Wire vs. RJ Prospecting/Production

30 replies [Last post]
Curious1's picture
Offline
Joined: 2009-09-15

OK.....I am sure this post/question will draw a few flames but I ask this in all seriousness...
 
I have talked with a number of folks from wires and from EDJ and I have great respect for anyone who has succeed in this business where ever they may be or may have begun. I also have read enough to know that there are big producers in each of these environments. That being said...
 
So my question, asked in all honesty (and perhaps naiveté) is why does it at least appear, that Edward Jones folks, at least early in their careers seems to have much lower production than wires? 
 
I ask this not really because of the production number- but how it is arrived at.
 
In other words, is EJ so focused on door knocking early on that they are missing out on the production that wires seem to get from cold calling?  Or is this difference coming from a deliberate focus on the middle market, rather than HNW accounts? Or (last "or"- I promise) is it that wires have much more unrealistic production goals for their new reps when compared to EJ? 
 
If it is the because of the focus on the middle market, why would a new rep target these folks?
 
I guess from the outside looking in, wouldn't an EJ newbie, who took a wire-style approach to prospecting be very successful? Or is that in fact what successful EJ newbies do? 

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

It has nothing to do with prospecting methods, per se.  Jones teaches you a way of getting started from scratch.  Jones also has a philosophy that is accepting of middle-market investors.  Wirehouses, in general, are looking up-stream.  So they incent you to build higher net-worth clientelle.  I good example is certain firms not paying you on households under a certain dollar amount.
 
I think many people mistake Jones' "doorknocking" style with their overall philosophy.  Doorknocking is simply how they teach you to get started.  They prefer that FA's go meet people face-to-face.  That is their "differentiator".
 
I don't think most wires "focus" on cold calling as you say.  Honestly, most prefer to hire experienced people with backgrounds that they can leverage for their contacts.  I don't think any BOM relishes the thought of hiring someone that promises to cold call 10 hours a day.  They prefer to hire a former attorney or CPA or corproate HR manager with lots of contacts.  Ideally, they prefer to just buy brokers from other firms and bring over their existing books.  Training new advisors, even those with good contact spheres, is so hit-or-miss, that most wirehouses loath the idea of doing it.  However, it sounds like Merrill is back in that business.

Curious1's picture
Offline
Joined: 2009-09-15

Great post - thanks B24!
 
Only one follow-up question.  Doesn't the focus on the middle market mean that a rep needs more clients to get to the same production level?  It would seem that way, and if that is the case, a larger client base would allow less time with each client- in other word, not able to be as personal, which seems a key aspect that Jones mentions "a more personal relationship", so to speak.
 
Is there anything wrong with an EJ rep (read newbie) focusing upstream as though they were at a wire?

newbieFA1079's picture
Offline
Joined: 2009-06-17

Hey curious1
 
Let me say I think EDJ is a great company, but each company has its differenct approach to business.
 
If you equate to food EDJ seems to be more like McDonald's (everyone can eat it and they can pop one up anywhere).  A wirehouse seems to take on more of a feeling of an upscale steakhouse, we only want the clients that will pop down that $100 or $150 for dinner.
 
I am not saying either approach is right or wrong.  I think they both work.  For myself personally, I think I fit better at a wirehouse because of how I like to work.

fa09's picture
Offline
Joined: 2009-06-03

What does this have to do with Raymond James exactly?

fa09's picture
Offline
Joined: 2009-06-03

newbieFA1079 wrote:Hey curious1
 
Let me say I think EDJ is a great company, but each company has its differenct approach to business.
 
If you equate to food EDJ seems to be more like McDonald's (everyone can eat it and they can pop one up anywhere).  A wirehouse seems to take on more of a feeling of an upscale steakhouse, we only want the clients that will pop down that $100 or $150 for dinner.
 
I am not saying either approach is right or wrong.  I think they both work.  For myself personally, I think I fit better at a wirehouse because of how I like to work.
 
I would say the simile is that EJ would be more of a Chili's type restaraunt in that scenario. The differentiation in product and cost is much less and thus realistic that way.

newbieFA1079's picture
Offline
Joined: 2009-06-17

From what I have heard RJ gives you options to pick.  They have a channel similar to a wirehouse, a channel for banks and a channel for RIAs.  Mostly I think they only hire experienced guys though, at least in my area.

Curious1's picture
Offline
Joined: 2009-09-15

Wow- great catch fa09- lol That one is on me. In my subject line I wrote "RJ" and meant EJ. sorry!

Full Throttle's picture
Offline
Joined: 2008-08-26

Now, there's a slight error in your thought process...1,000 $50K accounts will generally produce more revenue for you than 100 $500K accounts.  The small accounts won't get any breakpoints (whether commission or fees), while most $500K accounts will qualify for a fee reduction or a breakpoint (obviously, this doesn't apply to annuities, and some other products).  But for the most part, a book of HNW households isn't going to gross the typical 1%; while a book of "mass affluent" accounts might. 
 
The 1,000 $50,000 accounts broker is also going to be positioned to pick up a lot more ancillary insurance sales, 401(k) rollovers as time goes on, and referral opportunities.  The other argument is the 100 account guy is going to do much less work for similar money and have more time freed up to prospect for other elephants. 
 
Either model can work, however, I think gaining more clients out of the gate even if there is less revenue per client (as long as you are picking up clients with potential) will give you better odds in the beginning (unless you work at a wirehouse) than elephant hunting.  You can alway refine your new client profile as you gain momentum and have a client base under you.

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

Curious1 wrote:Great post - thanks B24!
 
Only one follow-up question.  Doesn't the focus on the middle market mean that a rep needs more clients to get to the same production level?  It would seem that way, and if that is the case, a larger client base would allow less time with each client- in other word, not able to be as personal, which seems a key aspect that Jones mentions "a more personal relationship", so to speak.
 
Is there anything wrong with an EJ rep (read newbie) focusing upstream as though they were at a wire?

 
You're basically right.  And no, nothing stops you from swimming upstream.  Until the relatively recent past, a longtime big producer at Jones had no choice but to service his 500 small-ish clients alongside his 200-300 large clients.  But if he were to strip away those 500 small clients, he would probably do 80% of the revenue with 30-40% of the clients, and eventually do more, since he could focus on fewer clients.  Problem is, so many big Jones advisors grew up in the "stockbroker" era where more was better.  And those are the guys now currently training the newbs.  It's a cultural change.  But I will say, the training that the top producers get is basically saying today that you can't effectively service more than 300 clients, so get rid of the rest.  Of course, that is also self-serving for Jones, but it is actually a win for everyone.

Squash1's picture
Offline
Joined: 2008-11-19

newbieFA1079 wrote:Hey curious1
 
Let me say I think EDJ is a great company, but each company has its differenct approach to business.
 
If you equate to food EDJ seems to be more like McDonald's (everyone can eat it and they can pop one up anywhere).  A wirehouse seems to take on more of a feeling of an upscale steakhouse, we only want the clients that will pop down that $100 or $150 for dinner.
 
I am not saying either approach is right or wrong.  I think they both work.  For myself personally, I think I fit better at a wirehouse because of how I like to work.
 
I think your comparison is off a little.. McDonalds would be Etrade, Scotttrade(DIYrs).. EDJ would be average family restaraunt(Olive Garden, Chili's, etc) and then Wirehouse would be higher end chains Ruth Chris(still a chain though)..

MBA2FA's picture
Offline
Joined: 2009-06-01

Okay, so I have this new BOM at MSSB that seems to be a total idiot.  Basically, he wants the new guys to quit networking and doing other types of marketing and get on the phones and start cold-calling 10 hours a day.  I think it's kind of off because all the FAA's (except 1) are over age 35 and have pretty solid networks and have been making progress.He wants us cold calling selling muni-bonds.  Not that there is anything wrong with that.... except that we don't get paid on stuff under $100k.  How many $100k accounts do they really think we will open cold calling on the phone.  When I said I want to follow a business model similar to a top producer in the office who built his book to $100MM in under five years, spends most of his time outside the office (networking) and has NEVER made a single cold call......  well the BOM got mad and told us all that we are expected to be in the office on the phone from 8-5 and we are only allowed to leave if we have a cofirmed appointment.We aren't even allowed to go "cold walking" if we want to.... but the new BOM assured us that we won't be micromanaged.  My business plan of selling to my network of surgeons is unnacceptable.  Now, I am supposed to cold call lawyers on the phone instead.This is like a bad dream...

newbieFA1079's picture
Offline
Joined: 2009-06-17

Squash1 wrote:newbieFA1079 wrote:Hey curious1
 
Let me say I think EDJ is a great company, but each company has its differenct approach to business.
 
If you equate to food EDJ seems to be more like McDonald's (everyone can eat it and they can pop one up anywhere).  A wirehouse seems to take on more of a feeling of an upscale steakhouse, we only want the clients that will pop down that $100 or $150 for dinner.
 
I am not saying either approach is right or wrong.  I think they both work.  For myself personally, I think I fit better at a wirehouse because of how I like to work.
 
I think your comparison is off a little.. McDonalds would be Etrade, Scotttrade(DIYrs).. EDJ would be average family restaraunt(Olive Garden, Chili's, etc) and then Wirehouse would be higher end chains Ruth Chris(still a chain though)..
 
I think that's a fair comparison, makes sense.

newbieFA1079's picture
Offline
Joined: 2009-06-17

MBA2FA wrote:Okay, so I have this new BOM at MSSB that seems to be a total idiot.  Basically, he wants the new guys to quit networking and doing other types of marketing and get on the phones and start cold-calling 10 hours a day.  I think it's kind of off because all the FAA's (except 1) are over age 35 and have pretty solid networks and have been making progress.He wants us cold calling selling muni-bonds.  Not that there is anything wrong with that.... except that we don't get paid on stuff under $100k.  How many $100k accounts do they really think we will open cold calling on the phone.  When I said I want to follow a business model similar to a top producer in the office who built his book to $100MM in under five years, spends most of his time outside the office (networking) and has NEVER made a single cold call......  well the BOM got mad and told us all that we are expected to be in the office on the phone from 8-5 and we are only allowed to leave if we have a cofirmed appointment.We aren't even allowed to go "cold walking" if we want to.... but the new BOM assured us that we won't be micromanaged.  My business plan of selling to my network of surgeons is unnacceptable.  Now, I am supposed to cold call lawyers on the phone instead.This is like a bad dream...
 
 
I think you need to do all of the above.  Maybe my plan is different but cold calling is going to be 95% of what I do.  I have talked to many guys and unless you are a family team member inheriting your mom or dad's book, cold calling seems to be the way most EVERYONE built their business.
 
A lof them do not cold call now since they have an established business, they depend on referrals for all new business. 
 
But I think your BOM is being a little closed minded.  You should be able to network, do seminars and cold walk as well.  They are all valid means of gaining clients.  I really think us new guys need to put a little bit into each one of them.  My main focus is cold calling but I think it's not a matter of just picking one, it's a matter of spreading around your efforts to market yourself as much as possible.
 
If I were you I would cold call all day and do lunch and dinner meetings with my network.  Either way, you gotta warm up to the fact most of this business is cold calling.

Moraen's picture
Offline
Joined: 2009-01-22

MBA2FA wrote: Okay, so I have this new BOM at MSSB that seems to be a total idiot.  Basically, he wants the new guys to quit networking and doing other types of marketing and get on the phones and start cold-calling 10 hours a day.  I think it's kind of off because all the FAA's (except 1) are over age 35 and have pretty solid networks and have been making progress.He wants us cold calling selling muni-bonds.  Not that there is anything wrong with that.... except that we don't get paid on stuff under $100k.  How many $100k accounts do they really think we will open cold calling on the phone. 

A lot. Ask BondGuy - he opens million dollar accounts over the phone.

When I said I want to follow a business model similar to a top producer in the office who built his book to $100MM in under five years, spends most of his time outside the office (networking) and has NEVER made a single cold call......  well the BOM got mad and told us all that we are expected to be in the office on the phone from 8-5 and we are only allowed to leave if we have a cofirmed appointment.We aren't even allowed to go "cold walking" if we want to.... but the new BOM assured us that we won't be micromanaged.  My business plan of selling to my network of surgeons is unnacceptable.  Now, I am supposed to cold call lawyers on the phone instead.This is like a bad dream...

That sucks. Should have stayed with Edward Jones. Then you could have done whatever you wanted after the initial doorknocking phase.

KensLoveChild's picture
Offline
Joined: 2009-03-11

iceco1d wrote:Just tell your BOM to STFU.  If you're putting up numbers and meeting your hurdles, what's he gonna do?  Fire you?  I doubt it.  And if he does, then go somewhere else (if you can put up the numbers at a wire, you can put them up ANYWHERE). 
 
Now, if you aren't putting up numbers, that's another story.
 
Mind you, I'm a§§hole, so you may not want to listen to me.Agreed.It sounds like the BOM was hired out of a call center.  I don't know $hit about working at MSSB, but I would think if you are making progress and putting up numbers, you should be able to stand on the roof and crow like a rooster if it brings in business.

Moraen's picture
Offline
Joined: 2009-01-22

MBA - are you licensed yet?

I can't remember. If so, how long?

Squash1's picture
Offline
Joined: 2008-11-19

iceco1d wrote:Just tell your BOM to STFU.  If you're putting up numbers and meeting your hurdles, what's he gonna do?  Fire you?  I doubt it.  And if he does, then go somewhere else (if you can put up the numbers at a wire, you can put them up ANYWHERE). 
 
Now, if you aren't putting up numbers, that's another story.
 
Mind you, I'm a§§hole, so you may not want to listen to me.
 
My guess is they aren't doing the production... Most places including Jones only care about production, you could show up 3 days a week as long as your production is where it needs to be...He mentioned "progressing" that means nobody is closing their "networks"...

MBA2FA's picture
Offline
Joined: 2009-06-01

Moraen wrote:MBA - are you licensed yet?

I can't remember. If so, how long?I passed my 7 and 66, but I'm still waiting for my production number.  I want to get out and meet some folks (like the Jones guys), or at least make some networking phone calls , but the big boss doesn't want me too.  I got bored, do I got my CRPC designation.  I'm thinking on getting my CRPS and CLTC designations while I am waiting.  All the "experts" have a bunch of letters after their name, right?  One of the Jones guys I met had about 6 titles after his name.  I have no idea what they meant, but he seemed pretty proud.I am learning (very quickly) that my first BOM was a rare and valuable find. The new one seems more like the ones I hear everyone complaining about.  I believe my new BOM was an FAA for less than three years... during which time he learned more about being a top FA than anyone in the USA. However.... in the BOM's defense, all but one of the other FAA's are in the fourth or fifth quintile... so he feels the need to kick everyone in the butt.  I'd just like a few months to do it "my way."  if that doesn't work, then I'll follow marching orders.  The freedom to create my own business processes was a big factor in taking the MSSB job over EDJ.   My "fall back" plan was to follow the "Jones Recipe" at MSSB if nothing else worked... the problem is that I don't know how effective it is when I have $100k new account minimums.

Moraen's picture
Offline
Joined: 2009-01-22

MBA2FA wrote:
Moraen wrote:MBA - are you licensed yet?

I can't remember. If so, how long?I passed my 7 and 66, but I'm still waiting for my production number.  I want to get out and meet some folks (like the Jones guys), or at least make some networking phone calls , but the big boss doesn't want me too.  I got bored, do I got my CRPC designation.  I'm thinking on getting my CRPS and CLTC designations while I am waiting.  All the "experts" have a bunch of letters after their name, right?  One of the Jones guys I met had about 6 titles after his name.  I have no idea what they meant, but he seemed pretty proud.I am learning (very quickly) that my first BOM was a rare and valuable find. The new one seems more like the ones I hear everyone complaining about.  I believe my new BOM was an FAA for less than three years... during which time he learned more about being a top FA than anyone in the USA. However.... in the BOM's defense, all but one of the other FAA's are in the fourth or fifth quintile... so he feels the need to kick everyone in the butt.  I'd just like a few months to do it "my way."  if that doesn't work, then I'll follow marching orders.  The freedom to create my own business processes was a big factor in taking the MSSB job over EDJ.   My "fall back" plan was to follow the "Jones Recipe" at MSSB if nothing else worked... the problem is that I don't know how effective it is when I have $100k new account minimums.

The only letters after your name that are impressive to clients are CFP, CPA, ChFC (maybe) and CFA. The only one that is impressive to financial people is CFA.

That's the problem with choosing a wirehouse and having a "local" manager. I think you should have tried Jones. I now a few guys who have left Jones for MSSB and it worked out for them.

Sorry buddy. Glad to be independent.

ChrisVarick's picture
Offline
Joined: 2008-09-04

Who do you wirehouse brokers cold call? Business owners with debt thru their eyeballs? Financial professionals...dentists, doctors, lawyers, CEOs, etc?

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

Sucks for you MBA...looks like the honeymoon is over. Now it's time to "f*** them before they f*** you". I suggest stealing post-its and maybe a stapler next time you are in the office...cause your patience will run out very quickly in that environment...ps: this should have been posted under a new thread (my pet peeve)

MBA2FA's picture
Offline
Joined: 2009-06-01

Moraen wrote: MBA2FA wrote:
Moraen wrote:MBA - are you licensed yet?

I can't remember. If so, how long?I passed my 7 and 66, but I'm still waiting for my production number.  I want to get out and meet some folks (like the Jones guys), or at least make some networking phone calls , but the big boss doesn't want me too.  I got bored, do I got my CRPC designation.  I'm thinking on getting my CRPS and CLTC designations while I am waiting.  All the "experts" have a bunch of letters after their name, right?  One of the Jones guys I met had about 6 titles after his name.  I have no idea what they meant, but he seemed pretty proud.I am learning (very quickly) that my first BOM was a rare and valuable find. The new one seems more like the ones I hear everyone complaining about.  I believe my new BOM was an FAA for less than three years... during which time he learned more about being a top FA than anyone in the USA. However.... in the BOM's defense, all but one of the other FAA's are in the fourth or fifth quintile... so he feels the need to kick everyone in the butt.  I'd just like a few months to do it "my way."  if that doesn't work, then I'll follow marching orders.  The freedom to create my own business processes was a big factor in taking the MSSB job over EDJ.   My "fall back" plan was to follow the "Jones Recipe" at MSSB if nothing else worked... the problem is that I don't know how effective it is when I have $100k new account minimums.

The only letters after your name that are impressive to clients are CFP, CPA, ChFC (maybe) and CFA. The only one that is impressive to financial people is CFA.

That's the problem with choosing a wirehouse and having a "local" manager. I think you should have tried Jones. I now a few guys who have left Jones for MSSB and it worked out for them.

Sorry buddy. Glad to be independent.Perhaps Jones would have offered more freedom, but hindsight is 20/20.  At least with MSSB, I am actually under much less pressure to perform.  The Jones salary was so low that I would have depleted savings much faster (I have a family of six to feed).I agree with you on the "impressive" designations.  And no, I don't think ChFC matters to anyone but FA's.  I got the CRPC and CRPS designations for four reasons:1. You can't even get your CFP until you have three years in the industry.  Sure CFP is great, but it's not even up for discussion, because I don't qualify.2. given that.... CRPC and CRPS designations were inexpensive and added some letters to my name.  Research has shown a large increase in production to FA's within the first year of completing these designations.  I believe it to be a foolish argument that someone is better off without additional training than with.3.  People will be less likely to assume that I have been doing this for 2 weeks, given the fact that I have these designations.  Look around you.  Everyone is saying that it's stupid and I should focus on other things (since my business plan is complete and my boss won't let me prospect, I really don't have a whole lot to do until I get my production number).  How many new reps have these designations?  Virtually NONE!  Thus, people would be much more likely to assume that I may have a little experience and may know what I am talking about. As it turns out, I actually do know what I'm talking about!4. A large portion of my business focus is on retirement planning (and basic retirement plans) for small business owners and self employed people.  The training for these certifications taught me a great deal about serving these people and I have found that I am more knowledgeable in this area than many of the experienced FA's.now... time to get back to work...

WarRoom's picture
Offline
Joined: 2009-10-25

What was the cost of getting your CRPC? Also, how many hours of study?

Gaddock's picture
Offline
Joined: 2007-02-23

MBA2FA wrote:Okay, so I have this new BOM at MSSB that seems to be a total idiot.  Basically, he wants the new guys to quit networking and doing other types of marketing and get on the phones and start cold-calling 10 hours a day.  I think it's kind of off because all the FAA's (except 1) are over age 35 and have pretty solid networks and have been making progress.He wants us cold calling selling muni-bonds.  Not that there is anything wrong with that.... except that we don't get paid on stuff under $100k.  How many $100k accounts do they really think we will open cold calling on the phone.  When I said I want to follow a business model similar to a top producer in the office who built his book to $100MM in under five years, spends most of his time outside the office (networking) and has NEVER made a single cold call......  well the BOM got mad and told us all that we are expected to be in the office on the phone from 8-5 and we are only allowed to leave if we have a cofirmed appointment.We aren't even allowed to go "cold walking" if we want to.... but the new BOM assured us that we won't be micromanaged.  My business plan of selling to my network of surgeons is unnacceptable.  Now, I am supposed to cold call lawyers on the phone instead.This is like a bad dream...
 
Call the sergeons...you sound like the cold call aversion poster boy.
 
I think your manager is right and in the long run will be the reason you survive.

Moraen's picture
Offline
Joined: 2009-01-22

MBA - all certifications show an uptick in production after getting them. The reason? You've been in business longer, made more contacts, and closed more business.

Moraen's picture
Offline
Joined: 2009-01-22

iceco1d wrote: And you're now dedicating your study/class time to prospecting...

Yep.

Please or Register to post comments.

Industry Newsletters
Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×