Reveal current salary?

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opie's picture
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When asked your current salary during the FA interview process, should career changing interviewees change the subject?  I generally do that for other careers, but in this field should I give it up, since you're not going to get a big first year offer anyway?

maybeeeeeeee's picture
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This is a sales job.  Salaries are for people who can't live off the work of their hands (ie: comissions)
You emphasize salary, and that means you don't believe in yourself.
A trainee should not expect more than $40k their first year in salary.

Big Easy Flood's picture
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maybeeeeeeee wrote:
A trainee should not expect more than $40k their first year in salary.

I know lots of people who get much more than that.  I know a guy who was given a red ink draw of $10,000 per month for two years because he made a compelling case for why that was necessary and why he was worth it.

waterboy's picture
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Joined: 2005-12-27

No trainee will EVER get 10 k a month for 2 yrs! That was the original question wasnt it?

tentative's picture
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I started at an RIA and my salary was $50K/annum + 25% bonus.

opie's picture
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tentative wrote:I started at an RIA and my salary was $50K/annum + 25% bonus.
Thanks for the input.  Pardon my ignorance, but isn't every FA an RIA?  I'm new to this game.

Captain's picture
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Opie -

No - every FA generally is considered to be a registered representative of
a broker-dealer firm. You may use the word 'Advisor' in many senses of
the position, but a 'registered investment advisor' is not the same.

An advisor who STARTS their own firm, generally will start the firm as a
Registered Investment Advisor (RIA) and is regulated by the SEC, and not
the NASD (which regulates broker-dealer firms, which in turn also
regulate registered reps).

So, to directly answer you question.... No, FA's are not RIA's.

Individuals who work at an RIA firm = investment Advisory
Representatives

Individuals who work at a broker/dealer = Registered Representatives.

An RIA firm would be akin to a fee-only investment advisor (like Mom and
Pop Investment Advisors LLC)

A broker/dealer firm would be, generally, a firm which offers a fee or
commission-based relationship. (i.e. Merrill Lynch)

C

opie's picture
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Thanks Captain - good info.
Is there a list out there of RIAs?  For instance, is Raymond James considered an RIA?

bankrep1's picture
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RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.
There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.
The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 
The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

Big Easy Flood's picture
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bankrep1 wrote:
RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.
There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.
The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 
The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

The misinformation, and outright stupid comments, in that are awe inspiring.
Anybody reading this should immediately forget what this fool is saying.

Captain's picture
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Joined: 2006-04-07

You can get a list of RIA's by using the SEC's website. The site address is
follows:

http://www.adviserinfo.sec.gov/IAPD/Content/
Search/iapd_OrgSearch.aspx

In response to a few comments made above. There are several large
firms that are held to both standards and ARE considered fiduciaries. I've
seen it at my old BD firm (large wirehouse) and can assure you that large
firms which are both RIA's and BD's are held to a dual standard. For
those advisors who are acting as fee-based advisors for a fee-based
client, the standard of care is elevated in terms of whether or not you are
considered to be a fiduciary. I've seen the 'checklist' from my former
firm, and yes, you are a fiduciary... straight up.

I agree.. investors are fee conscious, however, the fees on investment
products (i.e. funds and annuities) can be drastically lower within a RIA
platform than any type of wirehouse's bundled fee-based solution. That
being the case, I'm certain that the operational efficiencies and lower-
expense funds offered through an RIA platform can mitigate many of the
objections that larger investors may (I really mean 'may'....) have for
advisers charging 1% on millions under management.

I've used the Davis funds for years. When I did the RIA thing, I found out
that they wouldn't even touch a portfolio (managed portfolio, that is....)
without charging 1% as a base fee with a $10 million minimum. Takes
balls, but if you have a good service, it's worth 1% on virtually most
portfolios (until you get to $20 million perhaps.

While I'm not sayng that BD firms which offer RIA services are for sh*t, I
will say that the 'pay for play' arrogance is getting a bit old.

C

Captain's picture
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As for whether or not Raymond James is an RIA.....

If they offer a 'fee for advice' program, then yes, they are also dually
registered as an RIA.

There are two types of programs, which are fee-based, that exist....

1.) Fee for advice - Those allow the advisor to charge for advice ONLY.
2.) Fee in lieu of commissions - Those allow for the firm to charge an
asset-based fee in lieu of charging commissions.

To address #1 - A fee for advice program will HAVE to adhere to a
fiduciary standard. I believe those types of firms are still regulated by the
NASD (this is hotly debated right now...). The firms will then be a sponsor
of a 'wrap-fee' program, allowing for the advice and trading costs to be
bundled within one, simple, asset-based fee. They are 99% of the time
non-discretionary investment programs where the client STILL needs to
give the ultimate 'yes' or 'no' answer to each and every trade you effect
within their account.

To address #2 - A fee in lieu of commission account (which many firms
are getting rid of, by the way...) is a program which allows the client to
maintain a certain amount of expense, while having a seemingly
unlimited amount of trading (there are restrictions on the amount,
generally). The problem here was that advisors were charging a fee, and
there were no trades being done. In many instances, clients within a fee
in lieu of commission account were overcharged for the level of activity.
This caused most firms to question the programs and to initiate a 'fee for
advice' program which wasn't dependent on the level of trading activity.
Fee for ADVICE is dependent on providing the advice, due dilligence and
communication to the client (those, instead of 'trades' were the
deliverables for clients within those programs).

The only firm which may not be registered dually as an RIA would be
Edward Jones. I'm thinking that you will find that MOST firms will offer a
fee for advice program which WILL render them as RIA's in addition to
Broker Dealers.

It's a convoluted issue, but the distinction is clear.

I've recently founded my own RIA, and have worked at a wirehouse also.
I've researched this for years, and feel that I've got all the information
covered.

I will say that forming your own firm and keeping 100% of the fees billed
is a rather good way to go.

C.

bankrep1's picture
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Big Easy Flood wrote:bankrep1 wrote:
RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.
There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.
The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 
The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

The misinformation, and outright stupid comments, in that are awe inspiring.
Anybody reading this should immediately forget what this fool is saying.

BEF,
What specifically do you think is misinformation? 

Scorpio's picture
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Joined: 2005-05-22

Captain wrote:

An RIA firm would be akin to a fee-only investment advisor (like Mom and
Pop Investment Advisors LLC)

A broker/dealer firm would be, generally, a firm which offers a fee or
commission-based relationship. (i.e. Merrill Lynch)

C

Merrill is considered both.

Big Easy Flood's picture
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bankrep1 wrote:Big Easy Flood wrote:bankrep1 wrote:
RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.
There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.
The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 
The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

The misinformation, and outright stupid comments, in that are awe inspiring.
Anybody reading this should immediately forget what this fool is saying.

BEF,
What specifically do you think is misinformation? 

Everything.  Nothing you said is factual, and some of it is downright stupid.
Where in the world did you come up with the idea that a broker/dealer does not have fiduciary responsibility--and that they like it that way so they can sell junk?
That is awe inspiringly stupid--and indicates that you don't have the most basic idea about this industry and how it works.

Big Easy Flood's picture
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Let somebody who knows what they're talking about weigh in on this RIA discussion.
A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.
What several of the "experts" on this forum are describing is a "Fee Only Finanical Planner."  People who will, for a flat fee, advise a client what to do with their money--but will not actually sell the various things to them.  They do not require licensing because they don't sell, and they are very unregulated because the NASD has no reach since they don't sell.
Basically if you want to be a fee only advisor all you need to do is open an office an run an ad in the yellow page.  Organizations like The Financial Planning Association have designations and things such as "The Registry" which are lists of people who have met various qualifications--but none of them are mandated so an individual may or may not end up with somebody who knows anything at all.
This is not the world of brokerage firms, insurance companies and financial planners such as the many "indy" firms that are out there.
Let's go there, let's go to Merrill.
There is a concept called "wrap accounts" which is the idea of allowing a single firm--say Merrill--to manage all your assets for an annual fee which is a percentage of the assets being managed.
When that arrangement is entered into Merrill will be acting as a Registered Investment Advisor.  Somebody in New York, or other regional offices, will be your teammate and they will call the shots for your client.  You will be expected to act as a buffer between the client and the individual RIA in New York.
There are also independent RIAs out there--lots of them.  They work out of very fancy offices in cities and towns all over the country.  Their goal is to attract the pension fund market as a client.  They will earn a percentage--less than 1%--of what they manage for the pension funds and other types of institutional investors.
They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.
Enter Series 65 or Series 66.  These are two relatively new--say 15 years now--exams that are designed for the major purpose of getting testing fees for an organization known as the North American State Securities Administrators Association or NASSAA.
These are the fifty state securites commissioners who regulate the RIA business.  Depending on how many clients the RIA has, and how much money they actually manage, they may be too small for the SEC to be concerned with--but somebody has to be concerned with them so the states are.  A lot of this is what Series 65 and 66 is all about--learning when the SEC is involved and when the states are involved and stuff like that.
Anyway, in order to enroll a client in a wrap account--or any of the other arrangements where there is an RIA in the mix--you must qualify as an IAR or Investment Advisor Representative.  You do that by passing Series 65 or 66.
What is Series 63?  First, it's an old test.  Been around for decades.  It is the exam that allows you to be "legal" in a state.  Years ago each state that required a test--not all do, Florida for eample--had its own test and you might find yourself being tested twenty, thirty or more times.  Some of the tests were easy, others were tricky, others were damn hard.  Utah required you to take the test in Utah, so if you were a broker in Boston but had a client in Utah you had to get on a plane and go to Utah to take a silly test.
Texas asked "What is the county seat of Bexar County?"  Stuff like that.
That was all "cured" by Series 63 which came along in the mid 1970s.
These days what most rookies do is take a Series 6 and 65 or a Series 8 and Series 65 or 66.  The Series 63 is covered by passing a Series 65 or 66 in the sense that paper covers rock, and is rarely suggested by firms who are not trying to get  you registered as soon as possible because you're actually nothing more that the latest body to come through their revolving door.
Let's get back to RIAs. They are not broker/dealers, although the big broker dealers all have an RIA division.  Legally they are completely separate organizations.  Merrill Lynch is a holding company that owns Merrill Lynch the brokerage firm, but it also owns one or more RIAs, a clearing firm and lots of investment banking firms that operate as separate entities.
It will be suggested that your clients at least consider the pros and cons of paying a one time annual fee to have their money managed by an RIA.  In return there will be no other charges for the account for the year.
The argument against it is that for an awful lot of people the annual fee is more than they would pay for the various charges because they don't really incur that many charges.
It's not unlike a restaurant that has a fixed price dinner.  For $40 you get an appetizer, salad, soup, entree and desert.  That's a good deal if you want all those things--but what if all you want is a salad and entree?
You can find such arrangements in the transaction oriented area as well.  There are firms that will allow you to make an unlimited number of trade for an annual fee equal to, say, 3% of the value of your account.
If you have $200,000 with that firm you're going to pay them $6,000 per year for the privilege of making all the trades you care to make.  Well, you can buy a hell of a lot of trades at $5 apiece for $6,000--not to mention the fact that doing a lot of trading is never a good idea unless you have the time to devote to watching what's going on almost all the time.
Speaking of that, Google is open.
i could have typed that entire piece like this with no punctuation of any sort and no capitalized letters but why in the world would i want to make the reader think i didnt know any better you never get a second chance to make a first impression

Big Easy Flood's picture
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As often happens my phone was ringing so I sent that without proofing it.
The reference to Series 8 should be Series 7.  There used to be a Series 8 but there isn't any longer.
My bad.

Starka's picture
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Just a casual glance at the above post reveals that it is at the least, inaccurate.
For example, one is NOT required to hold a Series 65 or Series 66 to be designated an Investment Advisor Representative (IAR).
As usual, Put Trader is wrong.

Big Easy Flood's picture
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Google is steady, but the July contracts are down on both sides.
This often happens on the Monday after an expiration when the stock is not banging around.
Patience is the key, they're willing to pay $74 and change for the combination.  Let's see I want to do ten within a few days, I'll do three right now and see if I can't get $75 1/2 for five more later in the day and then try to get $77 for the ther two later in the week.
Anything worth having is worth waiting for.

Big Easy Flood's picture
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Starka wrote:
Just a casual glance at the above post reveals that it is at the least, inaccurate.
For example, one is NOT required to hold a Series 65 or Series 66 to be designated an Investment Advisor Representative (IAR).
As usual, Put Trader is wrong.

A statement such as that, without any supporting comment, is nothing but a brain fart.

troll's picture
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Big Easy Flood wrote:Let somebody who knows what they're talking about weigh in on this RIA discussion.
A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.Let someone who THINKS they know EVERYTHING about the industry weigh in with their OPINION presented as FACT.At least you're consistent, Put.

Big Easy Flood's picture
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joedabrkr wrote: Big Easy Flood wrote:
Let somebody who knows what they're talking about weigh in on this RIA discussion.
A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.
Let someone who THINKS they know EVERYTHING about the industry weigh in with their OPINION presented as FACT.At least you're consistent, Put.
What do you disagree with Joe?  Are RIAs more commonly referred to as money mangers or not?
Do they sell advice, or don't they?
You, like your buddy Starka, are a moron who is excptionally adept at dropping brain farts on an Internet forum, but when you say that something one person says is wrong it is as meaningless as a puff of smoke without following up as to why you make that statement.
Perhaps you can visibly see it by simply looking at the length of the things I write.
Can you imagine being able to write more than a single sentence or two with your double digit IQ?

troll's picture
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Big Easy Flood wrote:joedabrkr wrote: Big Easy Flood wrote:
Let somebody who knows what they're talking about weigh in on this RIA discussion.
A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.
Let someone who THINKS they know EVERYTHING about the industry weigh in with their OPINION presented as FACT.At least you're consistent, Put.
What do you disagree with Joe?  Are RIAs more commonly referred to as money mangers or not?
Do they sell advice, or don't they?
You, like your buddy Starka, are a moron who is excptionally adept at dropping brain farts on an Internet forum, but when you say that something one person says is wrong it is as meaningless as a puff of smoke without following up as to why you make that statement.
Perhaps you can visibly see it by simply looking at the length of the things I write.
Can you imagine being able to write more than a single sentence or two with your double digit IQ?Double digit IQ?  Funny, MENSA didn't agree with you.  I just received my membership packet last week.But of course, you'll simply say that I'm making that up too.While I can at times be long-winded, you are way ahead of my on that front.  Personally I try to present my thoughts on here based on the goal of QUANTITY, not QUALITY.I would expect a retired bureaucrat like yourself to be proud of your ability to use 500 words when only 100 is needed to to the job.At least you're good for entertainment purposes now and then.Oh, and yes RIA's do charge money for advice.  All money managers are generally registered as RIA's, but not all RIA's refer to themselves as "money managers".Whatever.

Big Easy Flood's picture
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joedabrkr wrote: While I can at times be long-winded, you are way ahead of my on that front.  Personally I try to present my thoughts on here based on the goal of QUANTITY, not QUALITY.
You need to say no more.

Big Easy Flood's picture
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joedabrkr wrote:
Double digit IQ?  Funny, MENSA didn't agree with you.  I just received my membership packet last week.But of course, you'll simply say that I'm making that up too.
Great.  Included in the package is a copy of the magazine.
What issue do you have, and what is the first word to appear on page 19?

troll's picture
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Big Easy Flood wrote:joedabrkr wrote: While I can at times be long-winded, you are way ahead of my on that front.  Personally I try to present my thoughts on here based on the goal of QUANTITY, not QUALITY.
You need to say no more.lol...egg on my face....I suppose that's what happens when you "post before you proof because the phone is ringing". Oh well, I really don't care if some of you get a little chuckle at my expense.  I know what I meant, and Isuspect many others did too.

Indyone's picture
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Big Easy Flood wrote:
joedabrkr wrote:
Double digit IQ?  Funny, MENSA didn't agree with you.  I just received my membership packet last week.But of course, you'll simply say that I'm making that up too.
Great.  Included in the package is a copy of the magazine.
What issue do you have, and what is the first word to appear on page 19?
oooohhhh...I can't wait for this reply!!!

troll's picture
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Big Easy Flood wrote:joedabrkr wrote:
Double digit IQ?  Funny, MENSA didn't agree with you.  I just received my membership packet last week.But of course, you'll simply say that I'm making that up too.
Great.  Included in the package is a copy of the magazine.
What issue do you have, and what is the first word to appear on page 19?I have other things to do, but I walked out to the car just for the satisfaction of answering you.Mensa Bulletin, February 2006, #492.First word on page 19?  If you go by the headline, the answer would be "American".  If you instead refer to the body of the article, the first word would be "On".  Any more questions?I presume this means you are also a member.  I got the sense you were rather smart, if perhaps a little misguided and arrogant.

Big Easy Flood's picture
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joedabrkr wrote:I presume this means you are also a member.  I got the sense you were rather smart, if perhaps a little misguided and arrogant.
If you are like me you will go to one meeting.  There you will meet people who you didn't even know existed.  They will talk about things that you dont' give a damn about and you'll never go back.
However, you will continue to pay the annual dues for reasons you cannot justify--just like you can't really explain why you even sent them the money to take the test and spent a Saturday taking it.
It was a "I wonder if I can do it" scratch that needs to be scratched.
There are other, like "I wonder if my best friend's wife is good in bed?"  Don't even think of trying to find out.

troll's picture
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Big Easy Flood wrote:joedabrkr wrote:I presume this means you are also a member.  I got the sense you were rather smart, if perhaps a little misguided and arrogant.
If you are like me you will go to one meeting.  There you will meet people who you didn't even know existed.  They will talk about things that you dont' give a damn about and you'll never go back.
However, you will continue to pay the annual dues for reasons you cannot justify--just like you can't really explain why you even sent them the money to take the test and spent a Saturday taking it.
It was a "I wonder if I can do it" scratch that needs to be scratched.
There are other, like "I wonder if my best friend's wife is good in bed?"  Don't even think of trying to find out.I would appreciate if you could refrain from implying that I am "like you".

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joedabrkr wrote: I would appreciate if you could refrain from implying that I am "like you".
I agree.
For example there is no way in hell that I would ever quit at UBS, become and indy and then waste precioius liquidity on the initiation fee at a country club.  Nor would I buy a house right away, I'd want to give my new practice a chance to grow so that I could determine how much house I could afford.
But then, I'm not a failed planner.

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Big Easy Flood wrote:joedabrkr wrote: I would appreciate if you could refrain from implying that I am "like you".
I agree.
For example there is no way in hell that I would ever quit at UBS, become and indy and then waste precioius liquidity on the initiation fee at a country club.  Nor would I buy a house right away, I'd want to give my new practice a chance to grow so that I could determine how much house I could afford.
But then, I'm not a failed planner.Of course you wouldn't....you wouldn't have the GUTS to do it, nor the liquidity!Well if I'm a "failed planner" then it's a pretty good life from where I'm sitting!

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joedabrkr wrote:Of course you wouldn't....you wouldn't have the GUTS to do it, nor the liquidity!Well if I'm a "failed planner" then it's a pretty good life from where I'm sitting!
Joe, I happen to know that LPL advises their new associates, partners, or whatever, that the most important thing they can do when they're starting is to maintain liquidity.  At all costs maintain liquidity.
Against that backdrop are you saying that you are such a poor businessman that you actually bought a new country club membership?  Who sponsored you for it, what with you being brand new in town and just getting your business started?
How could you be such a bad advisor?  Regardless of how much liquidity somebody has what they do NOT do when they're starting a business is join a country club.  They hold onto their precious liquidity in case they hit a rought spot in the road.
Sometimes it's better to admit you were trying to bullschidt about a small thing, like a country club membership, rather than look like a complete moron when it comes to your understanding of your career choice.

opie's picture
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By the way, does it makes sense to make an investment into country club membership in order to develop future contacts?
Five grand a year for a few years doesn't seem like much if it results in a few new weathly clients.  I'm making conjecture, as I cannot speak from experience (yet).

troll's picture
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opie wrote:By the way, does it makes sense to make an investment into country club membership in order to develop future contacts?
Five grand a year for a few years doesn't seem like much if it results in a few new weathly clients.  I'm making conjecture, as I cannot speak from experience (yet).Bingo!

Big Easy Flood's picture
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joedabrkr wrote: opie wrote:
By the way, does it makes sense to make an investment into country club membership in order to develop future contacts?
Five grand a year for a few years doesn't seem like much if it results in a few new weathly clients.  I'm making conjecture, as I cannot speak from experience (yet).
Bingo!
So, as an financial advisor you would suggest that somebody who is starting a new business should spend scare liquid assets on a country club membership--is that what you are going to say?  Yes or no?
As for $5,000 for a few years.  It is my experience that country clubs that have residential communities associated with them are going to have a fairly steep initiation fee, coupled with pretty steep monthly dues for a full membership.
But the biggest question is the wisdom of obligating yourself to any unnecessary obligation during the critical start up phase of any new business--but especially one as unpredicatble as this industry.
Do you think there is a manager worth is salt that would tell a rookie broker to join a country club?
Really?

bankrep1's picture
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Big Easy Flood wrote:
Let somebody who knows what they're talking about weigh in on this RIA discussion.
A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.

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Investment Advisers:What You Need to Know Before Choosing One
The SEC receives many questions about investment advisers—what they are and how to go about choosing one. This document answers some of the typical questions we receive from investors about investment advisers. This Q&A is for the benefit of investors. You should not rely upon it to determine if you need to register as an investment adviser.
Q:  What is an investment adviser?
A:  Investment advisers are in the business of giving advice about securities to clients. For instance, individuals who receive compensation for giving advice to a specific person on investing in stocks, bonds, or mutual funds, are investment advisers. Some investment advisers manage portfolios of securitie
What several of the "experts" on this forum are describing is a "Fee Only Finanical Planner."  People who will, for a flat fee, advise a client what to do with their money--but will not actually sell the various things to them.  They do not require licensing because they don't sell, and they are very unregulated because the NASD has no reach since they don't sell.
They are regulated just not by the NASD, the SEC or states take care of them because the NASD is a self regulatory organization of Securities dealers that sell stuff, sometimes it is junk sometimes not.
Basically if you want to be a fee only advisor all you need to do is open an office an run an ad in the yellow page.  Organizations like The Financial Planning Association have designations and things such as "The Registry" which are lists of people who have met various qualifications--but none of them are mandated so an individual may or may not end up with somebody who knows anything at all.
The FPA is a non profit organization that promotes the CFP and people who support financial planning.
This is not the world of brokerage firms, insurance companies and financial planners such as the many "indy" firms that are out there.
Yes it is, would you like to see who is a member go to www.fpa.com find your state and click member list,  you'll see the big wires, insurance companies, indys and RIA's they do not discriminate
Let's go there, let's go to Merrill.
There is a concept called "wrap accounts" which is the idea of allowing a single firm--say Merrill--to manage all your assets for an annual fee which is a percentage of the assets being managed.
You finally got one right
When that arrangement is entered into Merrill will be acting as a Registered Investment Advisor.  Somebody in New York, or other regional offices, will be your teammate and they will call the shots for your client.  You will be expected to act as a buffer between the client and the individual RIA in New York.
Known as an IAR
There are also independent RIAs out there--lots of them.  They work out of very fancy offices in cities and towns all over the country.  Their goal is to attract the pension fund market as a client.  They will earn a percentage--less than 1%--of what they manage for the pension funds and other types of institutional investors.
NOT TRUE, maybe some serve this market but most I know handle retail accounts 100K and up with the average about 500K according to www.investmentadvisor.com
They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.
Fact is most are 1 or 2 man shops that got fed up with their hands being tied at a b/d or insurance company
Enter Series 65 or Series 66.  These are two relatively new--say 15 years now--exams that are designed for the major purpose of getting testing fees for an organization known as the North American State Securities Administrators Association or NASSAA.
These are the fifty state securites commissioners who regulate the RIA business.  Depending on how many clients the RIA has, and how much money they actually manage, they may be too small for the SEC to be concerned with--but somebody has to be concerned with them so the states are.  A lot of this is what Series 65 and 66 is all about--learning when the SEC is involved and when the states are involved and stuff like that.   wHO CARES
Anyway, in order to enroll a client in a wrap account--or any of the other arrangements where there is an RIA in the mix--you must qualify as an IAR or Investment Advisor Representative.  You do that by passing Series 65 or 66.
Or simply be a CFP in most states
What is Series 63?  First, it's an old test.  Been around for decades.  It is the exam that allows you to be "legal" in a state.  Years ago each state that required a test--not all do, Florida for eample--had its own test and you might find yourself being tested twenty, thirty or more times.  Some of the tests were easy, others were tricky, others were damn hard.  Utah required you to take the test in Utah, so if you were a broker in Boston but had a client in Utah you had to get on a plane and go to Utah to take a silly test.
 
Again....
Texas asked "What is the county seat of Bexar County?"  Stuff like that.
That was all "cured" by Series 63 which came along in the mid 1970s.
These days what most rookies do is take a Series 6 and 65 or a Series 8 and Series 65 or 66.  The Series 63 is covered by passing a Series 65 or 66 in the sense that paper covers rock, and is rarely suggested by firms who are not trying to get  you registered as soon as possible because you're actually nothing more that the latest body to come through their revolving door.
Let's get back to RIAs. They are not broker/dealers, although the big broker dealers all have an RIA division.  Legally they are completely separate organizations.  Merrill Lynch is a holding company that owns Merrill Lynch the brokerage firm, but it also owns one or more RIAs, a clearing firm and lots of investment banking firms that operate as separate entities.
It will be suggested that your clients at least consider the pros and cons of paying a one time annual fee to have their money managed by an RIA.  In return there will be no other charges for the account for the year.
The argument against it is that for an awful lot of people the annual fee is more than they would pay for the various charges because they don't really incur that many charges.
It's not unlike a restaurant that has a fixed price dinner.  For $40 you get an appetizer, salad, soup, entree and desert.  That's a good deal if you want all those things--but what if all you want is a salad and entree?
You can find such arrangements in the transaction oriented area as well.  There are firms that will allow you to make an unlimited number of trade for an annual fee equal to, say, 3% of the value of your account.
If you have $200,000 with that firm you're going to pay them $6,000 per year for the privilege of making all the trades you care to make.  Well, you can buy a hell of a lot of trades at $5 apiece for $6,000--not to mention the fact that doing a lot of trading is never a good idea unless you have the time to devote to watching what's going on almost all the time.
Boring
Speaking of that, Google is open.
i could have typed that entire piece like this with no punctuation of any sort and no capitalized letters but why in the world would i want to make the reader think i didnt know any better you never get a second chance to make a first impression

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Big Easy Flood wrote:joedabrkr wrote: opie wrote:
By the way, does it makes sense to make an investment into country club membership in order to develop future contacts?
Five grand a year for a few years doesn't seem like much if it results in a few new weathly clients.  I'm making conjecture, as I cannot speak from experience (yet).
Bingo!
So, as an financial advisor you would suggest that somebody who is starting a new business should spend scare liquid assets on a country club membership--is that what you are going to say?  Yes or no?
As for $5,000 for a few years.  It is my experience that country clubs that have residential communities associated with them are going to have a fairly steep initiation fee, coupled with pretty steep monthly dues for a full membership.
But the biggest question is the wisdom of obligating yourself to any unnecessary obligation during the critical start up phase of any new business--but especially one as unpredicatble as this industry.
Do you think there is a manager worth is salt that would tell a rookie broker to join a country club?
Really?I would say that one should guard one's liquidity, as you have suggested.I would also say that it is a wiser investment for a young adviser-once they can afford it-that to spend it chasing women in the Hamptons all summer, or driving the hottest new car.But that's my opinion.  I'm not suggesting anyone get to a point where they're spending over their head or making commitments that they can't afford.Too, you're measuring your costs against what you're accustomed to in the Tri-State area.  The rest of the country is far more rational when it comes to the costs of certain luxuries. ;-)

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Oh yeah now that I have proved your a moron let me address your fiduciary remark.  If you have any other stupid comments please post here so I can poke more fun at you, here's the link
http://quote.bloomberg.com/apps/news?pid=10000039&sid=a6 xcdDORhQwc&refer=columnist_wasik
Educating stupid people like BEF is my job!

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joedabrkr wrote: Big Easy Flood wrote:
joedabrkr wrote:
Double digit IQ?  Funny, MENSA didn't agree with you.  I just received my membership packet last week.But of course, you'll simply say that I'm making that up too.
Great.  Included in the package is a copy of the magazine.
What issue do you have, and what is the first word to appear on page 19?
I have other things to do, but I walked out to the car just for the satisfaction of answering you.Mensa Bulletin, February 2006, #492.First word on page 19?  If you go by the headline, the answer would be "American".  If you instead refer to the body of the article, the first word would be "On".  Any more questions?I presume this means you are also a member.  I got the sense you were rather smart, if perhaps a little misguided and arrogant.
...Heck, according to the Mensa website, my SAT score qualifies me also...I honestly thought that Mensa was a bit more discriminating than that...

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What a pathetic attempt.  How is the reader suppose to know what to read, what to skip, where the smart person is talking and where your drivel picks up.
Sloppy work.  D-
For the record The Financial Planning Association is a third tier industry association--behind the Securities Industry Association, The Bond Dealers Association and a host of others.
The list of members of the FPA is NOT a list of Registered Investment Advisors, it is a list of the members of the FPA. It's a very exclusive assocation--they require that a potential member send in a check.
They have no regulatory authority in the industry at all.
Tell me, bankrep, are you able to write an understandable sentence that explains what you're tying to say regarding the relationship between the NASD and the brokerage community?
What are you trying to say with your disjointed comments about fiduciary duties, brokerage firms and junk? What's that all about?

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bankrep1 wrote:
They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.
Fact is most are 1 or 2 man shops that got fed up with their hands being tied at a b/d or insurance company

Nope, as with everything else in that ridiculous response you took stupid responses from your earlier attempt and made them worse.
The guys you'll probably run into at a RIA are analyst types--they come from, and still are on, the side of the business known as "buy side."  They were possibly fund managers with a family of funds who got the itch to do it on their own and left to form their own shop.
They are not former brokers or insurance salesmen--which is called the "sell side" of the industry.

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Big Easy Flood wrote:bankrep1 wrote:
They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.
Fact is most are 1 or 2 man shops that got fed up with their hands being tied at a b/d or insurance company

Nope, as with everything else in that ridiculous response you took stupid responses from your earlier attempt and made them worse.
The guys you'll probably run into at a RIA are analyst types--they come from, and still are on, the side of the business known as "buy side."  They were possibly fund managers with a family of funds who got the itch to do it on their own and left to form their own shop.
They are not former brokers or insurance salesmen--which is called the "sell side" of the industry.Not entirely correct.  Some RIA's function as specialized money managers.  They usually focus on only one or two niches/styles in the market such as perhaps small cap and mid cap value portfolios, or perhaps adjustable rate bank loans.  Highmark Capital is an RIA who focusses on this area, and they also manage several mutual funds.There are, however, plenty of RIA's formed by folk from the 'sell-side' who manage customized mutual fund and ETF portfolios for their clients.  Many of them also have nice offices. ;-)

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Big Easy Flood wrote:
bankrep1 wrote:
They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.
Fact is most are 1 or 2 man shops that got fed up with their hands being tied at a b/d or insurance company

Nope, as with everything else in that ridiculous response you took stupid responses from your earlier attempt and made them worse.
The guys you'll probably run into at a RIA are analyst types--they come from, and still are on, the side of the business known as "buy side."  They were possibly fund managers with a family of funds who got the itch to do it on their own and left to form their own shop.
They are not former brokers or insurance salesmen--which is called the "sell side" of the industry.

BEF, do you have any kind of statistical evidence to back up your claims?  Or is it purely anecdotal "from your wide experience"?
We're all entitled to our opinions, but none of us are entitled to our own "facts".

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Philo Kvetch wrote:
BEF, do you have any kind of statistical evidence to back up your claims?  Or is it purely anecdotal "from your wide experience"?
We're all entitled to our opinions, but none of us are entitled to our own "facts".

What have I said that is statistical in nature?

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In almost every post regarding who is and isn't an RIA.
 

Big Easy Flood's picture
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Philo Kvetch wrote:
In almost every post regarding who is and isn't an RIA.

What would be a statistic that you think is wrong?

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Are you going to admit you were wrong about being paid for their advice?
Did you read the article where it says a b/d does not have to act in your best interests or is there something you don't understand about that? 
Why would anyone invest in a fund with a 2.5% expense ratio and a front load if B/D's didn't sell some junk?  Think about it.

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Big Easy Flood wrote:Philo Kvetch wrote:
In almost every post regarding who is and isn't an RIA.

What would be a statistic that you think is wrong?

I didn't say right or wrong.  I'm simply asking what is the source of your facts.

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Nope, I do not agree that a Fee Only Planner is the same as a Registered Financial Planner.  Just because it's on a website--even the SEC website--does not mean the person who wrote it knows what they're talking about.
What article are you talking about, and who says that a broker/dealer does not have to act in your best interest?
What fund has a 2.5% expense ratio and a front end load, and what broker dealer is selling it?
You have listed three things--in two of them you are referring to things with nothing to back up what you're saying.
That is exceptionally sloppy.  Your grade is F

Big Easy Flood's picture
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Philo Kvetch wrote:
I didn't say right or wrong.  I'm simply asking what is the source of your facts.
What have I said that can be supported with statistics?

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