch less income into enough to pay the bills.
Having a working spouse does wonders--but your lifestyle already assumes they're working so when your income suddenly drops the working spouse is not going to be "new help" at all.  In fact they often become the nag that is saying, "You've got to get a 'real' job!"

opie's picture
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Joined: 2006-06-15

young_gun, there are many topics in these forums about salary and going independent.  Do a forum search on your 'firm' and you should find all the answers you need to help you make your decision.

FreedomLvr's picture
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Joined: 2006-02-10

young_gun wrote:
Lastly, in the contract there is a clause where I CANNOT take any of my clients I have collected throughout my employment with this firm and bring them to a new firm.  Is this a normal thing?  Because i always here how you guys say that when you move to another firm the employers always ask how big is your book.  But what good is asking that question if you can't move your book to that firm if the contract says you cant?

Generally you can't SOLICIT your clients to come with you to a new firm.  However you're usually able to send them a letter letting them know you're no longer at the old firm, who your new firm is, and your new address and phone number.  As they contact you (and if you've been doing your job well, they will) you can talk to them about moving their accounts.
At the time it will be important to consult your own attorney regarding this.

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