Moving Firms Soon - info on negotionation needed

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dezaster's picture
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Joined: 2007-12-30

I have a book of about 200 mil and my trailing 24 is about 1.25 mil.  I have not looked around in my five years since joining my current firm, so I am not very edudcated on packages.  I want to make sure I get the best deal possible.  Unfortunately given the situation of my firm, i want to move in the next month.  I have looked at Merrl Lynch, Smith Barney, and Morgan Stanley thus far and am expecting proposals next week. 
I would appreciate guidance, advice and information from anyone  who know the process well.  Should I be getting more firms involved?  What is the best way to approach these new firms?  Also what type of package can I be expecting/asking for without appearing unreasonable.  Thanks in advance. 

donatello's picture
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Joined: 2007-12-22

It's a little hard to believe your numbers given your spelling/posting/lack of sophistication. You don't seem to be a serious candidate for movement.....explain yourself....I seriously can't believe this posting is real. I call b-s__t! What's the situation of your firm...really??? Don't mind helping...just don't believe you. And why is your moniker de-zas-ter??? Are you just a disaster waiting to happen?
 
I think the package you can expect is nill. That seems reasonable considering your lack of _______________________. ( fill in the blank)

dezaster's picture
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Joined: 2007-12-30

I just read my post.  It was pretty bad.  I typed it ultra fast because my wife was bugging me to eat dinner.  I am not lying and yes I do admit I am an awful speller.   If only great spelling led to great production and asset gathering. 
 
In all seriousness.  I am on a pretty short time frame and I could really use some help.  I cannot elaborate much on my firm on this board besides saying it is a mid size firm that is not known for advice, but pretty well known.  I can also say that the problems are big enough to consider leaving althrough there has not been much attrition yet.   It is not a wire house.  The name is the only tagline I have ever used that does not have personal information in it.  I cannot even give a hint of who I am on this board.  I have worked at the same firm for 6 years and I am not used to sneaking around in this manner.    

troll's picture
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Joined: 2004-11-29

How on earth, can you be a $1.25 million dollar producer, with $200 million in assets, and not know what the deals are out on the street. I have trainees in my office who are more educated than that on the subject.

gad12's picture
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Joined: 2006-12-06

No doubt.   Use some of that cash you have and hire a professional to help you.  You're crazy to waste your time on this site.  (If what you are saying is in fact true.)

pghkid's picture
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Joined: 2007-03-27

Disaster - If you are seriously looking at moving, call Danny Sarch.  He is a well known headhunter in the industry and could point you in the right direction and speak to the specifics of what deals are out there.  I pulled this information for you about his firm.  His number is: (914) 682-4000
 
I have to connection to Danny whatsoever.  I did see him speak once and find him in OWS every once and a while.
 
Danny Sarch, founder of Leitner Sarch Consultants has been working as a recruiter for the financial services industry since he graduated from the University of Pennsylvania in 1984. In 1990 he took over the predecessor firm, Leitner Consultants and renamed it Leitner Sarch Consultants. Today, Leitner Sarch Consultants has a full staff of search professionals, researchers and administration. 
Danny and his search team of Jordan Schultz, Senior Vice President, Steve Rappaport, Vice President and Elana Friedland, Senior Associate are on the phone -- all day -- every day -- talking to industry professionals to get the inside scoop on each firm, their office and their management team. This long-standing involvement in the financial services industry has given Danny and his staff the reputation, resources, contacts and the professionalism to match the highest caliber candidates to the best firms.
Danny has been recognized regionally and nationally for both his excellence and effectiveness in the industry. He frequently speaks and is interviewed by major business and industry publications on trends in recruitment and career strategies in the financial services industry.  
Danny serves as President of the prestigious Pinnacle Society, the nation's premier consortium of Executive Search professionals.

dezaster's picture
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Joined: 2007-12-30

Why would trainees be focused on transition packages?  In either case it is clear that given the reaction i am getting I need help and need to do more homework. 
 
Actually my numbers and assets are a little bit higher then what I said.   Again i want to avoid specific information that may identify me.  Is going through a recruiter better then contacting branch manager/regionals directly?   I have had no reason to leave my firm so there was no reason to understand them.  I just turned thirty so my numbers have been growing.  If it was up to me, I would stay at my firm forever, changing firms is very disruptive for the client and no matter who you are, you will  lose clients.  This is something that has been forced on me. 
 
I understand the basics 75-150% of the trailing 12 is pretty norm, some cash up front/some stock or mutual funds, have to pay it back if you leave in 6-8 years.  Really what I am looking for non obvious information from someone who may have gone through this already. 
 
How else am I able to compare firms?  What other catches do i need to look for?  How high can these firms go? What else should I ask for before I accept these deals?  THese packages are always changing and I have no idea what the current environment is with all of these firms having losses.  I guessed a recruiter may not be the best channel, as when I have spoken with them in the past, they seem very salesy and do not have your best interests in mind.  Of course I could be wrong. 

Broker24's picture
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Joined: 2006-10-12

D -
Find a headhunter that specializes in this.  At your production level, you cannot afford to make a mistake.  You also need to make sure the new firm (and branch office) is a fit for you and your type of business.  I would not get wrapped up in the front money, since you need to focus more on making sure your business transition is seamless.  One other question - is your business mostly fee, mostly commission, or mix of both?  Based on the production and AUM, I am guessing you have a fair amount in commissions.

troll's picture
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Joined: 2004-11-29

If you are 50%+ in fee  business, you should be able to get in the neighborhood of 200% of t-12, with about 140-150% up front, 75% of that in cash.
Compare firms technology, platforms, ongoing ed, support staff, payout, deferred comp.
With that said, one firm or another may have an edge in each of these areas, but more or less, they are all the same. They are about numbers, dont really care much about you as an individual (of course, they WILL care about someone like you, with your numbers if they are real), and there are FA's at every wirehouse bitching and moaning. The big difference is at the local leve. So find out about the culture of the branch you are talking to, and make sure there is a good fit with the branch manager, and that he'she is willing to truly partner with you in terms of support, etc.
The above all applies to a wirehouse, Indie is a whole nother story which I dont have experience with.
I've never moved, but do recruit for my branch. (ABOM)

dezaster's picture
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Joined: 2007-12-30

I think you nailed it.  Tech, platform, support, product,comp plan and account types all seem to be the same.  All the BMs seem to be very charming and intelligent.  I guess the initial package will be similar, but I think it will come down to my opinion of the BM and Regional manager. 
 
My business is 70 Comission and 30 fee based.  A great deal of the fee based was placed last year so this should increase naturally in 2008.  I will be of course focusing on Fee based but it was difficult to do at a firm that you suspect you will be leaving.  So a firm that is flexible in regards to type of busines is important.  Does anyone know how this works at the big firms?  Is one better then the other?  Merrll seemed a bit less flexible then Smith Barney. 
 
 

nestegg's picture
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Joined: 2007-06-14

Wachovia has some very attractive packages right now as well

CIBforeveryone's picture
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Joined: 2005-07-12

Have you considered going Indy?

dezaster's picture
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Joined: 2007-12-30

I was planning on staying at my current firm for 2-3 more years then going indy.  My timeline has been cut short at a point in my personal life were I cannot take many risks.  I did not think Indy was the right fit.  If I am missing something, please tell me. 
 
I am choosing wirehouse because:
 
1) I was under the impression I will learn more there.  I am only 30 and really want Reps around to learn from. 
2)  In this environment I think my clients would be more portable with a national brand name. 
3) I have never had support and product to leverage my skills.  I was under the impression the wirehouse gives more support and resources to top performers. 
4) From a legal aspect the wirehouse have been promising legal backing
5) With the legal fees and transition risks, my savings is really only 1 year in expenses.  Add some legal bills and my savings would only cover me for six months.  Given my family situation it is more of a risk.  As much as i would hate to admit it the transition package just makes too much sense for me. 
 
In 5-6 years I would considering going indy again.

troll's picture
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Joined: 2004-11-29

D - The 200% deals are generally 9 years.
I think your reasons for going wire vs indie make sense. You will definately get more support and good education programs related to not only product, but practice management, at a wire.
I have been at one firm my entire 8 yrs in the business, but from what I hear, ML is definately less flexible. SB pushes fees, but they dont punish you if you dont do it. And the payout is uniform across all products. My impression (maybe wrong>?) is that Morgan, UbS and Wachovia are less fee focused.
Wachovia has a payout that is 20% on the first $11,000 gross each month, but pays higher after that. They are also pretty busy right now absorbing the AG Edwards guys (the ones that are left). SB had a 20% on the first $5000, but eliminated that as of Jan 1st. UBS has ticket charges. Every firm has some way of taking someting from you, so look at the payout grid but ask a lot of questions.
Good luck.

CIBforeveryone's picture
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Joined: 2005-07-12

It sounds as if your mind is made up, but based on your numbers you are big enough to go Indy now. Going through one move may be enough to convince yourself not to do it again "in a few years." I do not know enough to push you one way or the other and won't screw with you like that.
 
 
 
dezaster wrote:
I was planning on staying at my current firm for 2-3 more years then going indy.  My timeline has been cut short at a point in my personal life were I cannot take many risks.  I did not think Indy was the right fit.  If I am missing something, please tell me. 
 
I am choosing wirehouse because:
 
1) I was under the impression I will learn more there.  I am only 30 and really want Reps around to learn from. 
2)  In this environment I think my clients would be more portable with a national brand name. 
3) I have never had support and product to leverage my skills.  I was under the impression the wirehouse gives more support and resources to top performers. 
4) From a legal aspect the wirehouse have been promising legal backing
5) With the legal fees and transition risks, my savings is really only 1 year in expenses.  Add some legal bills and my savings would only cover me for six months.  Given my family situation it is more of a risk.  As much as i would hate to admit it the transition package just makes too much sense for me. 
 
In 5-6 years I would considering going indy again.

judyowen's picture
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Joined: 2007-08-27

I can be of assistance.  I have been an independent recruiter for the last 15 years.  I represent several firms which may be a fit for your business style.  Please email me and we can discuss.
 
judyowen@entouch.net

EDJ4now's picture
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Joined: 2006-02-08

From what I have heard and seen, ML is harder to move assets out of than the other firms, so unless you plan on making it your last move, I would lean a different direction.

Broker24's picture
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Joined: 2006-10-12

dezaster wrote: "I have a book of about 200 mil and my trailing 24 is about 1.25 mil.  I have not looked around in my five years since joining my current firm..."
 
 
I am choosing wirehouse because:
 
1) I was under the impression I will learn more there.  I am only 30 and really want Reps around to learn from. 
2)  In this environment I think my clients would be more portable with a national brand name. 
3) I have never had support and product to leverage my skills.  I was under the impression the wirehouse gives more support and resources to top performers. 
4) From a legal aspect the wirehouse have been promising legal backing
5) With the legal fees and transition risks, my savings is really only 1 year in expenses.  Add some legal bills and my savings would only cover me for six months.  Given my family situation it is more of a risk.  As much as i would hate to admit it the transition package just makes too much sense for me. 
 
In 5-6 years I would considering going indy again.
 
It sounds like a real dizaster.  First you say you produce $750K t-12 w/200mm in assets, but you are only 30, and you only have 1 year in savings put away????  Dude, something doesn't seem right here.  You are netting like 400K before taxes, and you only have 1 year of expenses saved to show for it?  I'm not sure I am buying this whole story.  It sounds like you are in over your head, but I can't really figure it out.
Also, if you have amassed $200mm in assets, why in the WORLD do you need mentors around you???  If you built that yourself (which I am starting to doubt), you shouldn't need mentors.
I really think there is much, much more to your story.  Maybe I'm missing something.

Big Taco's picture
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Joined: 2006-11-15

That's the part I don't get.  That dezaster feels that he needs people around to learn from.  Sounds like they could learn from him. 
 
Depending on what you need to learn about, at least where I'm at I can learn just about anything related to the financial markets from the learning tools my B/D has made available to me, AND print off client approved pieces on topics that I feel my clients are interested in.
 
In other words, I'm not sure what dezaster is interested in learning about, but it *sounds* like he's got the sales part down pat.

Indyone's picture
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Joined: 2005-05-30

What say you, Dezaster?  Did you build this book or inherit it from dad?  It's fine if you did, but I'm with the rest...if you built it from scratch, what do you need mentors for?  Most decent B/D's have guide information on products and can help you set up appropriate portfolios.  If you need company, you can hang out here and enjoy the virtual water cooler.

Big Taco's picture
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Joined: 2006-11-15

Indyone, are you really located in Canada?

dezaster's picture
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Joined: 2007-12-30

Yes, I do have the sales part down pat, but it is not really sales, it is genuine concern over clients best interest, knowledge, and work ethic.  I enjoy cold calling, that is right.  I actually like speaking to new people and enjoy the challange of opening the account. 
 
I also have a huge interest in the markets.  That is all I do. 
 
I am 30, I would be a fool to think that I do not need to learn any more at this point.  Every year I look back and think how little I knew the year before. 
 
No dad hand me down :(  However I was in the right place at the right time and I worked hard. 

footsoldier's picture
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Joined: 2006-04-30

Cmon dezaster,
 
Come clean dude. I lay odds that you are a Jones GP teaching us about bass fishing (as in setting the hook!) in Missouri.
 
No way in hell you could amass those kind of assets in such a short time. Right time and place might get you 50M but 200M, you either robbed the bank or the Donald is your best client.

Indyone's picture
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Joined: 2005-05-30

Nah...that's just where I like to go fishing...

Indyone's picture
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Joined: 2005-05-30

dezaster wrote:Yes, I do have the sales part down pat, but it is not really sales, it is genuine concern over clients best interest, knowledge, and work ethic.  I enjoy cold calling, that is right.  I actually like speaking to new people and enjoy the challange of opening the account. 
 
I also have a huge interest in the markets.  That is all I do. 
 
I am 30, I would be a fool to think that I do not need to learn any more at this point.  Every year I look back and think how little I knew the year before. 
 
No dad hand me down :(  However I was in the right place at the right time and I worked hard.
 
I don't want to burst your bubble, but you're going to be hard-pressed to get much good from co-workers at most firms.  Most of these folks that work next to you couldn't care less about your success.  They are too busy working on their paychecks to worry about mentoring you unless there is a financial reward in it for them.  There are notable exceptions in some offices and in this forum (Bond Guy and The Judge come to mind), but odds are, you'll be disappointed in that regard just about wherever you go.
 
Again, most of the better B/Ds have plenty of investment information through continuing ed and their product departments and I can't imagine a guy with a $200 million book having trouble getting information whenever he asks for it.

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