November 08 Production Numbers...

92 replies [Last post]
Vin Diesel's picture
Offline
Joined: 2007-04-18

How are your production numbers for November?
Speaking for myself and my firm - they are HORRIBLE

ezmoney's picture
Offline
Joined: 2004-11-30

bad.thank god for fee based.

Hank Moody's picture
Offline
Joined: 2008-11-10

Good. Thank God for Indexed Annuities. 

fritz's picture
Offline
Joined: 2006-01-12

Vin Diesel wrote:
How are your production numbers for November?
Speaking for myself and my firm - they are HORRIBLE
 
AWFUL..Never seen so many ACAT's going according to Front Desk help..myself included unfortunately.  The managed money guys will probably not see the big hit until jan when new fees go out, but from what can gather the guys who were at 1 MM will do less than 400 next year, 50% drop from assets drop and another 10-20% from people who closed their accounts, and the 500K guys will struggle to do 200K next year, even if we stay around 8000 on the DOW, if we break than all the above numbers are way to high.  But its so bad you just have to ask yourself if you have any skills to switch careers, I have asked myself and not come up with a good answer yet.

YHWY's picture
Offline
Joined: 2007-07-18

This may well be the cycle that tests the real validity of the fee-based advisory approach that has been aggressively "suggested" to all of us over the past decade or so. I have never been a believer nor practitioner of, but my T12 is taking it on the chin, none the less ( I never doubted that it was better for brokers (and especially their firms), I've just never thought it was better for clients). I am and have been targeting currently fee-based prospects with advertising asking whether those fees are really a good value or not and encouraging readers to look closely at fee costs now, more than ever. Let the pot-shots begin!

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

Production remains stable, though I am re-amping my business after splitting with my partner. Finding a lot of accounts $250-450K range at wirehouses that are neglected.
YHWY, I came from a EDJ, home of the longterm investor, only problem is after 5-6 years they reup that sales charge by changing to another fund company.. My favorite is when they split between Franklin and American Funds, and tell them it was diversification, but the real reason was increased commission on less breakpoints...Anyways won't argue fee based vs commission, but I think if I can add stocks, alternative assets, uits, mutual funds, etfs, indexes and not have to charge the client for every single item, and beat a asset allocation of index funds by at least my fee, then it is better for my clients than them being on their own...

badmove?'s picture
Offline
Joined: 2006-06-10

at 400k for year, less than 15k in for November...ugleeeeee. Goal was 450-500 for the year, going to be tough. More importantly not a whole lot in the pipe either.

fritz's picture
Offline
Joined: 2006-01-12

badmove? wrote:at 400k for year, less than 15k in for November...ugleeeeee. Goal was 450-500 for the year, going to be tough. More importantly not a whole lot in the pipe either.
 
Least one honest person on the board.  I know its pretty important to stay positive, but my pipeline is so empty could see to russia on a clear day.  I barely have the energy to go in and can not imagine trying to get more clients now..Attitude going to have to change Jan or could be rough, already told the wife to quit spending money.  HOPE I am wrong but think this bear market going to a long painful event.  Seeing retail stock like Nordstrom, Macys, Saks, Ann Taylor all looking like BK is a real threat.  Dozens of restaurants look like BK also, could not look someone in the face now with a clear conscience and say" I am so excited about this economy and you should be too" 20% of S&P 500 stocks under 10.00 today, after crash 1987 it was only 30 names, this is serious stuff.

ABOM's picture
Offline
Joined: 2008-11-01

Lots of cuts coming at all firms on many parts of a branch P&L. If a branch had 4 billion in assets at .75 roa they where doing 30 million. same roa on 2-3 billion means branch now doing under 20 million!!

not to mention the errors and legal line are killing branch offices.

Support staff cuts, marketing budgets, real estate, manager cuts, and low performing FA cuts will be coming very soon.

today1's picture
Offline
Joined: 2008-05-07

last month was great and im looking to end the year strong.  i will admit my business has changed though.   mostly fixed income business buying intermediate muni's and short term corporates.  dont think i have done this much fixed income business in my life.  also did some fixed annuity business.  my revenue is up year over year.  these are the markets where the strong survive. 

HymanRoth's picture
Offline
Joined: 2008-08-25

My business is up slightly, and new assets are starting to come in.

Morphius's picture
Offline
Joined: 2007-07-21

fritz wrote:... and the 500K guys will struggle to do 200K next year, even if we stay around 8000 on the DOW, if we break than all the above numbers are way to high. We broke 8,000 on the Dow just hours before you wrote that, with a close of 7,997.  It may be ugly, and it may be a long time since we were below that level, but there's nothing magical about 8000. 

Hank Moody's picture
Offline
Joined: 2008-11-10

fritz wrote:badmove? wrote:at 400k for year, less than 15k in for November...ugleeeeee. Goal was 450-500 for the year, going to be tough. More importantly not a whole lot in the pipe either.
 
Least one honest person on the board.  I know its pretty important to stay positive, but my pipeline is so empty could see to russia on a clear day.  I barely have the energy to go in and can not imagine trying to get more clients now..Attitude going to have to change Jan or could be rough, already told the wife to quit spending money.  HOPE I am wrong but think this bear market going to a long painful event.  Seeing retail stock like Nordstrom, Macys, Saks, Ann Taylor all looking like BK is a real threat.  Dozens of restaurants look like BK also, could not look someone in the face now with a clear conscience and say" I am so excited about this economy and you should be too" 20% of S&P 500 stocks under 10.00 today, after crash 1987 it was only 30 names, this is serious stuff.Why can't you change your attitude on November 20, 2008?

anonymous's picture
Offline
Joined: 2005-09-29

"Why can't you change your attitude on November 20, 2008? "
 
Early in my career, I learned an important lesson about attitude.  It's very, very difficult to have a positive attitude without a full pipeline.  The negativity feeds on itself.  Anyway, what I learned is that activity comes before attitude. 
 
If you wait to get a good attitude to do the things that are needed to fill your pipeline, you're screwed.  If you do the things that are needed to do to succeed despite your attitude, your attitude will immediately improve.

buyandhold's picture
Offline
Joined: 2008-09-23

Disappointing results. Three years in, I need to bring in at least 300k investable per month to survive and it's not happening. 

But have had good conversations with prospects lately. Dropped the EDJ 'sun will come up tomorrow/if you diversify everything will be OK/we didn't see any of this coming but believe what we're saying now' spin and have been leveling with people. It's bad and it's going to be bad for a while. Here's what we can do.
Have not lost any clients and only two have liquidated. Having their confidence feels good.
 

Greenbacks's picture
Offline
Joined: 2004-12-21

Interesting topic.
Thank God I am indy.
My numbers are down and I am thankful for fee based and C-shares.

I hired a marketing professional to go after the wire house accounts in my area. I will see how that goes going forward into the first quarter of 08. I do not need that many more fee-based accounts and my practice will be at full capacity for me.  

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

Ice--

 
Since you're 100% fees, I assume you're charging fees on a wide variety of account sizes.
 
At Jones, there's a $100K minimum for our fee-based account. Can an indy charge fees on any sized account?

UNDERMINDED's picture
Offline
Joined: 2008-10-14

bad bad production month, started to pick up this week finally but I need more new assets.

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

Thanks for the information. It's very difficult for me to implement our fee-based option with the $100K minimum; I need the upfront pop t-o-d-a-y.
 
I was just wondering if an indy can charge fees on any account size.

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

Dang it!

snaggletooth's picture
Offline
Joined: 2007-07-13

Borker Boy wrote:Thanks for the information. It's very difficult for me to implement our fee-based option with the $100K minimum; I need the upfront pop t-o-d-a-y.
 
I was just wondering if an indy can charge fees on any account size.
 
Our firm's minimum for fee based is $25k.  But I personally do C shares up to $100k.

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

Borker Boy wrote:Thanks for the information. It's very difficult for me to implement our fee-based option with the $100K minimum; I need the upfront pop t-o-d-a-y.
 
I was just wondering if an indy can charge fees on any account size.
 
Borker, I use C-shares for most accounts under 100K, and any DCA money.  I don't do it to annuitize my business - I really feel it's better for the client.  It will take 10 years in some cases for the breakeven point, and many people have time horizons of less than 10 years.  It's also a huge dis-incentive for a client to pay 4.5-5.75% upfront.  So I find C-shares very useful.  But you will make far less upfront, and it will take 3-5 years for your income to break even versus an A-share under 100K.
Over 100K, I am trying to use Advisory on new money.  But I usually stagger it with other things (fixed annuities, CD's, MMKT for short-term income).

ezmoney's picture
Offline
Joined: 2004-11-30

I am thanking god each day that I went indy 1 1/2 ago. With my payout and fee based I can weather this storm. But my income has been cut in half.

willbbetter's picture
Offline
Joined: 2008-10-22

We (Wachovia) bill quarterly, but are paid monthly.  So we're being paid on account values a/o September.  First quarter '09 will not be pretty

Spaceman Spiff's picture
Offline
Joined: 2006-08-08

Jones pays monthy and clients are charged monthly.  Most of us don't do enough fee based for it to matter. 
 
So, how does a fee only advisor survive when his income just got cut in half over the last two months?  You can't possibly bring in that many new assets quickly enough.  Isn't an environment like this one where a commission based advisor may not even feel the pinch?  I know I haven't so far.   In fact I had my best month of the year in Oct, followed by a marginal Nov, and the transfer paperwork calls for a stellar Dec. 
 
But, if I had a fee only biz with $20MM that is $10MM now, even bringing in $1MM a month won't get me back to even for the next year.   

YHWY's picture
Offline
Joined: 2007-07-18

< ="-" ="text/; =utf-8">< name="ProgId" ="Word.">< name="Generator" ="Microsoft Word 12">< name="Originator" ="Microsoft Word 12"><>

Normal
0

false
false
false

EN-US
X-NONE
X-NONE

MicrosoftInternetExplorer4

<>

<>

<>
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri","sans-serif";
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-fareast-font-family:"Times New Roman";
mso-fareast-theme-font:minor-fareast;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:"Times New Roman";
mso-bidi-theme-font:minor-bidi;}

A little perspective re: Wirehouse v. Indy & fee-based
v. commission. I left WB for LPL one year ago (today, in fact) and my business
is 100% "traditional" commission-based. My 2008 income is already right
about 80% of my 2007 full year income. Consider that this includes the actual transition
(one never takes 100% of desired clientele, followed by the worst year
(especially last @2 mo.) in most of our memories), not to even bring up the
state WB is in and the proprietary effect that's had on WB brokers
specifically. All things considered, I am happy as hell to be smoking a cigar
poolside right now, having control over my business and branch (as OSJ) and having my
income hold up so well, given the state of the markets. Couldn't be happier!

YHWY's picture
Offline
Joined: 2007-07-18

Sorry about the annoying font up there.

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

Thank God for a a few rich guys I make cash hand over fist with my strategy my stuff is onm track, month 15 and I hope to do $20k. Getting some good accounts with their friends.

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

Attrition;  Of my class in the 70's there are only 28 left. Of them I'm 3rd. My paycheck is just getting my over the hump. I can't imagine how the other rookies are paying the bills. I'm LUCKY LUCKY LUCK. I'm not bragging and not really proud. Hard biz newbies. But I'm having fun doing it and think I'll be here in the long run.

ezmoney's picture
Offline
Joined: 2004-11-30

live within your means and when your fee based is cut in half you can manage. Live like a king and you're dead. I doubt very much that comission brokers a barely feeling the pinch spaceman! They'll be the first to fall. Trust me on that.

YHWY's picture
Offline
Joined: 2007-07-18

ez, if you think that the fee-based model is your salvation, then I believe you are misguided. Unless, of course, it is your contention that it is by far (and provable, beyond argument) best for your clients. Good luck with that argument.

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

I don't think any fee-based advisors have had their incomes cut in half. If their book is fairly balanced, they are probably down 25%-30%. Let's remember, most balanced portfolios will include bonds, govies, some cash, etc. If you are a pure equities advisor, yeah, you maybe down 40%+.

YHWY's picture
Offline
Joined: 2007-07-18

B24 I'd like to ask any fee-based former AGE  Advisors doing under about $400-450k how their income has been and will be effected. I suspect that with the Dow down over 45% from last years' high and the new Wach Sec hurdle grid going into effect, I suspect declines in income of 40%+ are likely. (For you wirehouse guys who want to scoff at $400-$450k, save it. Your @35-42% of whatever your "gross" is doesn't impress me anymore)

fritz's picture
Offline
Joined: 2006-01-12

B24 wrote:I don't think any fee-based advisors have had their incomes cut in half. If their book is fairly balanced, they are probably down 25%-30%. Let's remember, most balanced portfolios will include bonds, govies, some cash, etc. If you are a pure equities advisor, yeah, you maybe down 40%+.
 
maybe down 40% ARE you joking?  Brandes, Lazard which have a few people in are down over 60% YTD.  Do not believe any managed account unless counting cash and GOVT stuff is down less than 40%..  I am not a big believer in Managed Money, in fact I think it is bordering on criminal have a book of all clients in this stuff, but from the guys I see who have most/all their book in Managed Accounts they have pretty much had about 1/4 of the people close their account in the last 3/4 weeks.  Think this business, if the market does not rebound will be very different in 12-24 months.  The last stage of a true bear market is client despair, thats when people realize they are not getting even and paying 1.5-2% to watch you account go nowhere, tough sell.

fritz's picture
Offline
Joined: 2006-01-12

Morphius wrote: fritz wrote:... and the 500K guys will struggle to do 200K next year, even if we stay around 8000 on the DOW, if we break than all the above numbers are way to high. We broke 8,000 on the Dow just hours before you wrote that, with a close of 7,997.  It may be ugly, and it may be a long time since we were below that level, but there's nothing magical about 8000. 
 
Nothing Magical about 8000?  That was new closing low on the DOW,  after weeks of bouncing off 8000.  That will usually create a lot  technical selling, and psycological damage.  Looks like it happened.  Just a number yes, but it matters, just like it will if we dont hold 5000.

troll's picture
Offline
Joined: 2004-11-29

If you are still adding to your fee based assets, the pay cut is minimal.  Another flaw in this thread is fee based accounts being down 40%.  Not all accounts are down 40% just because the market is.  This month has been my biggest month since May with a week to go.

skbroker's picture
Offline
Joined: 2007-06-16

not 8000 but 7800 the previous intraday low

YHWY's picture
Offline
Joined: 2007-07-18

icecold1d, You can compare your business model to the dregs (MUCH more that half of mutual funds have ridiculous expense ratios and are complete rip-offs) and feel good about it. What you can't do is try to compare total expenses to the best mutual funds (which any advisor worth his salt uses to the exclusion of those "dregs"). I just don't want to have to re-sell my entire business model every quarter in a down market, but to each his own.

fritz's picture
Offline
Joined: 2006-01-12

iceco1d wrote:You sound like a bit of a toolbox fritz.
 
I'm nearly 100% fee-based (barring a few 529 plans), and my portfolios have lower avg. expense ratios than more than half of the mutual funds out there @ NAV - when INCLUDING my fee. 
 
Sounds good, how are you doing this year for your clients?  Let me guess if someone called you end of Sept you told them to stay in for "long term"?  Right?  that  way your could continue to get your fee. Guess at what point would you get them out so they would not have to continue to lose sleep over their losses and put them in a CD or something to that effect?  Pretty sure that type of thing not in your bag of tricks.

YHWY's picture
Offline
Joined: 2007-07-18

ice, I am not challenging your business plan or model, but I thought that your quoted total expense to clients (including your .9%) of roughly 1.25% seemed off-kilter. I'm not a fee-based guy, but .35 bps internal expenses seems odd (i.e., not funds, nor discretionary EFT portfolios, nor private money management nor any other structure I can think of). My main concern has been to ask if a percentage fee is always in clients' best interest as well as having to defend that line detail on statements every quarter during a down market.

YHWY's picture
Offline
Joined: 2007-07-18

ice, I respect your decisions, make no bones about it. Always interested in other points of view.

Gordon Gekko's picture
Offline
Joined: 2007-07-08

Ice, come over to the dark side. I can mail you a Terrible Towel!

ezmoney's picture
Offline
Joined: 2004-11-30

YHWY,

The bottom line is this. If I want to charge 3% and fully dislose this to my clients and they agree, then it's a deal. Who can say the client is being wronged? Hell he agreed to it. There is nothing wrong with a 2% overall fee (including fund expenses).
 
I am in business to make money. Profit is the name of the game. My services are not free. As long as all my merhcandise is priced, and fully disclosed, and the client buys my services. I'm o.k. with my pricing structure. Disclosure is the key. The only one disagreeing with this is your self rightous transaction broker who is about to starv for the next 6 mths.

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

90% fee based, but down 20-30% for the month.
20% on client market value (I have a LOT of balanced managed accounts)
and perhaps another 10% on clients who I have lost or whom have pulled money out against my advise to wait it out.
 
Thank God for this type of business though. The commission guys here are on suicide watch.

2wheeledbeemer's picture
Offline
Joined: 2008-10-10

 
 
Thank God for this type of business though. The commission guys here are on suicide watch.
 
I'm a little confused, because I'm WAAAAY transactional, with some in C shares for my annuitized bit, and I'm in the process of closing my all time high month since making the switch from AGE to RJ.  I'm selling Somalian tanker loads of insured utility pfds. and highly rated corporates.  These clients understand what happens if interest rates skyrocket, they just want something warm to hold on to.  And it's not coming at the expense of blowing out of everything else. 
 
What else are you other transactional guys doing?

bspears's picture
Offline
Joined: 2006-11-08

I have a nice base of income because of Advisory and C share mf's and L Share annuities.  New to Fee business so my hit on the values are minimal as far as income is concerned. All L shares go in on 12 month DCA, which has been somewhat a savior. I'm doing more in tax free's to build on the base recently.  However, the transfers are picking up as the prospects I've been calling on since 2001 are wanting a change.  Not proud of that, but will not turn anyone away who wants to change advisor's-- and they go directly into Advisory.  I have a tremendous $ sitting in mmkts and cd's and as they come due, like this AM, I can put into other revenue generators. 50k  12 month cd came due and put into a 7yr tax free at 5.5% paying 20 per 1000.  Several more coming due in the next several months...

Mike Damone's picture
Offline
Joined: 2004-12-01

I'm 99% transactional and my GDC is up 21% from last year.  I have a ton of VA contracts paying me 1% a year.

ezmoney's picture
Offline
Joined: 2004-11-30

L shares, c shares, wrap and managed $$ I count as fee based, and I'm damn glad I have them. Makes you lazy though!

ezmoney's picture
Offline
Joined: 2004-11-30

fair statement

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

Judging by how the 'money managers" have performed I can't see paying them for something I can do myself, why punch their meal ticket with my clients $$$ I would rather keep the cash in their account.

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

Nolt talking about anybody but myself ... AGE training wants you to be a non thinking managed money drone my trust in them blew up when they pushed the FNM. S & T series out as the greatest thing since sliced bread. Two months later Grannies acount goes POOF! I dont need a CFA to destroy an account. I can do that myself.

Please or Register to post comments.

Industry Newsletters
Investment Category Sponsor Links

 

Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×