Should I take a GoodKnight?

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YoungBanker's picture
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Joined: 2008-06-25

First post here....
A local EDJ rep here has been on me to take a GoodKnight plan from him. I have been knowing him all my life and he has been wanting me to join the firm because he thinks I would do well.  EDJ feels they could use another rep or two in the area.  I am a banker for a community bank with 11 years in the local market.
The last offer was around $30 million of his book for the Goodknight plan.  He has a very successful offices and ranks high on the FA list.  I know that most of the GoodKnight plans are the "dog" accounts, but one of his goals is to start the retirement process and he says EDJ probably won't allow one rep to take over his office due to the size.
 
What are your thoughts on the GoodKnight plan?

henryhill's picture
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Joined: 2007-08-23

This is a no brainer.  Take the deal.

NOLA_Advisor's picture
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Joined: 2008-04-23

If you don't take it, tell the gentleman that I will.

captclose's picture
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Joined: 2008-02-14

30-million???? Take the deal. 

Broker24's picture
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Joined: 2006-10-12

You're nuts if you don't. Take 30mm from him, plus some accounts from the bank and other contacts you have? I assume your overall payout would be higher (when you factor in bonus on top of commission %). And if he is really planning his retirement, chances are he is going to throw all the new accounts your way as well (why would he open new accounts if he is heading towards retirement?). You're NUTS not to take it.

2legit2quit's picture
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Joined: 2008-06-22

30 Million.  Thats like a 5 yr head start in this business for some, and the first two years are the toughest.  Thats at least 100 net to you.

OldLady's picture
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Joined: 2006-11-19

I've got a question that I think I know the answer to: You are a banker NOT a rep at a bank, correct?   Banking is very different from our industry.  Even as you describe this opportunity, this is a difficult business and you might be entering during a tough economic time.  Many bankers have trouble dealing with the uncertainty of the markets as well as the need to prospect.  
Rather than asking if you should take the Goodknight, perhaps you should ask if this is a business you would enjoy.  Even with the advantage of the GK program, it is possible if not likely that your income would drop in the short to intermediate term.  The amount and type of work is also very, very different.

apprentice's picture
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Joined: 2006-06-06

How much will this cost you?  If you're buying this book - what's the re-occuring revenue and will it come close to cover what you may need to pay out each quarter?  If it's a book full of fresh B shares and annuities - you may be stuck.
 
Anyway - things to think about

Broker24's picture
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Joined: 2006-10-12

You don't pay for a book at Jones and most wirehouses.  You get a reduced payout (on the accounts you are given) for some time.

saul4paul's picture
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Joined: 2008-05-27

YoungBanker wrote:
First post here....
A local EDJ rep here has been on me to take a GoodKnight plan from him. I have been knowing him all my life and he has been wanting me to join the firm because he thinks I would do well.  EDJ feels they could use another rep or two in the area.  I am a banker for a community bank with 11 years in the local market.
The last offer was around $30 million of his book for the Goodknight plan.  He has a very successful offices and ranks high on the FA list.  I know that most of the GoodKnight plans are the "dog" accounts, but one of his goals is to start the retirement process and he says EDJ probably won't allow one rep to take over his office due to the size.
 
 
What are your thoughts on the GoodKnight plan?
 
You retards fall for anything on here, I just wanted to see what it was like to be a banker for a day. I should have said the GoodKnight was for 50 mm, lol you retards!

nottheone's picture
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Joined: 2008-06-21

When you do things like that, your only making harder for the people that actually need and want advice. By acting like a complete jackass, you only make those who are willing to help reluctant to do so because it might be you being a shmuck. That's f-cked up! Get a life!

saul4paul's picture
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Joined: 2008-05-27

nottheone wrote:When you do things like that, your only making harder for the people that actually need and want advice. By acting like a complete jackass, you only make those who are willing to help reluctant to do so because it might be you being a shmuck. That's f-cked up! Get a life!
 
Sir,
 
What are you talking about?
Have I not paid you enough attention? I'm sorry, would a sunflower make you smile? I bet you have some nice bleached pearly whites! Do you find it hard to get dates lately? You must be afraid of women, all that raw energy you spew. I am a lover not a fighter. I have many,many friends and not a single enemy. But I can be rough when I have to be, if you keep this line of dialogue going you will be bitched slapped. I dont even want to see another post from you on this board, not one.

nottheone's picture
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Joined: 2008-06-21

What are you talking about?I didn't stutter the first time around. I didn't think I was being vague but somehow you missed the point. That says a lot about you. No wonder why you like Ron Paul so much. You two have a lot in common. He LOST out to McCain and you are simply a LOSER!!!

YoungBanker's picture
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Joined: 2008-06-25

OldLady wrote:
I've got a question that I think I know the answer to: You are a banker NOT a rep at a bank, correct?   Banking is very different from our industry.  Even as you describe this opportunity, this is a difficult business and you might be entering during a tough economic time.  Many bankers have trouble dealing with the uncertainty of the markets as well as the need to prospect.  
Rather than asking if you should take the Goodknight, perhaps you should ask if this is a business you would enjoy.  Even with the advantage of the GK program, it is possible if not likely that your income would drop in the short to intermediate term.  The amount and type of work is also very, very different.
 
You are correct. I am not a  Bank rep, just a banker for a "small town" community bank.  I do various things, but a big role of mine is the Larger Commercial Customers and the business owners. I do treasury management for them and assist our Chairman of the Board, who is a commercial lender of sorts.
 
Anyway....Of course, it will be a big change in the way I am paid. And some of the reponses for you all are eye opening.
 
Can someone give me some kind of breakdown on what the $30MM would do for the branch? Does EDJ pay the "new broker" anything on this or is it just a book of business that provides potential future revenue for new activity/funds, etc.? Is is calculated in the branch profits?
 
I just want some insights from some of you, so when I continue my discussions with the FA I will not be flying blind and taking his word for everything.
 
Thanks for all the help.
 
 

Spaceman Spiff's picture
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Joined: 2006-08-08

You won't get paid per se on the $30MM.  If you work with those accounts and do some business you will split the comissions with your Vet FA.  Your Vet gets some benefits to his branch profit and loss statement because you are sharing his office and they try to entice FAs to do GNKs.  So, he will get bigger bonus checks for doing this. 
 
The benefit to you is that you instantly have a bunch of warm bodies to work with.  There are probably some diamonds in the rough there that either the Vet doesn't care to work with or just doesn't have the time to cultivate. 
 
One word of caution.  Those clients don't have to stay with you.  It's  not uncommon for people to want to stay with their veteran FA.  After all, they've known him for years and might not like you.  At the end of the day they get to choose who they work with and they have the right to stay with his office.  Hopefully that's not an issue, but just be aware of it.  Even with that attrition you'll still have a great head start.  

YoungBanker's picture
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Joined: 2008-06-25

Thanks, spiff.
 
I have a lot of soul searching to do.

Broker24's picture
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Joined: 2006-10-12

Think of it this way - you will have to stay in that vet's office for about 2 years, splitting commissions with him. Chances are, when you leave his office, you will have a book of about $40mm, give or take, of which you will now garner 100% of the commissions and fees. Some clients will have left or stayed with veteran, you will have pulled in a lot of new assets from the GK accounts (and probably a lot of insurance if you are smart - that's how you can make money on a GK plan), and you will have opened many of your own accounts. So 40mm of AUM after 2 years is a damn good start, regardless of the fact that there may be a lot of junk. At minimum, you are probably getting 25bps on the whole shootin match (trails, bonds and CD's coming due, etc.). This would be your base, in addition to new money and new trades, etc. I would say with 40mm AUM, you are looking at 100K gross just for opening the door in the morning. In reality, at that stage of one's career, you should be able to gross around 300K just by doing the work. And you could do a lot more if all the planets line up. Guy in my region got a 30mm GK, and he will do about 400K gross in his 3rd full year. But remember, there are tons of variables, so go in with eyes wide open.

noggin's picture
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Joined: 2004-11-30

YoungBanker wrote:
First post here....
A local EDJ rep here has been on me to take a GoodKnight plan from him. I have been knowing him all my life and he has been wanting me to join the firm because he thinks I would do well.  EDJ feels they could use another rep or two in the area.  I am a banker for a community bank with 11 years in the local market.
The last offer was around $30 million of his book for the Goodknight plan.  He has a very successful offices and ranks high on the FA list.  I know that most of the GoodKnight plans are the "dog" accounts, but one of his goals is to start the retirement process and he says EDJ probably won't allow one rep to take over his office due to the size.
 
What are your thoughts on the GoodKnight plan?
Some items to consider:
How will you feel when they bring in another 1-2 reps?
How will your bank and specifically commercial loan officer take you leaving the bank?
After 11 years in the bank, why do you want to make a change?
Has he done a goodknight before, if not why?
What does his book look like, is it mostly mf's, fixed income or what?
Can you stand to be his gofer for 2 years?

Spaceman Spiff's picture
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Joined: 2006-08-08

noggin wrote:YoungBanker wrote:
First post here....
A local EDJ rep here has been on me to take a GoodKnight plan from him. I have been knowing him all my life and he has been wanting me to join the firm because he thinks I would do well.  EDJ feels they could use another rep or two in the area.  I am a banker for a community bank with 11 years in the local market.
The last offer was around $30 million of his book for the Goodknight plan.  He has a very successful offices and ranks high on the FA list.  I know that most of the GoodKnight plans are the "dog" accounts, but one of his goals is to start the retirement process and he says EDJ probably won't allow one rep to take over his office due to the size.
 
What are your thoughts on the GoodKnight plan?
Some items to consider:
How will you feel when they bring in another 1-2 reps? - You can feel secure in knowing that Jones doesn't just add people on a whim.  There are rules about when and where they will add people.  If your GKN vet is going to hand you $30MM, plus like B24 said, you can add another $10MM you won't really care if they bring in another person. 
How will your bank and specifically commercial loan officer take you leaving the bank? - If they act like adults they won't begrudge him leaving the bank to start a new career.  They'll be happy he's not going to the other bank across town to compete with them.  They won't like having to fill his position, but they'll do it.  Why does it matter what a commercial loan officer thinks about his career choices anyway?   
After 11 years in the bank, why do you want to make a change? - Because he likes to make money.  And a friend has offered him a great opportunity. 
Has he done a goodknight before, if not why? - Does it really matter?  If he has, then he won't be getting all the "dog" accounts.  If he hasn't he's still being offered $30MM.  Who cares?  
What does his book look like, is it mostly mf's, fixed income or what? - This one is actually a valid question.  Make sure you ask him. 
Can you stand to be his gofer for 2 years? - He's not a sales assistant, he's not a licensed BOA.  He's an FA who is working with accounts that have probably been ignored for a long time now.  He has the same duties and responsibilities as the Vet does.  That's a poor representation of the GKN program and you know it. 
 
The only questions I'd add to nog's list are how will you feel when some guy on a forum
a) badmouths you for going to work for a sub par company like EDJ (see June 2008   SmartMoney article on full service brokerage firms)
 
b) same guy tells you that he's better than you because he wasn't handed a $30MM book (chuckle at him while you are cashing your paycheck and sitting on the beach in Costa Rica courtesy of EDJ)
 
c) same guy tells you that you are a kool aid drinker who has lost the ability to think for himself (see parenthetical statement for item b))
 
 
 
 
Take the GKN and enjoy the rest of you life.       

YoungBanker's picture
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Joined: 2008-06-25

Mostly Spiff nailed the answers for me , but Real Quick....
 

Some items to consider:
How will you feel when they bring in another 1-2 reps?
 
I think the fact that he will bring me on and maybe they will have another, but if I can get in first and work hard, then it shouldn't matter.  The present FA is basically the only game in town to the vast majority....some use Bank Reps...or out of town brokers...but dominates the market.
How will your bank and specifically commercial loan officer take you leaving the bank?
 
It is a small town bank, but they will understand. They have been good to me and my family, but it is family owned and I am not in the family. So, I have starting to bump the ceiling in my position with them.
 
After 11 years in the bank, why do you want to make a change?
Need to expand my horizons and take on challenge that rewards me for my hard work. 
 
Has he done a goodknight before, if not why? He has and the broker was from out of town and left to go manage some insurance outfit out of the area. It was interesting. But the GKN was like $10MM or so. Maybe less if that is possible.
 
What does his book look like, is it mostly mf's, fixed income or what? Not sure. But will find out. From my general understand of the market he should have a good mix.
 
Can you stand to be his gofer for 2 years?  If I am rewarded....yes.

Broker24's picture
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Joined: 2006-10-12

YB,
 
You sound like you have an open mind and a good head on your shoulders.  Take the GK, then stop coming to this forum - it will sour you completely.

noggin's picture
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Joined: 2004-11-30

Spaceman Spiff wrote:noggin wrote:YoungBanker wrote:
First post here....
A local EDJ rep here has been on me to take a GoodKnight plan from him. I have been knowing him all my life and he has been wanting me to join the firm because he thinks I would do well.  EDJ feels they could use another rep or two in the area.  I am a banker for a community bank with 11 years in the local market.
The last offer was around $30 million of his book for the Goodknight plan.  He has a very successful offices and ranks high on the FA list.  I know that most of the GoodKnight plans are the "dog" accounts, but one of his goals is to start the retirement process and he says EDJ probably won't allow one rep to take over his office due to the size.
 
What are your thoughts on the GoodKnight plan?
Some items to consider:
How will you feel when they bring in another 1-2 reps? - You can feel secure in knowing that Jones doesn't just add people on a whim.  There are rules about when and where they will add people.  If your GKN vet is going to hand you $30MM, plus like B24 said, you can add another $10MM you won't really care if they bring in another person. 
How will your bank and specifically commercial loan officer take you leaving the bank? - If they act like adults they won't begrudge him leaving the bank to start a new career.  They'll be happy he's not going to the other bank across town to compete with them.  They won't like having to fill his position, but they'll do it.  Why does it matter what a commercial loan officer thinks about his career choices anyway?   
After 11 years in the bank, why do you want to make a change? - Because he likes to make money.  And a friend has offered him a great opportunity. 
Has he done a goodknight before, if not why? - Does it really matter?  If he has, then he won't be getting all the "dog" accounts.  If he hasn't he's still being offered $30MM.  Who cares?  
What does his book look like, is it mostly mf's, fixed income or what? - This one is actually a valid question.  Make sure you ask him. 
Can you stand to be his gofer for 2 years? - He's not a sales assistant, he's not a licensed BOA.  He's an FA who is working with accounts that have probably been ignored for a long time now.  He has the same duties and responsibilities as the Vet does.  That's a poor representation of the GKN program and you know it. 
 
The only questions I'd add to nog's list are how will you feel when some guy on a forum
a) badmouths you for going to work for a sub par company like EDJ (see June 2008   SmartMoney article on full service brokerage firms)
 
b) same guy tells you that he's better than you because he wasn't handed a $30MM book (chuckle at him while you are cashing your paycheck and sitting on the beach in Costa Rica courtesy of EDJ)
 
c) same guy tells you that you are a kool aid drinker who has lost the ability to think for himself (see parenthetical statement for item b))
 
 
 
 
Take the GKN and enjoy the rest of you life.       
 
I'm glad that you are able to answer for Youngbanker. The point of the question of the gofer is that I have seen people who liked and had a friendship and once the GK started that turned sour. The New FA is not the equal of the Vet and you know that unless the Vet makes sure that everyone knows and sees the Vet treat him as an equal partner.
 
In a small town no job changes occur in a vacuum, so therefore that's why I asked about leaving the bank.
 
 

Ace Planner's picture
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Joined: 2006-03-09

Just wanted to poke my head in here and say hi!  Also, good luck on the GK, I say do it.  A local guy mentioned it to me, say 10MM, and I turned up my nose to it.  If I had taken it, I could have converted them into fee paying clients, eventually... but I would've had to leave behind my fee paying clients... interesting how that works, huh.  But it's a good way to get started...

pretzelhead's picture
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Joined: 2007-03-23

What about licensing?  Who is going to pay for you to get 7, 66, and insurance?

Spaceman Spiff's picture
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Joined: 2006-08-08

EDJ pays for all licenses.  AND they'll help him study for and pass them. 

Effay's picture
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Joined: 2008-04-11

saul
please be like a very bad cold
and just go away
 
 
 
 
 
(cant we get this guy off the boards?!)

LRT12's picture
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Joined: 2008-07-07

Are you kidding me with this crap? This guy doesnt know if a 30mil goodnight is something he should take? He should be fired immediately for lack of basic understanding!

troll's picture
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Joined: 2004-11-29

Ace Planner wrote:Just wanted to poke my head in here and say hi!  Also, good luck on the GK, I say do it.  A local guy mentioned it to me, say 10MM, and I turned up my nose to it.  If I had taken it, I could have converted them into fee paying clients, eventually... but I would've had to leave behind my fee paying clients... interesting how that works, huh.  But it's a good way to get started...
 
So, how many billionaire clients do you have now?
 
How's that PhD coming along?

farotech's picture
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Joined: 2007-01-05

take the goodknight.

B24's picture
B24
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Joined: 2008-07-08

Any update on your decision to take the GK?

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