Waddell & Reed

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PraiseHim's picture
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Joined: 2008-05-01

Can someone give me the truth on this outfit for someone entering the business?  Anyone ever worked for them?  Other then being a 1099 emplyee and receiving a $2,000/month 'salary' for first 6 months I can't see any other benefits because I don't how their product offering is different then a wire house or EDJ?
 
I appreciate the feedback.......either good or bad.    

avise's picture
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Joined: 2007-12-12

Don't know how it works today. I understand from ex WD'ers that you went out and sold WD funds, which at the time (this guy's retired so probably 80's-90's) were really pricey.

IsOldSpiceRightForMe's picture
Joined: 2008-04-14

I did an internship there in college and it was kind of a joke.  I went to all the FA meetings and the training meetings.  The training meetings were nothing but people sitting around talking about who sold what insurance that week, no training at all.  The branch manager bragged about working 20 hours/week and making over $200k.  They sell these "Focus Plans" for a decent price, starting at about $1,000.  It's basically a print out of info typed into a computer.  The branch manager came to me one day and said "Hey, is going to be here in about 20 minutes, can you do this focus plan for me real quick."  I typed the info in and had the print out in about 5 minutes.  He presented it without having looked it over and the client paid for it.  I really felt like that was taking advantage of his client.  I actually quit a few weeks later because the whole place seemed totally unethical. 
 
Another thing that was unethical there was this annuity this guy wanted to buy.  The FA told him he could buy it by putting $2,500 down up front and not make payments on it for a few years if he didn't have the money.  He told him this just to sell him this one that was something like $10k/year (the guy had about a $60k/year income).  Then after signing up the guy realized he was over his head, stopped making the payments, the policy was canceled, and the FA denied ever telling him any of that.  I was sitting in on the appointment and knew for a fact that he told him that.  The client was irate when it got canceled and he couldn't get his $2,500 back, the manager and FA both basically told him he's SOL and should have known better (which he should have, but that was his FA giving him the advice). 
 
Long story short, stay far far away from them.

deekay's picture
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Joined: 2007-05-15

Product line means absolutely nothing when it involves W&R.
 
Google "Steven Sawtelle" and you will see what I mean.

pghkid's picture
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Joined: 2007-03-27

Ed Jones or a wirehouse would be a better place to start in the business.  Or a bank program.

PraiseHim's picture
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Joined: 2008-05-01

pghkid,
 
Any particular reason why a wirehouse, bank, or EDJ would be better? What does a firm like Waddell & Reed lack?  I wish I could talk to a former W&R person or have them post their experience on here. 

Agent's picture
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Joined: 2007-07-19

PraiseHim,I formally worked, and actually started out at W&R prior to going the insurance BD route.  Feel free to PM me with your questions about W&R and I will do my best to answer them.EDJ would probably be most comparable to W&R as the prospect base is nearly identical (size of assets, income etc,..).  However EDJ, would have a better track, as I understand it, to run on.  A bank would have a salary, captive clients, a comfort that the other options would not provide, but with that comes an ever decreasing payout.  W&R sells "financial plans" (which are cookie cutter plans) and then their MF's to implement said plan (although I understand they may be just allowing large producers to sell individual stocks, though I cannot be sure if this is accurate). In my experience insurance was rarely sold at W&R - and if it was, it would have been term with a non-mutual ins. company. The wirehouses would also rarely sell insurance, as your primary concern is in asset gathering.Where do you want your practice to go?  What are your strengths?  My wife had a patient the other day who is an EDJ broker going on 12 years.  Naturally, he asked what her husband did. She told him that I worked for an Insurance company.  He said that he "Couldn't imagine selling insurance ALL DAY".  Well, I couldn't imagine knocking on doors to open a Roth or searching for assets all day!  The point is, it depends on what gets you going and what best compliments your strengths.If what you want to do is gather serious assets and have a sophisticated platform for the Investments - then ML, SB, Morgan Stanley might fit your bill. EDJ would differ with the wirehouses in that they deal more with middle America and thus have a less sophisticated platform.  Obviously, their approach is unique as is their office setup. However, if what you want to have is more of a focus in Life Insurance & financial planning, with the ability to place securities business then NYL, MassMutual, NWMFN or Guardian may suit you better. There again, if you wish to sell overpriced financial profile MODIFIED plans called 'focus plans' that are not worth the paper they are printed on 5 min. after the ink dries - then perhaps W&R is your flavor.At the end of the day there are people successful and rather happy at all of the above mentioned outfits.  Even W&R, I think.FWIW, If I were to start again and all the choices were before me - the companies that would be on my short list would be:Middle income investment management1. EDJ2. AGE (Only second because of the recent change)3. Any Bank Program4. W&RInsurance & Financial Planning1. NYL2. Guardian3. MassMutual4. NWMFNWirehouses1. ML2. Wachovia/AGE3. SB4. MS5. UBSIMHO, Insurance & Financial Planning route gives one the most liberty, prospects and future options.  Of course that is what best compliments my strengths.Agent

SeekingAlpha's picture
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Joined: 2008-05-22

This is a reply to all those that have written replies, inquiring  currently, or think they know anything about the firm Waddell & Reed.
 
I have been employed by the firm for many years now, and have found it to be one of the most well run companies in the industry.. Many of those who would beg to differ may not know that in all businesses there are problems, albeit in the firm which gets worked out, or with their personell.. No industry nor company is perfect.. But one thing i can attest to is the work that i have been able to do with hundreds of my clients has been beneficial, and ask any one of them what they truly care about is the person they develop the relationship with, and their personal training and expertise.  To all those "salesman" out there, who hunt to sell policies to meet their qoutas, or just gather assets for a living,, there is so much more to helping people make good decisions with their monies than the products you sell them, so if you want to exist as a financial planner to people, then be about it, don't just talk about it.. Time and time again i meet and take on clients who have worked with other people in the past.. And initially, they think they're getting a "financial advisor" from their insurance broker or wirehouse rep., but usually you get just another good idea that is good for only a certain amount of time because life, and ultimately your planning needs to change..And when you are always concerned about NEW business how can you even or would you care about OLD business that needs NEW ADVICE??
 
I have found more benefits to working for Waddell & Reed, than negative than any other firm, or for that matter area of the industry. Very few firms train their advisors to be planners.  And very few firms invest in creating infrastructure for their personell to grow a planning practice.. Those "Focus Plans" as one person put it, well thats just software designed to illustrate, and not a "financial plan" which is probably why he isn't in the planning field, because he has never found the value in advice nor the tools to illustrate it, what ever that may be
 
Now for you people looking into the industry,, keep this one very important fact in mind, this is an industry for people who want to make it themselves, this is a business for people who don't need their asses wiped, they want to dig in and grow a practice.. If you're looking for a firm that gives you leads, and holds your hand, go sell telephone advertising space. Financial Planning is about meeting people, developing a network of people who need and want continual consulation & advice... The products will be learned over time, and that is where training comes in handy, but it is YOUR job to meet people, and create activities to get in front of potential clients.  Time will create expertise, and so will your own personal interest in learning the business.
 
If there's any questions, or comments (as i'm sure there will be) feel free
 
 
In summary i'm happy with the choice i made in Waddelll & Reed, and I know my clients are as well.

SeekingAlpha's picture
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Joined: 2008-05-22

This is a reply to all those that have written replies, inquiring  currently, or think they know anything about the firm Waddell & Reed.
 
I have been employed by the firm for many years now, and have found it to be one of the most well run companies in the industry.. Many of those who would beg to differ may not know that in all businesses there are problems, albeit in the firm which gets worked out, or with their personell.. No industry nor company is perfect.. But one thing i can attest to is the work that i have been able to do with hundreds of my clients has been beneficial, and ask any one of them what they truly care about is the person they develop the relationship with, and their personal training and expertise.  To all those "salesman" out there, who hunt to sell policies to meet their qoutas, or just gather assets for a living,, there is so much more to helping people make good decisions with their monies than the products you sell them, so if you want to exist as a financial planner to people, then be about it, don't just talk about it.. Time and time again i meet and take on clients who have worked with other people in the past.. And initially, they think they're getting a "financial advisor" from their insurance broker or wirehouse rep., but usually you get just another good idea that is good for only a certain amount of time because life, and ultimately your planning needs to change..And when you are always concerned about NEW business how can you even or would you care about OLD business that needs NEW ADVICE??
 
I have found more benefits to working for Waddell & Reed, than negative than any other firm, or for that matter area of the industry. Very few firms train their advisors to be planners.  And very few firms invest in creating infrastructure for their personell to grow a planning practice.. Those "Focus Plans" as one person put it, well thats just software designed to illustrate, and not a "financial plan" which is probably why he isn't in the planning field, because he has never found the value in advice nor the tools to illustrate it, what ever that may be
 
Now for you people looking into the industry,, keep this one very important fact in mind, this is an industry for people who want to make it themselves, this is a business for people who don't need their asses wiped, they want to dig in and grow a practice.. If you're looking for a firm that gives you leads, and holds your hand, go sell telephone advertising space. Financial Planning is about meeting people, developing a network of people who need and want continual consulation & advice... The products will be learned over time, and that is where training comes in handy, but it is YOUR job to meet people, and create activities to get in front of potential clients.  Time will create expertise, and so will your own personal interest in learning the business.
 
If there's any questions, or comments (as i'm sure there will be) feel free
 
 
In summary i'm happy with the choice i made in Waddelll & Reed, and I know my clients are as well.

deekay's picture
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Joined: 2007-05-15

Seeking,
 
Did you search for Steven Sawtelle?  Just curious as to your thoughts on his case.

PraiseHim's picture
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Joined: 2008-05-01

I did search.  And it is obvious he got screwed as W&R tried to claim it was his fault for not supervising an FA on his team who was embezzeling and that W&R seemed to hide that there was illegal behavior going on.  They fired their top producer in hopes of not getting busted and then all hell broke loose and they tried slandering him as well after joining another firm. 
 
I'm a little surprised more of the top people didn't leave the company or step down....just the top guy at the time I believe......I don't have list of names at my side.
 
I also can't believe they didn't settle this all out of court to avoid publicity over such a long period of time.
 
 
 

SeekingAlpha's picture
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Joined: 2008-05-22

Things never work out perfectly but if you are in a supervisory role over an office, and someone you are to be held accountable for, overlook their transactions, etc fucks up and goes to jail.. IT SHOULD be your ass too..  As for what happened after.. no one wins, and the clients lose because they lost faith in the industry as a whole.. As always the press and the lawyers make things look larger than life.. But as an industry there are always problems, most of which are never seen, and its up to the client to make sure they deal with a reputable firm, and a person of a high character..
 
But its over, and there's 2500 advisors that work everyday to help people make good decisions with their money.. As for me.. its long over, and its doesn't affect my business what so ever, b/c i'm not him, nor do i give my clients any reason to doubt me.. Thats what they come to you for.. For you.. not the products you sell..
 
Ask anyone with half a bit of knowledge in the industry they know there's always some firm handling an issue, and Waddell would be considered to have a deminimus amount of problems when compared to other firms that are well known
 
take care

freeman12's picture
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Joined: 2008-04-23

After reading SeekingAlpha's answers I would say that there is another firm with kool aid. Look SA, we appreciate your loyalty but when you check your firms compliance record, the lawsuits, the absolute joke product structure and compensation structure as well as the low expectations for producers its simple to understand. Why use a K Mart investment firm? And yes I know about your stuff because one of your top managers is a good friend of mine and even he mourns over it. But he realizes he could never handle anything but the low to middle income clients that WR and EDJ go after.

His best comment,' our top recruits come from Edward Jones'

Enough said, you can private mail me if you want to discuss further about going Indy or working for a reputable firm but otherwise, do your self a favor and stop embarassing yourself by defending your firm like a Joneser.
OUT

Magician's picture
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Joined: 2008-05-19

Holy crap! I read that lawsuit summary.

I don't know anything about Waddell & Reed, but I'm already appalled. Kind of like what Jones did to that chick (sorry ladies) and firing her. This guy was a hero.

And SA - It appears that while Mr. Sawtelle was supervising Mr. Stevenson, he repeatedly told management that he (Mr. Stevenson) should be fired and was doing unethical things. I have to say, this blows most of what any other firm has done out of the water.

Absolutely reprehensible. Sorry, but there's no defending that. And I would hardly call a $10mil settlement to single plaintiff "de minimus".

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