Wachovia Finet Hiring Talent

49 replies [Last post]
WealthAdvisor's picture
Offline
Joined: 2006-09-30

My team has been doing some comprehensive due diligence on going the independent route. We had no idea where to start so called a recruiter and she pointed us to LPL and Raymond James, as well as some smaller b/d's. We also looked at the RIA model, but the risks to us outweighed the rewards.
Nobody ever informed us that Wachovia was in the independent model at all. We inquired about their platform and were enchanted enough to get some information and talk to their recruiter.
Recruiter I thought, that is. If anyone is in the west coast like us, you need to talk to the FINET guy who they have. This guy is unbelievable! Even if you are just looking to get some information on independent in general, you might want to consider talking to him (Craig Avery) as he seems to have a solid grasp on the industry, the competition, and the process.
Our team is still on the fence about what to do (ie, take a big check or go out on our own) but if  you are looking- check out Wachovia's site (I think it is www.wsfinet.com). Hope this helps.
TSA

Indyone's picture
Offline
Joined: 2005-05-31

OK...it's obvious you're a shill for Wachovia.  We'd have a whole lot more respect for you if you were at least honest about it.

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

Wachovia= Bank...........Can't trust them.

Captain's picture
Offline
Joined: 2006-04-07

I've seen the Wachovia deal inside and out.

Create the RIA, trade portfolios like you should (i.e. in groups and models),
and own the RIA yourself.

You won't regret it.

Call Fidelity. Call Schwab. Make the appointment to talk to their RIA people.

True 'wealth advisors' don't affiliate with a B/D who acts like an RIA.

C

Biasedrecruiter's picture
Offline
Joined: 2006-04-04

Last time I spoke with your wonderful West Coast Guy for Wachovia, he sounded like a used car sales person to me.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Thanks for the feedback. Shilling for Wachovia- impressed yes- but nothing else. I've been an active reader of these pages for a couple of years and only recently started to participate- seems to me EVERYONE here has STRONG opinions of who they think is best, or what they think is best. No surprise- look what we do for a living, or at least most of us. To reply to "biasrecruiter", that says it all. When someone is paid to push to the highest bidder, which MOST recruiters do, that's the used car saleman. I have no personal love for recruiters who get paid by the firm they place to- that revisits a conflict to me as big as B share mutual funds being pushed 5 years ago and even some firms like ML incentivising the FA to use theirs. Regardless of my opinion, thanks for yours.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

"Captain"- as far as I know, Wachovia does not offer an RIA, but I did read they were thinking about it. For someone who knows them "inside and out" you sure don't know much.

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

ezmoney wrote:Wachovia= Bank...........Can't trust them.
Agreed

csmelnix's picture
Offline
Joined: 2005-06-01

WealthAdvisor wrote:
"Captain"- as far as I know, Wachovia does not offer an RIA, but I did read they were thinking about it. For someone who knows them "inside and out" you sure don't know much.

Read that again, it's precisely his point that they don't allow it.  He's telling you to just go out and create and own your own.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Point taken- my apologies Captain. What about the risks of RIA, ie. Chief Compliance offer, my mutual fund trails (20% of my biz), and SEC accountability to?

Indyone's picture
Offline
Joined: 2005-05-31

I've often heard Wachovia referred to as "pseudo-indy" when compared to RJ/LPL.  I assumed this included lower payouts and less freedom.  For the record, what is the payout percentage for Wachovia...is it in line with the 90%+ offered by RJ/LPL?

Captain's picture
Offline
Joined: 2006-04-07

No, I was correct, but no offense taken. The whole RIA thing is a rather
confusing topic and isn't totally understood the first, or the second go
around...

So, it works like this...

You start your own RIA, rather than join someone else's (Wachovia has
one, Raymond James has one, etc.) In each case where you join a
pseudo-indpendent platform, you are becoming a Registered Advisory
Representative of the RIA you were joining. Again, you are joining an
existing RIA, and not forming your own.

The compliance issue is a non-event. First of all, you are compliant from
the minute you form your own firm...Why? Because you paid an attorney
to provide you with the proper systems, policies and procedures and you
don't really have any clients, yet. From that point on, it's just a matter of
following the rules. Our firm will spend $10,000 per year in compliance
consulting fees, and they are well worth it. Once you get going, you hire
the consultant to advise you as to the best way to set up your files, what
information you need to retain, things you should keep vigilance over,
and what issues you'll need to have tidy before an audit. First-year firms
will be audited, quite surely, within the first year, and then, perhaps,
every two to three years.

On the compensation and trails. For the last quarter, I'll bill $175,000
from my client accounts. Once we submit the data to Fidelity, the funds
show up within our master account within 10 minutes. We keep 100%,
and then pay our expenses from those funds. Expenses are roughly
$30,000 per year, per partner for my group.

Trails... we do NOT collect trails any longer. If there is a 12b-1 which is
paid by the fund company, our custodian (Fidelity in this case) will collect
it, and we don't see a dime. Since we did fee-based business within our
old firm, and also had the same arrangement, it doesn't bother us. We
do, however, have a higher propensity to use NON-12b-1 fund at this
point through our recommendations and fund models, since the client
shouldn't be obligated to pay the 12b1's if there are better options out
there.

SEC Accountability - yes, you are accountable, and they will coming
knocking at some point. Again, they will most likely visit within 12
months of you opening your doors, and then not again for a short while.
Firms which offer performance-based compensation, collect trails AND
advisory fees, have referral compensation arrangements with non-
registered 3rd parties, and also are wrap program sponsors will get a
special look on behalf of regulators. Firms like that are more likely to be
visited more often, and the subject of further scrutiny.

Compliance isn't as much of a time consuming issue - I expected it to be
a lot more complicated. But, if it's handled right, and you seek the proper
guidance and counsel, I don't see where it will kill you. If you are a single
individual, it can be a bit daunting.... but, you DO have the ability to
outsource much of the compliance to a third party... I'd suggest a good
look at something like that.

In the end, I wouldn't have done it differently. You will find that joining
another RIA will be expensive in terms of what they retain, and I really
don't see the big benefit if you have the experience, passion and the
understanding of the general concept of RIA formation.

You own it, you operate it, and can do it your way.

Best decision I've ever made, truly.

I looked at RJ, Wachovia (again, I know that platform inside and out), US
Fiduciary, Leonard and Co, AIG Advisors, and many others. Too
expensive in my opinion.

C

Captain's picture
Offline
Joined: 2006-04-07

WealthAdvisor wrote: "Captain"- as far as I know, Wachovia does
not offer an RIA, but I did read they were thinking about it. For someone
who knows them "inside and out" you sure don't know much.

WA -

The thing is.... Wachovia (through both the full service and the FINET
portions of their firm) DO offer an RIA. But, again, you join THEIR RIA
program as a registered investment advisory representative, rather than
forming your own. You play by THEIR rules, use THEIR software platform,
play the game using THEIR payouts, you pay THEIR ticket charges, and
may only sell your practice to THEIR advisors (in some cases), etc.

Once you form you own RIA, you can use Fidelity, Schwab or whoever as
your custodian.

But, my original comment was intended to point out that most firms
which are set-up as broker/dealers, have a fee-based advisory service
also. At that point, they (the BD) have created an RIA that you are joining.
Merrill Lynch, Wachovia, Smith Barney, RJ, etc., all have one.

It's also where there has been tons of grey area.... A while back, there was
scrutiny since many firms offered a fee in lieu of commission account...
THAT type of account was under the scrutiny of the NASD, and not the
SEC, since it regulated, basically, as a commission-based account. The
big deal lately has been how many firms (take RJ, for instance) has
unwound many of the fee in lieu of commission accounts, and now called
them 'Advisory' accounts... that's because they are now a part of the RIA
portion of the firm, and it's called fee for ADVICE (which the SEC
regulates), rather than fee in lieu of commissions (which the NASD
regulates).

Then you begin to get all the disclosures that 'the financial projections
aren't to be considered a financial plan' - as firms are trying to make sure
that their retirement planning software isn't a 'Financial plan' - that would
be another layer of crap, regulation, etc., that most firms don't' want to
deal with at this point.

It's been a loosely interpreted rule known as the 'Merrill Lynch rule' that
has been a huge grey area, as of late.

Complicated.

C

BrokerRecruit's picture
Offline
Joined: 2005-04-19

If my information is correct, payouts are pretty solid, but won't go as high as RJ and definitely won't approach what LPL is doing.  The downside to FiNet is that the payout scale - I believe - is readjusted each month based on the previous month's production, thus giving the FA a moving target.  Keep in mind this may be inaccurate, but from my understanding, that is the way they work. 
John Peluso, Jr. heads up the group and is a good guy and knows how to run a solid business.  He is someone that I've known previously and is very committed to growth.  Some of the others that work for him are weak in comparison.

Soon 2 B Gone's picture
Offline
Joined: 2006-09-27

Didn't Peluso come up through First Clearing?

BrokerRecruit's picture
Offline
Joined: 2005-04-19

I believe you are correct.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Gee- all I was pointing out was that they guy I talked to from them really impressed me and I do hear great things about Peluso. I don't know much about his background except from what I read on his bio on their website, which is how I found out who to talk to for California. 
Anyway- if anyone is looking at them, hope you have as much luck as I did.

vbrainy's picture
Offline
Joined: 2006-07-26

The above is a paid advertisement from Wachovia

WealthAdvisor's picture
Offline
Joined: 2006-09-30

vbrainy-  you have got to be kidding me. How is my comment a paid advertisement for Wachovia, when the comment above is a comprehensive case for RIA? Who's your Kool-aide?

Indyone's picture
Offline
Joined: 2005-05-31

Your comments are like a paid advertisement because they have zero substance.  WHY are you impressed? WHAT can they do for you that no one else can?  WHY do you feel like their platform is superior? Exactly what is the payout, ticket charges, etc.?  How do you deal with the monthly adjustable grid?
Give us some hard evidence without all the platitudes and I'll stop believing that you're a company shill.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Indyone- you guys just don't get it, do you? You are talking about ticket charges, grid, payouy, blah, blah, blah- and you call that substance? Given the fact that you've posted 1241 times on this site, seems you might spend too much time in here. Okay stud, you want substance- let's go.
Substance is not twenty-something dollar ticket charges, 25 bps admin fees, 90% grids, or franchise fees, etc. Those are commodities- very close for each firm. Substance is going from an employee to independent successfully in which you understand your pricing model, your business structure, you overhead, and your overall fully allocated profitability.
Substance is knowing the risks and rewards of where to move and when because I am sure we are all looking for different things- some the cash flow, some the asset, some the tax advantages, and some, a better quality of life.
Substance is understanding WHY MS and UBS are offering the BIG upfront check when they are not in the business of charity. Substance is knowing the culture of ML and whether it will work for you or not. It's knowing what Tom James will do with his company in 5 years, or whether the venture capital firms at LPL will go IPO, sell-out, tighten up, etc. Substance is understanding the capabilities of Ed Jones and there limited offering but excellent training.
How about the ability to market effectively and with a unique value proposition, or how doing so in an RIA model may or may not pose risk if you are offering to advise clients on "most" of their assets, but not all, then get hammered for missing something THEY thought you were managing actively or overseeing.
I don't think you are as smart as you think you are- which is why you spend so much time reading blogs. You see, we understand that we can confidently have significant profit margins in ANY platform, but it is nice to talk to professionals who speak and understand what we are trying to do at our level and then show us HOW we can do it. So- if you want to know Wachovia's, or LPL, or Raymond James ticket charges, CALL THEN yourself.
Don't get me wrong- I find value in the forum here, but not from people who seem to think others need to prove something to them to make them legitimate- or is that how a NEWBIE  is broken in.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Captain- I don't agree with all that you explained but I really appreciate your feedback and knowledge. We have talked to Schwab and the risk of this was an issue for us, as well as the fact that they did not offer any upfront capital to help, whereas LPL only offered a 10% working capital loan, and FiNet offered a 20% forgiveable and then a substantial working capital as well.
Basically, from what I'm hearing you describe, RIA is the way to go, but I have an issue with trying to manage money and being the compliance guy as well. FiNet explained to me that they take care of that just like where we are at now and I think I'm more apt to "spend the money" on letting them worry about it and not me or my staff. I thought Schwab would cover that portion but I now understand they don't. Anyway- thanks for the useful information.

Indyone's picture
Offline
Joined: 2005-05-31

WealthAdvisor wrote:Indyone- you guys just don't get it, do you? You are talking about ticket charges, grid, payouy, blah, blah, blah- and you call that substance? Given the fact that you've posted 1241 times on this site, seems you might spend too much time in here. Okay stud, you want substance- let's go.  Yes, I get it.  You come on here and say "RAH, RAH WACHOVIA!!!" without giving us any real information about why you're so high on the firm.  Why do you think I believe you to be a shill?  As far as whether or not I spend too much time here, that's not your call, big boy...I don't work for you, but given that I've posted less than 2.5 times a day, I'm comfortable with the amount of time I spend on here.
Substance is not twenty-something dollar ticket charges, 25 bps admin fees, 90% grids, or franchise fees, etc. Those are commodities- very close for each firm.  I don't think it's as close as you'd like us to believe, shill.  If it is, put your money where your mouth is and post Wachovia's numbers.  Substance is going from an employee to independent successfully in which you understand your pricing model, your business structure, you overhead, and your overall fully allocated profitability.  What a bunch of meaningless fluff.  You still haven't answered why Wachovia is best for you.  I'm not saying it's not...just telling you that the "RAH RAH" stuff is worthless for someone trying to make an informed decision.
Substance is knowing the risks and rewards of where to move and when because I am sure we are all looking for different things- some the cash flow, some the asset, some the tax advantages, and some, a better quality of life.  No kidding.
Substance is understanding WHY MS and UBS are offering the BIG upfront check when they are not in the business of charity. Substance is knowing the culture of ML and whether it will work for you or not. It's knowing what Tom James will do with his company in 5 years, or whether the venture capital firms at LPL will go IPO, sell-out, tighten up, etc. Substance is understanding the capabilities of Ed Jones and there limited offering but excellent training.  Don't know what Tom James intends to do, but it's likely he'll look to cash his chips at some point.  LPL has made no secret out of the fact that there will most likely be an IPO, perhaps as early as 2008.  The Edward Jones story is old news...and gee, I'm sure nothing adverse will happen at Wachovia over the next few years.
How about the ability to market effectively and with a unique value proposition, or how doing so in an RIA model may or may not pose risk if you are offering to advise clients on "most" of their assets, but not all, then get hammered for missing something THEY thought you were managing actively or overseeing.  You can argue that with Captain...I'm not an RIA.
I don't think you are as smart as you think you are- which is why you spend so much time reading blogs. You see, we understand that we can confidently have significant profit margins in ANY platform, but it is nice to talk to professionals who speak and understand what we are trying to do at our level and then show us HOW we can do it. So- if you want to know Wachovia's, or LPL, or Raymond James ticket charges, CALL THEN yourself.  You don't know how smart I am or how smart I think I am.  I'm smart enough to know that you always need to be learning in this business, so yes, I do like to read about what others are thinking...how's that any different than what you're doing, except for the fact that I started reading here a while before you did.  I personally don't give a rat's ass about the charges on any platform, but the one I'm on.  The day I become unhappy with that platform, then I'll start caring.  What I was trying to accomplish was to see if you'd post any real information on Wachovia that might be useful to someone here looking at the various firms.
Don't get me wrong- I find value in the forum here, but not from people who seem to think others need to prove something to them to make them legitimate- or is that how a NEWBIE  is broken in.  I find value here also...but not with "RAH, RAH, WACHOVIA!!!"  That tells a Wachovia prospect nothing, except that you might have a vested interest in driving recruits to Wachovia.

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

WealthAdvisor wrote:Captain- I don't agree with all that you explained but I really appreciate your feedback and knowledge. We have talked to Schwab and the risk of this was an issue for us, as well as the fact that they did not offer any upfront capital to help, whereas LPL only offered a 10% working capital loan, and FiNet offered a 20% forgiveable and then a substantial working capital as well.
Basically, from what I'm hearing you describe, RIA is the way to go, but I have an issue with trying to manage money and being the compliance guy as well. FiNet explained to me that they take care of that just like where we are at now and I think I'm more apt to "spend the money" on letting them worry about it and not me or my staff. I thought Schwab would cover that portion but I now understand they don't. Anyway- thanks for the useful information.Hey smart guy....how about you apply a little common sense to the equation?  There is a REASON why FiNet is offering a 'transition package' that is twice as rich as LPL.  They have to do so to attract advisors.  Yet, despite this greater incentive, they still haven't been near as successful recruiting as LPL over the last 2-3 years.  Hmmmmm.  Wonder why?FiNet means that you're working for management with a wirehouse mentality, but you have an indy cost structure.  With wirehouse compliance people.FiNet offered me a 25% deal, part outright signing bonus part loan which was paid via a reduced payout.  I turned them down, and was happy for it.Ask them how many times they've tweaked their comp structure in the last five years.  See if they give you an honest answer.

Soon 2 B Gone's picture
Offline
Joined: 2006-09-27

When a guy is doing 150 it's easy to decide to turn down a 25% transition package that mostly has to be repaid.
It's also easy to claim you were offered such a package, when in reality your production is not high enough to get an offer in the first place.

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

At Wachovia, if you're not producing 250k gross minimum than your payout is reduced. Sounds like a bank or wirehouse to me, not an indy firm.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

IndyOne- looks like we're getting into heated debate here- but take a moment to look at my perspective, just for a minute.
I've been occassionally reading these forums for a couple of years- thinking most of it really provided me, moderate value a best, depending on the subject.
Once we started doing our due diligence, we started spending a lot of time (too much time in fact) on trying to find the best fit- and quite honestly, didn't necessarily think it was independence because leaving our big firm is a bit scary.
So, I took a call from a couple of recruiters, but felt we were being steered toward certain firms, so we decided to contact the firms ourselves. Of the several recruiters we talked to, I was impressed with one, and my point of the posting was to share that with other people looking to move- period. They maybe would have the same experience we did, maybe not- but it is a referral to them.
You were the first to response in what I consider an attack- by callling my post a "shill" for Wachovia. I didn't appreciate being basically called "bait" for Wachovia, at all. I especially did not appreciate it since over the last few months I've read many, many, many entries that could be perceived as such because they were books on the firm they were jumping up and down on. That's okay though- it's an open forum.
At the end of your comments you mentioned that you were looking for something else from my comment- some "meat" on Wachovia. Honestly, that was not the purpose of my comment. The purpose was a simple referral to someone. Contact them or not-
Now, if this is the place people want real hard facts- fine. Just don't read my posting- which seemingly became a debate, albeit I did learn quite a bit from "Captain"- though I still don't believe he knows Wachovia inside and out.
I have done enough due diligence that I have asked many questions in order to come to our teams decision- and that is to affiliate with Wachovia FiNet. Yes, the upfront had "something" to do for it, but it was clear that Wachovia is not looking to attract the lower producers. They offer no upfront in forgiveable dollars for under $250k FA, 5% for up to $300k, then it tiers up from there, and I don't know exactly how, just that at $800k, ours was 20% plus another 30% available- and they made it clear that it was to help us start our company and it vested by production and has 8 years to balloon, no penalty should we prepay, etc.
The grid is 90% on advisory and packaged products, 85% on transactional business with a $26 ticket charge and they made it clear that they make money from that by design- and told us that without our asking. They have administrative fees on their advisory accounts that ranger from 35bps to 2bps, but for our accounts which average $500k, we were looking at 25bps and they showed us an example of how to bill and gave us the calculators to play with so we can replicate our business to theirs.
They ran a pro-forma (which was a mirror of our business) and layed out all the expenses- and I have that and my LPL one and they are very similar- the LPL one lower ticket charges but looks like the administrative fees are higher. Wachovia has the highest technology charges but they have a Thomson One based tech system similar to what we have at ML and it seems very robust and user friendly- I can even move money without asking my assistant if need be.
Their regional teams are organized to not just recruit but be our contact to the resources of the bigger firm. I visited their office in Richmond (VA) and FiNet was clearly a separate entity with different ops, supervision, and management (and yes, I met John Peluso, and he impressed the heck out of us with his candor and open answering Q&A session with us).
I like that Wachovia is a recognized brand, although we are going to "brand" ourselves but telling our clients that their assets will be held with a big brokerage is comfortable. We did ask them whether they we dabbling in this busines or not and they reminded us that they own First Clearing which as over 150 broker dealer clients (Peluso helped build that I think I ready in the blog here), and they've been donig this for 5 years and seem to be successful.
I talked to 4 of their practices. I was reluctant to take the names they recommended, but they told me to just get on their office locator, and call ANY one of the practices, tell them what I was doing and ask if they minded asking some questions. I called 1 on the east coast, and 3 on the west and they all seemed pretty happy with their decision and with the regional team that supported them.
I was impressed with their investment planning software, their advisory folks (Michael Jones), and their approach to open architecture.
So- no, I am not a shill but I am quite sure that they are the best partners for us- not everyone, but us- and I do encourage those who are looking to look at them. After 6 months after we do this, I will post our contact information so you can ask me once the honeymoon is over, but for now- I stick to my first comment and if that is for some reason offensive to someone, skip over or slay away.
IndyOne- I just attempted to make "peace" with you by taking more time than I intended on a Saturday morning to provide some value to those looking and I hope this squares us up, not for any other reason that at the end of the day, we both do something very difficult- manage the financial life of often emotionally driven, sometime irrational clients- and to me, that deserves some respect unless you're a crook, and from reading many of your posting, I don't think you are at all.
TSA

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Excuse my typos, I was somewhat in a rush and did not go back and check my work, again.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??

Soon 2 B Gone's picture
Offline
Joined: 2006-09-27

WealthAdvisor wrote:
IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??

Perhaps he's a very small producer?

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

Soon 2 B Gone wrote:When a guy is doing 150 it's easy to decide to turn down a 25% transition package that mostly has to be repaid.
It's also easy to claim you were offered such a package, when in reality your production is not high enough to get an offer in the first place.Oh so now you know I was doing 150 at the time?  You just keep on thinking that, ok?It really cracks me up how you are so obssessed with the details of my career and my business, and yet you still can't get them right.

Indyone's picture
Offline
Joined: 2005-05-31

WealthAdvisor wrote:IndyOne- I just attempted to make "peace" with you by taking more time than I intended on a Saturday morning to provide some value to those looking and I hope this squares us up, not for any other reason that at the end of the day, we both do something very difficult- manage the financial life of often emotionally driven, sometime irrational clients- and to me, that deserves some respect unless you're a crook, and from reading many of your posting, I don't think you are at all.
TSA
I redacted most of yourt post so as to not make this get too lengthy.  I'll start by saying that while you could be anyone, and theoretically could be a company shill, this post did not read like one and I no longer believe that you are.  This post had much of what the earlier ones did not...reasons why you liked Wachovia.  I respect your decision. and no, you don't owe anyone here an explanation, but to be honest, raving about a company without telling us why just sounded like a paid advertisement, and given that I've seen these time-wasting, disingenuous types on here before, I called it like I saw it.  Assuming you to be genuine, you have my respect for making a difficult decision to take the leap to independence and I wish you well.  If you have time as you make the transition, or after the dust settles, feel free to tell us how it went.  There's a lot of junk on here, but there's also valuable information posted by reps who've made a change for reps contemplating making a change, whether it's from one firm to another or one channel to another.
See, I'm not a bad guy if you're not trying to sell me something...

Indyone's picture
Offline
Joined: 2005-05-31

WealthAdvisor wrote:IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??
...that depends upon your perspective, I suppose.  For the record, I am who I say I am, although I'll admit to varying my past production/AUM numbers on occasion to keep my old manager from finding me here when I was doing due diligence.  Again, keep in mind, I average 2-3 posts a day and as a chronic insomniac who averages about five hours of sleep, I have plenty of time to cover all my duties and contribute here.  I keep busy, but I like it that way.  I don't consider myself a shill, but I have defended my B/D from time to time and I think they do a fine job helping me run my practice.
Touche.

Indyone's picture
Offline
Joined: 2005-05-31

Soon 2 B Gone wrote:WealthAdvisor wrote:IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??
Perhaps he's a very small producer?
Spoken like a former Vice President of Paperclips after being downsized...

Soon 2 B Gone's picture
Offline
Joined: 2006-09-27

Indyone wrote:Soon 2 B Gone wrote:WealthAdvisor wrote:IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??
Perhaps he's a very small producer?
Spoken like a former Vice President of Paperclips after being downsized...

You think they downsized the need for having an SVP head up branch office operations?

WealthAdvisor's picture
Offline
Joined: 2006-09-30

IndyOne- so who did you affiliate with and why? Who did you look at? What did you like and not like about them?

Indyone's picture
Offline
Joined: 2005-05-31

WealthAdvisor wrote:IndyOne- so who did you affiliate with and why? Who did you look at? What did you like and not like about them?
For those who don't know, I looked hard at Raymond James and LPL and ultimately affiliated with LPL.  Wachovia didn't really come up in my search, probably for a variety of reasons.  First, Wachovia is a bank-owned B/D, and I was having a pretty poor experience with a bank-owned operation at the time.  Two, my wholesalers all told me that RJ & LPL were the two big players when it came to indy B/Ds.  Third, a couple of friends told me that the Wachovia grid was a moving target based on production, and they really didn't have a true indy platform.
It's always possible that I didn't get good information on Wachovia (or perhaps I got good information that is now stale), and had I not found a comfortable fit on my first two due diligence trips, I would have looked at Commonwealth, which I subsequently heard good things about, and perhaps Wachovia.  As it was, I had a very tough time deciding between RJ and LPL and felt like I could have made it work with either one.  I chose LPL because I liked their tech platform and the choices under their fee-based system, among other things, but as I've said, it was a close decision.  If you want to see the whole story, it's under that gigantic "Raymond James vs. LPL" thread.
Now, a question for you and possibly others familiar with Wachovia...it's been said several times on here and elsewhere that Wachovia has a "pseudo-indy" platform.  Perhaps that is an unfair characterization, but fair or not, I'm now a bit curious as to what the difference between a "pseudo-indy" and an "indy" platform really is.  Any insight here?

WealthAdvisor's picture
Offline
Joined: 2006-09-30

IndyOne- yes, I can answer that because I looked at it, and think this is where the confusion comes in.
Within its PCG (Private Client Group) platform (you know, big office, BOM, traditional model), is something referred to as Profit Formula. Profit Formula was dubbed pseudo-independent because it provided at one time, a stand alone office, a 75% grid, and a Schedule A list of expenses that the Profit Formula FA's paid a pro-rata portion of. As FiNet rolled out, and a separate B/D was created (WSFN), the WS b/d changed the deal on Profit Formula that it has to be a suite in an existing office (co-located with the BOM).
Those from the wirehouse (me included) thought this was independent, but you are still an employee of Wachovia Securities. You get a W-2, have benefits, etc. Reality of it is, you're not independent at all, but some BOM's sold it as that because of the independent structure of it. I found out that it is actually an enhanced payout structure under the traditional PCG model and though it does give an FA more control, it's not the world of independence as you know it, and I will. It is also confusing sometimes because John Peluso built Profit Formula but then took over FiNet.
FiNet is basically the creation of taking Wachovia Corps First Clearing model, and adding the Wachovia brand, sales supervision, and consulting firm to it. That is why I am not concerned at all about whether I will like WSFN or not- because I can go with a First Clearing b/d with the same products anyway- just wouldn't get the upfront money and a regional team supporting us, which I consider important.
So, FiNet (also known as WSFN) is truly independent in that they have the same structure (1099 to its owners), same overall payout options, as LPL, Raymond James, Commonwealth, etc. We too, looked at ALL of them, but that is where Craig went over some things that differentiate them and why we ultimately chose FiNet. I relied on him because he has a independent background and didn't talk like a corporate pawn (whom I also don't like- nor shillls, which is why I took such offense to your initial insult)- though I now think you're actually probably a really good guy (or gal?) and I'm over it.
Did you understand my explanation? I almost confused myself- but Profit Formula is an enhance pay package that is the employee model,and FiNet is a 1099 independent model. As I know it- Profit Formula has a $1 million per FA minimum, and FiNet $250k, but the FiNet model only becomes compelling around $350k to $400k as far as we could tell unless you are sharing space with someone else.
As usual, excuse my typos.

Indyone's picture
Offline
Joined: 2005-05-31

That's excellent information...and it looks like Wachovia has evolved some since I first heard about their indy program.  Thanks for contributing.

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

Soon 2 B Gone wrote:WealthAdvisor wrote:
IndyOne- I just finished reading the comparison of LPL to RJ that you started May 2005. I have to ask- how did you find time to do your due diligence, move your book from a bank channel to independence, service your clients, and still have time to visit this site and post a message 1242 times? This truly amazes me and I've already spent more time than I should have in here, but I understand it was a great resource for my team in making a decision. Just an inquiry- you're not a shill for another B/D after all, are you??
Better to be a small producer than dead weight!
Perhaps he's a very small producer?

csmelnix's picture
Offline
Joined: 2005-06-01

Not to start a fight or anything but I do disagree with the idea of FINET being the same as RJ or LPL and even Commonwealth for a few reasons.  It does appear that they are trying to fix or address these but...in my opinion it's part of the issue of being tied with a bank.
For one they do not allow you to establish your own RIA and as such are tied to using their own financial planning software, from what I have seen (granted somewhat limited) is pretty darn weak.  Furthermore, this forces me to do fee planning as they determine not me.
Their insurance platform is weak in terms of support and staff as well as the platform - maybe you can dispell this and explain how a Finet advisor can do insurance business there Craig?
One of the biggest issues I see is any portion of your business that might compete with the mother ship, they will work to shut you down.  Like mortgage business away, or even bigger, say a wach. securities client or bank client that you wish to make your client - uh....it won't happen. 
These are few things that I see as what keeps them still at the pseudo arena v true indy arena regardless of it being Finet or Profit formula.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

I have no objection to disagreement- and I welcome anyones response because I have no idea what FiNet does and does not allow in the RIA arena because we were not interested in it, so didn't explore it except to work under theirs.
Insurance- I know we can do anything we do at ML with them and we don't use a general agent so a non-issue for US.
The financial planning software they showed us was excellent, at least compared to what we have or have seen. *NOTE: have not looked into any third party software
Our recruiters name is Craig, not mine. When I am independent, I will then post my name proudly. IndyOne- see what you started
Lending- they told us the only thing we didn't get paid on was mortgages but that is was a legal issue they think will be resolved by beginning 2007.
Thanks for your feedback- I think the sticking points for us are the same as many, but also different for many. This depends on how you do business in my opinion.
CSMELMIX- are you independent? if so, who did  you choose? why? are you a FiNet owner? seems you know quite a bit about their platform?

csmelnix's picture
Offline
Joined: 2005-06-01

Oh I'm sorry, I thought you were Craig - I should have read the stuff closer. 
I am indy - a former clone...I joined LPL coming on 6 yrs.  I just like the fact of their complete independence compared to the others I looked at and how they demonstrated they could support my business.  To me, it wasn't even close - other firms I looked at had competing profit center w/i their model like Wachovia that inevitably would compete for dollars that could be reinvested back into the b/d and help improve their ability to support me.  FF to where I sit now, it has proven to be dead on - looking at RJFS, especially with all their recent changes, seeing so many others get bought out by product vendors and the many other smaller ones being dependent on 3rd party clearing....I couldn't be happier with the decision. 
Best of luck to you on your indy move!

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Thanks for the feedback- I appreciate it. Like I've said a few times in here- different b/d's are going to fit each of us better depending on how we do business, what we want, etc. I still think that if someone is looking- and establishing their own RIA is not worth the risk for them, or they don't have the type of business to do that- then the main runners from my viewpoint are LPL, Raymond James, and Wachovia FiNet. They all their pros and cons but at the end of the day- you have to do your due diligence and you have to visit them on site and dissect them before you make the huge leap.
I am getting excited about this . . . and in some respects, getting butterflys too

Captain's picture
Offline
Joined: 2006-04-07

Now that I've done it (i.e. the RIA route), I'll ask this...

What's the perceived risk of starting your own RIA vs. being independent
through another B/D...?

As much as I try to fight it, I just can't think there is a better way than an RIA
when you are doing the numbers.

I just don't 'get' working for someone else's RIA....

It is exciting, that's for sure...

C

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Captain-
I think you pose an interesting question. I don't know what your business mix was before moving, what you production was, what you gave up (if anything), etc. so it's hard to say. Surely, if you want to outsource everything, run a hedgefund, or the like, I think it's the model- but I'd rather the b/d take the risk off my back and give me more time to leverage their platform to get done what I want to get done to serve my clients, and pull a bottom line profit margin of 60-70%. No worries about multiple custodians, SEC audits, chief compliance roles, third party planning and performance softwares, and so on. NOW, that's okay for some, just not me.
I also am not willing to give up my licenses because I still do some business which requires it, and quite honestly, holding my license at one place, and then having an RIA somewhere else, just sounds like a lot of work to me- BUT I EMPHASIZE, that's just me (and my team). I want to keep it simple and a turn key platform accomplishes that and if I want to, can migrate to a dual platform of First Clearing and an RIA model (but that's not in the plan for now).
Thanks for the input-
Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.

Indyone's picture
Offline
Joined: 2005-05-31

WealthAdvisor wrote:Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.
Absolutely...but I think that you'll find the freedom to run your business with very minimal interference is as big a benefit as anything, though I'm not complaining about the money, that's for sure.

Grammar Police's picture
Offline
Joined: 2006-09-18

Indyone wrote:
WealthAdvisor wrote:Call me a replicator who should make 40% more cash flow and create an asset from what he currently does- and get some upfront money doing it- not a bad call I don't  think and nobody has yet to convince me otherwise yet.
Absolutely...but I think that you'll find the freedom to run your business with very minimal interference is as big a benefit as anything, though I'm not complaining about the money, that's for sure.

I think you're lying.  Prove it.

WealthAdvisor's picture
Offline
Joined: 2006-09-30

Which one of us is lying there Ms. Grammar Police? Who are we proving this too anyway? Are you questioning the cash flow piece, the freedom, or do you just hate your professional world and feel better throwing out pathetic accusations to participants (be it me, IndyOne, or anyone else). Nobody has anything to prove to you, for if you are independent and don't understand increases in cash flow, you are mismanaging something- and if you are questioning freedom with minimal interference, then you might just be high maintenance (which is why I referred to you as Ms., Ms.). Do something useful rather than 6 word blogs- like counting how many grammatical errors I made in this response-

haRDcorp's picture
Offline
Joined: 2006-10-13

Hey smart guy....how about you apply a little common sense to the equation?  There is a REASON why FiNet is offering a 'transition package' that is twice as rich as LPL.  They have to do so to attract advisors.  Yet, despite this greater incentive, they still haven't been near as successful recruiting as LPL over the last 2-3 years.  Hmmmmm.  Wonder why?FiNet means that you're working for management with a wirehouse mentality, but you have an indy cost structure.  With wirehouse compliance people.FiNet offered me a 25% deal, part outright signing bonus part loan which was paid via a reduced payout.  I turned them down, and was happy for it.Ask them how many times they've tweaked their comp structure in the last five years.  See if they give you an honest answer.
Let me respond to you points above to provide some clarity-
FINET started in 2001. The intent of starting FINET was to bridge the gap between the full-service retail side of Wachovia Securities (PCG) and the First Clearing Correspondent Group/Independent Brokerage Group (IBG) owned by Wachovia Corp.
Since First Clearing already had a relationship with over 100 b/d's it clears for, it was logical for Wachovia to create it's own b/d serviced by First Clearing- thus the birth of FINET.
To create FINET and merge the benefits of First Clearing with the Wachovia brand recognition many wirehouse brokers are looking for, FINET was created by one of the heads of the IBG, John Peluso Jr. He built the infrastructure to support FINET by recruiting talent from IBG, PCG, and the outside.
Most of the management at FINET has business owner or independent experience. The national guy came from a series of independent firms, Keith Gregg, as did many of the operations and supervision team. The talent pool to create FINET was fairly rich considering all the areas Peluso could pull from.
Currently, the Regional Directors of FINET come from independent firms to include one FINET business owner, Schwab, RJ, JWG, etc. The CAO is from First Clearing, as is the Ops Managers.
The management team at FINET is totally separate from the PCG side and operates under a different b/d totally. The only overlap is that FINET taps the core resources of the larger firm, from research, to products, services, and technology.
The "comp structure" started as a mirror of LPL and RJ, and then minor changes were made over 2-3 years to incentivise the way FINET believes the business is going as it relates to a best fit with them and the philosophy of "don't be all things to all people". So, ticket charges were raised, but admin fees for advisory business was lowered 50%.
The overall profitability after ticket charges, admin fees, technology, E&O, and a couple of other fees, are within .4% of both LPL and RJ. Th local expenses are on the owner and are to be managed by them, as it is with LPL and RJ.
LPL and RJ are fine firms. Many of you have used them and they absolutely have momentum in recruiting based on the fact that both firms started on the independent side whereas FINET is only 5 years old. Each firm has its pros and cons for association and I have yet to meet too many that don't see any of the solutions as a big improvement to the retail wirehouse world.
That being said- don't shoot something down until you understand the facts, or it just becomes rumor. Clearly 500 FA's with the highest FA productivity of the three mentioned can't all be wrong. And no, I am not a shill for Wachovia, I represent it- and don't apologize for that. If  you don't have passion for what you do or who you represent, whether yourself or the firm you work for, then you should find something else to do (not directed to anyone, just an opinion), and as Roosevelt once said back in 1910 (some of you might remember this speech personally)-
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

Please or Register to post comments.

Industry Newsletters
Investment Category Sponsor Links

 

Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×