insight and advice requested

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mktsystms's picture
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I found this forum a couple of days ago, and I have been reading hundreds of messages since then.  It's been a great resource for me, and now I would like to ask for some insight and advice.I am 50 years old.  I have been making my living for the past 18 years as a full time independant S&P futures trader.  Yes, I'm one of those people who basically lived by myself in a cave (my home office,) in front of a bunch of computer screens, trading proprietary and *mostly* automated systems. For many reasons, I have reached a point in my life where I want to finally get out of the cave, and work amongst other people, using whatever skills and knowledge that I have.I have just been offered a job with MS in the FA training program.  From reading many posts here on this board, it seems as if I have been offered the standard deal:  $60k salary + the license training.  Changes to all commissions by the end of the 2nd year.   $5 million AUM and $15k production must be hit by the end of the first year, and other targets for the 2nd year, etc.In addition, I have also spoken with NY Life, and I know that they are going to want me too.  My next interview with them isn't until next Monday, when they say that they are going to explain compensation to me.  The guy did tell me that I should expect to make at least $60k the first year, and at least $100k the 2nd year.Now, here is my question:I see the comments here on the forum mostly look down on insurance sales in comparison to working as a FA.  I also read post after post about the mortality rate (80%) of new FAs, but I haven't heard anything about the mortality rate for insurance guys. I also have no idea about the difference in *average* compensation.  So, can any of you please enlighten me as to the real differences between working at a place like MS compared to working at a place like NY Life?Thank you for your time.

Soon 2 B Gone's picture
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At Morgan Stanley you will truly be a "full service" broker--literally anything that could ever be wanted will be available.
At NYLife you're going to be expected to sell insurance, variable annuities, and mutual funds.  They will encourage you to get a Series 6 license--although with your background you should be able to tell them that you want to get the Series 7 and they'll agree to sponsor you for it.
The reality is that most of the people you encounter are going to need insurance and very few of them are going to need investments--that tilts in favor of NYLife.
You're fifty.  If you've read much of what I've had to say you'll know that I do everything I can to discourage people under thirty five from even trying at a place like Morgan Stanley--the odds are so long that it just doesn't make sense to waste several years only to fail.  Instead they should start at NYLife and move to Morgan Stanley when they're in their late thirties or forties.
The reality is that you're going to be discouraged from becoming a clone of your formerself--staring at flickering lights in a Morgan Stanley office instead of in your home office.
If I were you I'd go with NYLife--life insurance is not a luxury.  Being a middleman between the investor and a money manager is a fad that is going to pass sooner rather than later.

bankrep1's picture
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He failed, don't listen to him. Do you want to be an investment guy or an insurance guy? I believe it is that simple, I will tell you insurance commissions blow what you'll make as an advisor charging 1% away. You probably can make 100K your 2nd year at NY Life, but don't expect 100K until you've put in 4 or 5 years at MS. I find my average commission % seems to fall every year I have been in this business. However assets increase so all is well!

mktsystms's picture
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Thank you for your reply.I have no intention of trading anymore, but I was surprised to learn that FAs don't actually manage the portfolios.  When did FAs become contractors and sub-contract out the actual portfolio management?   It seems that the industry has changed from "stockbrokers" pushing and selling stocks, to FAs pushing and selling money managers.  Although, my mom uses a guy at ML in South Florida, and he DOES manage her portfolio.  He isn't a middleman.  He doesn't sub-contract out the work...except for some international mutual funds that he has her in.  (He also put her in a managed futures fund at one point, but I convinced her to get out of that because there was way too much volatility and absolutely zero transparency.) Maybe it's because he's been there for such a long time?  Or maybe it's the size of the account? (it's pretty big)What sets one FA apart from another, if they are all selling the same product? The BOM told me that I would never lose an account because of performance (return on investment,) but that I could lose lots of accounts if the service was bad.  Of course I realize how important service (hand holding) is, but how can investment firms tell their clients that they shouldn't be concerned about their return on investment?  When did THAT come about?What I'm still trying to figure out is why you suggest people start at NYLife and THEN move to a wirehouse?  Is it just because of more products to sell?  Actually, at this point in my life, I'm mostly concerned with MY income and the work I need to do to attain the income I desire.  Do you have any insight on the differences between MS and NYLife in that regard?MS offered me a salary to start of with, and while it is a tiny salary, it's a least something to count on.  I have no idea what the deal with NYLife will be.Again, thank you for your help.

mktsystms's picture
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bankrep1 wrote:Do you want to be an investment guy or an insurance guy? Actually, it seems to me that they're both just sales guys.  What difference does it make what a guy is selling?  Sales is sales.I'm trying to compare the compensation and the daily life between the two.If insurance guys make so much more than FAs, then why are they looked at as 2nd class citizens?  Selling insurance isn't sexy...but making money is...right?

bankrep1's picture
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Then go sell something else... This business is not easy there are many other places to make good money with less effort.

Soon 2 B Gone's picture
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mktsystms wrote: bankrep1 wrote:Do you want to be an investment guy or an insurance guy? Actually, it seems to me that they're both just sales guys.  What difference does it make what a guy is selling?  Sales is sales.I'm trying to compare the compensation and the daily life between the two.If insurance guys make so much more than FAs, then why are they looked at as 2nd class citizens?  Selling insurance isn't sexy...but making money is...right?
That is exactly right.  The child you're talking to called Bankrep is late 20s, perhaps early thirties and he is afraid to be in sales so he sits in a bank lobby and smiles at people making deposits hoping to get a signal from a teller that the customer just deposited a check indicating they are an investor.
It is the investment world's minor leagues.
You are focused on making some money in the last ten or fifteen years of your career--even the child has said that you may make $100 grand in your first year at NYLife where you would not hit that for several years at a brokerage firm.
How do the day-to-day lives differ?  At NYLife you'll spend more time doing business and less time prospecting--at Morgan Stanley it will be 180 degrees the other way.
The reality is that there is a bit of a caste system in the financial services industry and insurance is not at the top of the heap.
It really depends on who you see as your "natural market."  If you envision yourself opening accounts with people who want to be investors in things beyond insurance, variable annuities and mutual funds you should go with Morgan Stanley.
However, since 90% of the population--or even more--are best served with insurance and mutual funds there is no reason to bother with the potential for failure at Morgan Stanley when the chances for success are so much greater at NYLife.
Seeing as the child chose to advise you to not listen to me because I "failed" we should address the fact that I became a Senior Vice President in charge of branch operations for one of the top six wirehouses--perhaps Morgan Stanley, before retiriing earlier this year after thirty five years in the industry.
If that is failure I'll take it all day long.

troll's picture
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mktsystms wrote:I have no intention of trading anymore, but I was surprised to learn that FAs don't actually manage the portfolios.  When did FAs become contractors and sub-contract out the actual portfolio management?  
You can do either. It all boils down to what you think your job is. We have some of our best debates here about that very subject.
mktsystms wrote:What sets one FA apart from another, if they are all selling the same product?
They aren't.
mktsystms wrote: The BOM told me that I would never lose an account because of performance (return on investment,) but that I could lose lots of accounts if the service was bad.  Of course I realize how important service (hand holding) is, but how can investment firms tell their clients that they shouldn't be concerned about their return on investment?  When did THAT come about?
It isn't that firms tell clients not to care, it's clients who have told firms what matters to them most. Go ahead and sell yourself as the hottest dot out there, you'll probably attract those sorts of clients who will leave you when the next "hot dot" comes along and resells your now former clients.  BTW, service is much more than hand holding.

mktsystms's picture
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Soon 2 B Gone wrote: The reality is that there is a bit of a caste system in the financial services industry and insurance is not at the top of the heap....
Seeing as the child chose to advise you to not listen to me because I "failed" we should address the fact that I became a Senior Vice President in charge of branch operations for one of the top six wirehouses--perhaps Morgan Stanley, before retiriing earlier this year after thirty five years in the industry.
If that is failure I'll take it all day long.

BondGuy's picture
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This really is a matter of how you want to spend the next part of your career. My view is that the mortality rate for both businesses is about the same. Both businesses are damn hard to get started in, which is why MS is offering two years of salary. I don't know what NY life will offer, but many insurance companies offer little or no salary. Also many insurance companies force the trainee to pick up the costs of testing etc. On the FA side, all the costs are covered.
FAs don't subcontract the management of the assets. Most firms still give their FAs a wide latitude on how to build their business. That said, some firms are starting to steer their FA trainees in one direction, and that is fee business. Fee biz, the FA's job is to find the money and then recommend a fee program for the money. Professional managers do the actual day to day security selection, buying and selling, while the FA oversees the acct to make sure it is meeting the client's needs. The pro watches the money, the FA watches the pro and the client watches everyone. Freed from the day to day portfolio management duties the FA can concentrate on finding more money. At my firm FAs don't have to go the Fee route exclusively. They can go other directions or mix and match. Politically, howver, it's smart to go however the Branch manager wants you to go. If you end up anywhere near the cut line being a team player will buy you more time. One of my friends, a million dollar producer today, absolutely sucked nine months in, then he took off. So time can be your friend.
As far as money goes, I've never met an insurance salesman who makes over $200,000. I'm the piker of my small group of broker friends and I make substancially more than that. One of my broker friends makes over a million dollars a year. That is over a million dollars of income net before taxes. I helped train him. Apparently I did a good job (picture me patting self on back). I constantly remind him that he his a product of his training. Point is, if you are really motivated, in practical terms there is no top end in this business.
I'm sure there are insurance guys doing better than 200K, I've just never seen one.
MS is about as good as it gets.
One concern, is that cloistering yourself for all these years could lead to a culture shock. Your trading experience,while able to give you market knowledge and common sense, will be of little value here during your first several years as building a business is primarily a sales task. You've got to be a people person and make LOTS OF CONTACTS. Once made, you've got to ask these contacts to buy something. You need to be honest with yourself, can you do that?
Lastly, while some believe the insurance industry offers the best prep school for this business I believe it to be the local Ford Dealership. I am dead serious. If you don't know how to sell, that's something you need to learn. As good as MS is, I'll tell you up front that noone in their training department can teach you how to sell. Same goes for UBS, SB, ML, AGE. Just the way it is.

mktsystms's picture
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oops...I need to learn how to do the "quote" thing correctly.  Sorry for the last message

bankrep1's picture
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Soon 2 be Gone said:

Seeing as the child chose to advise you to not listen to me because I "failed" we should address the fact that I became a Senior Vice President in charge of branch operations for one of the top six wirehouses--perhaps Morgan Stanley, before retiriing earlier this year after thirty five years in the industry.

If that is failure I'll take it all day long.

Or was it two small insurance companies? That is what you said the last time we discussed your career did you forget what you did for 35 years?

I am not a kid anymore, maybe a young man, but in my 30's I doubt the word kid is used by anyone except of course those jealous of my early success.

bankrep1's picture
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OH yeah Newbie, see where we are with the 12K probably coming soon.

mktsystms's picture
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Soon 2 B Gone wrote:Seeing as the child chose to advise you to not listen to me because
I "failed" we should address the fact that I became a Senior Vice
President in charge of branch operations for one of the top six
wirehouses--perhaps Morgan Stanley, before retiriing earlier this year
after thirty five years in the industry.
If that is failure I'll take it all day long.You don't need to give your qualifications to me.  On internet forums, the content of what people write usually says a lot more about who they are than if they post their resumes.  I appreciate your words of wisdom in this and other threads.

logan's picture
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NYL does not offer a salary but "marketing money" that is a loan.  At least that was thier offer to me about 18 months ago.
This loan is to be used only for marketing and not a salary.
Ask the NYL manager to explain this 60k+ a year in detail.
The manager I interviewed with (SE MI) used the following example-
We loan you 3k to send out a mass mailing or hire telemarket firm, you sell 5-6k worth in commish.  Rinse and repeat.
Now one thing to remember is this 5-6k in commish is spread out over a couple years and includes bonus money.  Of course that bonus money is dependent on hitting your goals and the policies staying in place.
Also ask what expense's are covered or should say not?
Getting hired at NYL is not a big deal.  The feeling I got was if you had a pulse and any kind of warm market your in.
No matter good luck.

bankrep1's picture
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Read the one where he says he worked for two small insurance companies, then read this one where he says he worked for two large wirehouses. Then read the post where he says he failed as a broker and blew up clients by selling bonds, then they promoted him to VP. Now use common sense and think about why anyone would promote someone who failed not once but twice.

mktsystms's picture
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mikebutler222 wrote:mktsystms wrote: The BOM told me that I would never lose an account because of performance (return on investment,) but that I could lose lots of accounts if the service was bad.  Of course I realize how important service (hand holding) is, but how can investment firms tell their clients that they shouldn't be concerned about their return on investment?  When did THAT come about?
It isn't that firms tell clients not to care, it's clients who have told firms what matters to them most. Go ahead and sell yourself as the hottest dot out there, you'll probably attract those sorts of clients who will leave you when the next "hot dot" comes along and resells your now former clients.  BTW, service is much more than hand holding.I hope that I haven't come across as a hot shot. Can you explain more about what constitutes the service that clients want?  Thank you.

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bankrep1 wrote:Read the one where he says he worked for two small insurance companies, then read this one where he says he worked for two large wirehouses. Then read the post where he says he failed as a broker and blew up clients by selling bonds, then they promoted him to VP. Now use common sense and think about why anyone would promote someone who failed not once but twice.
You're the only person who can't figure out what I've said.  Why do you suppose everybody but you can do it?

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No. I could pull up the thread where everyone bashed you and asked you to explain yourself, but I won't waste my time, it is precious. I have a big day tommorrow, lots of people to see at the bank.

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bankrep1 wrote:No. I could pull up the thread where everyone bashed you and asked you to explain yourself, but I won't waste my time, it is precious. I have a big day tommorrow, lots of people to see at the bank.
Liar.

mktsystms's picture
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Soon 2 B Gone wrote:It really depends on who you see as your "natural market."  If you envision yourself opening accounts with people who want to be investors in things beyond insurance, variable annuities and mutual funds you should go with Morgan Stanley.
However, since 90% of the population--or even more--are best served with insurance and mutual funds there is no reason to bother with the potential for failure at Morgan Stanley when the chances for success are so much greater at NYLife.Let's suppose that all of my clients would only want insurance, variable annuities and mutual funds.Why would that equal success at NYLife, but failure at MS?Are the fees and payouts structured differently?

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mktsystms wrote: Soon 2 B Gone wrote:It really depends on who you see as your "natural market."  If you envision yourself opening accounts with people who want to be investors in things beyond insurance, variable annuities and mutual funds you should go with Morgan Stanley.
However, since 90% of the population--or even more--are best served with insurance and mutual funds there is no reason to bother with the potential for failure at Morgan Stanley when the chances for success are so much greater at NYLife.
Let's suppose that all of my clients would only want insurance, variable annuities and mutual funds.Why would that equal success at NYLife, but failure at MS?Are the fees and payouts structured differently?
Absolutely.  At an insurance company the salesman keeps far more of the commissions than a broker at Morgan Stanley would keep--especially on the insurance business.
I'll leave it to others to fill in the details--the guy who did that all the time indicated that he was too busy to bother with this forum, but maybe he's one of these other names floating around.

logan's picture
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If your going to go the insurance route why not go indy?
At NYL your going to pay most if not all of your expenses.  If I remember correctly they did let you make local calls from an assigned cube.
No salary.
The NYL name does not stir clients like it used as lets face it people are jaded towards any insurance company.
Going to have push whole life as its the only way to hit your goals.  All of the goals are based on Life sales.
Are you prepared to sell a 100k WL policy to someone who really needs a 500k term policy?  Why?  Well your going to only get like 40% on the term and 55-60 on the WL.  Not to mention the prem. is going to be more.
Also be ready to sell WL as an "investment" of course this is done with a /wink. 
They will frown on you getting appointed with any other companies. 
You will for the most part be a one trick pony.
 
 

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The above is an example of something that could be valuable, except that it's written by a functional illiterate and as such the entire message becomes questionable.
As a customer of NYLife myself I can tell you that it is true that they will do every thing they can to "force" you to sell what they refer to as "permanent" insurance--I find myself constantly having to fend off my guy who contacts me several times a year suggesting that I should convert my $2 million term policy to something else.
I disagree that the NYLife name does not carry the panache it once had.  Among the more sophisticated there is still brand appeal.  We are constantly being innundated with near subliminal messages about not trusting finanical types unless they are household names--NYLife is a household name.
But be clear, if you sign on with NYLife they're going to expect you to sell their policies and (I suppose) a relatively short menu of funds.
Much is made of the limited product line many people have to offer.  I've used the concept in talking with both potential hires and potential clients--but the reality is that almost 100% of the retail investors don't need anything  other than some more life insurance and a some decent mutual funds.

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Soon 2 b gone-
"As a customer of NYLife myself "
Sucks to be you!
You over paid for a name.  Oh well if it makes you feel better.

Broker24's picture
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mktsystms,
I know I will probably get blasted for this on the forum, but if you are looking for a firm with good sales training, you should consider EDJ.  I work for them, but was a former accountant.  I have great technical skills, understand the investment world very well (I studied it for many years), but was not a natural salesman.  EDJ's training helped quite a bit.  Yes, it does not have the panache, etc. of a MS, ML, ....but they do hold your hand along the way.  It's great having my own office, I like the culture, and there are certainly other benefits.  Yes, everyone else is going to chime in about all the drawbacks of our firm, but I should tell you, they just increased the New Investment Rep compensation again this week for the 2nd time this year.  It is pretty lucrative.  Keeps you going for close to 3 years (4 years for Health Ins.).
If you are interested let me know and I will get you my e-mail address (ignore all the bashing from people that either never worked here, or have not worked here in years).
 

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Broker24 wrote:
mktsystms,
I know I will probably get blasted for this on the forum, but if you are looking for a firm with good sales training, you should consider EDJ.  I work for them, but was a former accountant.  I have great technical skills, understand the investment world very well (I studied it for many years), but was not a natural salesman.  EDJ's training helped quite a bit.  Yes, it does not have the panache, etc. of a MS, ML, ....but they do hold your hand along the way.  It's great having my own office, I like the culture, and there are certainly other benefits.  Yes, everyone else is going to chime in about all the drawbacks of our firm, but I should tell you, they just increased the New Investment Rep compensation again this week for the 2nd time this year.  It is pretty lucrative.  Keeps you going for close to 3 years (4 years for Health Ins.).
If you are interested let me know and I will get you my e-mail address (ignore all the bashing from people that either never worked here, or have not worked here in years).

I agree with this advice.  Jones is what you make of it--if you're a chronic bitchoid they will give you plenty of grist for your problem, but there are thousands of very successful people there who do not suffer from the tendency to whine.

mktsystms's picture
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BondGuy wrote:One concern, is that cloistering yourself for all these years could lead to a culture shock. Your trading experience,while able to give you market knowledge and common sense, will be of little value here during your first several years as building a business is primarily a sales task. You've got to be a people person and make LOTS OF CONTACTS. Once made, you've got to ask these contacts to buy something. You need to be honest with yourself, can you do that?
Lastly, while some believe the insurance industry offers the best prep school for this business I believe it to be the local Ford Dealership. I am dead serious. If you don't know how to sell, that's something you need to learn. As good as MS is, I'll tell you up front that noone in their training department can teach you how to sell. Same goes for UBS, SB, ML, AGE. Just the way it is.I realize that the early part of this business is all about making contacts and networking.  I also realize that it is the exact opposite of what I have been doing for the last 18 years...but... they wouldn't call it a "career change" if it wasn't different from what a person had been doing previously.  Actually, this will be my 2nd career change, as I was a professional musician and performer on stage for 16 years in my "first" life.  Rather than asking people to buy something, I hope to be able to make presentations that educate and inspire people to want to buy.  I'm a soft-sell kind of guy.

troll's picture
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mktsystms wrote: mikebutler222 wrote:
mktsystms wrote: The BOM told me that I would never lose an account because of performance (return on investment,) but that I could lose lots of accounts if the service was bad.  Of course I realize how important service (hand holding) is, but how can investment firms tell their clients that they shouldn't be concerned about their return on investment?  When did THAT come about?
It isn't that firms tell clients not to care, it's clients who have told firms what matters to them most. Go ahead and sell yourself as the hottest dot out there, you'll probably attract those sorts of clients who will leave you when the next "hot dot" comes along and resells your now former clients.  BTW, service is much more than hand holding.
I hope that I haven't come across as a hot shot.
No, you've been fine, I was referring to the "hot dot". That's last years big money maker. IMHO, if you sell yourself not as someone who can help clients formulate and achieve financial goals, you'll be selling yourself only on performance. You'll end up attracting people who are always willing to move to the next guy with a better short-term record or pitch.
 
mktsystms wrote:
 Can you explain more about what constitutes the service that clients want?  Thank you.

It's been my experience that few, if any, clients worth having are cases where their only desire is "make this pile as big as you can". Most need to do things with their money, preserve it, make income with it, grow it for 20 years down the road (retirement), help them minimize taxes on it or help them get it to their heirs without getting bashed on taxes. Those are just a few of the services I'm talking about.

babbling looney's picture
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Insurance v.s. Brokerage business.  
You will make more money in the insurance business than the brokerage business, and as Soon (Put et al) says more  people need or are suited for mutual funds, annuities and insurance products.  However, it takes some time to learn how to sell and how to appropriately use insurance products.  You will NOT get much training or support in that area from any broker dealer. 
Having never been contracted as a captive agent by NY Life, I couldn't say how much support they have for you on the investment side, but I would assume that they would have some quality insurance training.
Either way, it is a sales and contact job.  You have a leg up in your advanced age (I'm advanced too, so I can say that).  People who are our age, the Boomers, are more likely to trust you than if you were in your 20's.  People who are younger are more likely to trust you as a voice of experience and you are old enough to be able to relate to the really geriatric types like Soon 2 B Gone    You also have a leg up in that you are a past performer and probably will enjoy doing seminars and being in the spotlight.  (I too, used to be a professional singer.....long long ago in a city by the bay...but I digress.)
Don't go to EDJ if your goal is to make any real money.  If you want to get a 2 to 4 year education in running a small office and some rudimentary investment training, they are adequate.   After quite a few years in this business I have found the perfect niche for me as an Independent in a wealthy retirement community.  I can offer any types of investments I feel suitable and use any strategies on the investment side that are available to the wire-houses.  On the insurance side I am independently contracted and that business is not subject to overrides by the broker dealer.  That being said, I would not recommend you jump head first into the indy end of the pool without some experience either at a wire-house or insurance brokerage.
Best of luck.
 

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I am currerntly talking with a few NYLife guys about my firm.  Their investment support is shockingly rudimentary at best, and the local guys are limited to doing proprietary products until they have done a certain level of business with NY Life-a very significant level.  I do not know if this policy extends beyond the local branch.

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mktsystms wrote:
I realize that the early part of this business is all about making contacts and networking.  I also realize that it is the exact opposite of what I have been doing for the last 18 years...but... they wouldn't call it a "career change" if it wasn't different from what a person had been doing previously.  Actually, this will be my 2nd career change, as I was a professional musician and performer on stage for 16 years in my "first" life. 
Rather than asking people to buy something, I hope to be able to make presentations that educate and inspire people to want to buy.  I'm a soft-sell kind of guy.
The music experience may help you in that with this business the show must still go on regardless of what's happening in your life or how you feel.
As for the soft sell, that's how it's done here, no arm twisting. Yet, once you've "inspired" people to buy you still have to close. This you will learn quickly. Learning how to do it with finesse is the art form not taught by most of the majors.
For example, you've done a great job of working with a prosepect to show them the road to a successful retirement, their stated goal. This process has taken months and a bond has developed between you and the prospect. And, at this final meeting you were on and good. All systems are go. Yet, the client says they want to think about it. You think, this is a done deal, You've laid it out perfectly, there is nothing left out, the prospect agrees with everything as presented. There is nothing to think about. What are you going to do? Welcome to our world!
A consensus close would be like Christmas in July for us. Unforunately, for the most part, it doesn't go that way.
 

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The success rate for new FAs throughout the industry is about 20%.The success rate among wirehouse training programs is just under 50%.  Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years.  You may want ask some questions about the recent cuts before you make a decision.If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best.  However, if most of your network only needs insurance, then insurance may be better.I'm not sure about the earlier claim that you will make more selling insurance than you will at MS.  The average FA at MS makes over $200K.Full disclosure:  I recruit experienced FAs for wirehouses.  I do a lot of work with experienced trainees, but do not place people with insurance firms.  That makes me biased, so I suggest you take my comments in context.Good luck and let us know what you decide!

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babbling looney wrote:You have a leg up in your advanced age (I'm advanced too, so I can say that).Wait a sec...advanced age?  not me.I converted when I was 40...to celsius...now I'm 18 again.
babbling looney wrote:You also have a leg up in that you are a past performer and probably will enjoy doing seminars and being in the spotlight.  (I too, used to be a professional singer.....long long ago in a city by the bay...but I digress.)I was musical director for several artists, and we used to go to San Fran and play at the Fairmont a couple of weeks each year. 

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BondGuy wrote:As for the soft sell, that's how it's done here, no arm twisting. Yet, once you've "inspired" people to buy you still have to close. This you will learn quickly. Learning how to do it with finesse is the art form not taught by most of the majors.
For example, you've done a great job of working with a prosepect to show them the road to a successful retirement, their stated goal. This process has taken months and a bond has developed between you and the prospect. And, at this final meeting you were on and good. All systems are go. Yet, the client says they want to think about it. You think, this is a done deal, You've laid it out perfectly, there is nothing left out, the prospect agrees with everything as presented. There is nothing to think about. What are you going to do? Welcome to our world!
A consensus close would be like Christmas in July for us. Unforunately, for the most part, it doesn't go that way.I get the picture.  Thank you.

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JCadieux wrote:The average FA at MS makes over $200K.I read an article that said the avergae FA production at ML was almost $750k, while the average at MS was about $475k.The BOM at MS told me that the FAs get anywhere from 33% to 50% of their production.  How is that range determined?  Is it based on account size, or AUM, or LOS, or that some products pay more than others?

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babbling looney wrote:
Insurance v.s. Brokerage business.  
You will make more money in the insurance business than the brokerage business, and as Soon (Put et al) says more  people need or are suited for mutual funds, annuities and insurance products.  However, it takes some time to learn how to sell and how to appropriately use insurance products.  You will NOT get much training or support in that area from any broker dealer. 
Having never been contracted as a captive agent by NY Life, I couldn't say how much support they have for you on the investment side, but I would assume that they would have some quality insurance training.
Either way, it is a sales and contact job.  You have a leg up in your advanced age (I'm advanced too, so I can say that).  People who are our age, the Boomers, are more likely to trust you than if you were in your 20's.  People who are younger are more likely to trust you as a voice of experience and you are old enough to be able to relate to the really geriatric types like Soon 2 B Gone    You also have a leg up in that you are a past performer and probably will enjoy doing seminars and being in the spotlight.  (I too, used to be a professional singer.....long long ago in a city by the bay...but I digress.)
Don't go to EDJ if your goal is to make any real money.  If you want to get a 2 to 4 year education in running a small office and some rudimentary investment training, they are adequate.   After quite a few years in this business I have found the perfect niche for me as an Independent in a wealthy retirement community.  I can offer any types of investments I feel suitable and use any strategies on the investment side that are available to the wire-houses.  On the insurance side I am independently contracted and that business is not subject to overrides by the broker dealer.  That being said, I would not recommend you jump head first into the indy end of the pool without some experience either at a wire-house or insurance brokerage.
Best of luck.
Being an old fart does have its advantages.  If you're in your 20s you can make it selling high commission life insurance/ Var annuities.  I find it is easiest for me to sell to those under 40. 
 
 

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mktsystms wrote:
JCadieux wrote:The average FA at MS makes over $200K.I read an article that said the avergae FA production at ML was almost $750k, while the average at MS was about $475k.The BOM at MS told me that the FAs get anywhere from 33% to 50% of their production.  How is that range determined?  Is it based on account size, or AUM, or LOS, or that some products pay more than others?Payouts are determined by a lot of factors.  I can't post the link here.  If you send me a PM I'll point you towards a resource that lists the payout grids for all of the major firms.

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mktsystms wrote: JCadieux wrote:The average FA at MS makes over $200K.I read an article that said the avergae FA production at ML was almost $750k, while the average at MS was about $475k.The BOM at MS told me that the FAs get anywhere from 33% to 50% of their production.  How is that range determined?  Is it based on account size, or AUM, or LOS, or that some products pay more than others?
I'll jump in here. Payout is determined by two factors, production level and length of service(LOS). As time goes on you must increase your production or at least maintain a certain level to maintain your payout level. Higher payouts are only achievable through higher production. The payouts are laid out on a production versus LOS  grid. Thus the system is known as 'The Grid." The grid shows what your cut, so to speak, will be of every dollar of production you do. Each firm has its own grid , LOS and production requirements. Not part of most grids are deferred comp and other soft dollar payments.
The BOM is giving you a payout range. This is of little concern to a trainee early on as most of your income will come from the salary. negotiate the best salary that you can. One word about a common mistake, that is agreeing to a salary that won't work. Ok, it's a new career, so sacrifices must be made. Yet, they must be weighed against the practical considerations of your personal situation. Too many trainees enter with to little salary figuring comissions will soon fill any gaps. For slow starters this plan is an iceberg on a cold dark night. It definately cuts the voyage short.
Concur that average income at MS tops $200K. However, averages are not a good indicator of how much the majority of the salesforce is making. One broker could be pulling a million dollars and five could be making $100K. Average would be $250k. Very misleading, add another million dollar guy and the average pops to $357K. There are too many variables in averages to put much weight in them. A better measure is median income. Better yet, ask what the second and third year trainees in the branch are making. That should give you a clearer picture.
My bids are back, back to work!

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mktsystms wrote: JCadieux wrote:The average FA at MS makes over $200K.I read an article that said the avergae FA production at ML was almost $750k, while the average at MS was about $475k.
That average MS figure sounds like it's from before last year's cuts. The average now is second among wirehouses at $653k.
mktsystms wrote: The BOM at MS told me that the FAs get anywhere from 33% to 50% of their production.  How is that range determined?  Is it based on account size, or AUM, or LOS, or that some products pay more than others?
 
The grid runs 33% to 42% (without bonuses, etc) and is based on production level and product type, with "tier 1" (assets based, mostly) paying slightly more.

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JCadieux wrote:The success rate for new FAs throughout the industry is about 20%.The success rate among wirehouse training programs is just under 50%.  Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years.  You may want ask some questions about the recent cuts before you make a decision.If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best.  However, if most of your network only needs insurance, then insurance may be better.I'm not sure about the earlier claim that you will make more selling insurance than you will at MS.  The average FA at MS makes over $200K.Full disclosure:  I recruit experienced FAs for wirehouses.  I do a lot of work with experienced trainees, but do not place people with insurance firms.  That makes me biased, so I suggest you take my comments in context.Good luck and let us know what you decide!
Jeff-is the wirehouse success rate really that high?  From what I observed when I was at UBS the failure rate in my branch was much higher.

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joedabrkr wrote:
JCadieux wrote:The success rate for new FAs throughout the industry is about 20%.The success rate among wirehouse training programs is just under 50%.  Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years.  You may want ask some questions about the recent cuts before you make a decision.If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best.  However, if most of your network only needs insurance, then insurance may be better.I'm not sure about the earlier claim that you will make more selling insurance than you will at MS.  The average FA at MS makes over $200K.Full disclosure:  I recruit experienced FAs for wirehouses.  I do a lot of work with experienced trainees, but do not place people with insurance firms.  That makes me biased, so I suggest you take my comments in context.Good luck and let us know what you decide!
Jeff-is the wirehouse success rate really that high?  From what I observed when I was at UBS the failure rate in my branch was much higher.Some of the wirehouses do better than 50%, and some do not.  50% is an average. Additionally, it's possible that your branch is not representative of UBS as a whole.  Some branches tend to hire more people than others, so your office may have a lower than average success rate.However,  I have been told directly by BOMs and training managers at several firms that the industry average success rate is 50%.  I have been told that the success rate of individual firms clusters between 50% and 65%.  This number has been reaffirmed by brokers who have been through the program.These numbers are also about a year old, so I'm not sure how recent cuts by MS impacts the numbers.It's difficult to get an apples-to-apples comparison.  I understand that some firms exclude new-hires who never pass their Series 7 from the success numbers.  Other firms to not.However, the 50% number is consistent and comes from multiple sources.

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I have seen the same thing JoeDa. 
Most branch managers and senior broker's I've taked with indicate a 10% to 20% success rate after about 3 years.  Maybe 50% within the first couple years.
This seems congruent with the fact that about 90% of all new businesses fail.  There's not much difference between being a broker and a new business owner (other than the upfront costs etc...) from a 'creating clients and revenue' standpoint. 
I don't personally feel that a big brand name is always a benefit though...although it will help in opening doors for those who don't have age, contacts, experience and/or sex appeal.
 

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babbling looney wrote: (I too, used to be a professional singer.....long long ago in a city by the bay...but I digress.)

Are you Grace Slick?
 

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Mike Damone wrote:babbling looney wrote: (I too, used to be a professional singer.....long long ago in a city by the bay...but I digress.)

Are you Grace Slick?

Ho ho.  I'm not THAT old.  

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Steve Perry?

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I named my cat Steve Perry (although I am sorry to say I'm not a Journey fan).  Just seemed like a good fit.

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JCadieux wrote: joedabrkr wrote: JCadieux wrote:The success rate for new FAs throughout the industry is about 20%.The success rate among wirehouse training programs is just under 50%.  Note that this number is probably much lower at MS right now, since they have made some serious cuts in their training program over the past two years.  You may want ask some questions about the recent cuts before you make a decision.If you have a good network of HNW individuals (such as retirees, executives or small business owners) then the wirehouse route may be best.  However, if most of your network only needs insurance, then insurance may be better.I'm not sure about the earlier claim that you will make more selling insurance than you will at MS.  The average FA at MS makes over $200K.Full disclosure:  I recruit experienced FAs for wirehouses.  I do a lot of work with experienced trainees, but do not place people with insurance firms.  That makes me biased, so I suggest you take my comments in context.Good luck and let us know what you decide!Jeff-is the wirehouse success rate really that high?  From what I observed when I was at UBS the failure rate in my branch was much higher.Some of the wirehouses do better than 50%, and some do not.  50% is an average. Additionally, it's possible that your branch is not representative of UBS as a whole.  Some branches tend to hire more people than others, so your office may have a lower than average success rate.However,  I have been told directly by BOMs and training managers at several firms that the industry average success rate is 50%.  I have been told that the success rate of individual firms clusters between 50% and 65%.  This number has been reaffirmed by brokers who have been through the program.These numbers are also about a year old, so I'm not sure how recent cuts by MS impacts the numbers.It's difficult to get an apples-to-apples comparison.  I understand that some firms exclude new-hires who never pass their Series 7 from the success numbers.  Other firms to not.However, the 50% number is consistent and comes from multiple sources.
I worked at UBS for along time, even in the good years when it was just plain old Paine Webber. The 50% number doesn't come close to the failure rate I witnessed at two large metropolitan UBS branches. Closer to 80%. My wife's SB branch did somewhat better, but her training class had a failure rate approaching that of my UBS branch. Three years in, only 21 of 72 trainees remained. From the trainees flowing through my current office, looks to be about the same.
Jeff, I'll give you the benefit of a doubt based on your reputation as an excellent resource. My view is limited to a very small sample. On the other hand, maybe the numbers being given are at some early benchmark, one year for example.

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BondGuy wrote:Jeff, I'll give you the benefit of a doubt based on your reputation as an excellent resource. My view is limited to a very small sample. On the other hand, maybe the numbers being given are at some early benchmark, one year for example.Thanks for the compliments, BG.I knew this number would be controvercial.  And yes, the number represents the "graduation rate" from the firm's individual programs.  Program lengths generally range from 12 to 24 months.I'm just passing along a consensus number that I've heard from a variety of sources.  I find it interesting that everybody tells me all the wirehouses collectively average 50%, but nobody will admit to having a rate under 50%.  (Then again, not all of the wirehouses are clients of our trainee practice...).I've interviewed a number of sales manager candidates who claimed that they can document very high success rates among new FAs in their branches.  They do this by concentrating on more-experienced candidates.In my own experience, over 70% of the FA trainees placed by my firm are still with their firms after 12 months.  But that's not a representative sample, since our trainee practice only places current licensed FAs without portable books.  I'm sure the overall number is lower when you include entry-level FAs.I've also seen evidence that the success rate varies dramatically from branch to branch, no matter what the level of experience.

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BrokerRecruit wrote:I named my cat Steve Perry (although I am sorry to say I'm not a Journey fan).  Just seemed like a good fit.
...must have been one ugly cat...

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Nah, he just had a nice mullett...
I would tend to agree with all of the assessments.  It seems that, at an early stage, the fall-off of trainees is going to be hovering around that 50% mark. 
When you break it down and look 3/5/10 years in, that fall-off and success rate drops dramatically, and does so for a variety of reasons:
- they were not successful in hitting the various benchmarks after the first year- it was a career that they thought they would love, but actually found out that it's more difficult than Hollywood leads on- it was a difficult transition (financially speaking) that they didn't expect (many think that you can/should make $100k in year one)- training at their respective firm was poor and they grow frustrated and jaded with the industry overall
Again, just some scenarios I have seen, but it is interesting to see the various success rates as they compare to other firms (SB vs. AMP, for an extreme example).

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