Starting your FA business at EJ

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faca's picture
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Joined: 2009-07-14

Hi ,
 

Am new here and yes new at EJ  just starting .So all the bashers of EJ have fun responding to this topic  but please looking for a respond that can help . So all EJ rep did you start you business with a minimum asset like 25k per client or 50K in investable asset ? or just get any client  . :)

Moraen's picture
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Joined: 2009-01-22

I think you should start with a minimum of $1 million.

voltmoie's picture
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Joined: 2008-11-05

Faca,You'll starve if you set those types of minimums getting started. I suspect you've not even passed your series 7 yet since you've asked that?  Talk to your field trainer and he'll give you the details. But here is the long and the short of it .. you'll take anything that moves.  10k rollover? YEP! $250 Roth? YEP!  Jones wants to see activity.  Good luck!

bb44's picture
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Joined: 2005-06-17

voltmoie is exactly right, you take anything you can get in the beginning! 

faca's picture
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Joined: 2009-07-14

thanks guy.
 
Yes just starting the series 7

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

Faca,
When you're starting out, it is not so much about the initial client, but the relationships you develop.  The more relationships you develop, the more opportunities you have for referrals, leads to networking opportunities, and obviously investment opportunities with a particular client that don't exist right now.  Don't worry about minimums yet.  Down the road if you have too many clients, you can deal with that problem at that point.

Behavioral_FA's picture
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Joined: 2009-06-08

Good luck FACA!! Knock 'em dead.
 
If you want to make it...work hard, very hard, track your activity daily and be accountable to someone you respect. Those are the keys.
 
Don't worry about minimums right now. Learn how to open acts, and build relationships. Larger acts will come when you are confident. You gotta crawl before you can run.

Squash1's picture
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Joined: 2008-11-19

I disagree. I know you have to open a certain amount of accounts with jones and do a small amount of gross to make it to each level. Skip the people who don't have money. Starting off I would qualify for at least $10K, but realistically look for $25K minimums.

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

Squash, I would agree that you don't want to bring on dead wood.  But (1) sometimes there are clients that don't have a lot to invest now, but will be great clients to build with down the line (i.e. high earners, everything in their 401K - why not keep them in your back pocket??), and (2) more clients means more referral opportunities - even from clients that don't have much.   I just think early on that (regardless of the Jones requirements), you should develop as many relationships as possible.  Now, I would not suggest doing the trailer-trash circuit, but in the early stages of your career, there is probably more risk in opening too FEW accounts than too MANY.  You can always prune them down the line if necessary.

Squash1's picture
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Joined: 2008-11-19

I still disagree, lots of books have been written that people with like attitudes and morals and ideals hang out. So yeah I may get the every now and then referral from a crap client, but chances are that it will be someone similar to them. I want referrals from my larger clients because chances are they have friends with similar accounts. I also think you set a precedent by saying no to people who don't have to your minimum qualifications. And by starting out that way you don't have to piss people off when there account isn't big enough 3 years later.

I refer all my prospects with less than $50K to invest to a local guy down the street who will take anything(and it shows). I simply tell them that for me to be effective the minimum here is $50K, but ideally $100K to fully implement my plan. I also tell them that I could take their account but I would have to charge more and that wouldn't be fair to them since I am not actually doing the strategies i need to do but instead substituting and charging more. But I tell them when you get to that point and want to hear what my strategies are, then come back..... You would be surprised to see the number of people who come back(because the local guy who takes everything gives crappy service and follow up)...

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

Squash, I don't totally disagree with what you are saying.  In fact, at some point (though there are some people that run there business taking anyone forever), I think you HAVE TO implement a minimum, or your book will be unmanageable.  But we are talking about someone brand new to the business, not someone with an established book, or a warm network to start pulling from.  If you have the forsight and ability (or luck) to be able to tap into a lucrative niche right away, then that's great, you can start with minimums right away.  But otherwise, I can't imagine telling someone "yeah, I only have 3 clients, but you don't meet my minimums".
 
Again, I am not talking about taking on ANY crappy client with a heartbeat.  But I think there is more to qualifying a client than just amount of assets.  A perfect example for me would be the clients I have that are scientists.  Some of the younger ones make close to 200K a year, but went to school for so long (BS, MBA, PhD), that they have not had enough time to accumulate much assets yet - most started working for real money well into their 30's (like doctors).  But they will eventually accumulate a lot, and they are in a VERY lucrative network of friends and co-workers.  I am not talking about the trailer park grandma that just inherited 18K from her dead mother, and that's all she owns.  There's a big difference.
This is the other way I look at it....for every young, but strong potential future client that I bring on as a client (even if it means just opening a 529), that is one less client I need 10 or 15 years from now.  I am not prospecting for them, because I don't make any money on these clients, but when it falls in your lap, I think you gott take it.

chief123's picture
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Joined: 2008-10-28

Potential is one thing, guaranteed is another. Doctors, Dentists etc, is a case where they will have plenty of money in 3-5 years (depending on how they form their practice) and you are right the referrals from them are gold.

But some guy working a corporate job who will have his money stored in his 401k until he retires but wants to do $400/month in a roth, is a waste of time until he meets a certain minimum.

Typically i don't prospect anyone under 45. To me it's a waste of time.

Squash1's picture
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Joined: 2008-11-19

Chief has a point. But will take independent professionals all day regardless of age and income(because these people are small business owners that end up having a great income and assets by the time they set up their office). I have a dentist client who was working for another dentist, but then purchased an existing practice from a retiring dentist and now has an income of $200-300K just 2 years after purchasing the practice.

Small business owners i will take regardless of age, but i think chief has a point most average corp people have all their money inside their 401K, and that money is not accessible til they retire.

Squash1's picture
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Joined: 2008-11-19

First of all not with EDJ. Second if someone was DCAing $400/month then I would put him in C shares. Third. seriously 403Bs? Fourth; I think we run our business differently. The way i build portfolios requires a little more than 8K in a roth. also some of the solutions i use have minimum income/networth requirements.

voltmoie's picture
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Joined: 2008-11-05

 The question is not what you do when you have an established business it's if this BRAND NEW guy should set minimums.  I think it's great you guys can turn down business but if it has a pulse and some money to invest I'm going after it right now.  I'm also going to talk about insurance, friends/family, and anything else I can make a buck off of.  I think this guy should too.
 
For me, one of three things will happen to these accounts: 1. I'll goodnight them away at some point.  2. I'll leave them when I leave Jones.  3. They will develop into a nice relationship down the road and I'll enjoy working with them.
 
What's the loss?  I will say this though, I have spent a TON of time chasing small Roth IRAs just to make $50 - I've learned my lesson, it took 12 weeks, but will not turn down business.
 
Please PLEASE Please forward me your crumbs guys, just shoot me a PM and I promise to take care of them!

MJ's picture
MJ
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Joined: 2009-07-08

Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.

 
Crumbs are nice, but I don't dig for crumbs in a brand new bag of Baked Lays, I go for the big ones and get the crumbs when I get to em.
 
I do agree however that helping out people who are just starting out, is very lucrative for you in the long run. People don't start out rich and popular.

SometimesNowhere's picture
Joined: 2008-12-22

MJ wrote:Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.

 
Crumbs are nice, but I don't dig for crumbs in a brand new bag of Baked Lays, I go for the big ones and get the crumbs when I get to em.
 
I do agree however that helping out people who are just starting out, is very lucrative for you in the long run. People don't start out rich and popular.
 
Do you dig for crumbs in your bag of Cheeto's? Just wondering...

3rdyrp2's picture
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Joined: 2008-11-13

I'm only 3+ yrs in and there are handfuls of clients I acquired in my 1st year that gave me anywhere between $5,000-$20,000 that also DCA'd money every month and now have about $35,000-$60,000+ with me per household.  With 8-10 clients like that I can now flip that $500,000 total into managed money accounts and now those 10 clients are giving me $5,000+ GDC/year at 1%.  Instead of making $100-$200/year of the bank authorizations like before, now I'll be at $500 per avg. client.  It's pennies when you look at the whole grand scheme, but when you think about how these guys would have been turned away by any reputable wirehouse or independent a couple years ago and now they'll be responsible for $2,500 (at 50% payout) of my income next year?  Thats not bad considering their 401(k)'s and TSP's are still in the long term pipeline.

3rdyrp2's picture
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Joined: 2008-11-13

MJ wrote:Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.
 
How long is spent on the phone calling this guy?  10 minutes?  I think after spending a couple minutes on the phone w/a $25,000 prospect, there will still be daylight left to call the million dollar guy.

KensLoveChild's picture
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Joined: 2009-03-11

I've decided to change my business plan.  I am now limiting my prospects to those with 100million or more.  I only need one.

MJ's picture
MJ
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Joined: 2009-07-08

Unless you call 2 people a day, your response doesn't make sense. Your going to talk alot of them throughout the day, but qualify or disqualify them quickly. I'm simply stating not to ACTIVELY pursue  people with less than $50,000. If they automatically want to do business, by all means. If they call you later on, by all means. If they want to start DCA 25 bucks, by all means, but don't put them on your repeat call list and spend time doorknocking/prospecting them.  Spend that time looking for Qualified business.

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

I agree with MJ - I would not spend too much valuable time prospecting people without a lot right now, because yo will fail out/run out of money.  But the point is, when tehy drop in your lap, you consider them.

3rdyrp2's picture
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Joined: 2008-11-13

Would I be safe in assuming that not too many people, even those just starting out, ACTIVELY prospect people with $20,000 or so assets?  I don't know too many people that put in semi-daily/weekly phone calls to the guy with a couple extra bucks to invest out of his ING account.  I think most of the time we get clients with a little less than exciting assets they are usually those asking for help and kinda fall in our lap.

SometimesNowhere's picture
Joined: 2008-12-22

3rdyrp2 wrote:
Would I be safe in assuming that not too many people, even those just starting out, ACTIVELY prospect people with $20,000 or so assets?  I don't know too many people that put in semi-daily/weekly phone calls to the guy with a couple extra bucks to invest out of his ING account.  I think most of the time we get clients with a little less than exciting assets they are usually those asking for help and kinda fall in our lap.
 
No, that's not safe to assume. I am building my book on female employees of establishments of ill repute. I take their "earnings" and put it straight into an American Funds portfolio.  That way I am directly contributing to my own book of business .

MJ's picture
MJ
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Joined: 2009-07-08

voltmoie wrote: I think it's great you guys can turn down business but if it has a pulse and some money to invest I'm going after it right now. 

I've learned my lesson, it took 12 weeks, but will not turn down business.

Not according to Volt. He'll chase $50

voltmoie's picture
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Joined: 2008-11-05

Dummy .. I wrote that. I do think Jones brainwashes you to chase anything that moves when you start.  Took me a few weeks to realize it was not the best use of my time. 
 
I won't turn down someone that tells me they want to start a Roth when I'm on their doorstep though - just no longer will call them 3 times to set an appt..  There is however a MILF with a 2k rollover that I'm going to work very hard to secure an appt. with!!!

MJ's picture
MJ
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Joined: 2009-07-08

voltmoie wrote: There is however a MILF with a 2k rollover that I'm going to work very hard to secure an appt. with!!!

Amen...

Make sure you add Planned Parenthood to her portfolio

fa09's picture
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Joined: 2009-06-03

SometimesNowhere wrote: MJ wrote:Crumbs are nice in the beginning, but don't waste all your time ACTIVELY prospecting on them. Don't use valuable call/doorknock time on someone with less that $50,000. If they want to do business with you, then by all means every bit helps, but for all the time wasted prospecting those little accounts, you've given someone else the big ones. That $50,000 prospects neighbor could have $1M, but you've been calling the other guy the whole time. You just never know.

 
Crumbs are nice, but I don't dig for crumbs in a brand new bag of Baked Lays, I go for the big ones and get the crumbs when I get to em.
 
I do agree however that helping out people who are just starting out, is very lucrative for you in the long run. People don't start out rich and popular.
 
Do you dig for crumbs in your bag of Cheeto's? Just wondering...

Haha. I couldn't help but think the same thing when I read that.

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

Reg Rep has a great article called the The C Client Time Suck in this month's issue. The consensus among the consultants is that an advisor should not have more than 150 clients. (“If you're getting beyond 150 clients, I wouldn't call those clients, I would call them customers,” agrees Dan Inveen of FA Insight.)
 
This is where Jones's model gets out of control quickly. There's an advisor in my town with 1600 clients; he's already done one GK to get him down from 2000, but he says he can't afford to do another GK right now. What?
 
Jones's raison d'etre is to serve the masses and pick up the scraps from the folks who want to provide holistic, concierge-like services to a select group of clients.
 
I'm finally realizing how foolish it is to try and run a business this way. 

faca's picture
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Joined: 2009-07-14

That was my point for the question a read the book  the million dollar  financial services practice and he recommend no more then 100 to 150 but with minimum investable asset of 100k and  that you don't increase your AUM by more client  like 1600 clients  but with more big client of 100 k in asset.So my question is ,the model of EJ is it better for alot of small client or you  can concentrate on big asset client ?.

Still@jones's picture
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Joined: 2009-03-22

I'm trying to get 1600 $100,000 clients....maybe 2000.Maybe I should read that book.  

buyandhold's picture
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Joined: 2008-09-23

One Jones model is to open as many accounts as you can and then service the hell out of them because some of the 5k bond buyers will eventually move all their money over. The theory is that it's easier to get their big stuff after you have made them a client. But to do that and survive in the early days you have to open many, many, many accounts. And I think that mind set is changing.---B24 has said something like this before, but our current sweet spot is the 55-year-old soon-to-be retiree who will have 500k to a million when he stops working. Maybe a small business owner or a mid-level exec who took advantage of his 401k, maybe got an inheritance.

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

Borker Boy wrote: Reg Rep has a great article called the The C Client Time Suck in this month's issue. The consensus among the consultants is that an advisor should not have more than 150 clients. (“If you're getting beyond 150 clients, I wouldn't call those clients, I would call them customers,” agrees Dan Inveen of FA Insight.)
 
This is where Jones's model gets out of control quickly. There's an advisor in my town with 1600 clients; he's already done one GK to get him down from 2000, but he says he can't afford to do another GK right now. What?
 
Jones's raison d'etre is to serve the masses and pick up the scraps from the folks who want to provide holistic, concierge-like services to a select group of clients.
 
I'm finally realizing how foolish it is to try and run a business this way. 

Borker, that's great if you can find 150 clients with 500K-1mm each. But for the rest of us that don't have those waiting in our lobby, we have to scale back our expectations a bit. Let's get real.
The other thing you have to consider.....many of the big-time wirehouse and indy advisors with 100mm+ AUM have been at it 20-30 years. Just look at the "Top broker/advisor/indy/ria" lists. Look at the time in business. The articles you are reading are looking through the lense of someone that has honed their practice over decades, not months. And many of them have teams of 10-15 people or MORE. So you can ridicule Jones' model all you want, but don't think the big-time advisors just fell off the turnip truck and into a few hundred $Million+ clients. Also, take a look at where they are located...Boston, LA, Silicon Valley, Chicago, NYC, Florida, ......We don't all live in wealth mecas.

And FWIW, there are many models at Jones. Yes, there are lots of guys that have 1000+ clients and produce well north of $1mm per year. There are also plenty of FA's that have 200-350 clients and prodcue well over $1mm per year. But you know what? That is the case at ALL firms. Yes, even at Merrill, MS, SB, you name it. It's documented in the same pages you read from. I've seen articles about advisors with over 2000 clients that only do A shares. Sound familiar? And it wasn't a Jones advisor. Don't think our model is SOOOO unique. $1mm clients aren't just coming out of the woodwork everywhere across the country.

voltmoie's picture
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Joined: 2008-11-05

faca wrote:That was my point for the question a read the book  the million dollar  financial services practice and he recommend no more then 100 to 150 but with minimum investable asset of 100k and  that you don't increase your AUM by more client  like 1600 clients  but with more big client of 100 k in asset.So my question is ,the model of EJ is it better for alot of small client or you  can concentrate on big asset client ?.
You can focus on whatever you want.  You'll hear over and over how it's your business.  Jones will expect you to open 27 (or 23?) accounts in the first 17 weeks to qualify for PDP.  If you can find 27 100k accounts while not having an office please let me know how you did it.  In my opinion it would next to impossible. Pop those first required accounts to get that monkey off your back and then figure out how you want to build your business.

BerkshireBull's picture
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Joined: 2009-06-10

You guys complaining about a 35 year old guy with $400/mo to dump into a roth need to learn to uncover insurance needs.$75/mo DI policy on him$40/mo DI policy on wife$150/mo $150,000 UL on him with a $500,000 20yr term rider$75/mo $100,000 UL on wife with a $250,000 20yr term rider$15/mo 50,000 UL on his kidDoes he need these things I outlined above?  Other than coverage on his kid and he can decide that part of it, he absolutely does need a program like this.This is a $2000 insurance ticket and I'll take the $400/mo for each him and his wife into their roths and $100/mo for the kid into a 529.  I'll collect the $380 per year in commission on the roths and 529 and the $100 per year renewals on the insurance coverage, plus when his wife quits her job when she has child #2 I'll take her $60,000 401k into managed money for them.I'll also be glad to take a referral to help her parents plan for their retirement when they sell their small 160 acre farm for $500,000.

deekay's picture
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Joined: 2007-05-15

BB, the problem is that if they're at EDJ or a wire, the commission is going to have to go through the grid.  They'll starve serving those clients just like they'll starve while focusing their efforts on a $400/month Roth contribution.

BerkshireBull's picture
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deekay wrote:BB, the problem is that if they're at EDJ or a wire, the commission is going to have to go through the grid.  They'll starve serving those clients just like they'll starve while focusing their efforts on a $400/month Roth contribution.What does your payout look like on insurance products at Jones?For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You're telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?

voltmoie's picture
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Joined: 2008-11-05

BerkshireBull wrote:

deekay wrote:BB, the problem is that if they're at EDJ or a wire, the commission is going to have to go through the grid.  They'll starve serving those clients just like they'll starve while focusing their efforts on a $400/month Roth contribution.What does your payout look like on insurance products at Jones?For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You're telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?Correct, but a touch lower than that.

DeBolt's picture
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Joined: 2009-07-12

I seem unable to turn anyone away that is serious about getting help with their financial needs. Could you have an intern and/or a registered assistant to serve the B and C clients depending on the need. Clients get great service from employees climbing the ladder and wanting to move from salary/hourly to comish and build their own book one day.

deekay's picture
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Joined: 2007-05-15

BioFreeze wrote: BerkshireBull wrote: deekay wrote:BB, the problem is that if they're at EDJ or a wire, the commission is going to have to go through the grid.  They'll starve serving those clients just like they'll starve while focusing their efforts on a $400/month Roth contribution.What does your payout look like on insurance products at Jones?For example, I sell a life or DI and I get 50% of the first year premium up front and then a 4% renewal.  You're telling me that the commissions  goes through Jones and they only give you 45% of it and you walk away with 23% upfront and 1.8% renewal?You're getting fukt on the insurance.
 
If he's at a career agency, 50% is pretty standard.  The difference is he'll get pension, FICA, etc.  Once someone starts producing big time, the overall payout up front can reach 100%+ FYC.

gottago's picture
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Joined: 2009-07-18

only take someone over 45???   most of my business is 401k rollovers as someone changes jobs or leaves employment (starts family)----most of the women who leave their jobs to start a family are under 45.  Many people under 45 who change jobs and roll a 401k have well over 50k and often over 100k in those 401ks. 
in fact, I would say opposite.....most people over 45 are not going to be changing jobs or retiring very soon or making changes to investments ie....very little business there.  They spend alot of money and use discretionary income on high school and college kids.
 

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