Nope. A year ago it was all the rage here, “it’s coming”.

[quote=mikebutler222]Nope. A year ago it was all the rage here, “it’s coming”.[/quote]



Won’t do it, just like none of the other firms are going to do it.
Advisor productivity tends to follow a power law, so you have a fairly
long tail of low producing producers and a few hot shots. Given how
bouncy the GDC is, its much too risky to cut out people around the
minimum.

If they were smart, they’d force those guys to team up with better producers.

I used to chuckle when I heard a prospect had MS… Now… Not so much anymore… A close friend just jumped over there (with a huge check to cash at the bank) and he says nothing but great things… At this point, I think its say to say that Gorman is the MAN… What he has done to turn the boat around is remarkable…

[quote=AllREIT] [quote=mikebutler222]Nope. A year ago it was all the rage here, "it's coming".[/quote]

Won't do it, just like none of the other firms are going to do it. Advisor productivity tends to follow a power law, so you have a fairly long tail of low producing producers and a few hot shots.

[/quote]

Just to be clear, by the "here" in "the rage here" I meant this forum. Given the distribution of production among brokers, I never saw a serious threat directed towards 300k producers. Gorman's used a carrot approach to moving people up in production, the stick talked about so much here never showed up.

[quote=mikebutler222]

[quote=AllREIT] [quote=mikebutler222]Nope. A year ago it was all the rage here, “it’s coming”.[/quote]

Won’t
do it, just like none of the other firms are going to do it. Advisor
productivity tends to follow a power law, so you have a fairly long
tail of low producing producers and a few hot shots.

[/quote]

Just to be clear, by the "here" in "the rage here" I meant this forum. Given the distribution of production among brokers, I never saw a serious threat directed towards 300k producers. Gorman's used a carrot approach to moving people up in production, the stick talked about so much here never showed up.[/quote]

Just curious why MER over MS? I’m not at either but would probably consider them similar from a branding standpoint, with the expception being that people associate MER with retail business more and MS with their banking arm primarily, which could be seen by some as more prestigious. I will say I’ve ACATed away MANY more MS accounts, which says a lot since they have significantly fewer FAs overall. I believe this has more to do with fees and the fact that it tends to be easier to get cut at MS as an FA, leading a lot of newer clients unloyal to the firm and it’s pricing. (Not implying it’s a cakewalk to get by or that people stay much longer at MER either, but I don’t get their accounts…)

[quote=AllREIT]

OTH the smart thing for a good number of those people is to go indy, and get a high payout. [/quote]<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I really don't see someone who's peaked at 300k in a wirehouse environment going Indy for the payout. At that production level, unless you're willing to come down a long, long way in the standards in terms of office space appointments, administrative support, etc., your NET (which is all that matters) isn’t significantly higher. No, in my  mind a long-time rep who leaves a wirehouse at $300k is doing it to survive, not prosper with that “higher payout”.

 [quote=AllREIT]

IMHO MS"s brand equity isn't as strong as MER's so its not as much of a loss.


[/quote]

I think that depends on the type of client you’re talking about. In the middle market, you may be right. With HNW types, MS has significant brand equity. In fact, my experience is that it’s seen as being closer to GS than MER is, and if you’ve noted my posts in the past, I have a lot of respect for MER, being a product of Mother Merrill myself.

[quote=xbanker]..... people associate MER with retail business more and MS with their banking arm primarily, which could be seen by some as more prestigious. [/quote]<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

That's exactly how many of the HNW investors I come across see it these days....

[quote=xbanker]..... I will say I've ACATed away MANY more MS accounts, which says a lot since they have significantly fewer FAs overall. I believe this has more to do with fees and the fact that it tends to be easier to get cut at MS as an FA, leading a lot of newer clients unloyal to the firm and it's pricing. [/quote]

That "get cut" thing may have been true a couple of years ago. Perhaps you benefited from the turmoil after the cuts of under $225k/over 11 years in the business reps that Gorman brought with him. I don't see that as the case today. In terms of fees, MS isn't at a disadvantage to other wirehouses.

[quote=mikebutler222]

[quote=AllREIT]

OTH the smart thing for a good number of those people is to go indy, and get a high payout. [/quote]<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I really don't see someone who's peaked at 300k in a wirehouse environment going Indy for the payout. At that production level, unless you're willing to come down a long, long way in the standards in terms of office space appointments, administrative support, etc., your NET (which is all that matters) isn't significantly higher. No, in my  mind a long-time rep who leaves a wirehouse at $300k is doing it to survive, not prosper with that higher payout?[quote=AllREIT]

IMHO MS"s brand equity isn't as strong as MER's so its not as much of a loss.


[/quote]

I think that depends on the type of client you’re talking about. In the middle market, you may be right. With HNW types, MS has significant brand equity. In fact, my experience is that it’s seen as being closer to GS than MER is, and if you’ve noted my posts in the past, I have a lot of respect for MER, being a product of Mother Merrill myself.

[/quote]

Dunno, when I got started in this business (was it really that long ago?), my Mom was amazed that I wasn't going to work for Lehman Bros. So prestige is in the eye of the beholder.

I'm not sure that among very HNW types, the major wires have a big advantage over various family office type things. Your $10M doesn't move the needle at MS, it does at a smaller house.

I don't think Mike is talking about "family offices" that handle hundreds of millions or billions in assets.  I think (correct me if I'm wrong) he is referring to the former wirehouse guy that opens a little solo practice with 300K in t-12.  That is not exactly the hotbed of HNW investors.

However, you might go Indy for the payout if you are not serving highly affluent individuals.  If you are just serving middle-market (typical 6 to low-7 figure retiree), this scenario might help your bottom line if you set up a cheap shop.