Any opinions on H&R Block advisor$$$

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Rambo's picture
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Rambo
 
 
 
 

Soothsayer's picture
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That is the career equivalent of going from driving a 2005 Mercedes C-Class to an '84 Yugo.  Hope that answers your question.  BTW, I shorted HRB in my own account today.  I'm totally serious.  That company is in big time trouble.

troll's picture
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something isn't right when they have to put that generous a comp package on the table for you....

josephjones107's picture
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Don't walk, run

Lefty2's picture
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I'm giving Block my notice next week.  I left a huge firm for the 50% payout.  I would encourage you to read the most recent edition of Fortune Magazine about the future of HRBFA (H&R Block Financial Advisors).  It doesn't look pretty.  Big wigs are jumping ship.  Ernst is not ruling out a sale.  No response to the Fortune article has been made to the field.  Sad, really.  Tax side is not on board.  Buyer beware!!!

Lefty2's picture
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By the way...
Soothsayer is right on.  I'll likely be selling my BMW!!!

Rambo's picture
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Rambo

Soothsayer's picture
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And remember, K-Mart bought Sears.  Maybe H&R could be incorporated as part of a "blue light special."

ezmoney's picture
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That would be a sad situation if you made that move.

ezmoney's picture
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85% of you biz is fee based, you're with a good firm. Why not just sit back and build your book? I wouldn't go anywhere but indy, but you don't have the AUM.

frumhere's picture
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Although Dean Witter started as stocks and socks...

Beagle's picture
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I was offered a very lucrative contract to work as a branch manager at
H&R Block.  The problem is that I was offered the contract
without a serious interview.  They are desperate.

H&R Block has people in Wal-Mart near me.  I'd hate to be tied
to Wal-Mart when talking to large investment clients about their
portfolio's.  Who would take you seriously?

inquisitive's picture
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joedabrkr wrote:something isn't right when they have to put that generous a comp package on the table for you....

Generous?  Considering that the firm has to do very little to earn
that money other than office space, and a little processing
infrastructure, I find it quite unimpressive.

inquisitive's picture
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Soothsayer wrote:And remember, K-Mart bought Sears.  Maybe
H&R could be incorporated as part of a "blue light special."

Well, many think that Walmart is destined to get into financial services.

And they will be huge, if they do.

Clients aren't impressed by a kiosk in Sears?  Why are they impressed by Merrill's crappy research reports then?

frankstrom's picture
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My office is in two doors down from HRB.  They open IRAs and leave people in cash positions for years.  Tells you how well they are working what they have.
You need to do what you do best.  And at HRB it ain't investments.

eddjones654's picture
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frank,
hearing that ding-a-ling sound??? Time for your daily kool-aid

frankstrom's picture
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Yes, I did hear that sound.  It must have been you opening your mouth.
I have been out of Jones for years and what did my post have to do with Jones?

anabuhabkuss's picture
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I love the geniuses that post in this forum. Not one person has been able to step up and give full fledged evidence as to why the original poster should not consider H&R's platform. Instead we have a conversation that looks a lot like this:
Person A: "You should blow yourself up."
Person B: "Why?"
Person A: "Just because."
Person B: "Oh ok that makes sense."
H&R can offer deals because of their primary business which has been doing really well. Diversification hasn't hurt them either. I imagine their database that has access to their cleints W2's would probably benefit guys like you who waste their time posting "Run don't walk" posts instead of getting their hands dirty doing some heavy duty prospecting.
You guys boggle my mind with the whole Sears and Walmart thing. It's as if those companies don't have a wide range of customers. I imagine Sears and Walmart are sitting on their butts just on sheer luck. Think about it, the cliche FA is looking for the small percentage of the population that has a "hgih net worth" when instead they just bypass the numbers game altogether. People who have at least 100k in disposible income to invest shop at Walmart and Sears. I know freaking millionaires who are so tight on their money that shop in those places. Don't assume there is no money to be found just ebcause a client isn't wearing a rolex.
If given the opportunity, I would think twice before underestimating what Block is building on. It's something you're most definitley not going to have access to with any other firm for the meantime.

stanwbrown's picture
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inquisitive wrote:Soothsayer wrote:And remember, K-Mart bought Sears.  Maybe H&R could be incorporated as part of a "blue light special."Well, many think that Walmart is destined to get into financial services.And they will be huge, if they do.Clients aren't impressed by a kiosk in Sears?  Why are they impressed by Merrill's crappy research reports then?
 
LOL, bitter isn't pretty 

stanwbrown's picture
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Rambo wrote:
Hi -
I am a 4th year Broker at AG Edwards with a 200k trailing 12 and 14MM AUM.  85% fee based. 
I am being offered a bunch of money from H&R Block in the form of 2 years salary ($72k year 1, $60k year 2) PLUS whatever I make at a 50% payout (not a salary vs. draw deal).  Plus a 10% bonus of my gross for the first 3 years.  Plus a 401K match.  All is employment at will, no forgivable loan or employment contract.
Sounds great, but its H&R Block.  Any opinions of their financial advisor program?  Is this a downgrade from AG in terms of respectability?
Thanks - Rambo
 
 
 
 

 
I wouldn't make that move for love or money.

anabuhabkuss's picture
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I rest my case.

stanwbrown's picture
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anabuhabkuss wrote:
If given the opportunity, I would think twice before underestimating what Block is building on. It's something you're most definitley not going to have access to with any other firm for the meantime.

OK, I'll bite, what are they "building on"? A business model that while not 100% devoid of HNW clients is 99.99999% lacking? Who do you want to do business with? People with sizable assets or people who have their taxes done by H&R? Private CPA firms have the clients you want, not H&R. Want a book full of $2k IRA accounts?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I would agree that the search for HNW households to the exclusion of all others can be overdone, but just because Walmart isn’t completely lacking for sizable account prospects doesn’t mean it’s a good place to look for them.
The guy's already making, well, slightly less than decent progress at a reputable firm. There's no reason to toss that away for what H&R’s offering.
 

Soothsayer's picture
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I'll add on to Stan's post.  H&R's tax preparation business continues to falter.  Number of returns done is down, although they are getting slighty more per return.  TurboTax represents a huge short and mid-term menace to Block.  A guy can throw it into his cart at Costco for $99 and never set foot in a Block office again.  You mentioned research and heavy lifting.  Do some of that on yourself to see how HRB keeps cranking out a "growth" number that Wall Street eats up.  It is through their sub-prime lending business.  Now, how many sub-prime lending risks do you think make good long-term brokerage clients to build you and your family's livelihood around?  Like I said, I am short the stock in my own account.  I think the credit risks taken in this historical low interest rate cycle will come back to bite many lenders.  HRB is set up for a big, big "come to Jesus" when they come clean and own up to what they did to keep the growth engine running.

da public's picture
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Umm, the Express IRA program isn't even part of the brokerage side.  You don't have to take on 2k IRAs. 
Sooth, we all know you've shorted the stock. Congratulations.  UBS recently initiated a buy.  I assume they've done some research, right?  We'll see how you're short does.
 
 
 
 
 

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stanwbrown wrote:anabuhabkuss wrote:
If given the opportunity, I would think twice before underestimating what Block is building on. It's something you're most definitley not going to have access to with any other firm for the meantime.

OK, I'll bite, what are they "building on"? A business model that while not 100% devoid of HNW clients is 99.99999% lacking? Who do you want to do business with? People with sizable assets or people who have their taxes done by H&R? Private CPA firms have the clients you want, not H&R. Want a book full of $2k IRA accounts?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I would agree that the search for HNW households to the exclusion of all others can be overdone, but just because Walmart isn’t completely lacking for sizable account prospects doesn’t mean it’s a good place to look for them.
The guy's already making, well, slightly less than decent progress at a reputable firm. There's no reason to toss that away for what H&R’s offering.

 
What clients would I want? Both! there's money to made either way and there's no way that diversifying my clientele reach is going to end up hurting me or anyone else. I find it ironic that some of us pitch diversifying client's portfolio's when we ourselves end up chasing doctors along with every other FA in town (granted I just exagerated a bit right there). 

anabuhabkuss's picture
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Soothsayer wrote:I'll add on to Stan's post.  H&R's tax preparation business continues to falter.  Number of returns done is down, although they are getting slighty more per return.  TurboTax represents a huge short and mid-term menace to Block.  A guy can throw it into his cart at Costco for $99 and never set foot in a Block office again.  You mentioned research and heavy lifting.  Do some of that on yourself to see how HRB keeps cranking out a "growth" number that Wall Street eats up.  It is through their sub-prime lending business.  Now, how many sub-prime lending risks do you think make good long-term brokerage clients to build you and your family's livelihood around?  Like I said, I am short the stock in my own account.  I think the credit risks taken in this historical low interest rate cycle will come back to bite many lenders.  HRB is set up for a big, big "come to Jesus" when they come clean and own up to what they did to keep the growth engine running.
They hedge and then they securitize. What's the big deal?
Look, you guys are so worried that a company comes up to you with a lot of money on the table and think there's a catch to it. You guys are looking into this way too much.
I read an article about Block on Rep magazine (the article is here somewhere on the april issue) and according to them, HRBFA has 1000 advisors. That looks like they have plenty of money to throw around to me. You got to spend it to make it right? How are they offering so much money? Simple, a friend informs me HRBFA has no training platform. Two years ago if you had a license HRBFA would take you off the street and give you a job. Not so anymore. They're targeting producers between 200-400k. That is the number they've calculated where they can hand out that kind of money for that level of production. Call it supply and demand if you will. It';s not rocket science. Two to three eyars from now once they've brought enough people abord, they might not be as flexible with their deals. I'm sure they'd tell you that to you face.
Speaking of face, if that was ever a worry from you, why didn' you ever ask "Why are you offering me so much money?". I'd love to see what they'd say or how they'd react. I know how I would.
"What, you're offering me money!? You con artists!!!!!"

stanwbrown's picture
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anabuhabkuss wrote:stanwbrown wrote:anabuhabkuss wrote:
If given the opportunity, I would think twice before underestimating what Block is building on. It's something you're most definitley not going to have access to with any other firm for the meantime.

OK, I'll bite, what are they "building on"? A business model that while not 100% devoid of HNW clients is 99.99999% lacking? Who do you want to do business with? People with sizable assets or people who have their taxes done by H&R? Private CPA firms have the clients you want, not H&R. Want a book full of $2k IRA accounts?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I would agree that the search for HNW households to the exclusion of all others can be overdone, but just because Walmart isn’t completely lacking for sizable account prospects doesn’t mean it’s a good place to look for them.
The guy's already making, well, slightly less than decent progress at a reputable firm. There's no reason to toss that away for what H&R’s offering.

 
What clients would I want? Both! there's money to made either way and there's no way that diversifying my clientele reach is going to end up hurting me or anyone else. I find it ironic that some of us pitch diversifying client's portfolio's when we ourselves end up chasing doctors along with every other FA in town (granted I just exagerated a bit right there). 

 
I don't see any value in "diversifying" my book with small accounts. They're not money makers, they get under foot, they take as much time to handle as a larger more profitiable account and I see no way they'll get te ongoing service they deserve.
There are only so many hours in a day. I can spent it working a book with a massive number of households with small accounts or vastly fewer households with larger accounts. I know which route gets better results.
The same applies to prospecting. Every 15 minutes I spend talking to the guy opening a $2k IRA is 15 minutes I can't spend talking to someone with real assets.
 

Soothsayer's picture
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"UBS recently intiated a buy.  I assume they've done some research, right?"
Yes, and how many firms on the street had sell ratings on WorldCom?  Enron?  Too extreme for you?  How about the meltdown known as Fannie Mae?  More recently, Harley Davidson?  Typical Wall Street groupthink.  Yeah, those CFAs and analysts are all wizards.  I shorted 3 of the above 4.  I'm confident that I'll be right again.  Then, you'll know why I have clients.

Jonestown's picture
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Sears tried mixing stores, real estate, and investments....anyone remember what happened?  Can you name the failed entities?

ezmoney's picture
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Give this up. Serious money will never end up at H&R Block. Are you kidding?

Beagle's picture
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Completely off subject but computer software is NOT a major problem for
a company like H&R Block.  Reality is in numbers and over the
past 5 years the percentage of tax returns handled by tax professionals
has risen to 58%.  That's basically an 8% point rise in the past 5
years.  Computer software during that time has grown from about 8
to 20%.  What has happened is that people writing out their
returns with a pencil has plummeted.

A projection I saw said that tax pro's are expected to continue their
growth to about 60-65% of all returns and should keep their total in
that area.  Computer software is expected to rise to 30-35% over
the next 10 years.

The problem with H&R Block is that they are getting hit with
competition from other chains like Liberty and Jackson,Hewitt.  5
years ago they only competed with CPAs and Enrolled Agents and that
just isn't the case anymore.  New IRS regulation (just being
talked about at the moment) that all tax preparers must have a license
could have a serious implication on a firm like H&R Block in
finding a large enough pool of preparers without paying significantly
more money.

Soothsayer's picture
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anabuhabkuss wrote:
 
They hedge and then they securitize. What's the big deal?
Look, you guys are so worried that a company comes up to you with a lot of money on the table and think there's a catch to it. You guys are looking into this way too much.
I read an article about Block on Rep magazine (the article is here somewhere on the april issue) and according to them, HRBFA has 1000 advisors. That looks like they have plenty of money to throw around to me. You got to spend it to make it right? How are they offering so much money? Simple, a friend informs me HRBFA has no training platform. Two years ago if you had a license HRBFA would take you off the street and give you a job. Not so anymore. They're targeting producers between 200-400k. That is the number they've calculated where they can hand out that kind of money for that level of production. Call it supply and demand if you will. It';s not rocket science. Two to three eyars from now once they've brought enough people abord, they might not be as flexible with their deals. I'm sure they'd tell you that to you face.
Speaking of face, if that was ever a worry from you, why didn' you ever ask "Why are you offering me so much money?". I'd love to see what they'd say or how they'd react. I know how I would.
"What, you're offering me money!? You con artists!!!!!"

The big deal is that is HRB confessed today that full year guidance would come in on the low end.  I guess it's really not all that simple.  Time to find out what happens when you come out of a "good credit cycle" fueled by all-time low interest rates and a sea of liquidity.  Oh yeah, and their brokerage business continues to lose money as well.  But, I'm sure UBS has done their research.  I'll maintain my short position for clients and my own account, Thank You Very Much!

Starka's picture
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I know a fellow who manages a couple of Jackson-Hewitt "stores".  (His word, not mine.)  These guys are getting series 6 licensed.  So they're going to start doing $4K IRAs for their tax clients.  Groovy.  HRB and Jackson-Hewitt can fight over that business from now 'til the cows come home as far as I'm concerned.
High end CPAs and Accountants know what all high end professionals know...namely, that there's plenty of business for all high end specialists with high end clients who appreciate and are willing to pay for high end solutions to high end problems.
A decent living can be made, to be sure, from an hundred $200 commissions a month, but for me, that's too much of pain.  So let the short form filers fight it out.

bucko's picture
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Rambo,
Read all the negative stuff about HRB and felt compelled to respond.
I had book and experience at AGE almost exactly like yours, with an equally high 70% in AGE fee based program.  I got HRB offer very similiar to yours and accepted.
First - potential referral source.  I was successful cold calling but no longer wish to do that.  In my area in last 4 months,  referrals from tax preparers have overwhelmed the brokers.  While most are too small to care about, a number of 7 figure accounts are coming in. 
2.  Money.  AGE puts 3-400 people thru their training program a year and their brokers numbers are down 1k since i started 3-5 years ago.  $75k per trainee and still losing brokers.  HRB gives it to the survivors of 3-5 yrs experience doing 200-400k.  You tell me which company is spending money wisely.   HRB is net adding brokers.
3. Fee based program is better for clients at HRB.  AGE put limits in last year for under and over trading.  While they are certainly workable, it required monthly monitoring of accounts to avoid going into the penalty box.  And if you did, your payout gets cut to 20% and your clients gets hit with $50 surcharges per trade.  AT HRB it is far more flexible and for a broker like me who does a fair amount of stocks, I can feel better about putting stops on positions and not feel like my client and me may get thrown in the penalty box for trying to reduce our risk.
4.  AGE was awesome and totally recommend it for newbies.  But cold calling continues to get more difficult and time consuming so aligning with a referral source of tax pro's who enjoy the confidence of their clients seemed like a good marketing addition for my business.  There are a ton of middle class people who have 300-600k of savings who need help.  How do you reach them?
5.  I've also found the HRB management team far more focused on growth and creating serious but friendly sales goals and programs and frankly I don't mind the competition.  AGE did not have that drive for growth.
6.  And lastly,  nearly all my clients are coming with me with only a few exceptions.  I'm up and running at twice the salary. 
We'll see where it shakes out in 5 years but I'm putting my 401k money in HRB stock. I hope it goes lower. 
PS And I almost forget.  CLient statements at HRB have great graphical performace charting for all clients.  AGE like alot of broker firms have terrible statements that failed to tell the client how they were doing. (Why is that?) It required me to keep track of initial investments and remind the client of our perfomrance.
 

anabuhabkuss's picture
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Soothsayer wrote:
"UBS recently intiated a buy.  I assume they've done some research, right?"
Yes, and how many firms on the street had sell ratings on WorldCom?  Enron?  Too extreme for you?  How about the meltdown known as Fannie Mae?  More recently, Harley Davidson?  Typical Wall Street groupthink.  Yeah, those CFAs and analysts are all wizards.  I shorted 3 of the above 4.  I'm confident that I'll be right again.  Then, you'll know why I have clients.

 
I hope it doesn't hurt to be wrong. HRBFA stock went up 5 points today.

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Soothsayer's picture
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Soothsayer wrote:That is the career equivalent of going from driving a 2005 Mercedes C-Class to an '84 Yugo.  Hope that answers your question.  BTW, I shorted HRB in my own account today.  I'm totally serious.  That company is in big time trouble.
Time to check the record.......

Soothsayer's picture
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Soothsayer wrote:I'll add on to Stan's post.  H&R's tax preparation business continues to falter.  Number of returns done is down, although they are getting slighty more per return.  TurboTax represents a huge short and mid-term menace to Block.  A guy can throw it into his cart at Costco for $99 and never set foot in a Block office again.  You mentioned research and heavy lifting.  Do some of that on yourself to see how HRB keeps cranking out a "growth" number that Wall Street eats up.  It is through their sub-prime lending business.  Now, how many sub-prime lending risks do you think make good long-term brokerage clients to build you and your family's livelihood around?  Like I said, I am short the stock in my own account.  I think the credit risks taken in this historical low interest rate cycle will come back to bite many lenders.  HRB is set up for a big, big "come to Jesus" when they come clean and own up to what they did to keep the growth engine running.
And the price today is...........

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da public wrote:
Umm, the Express IRA program isn't even part of the brokerage side. 

Isn't this the fine program that they're now being sued over?

Soothsayer's picture
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anabuhabkuss wrote:
They hedge and then they securitize. What's the big deal?

I guess there's a little more to it than that......

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bucko wrote:
We'll see where it shakes out in 5 years but I'm putting my 401k money in HRB stock. I hope it goes lower. 
I think you have your wish.....

Soothsayer's picture
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anabuhabkuss wrote:Soothsayer wrote:
"UBS recently intiated a buy.  I assume they've done some research, right?"
Yes, and how many firms on the street had sell ratings on WorldCom?  Enron?  Too extreme for you?  How about the meltdown known as Fannie Mae?  More recently, Harley Davidson?  Typical Wall Street groupthink.  Yeah, those CFAs and analysts are all wizards.  I shorted 3 of the above 4.  I'm confident that I'll be right again.  Then, you'll know why I have clients.

 
I hope it doesn't hurt to be wrong. HRBFA stock went up 5 points today.

I covered up part of my position a few weeks back at just over $20, booking a 20%+ gain for myself and several clients in just over 1 year (long-term capital gain).  I still think the worst is yet to come.  But, with the stock price in the toilet, and trading at just 13x earnings, the board might be ready to wake up and shake up. 

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