Wells Fargo Advisors to Wells Finet

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GordonGecko's picture
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Joined: 2007-06-06

Would love to hear from someone who has done this recently...being in PCG ...Finet is never expained , etc. They obviously don't want PCG brokers going to Finet but they accept it versus one leaving the firm completely.

I'm tired of the haircuts in comp, the lack of support, etc. To this point I have not brought the idea of going Finet to my manager but feel it is the best way to go? Before I let it be known I was hopeful for some current info here. Apparently profit formula is not available anymore.

I realize going Finet you are responsible for all costs but you have Wells behind you. My 2011 production was 1.5 million. I feel like I'm losing money in PCG ($500,000) yearly or more in real money!

I've heard to go Finet Wells forces you to go to a two day workshop at the home office and basically try to scare you to death with all the expenses and talk you out of it.

With north of 75% of my production coming from reoccurring revenue I'm trying to understand why I should not do it.

I've heard you keep your retention money it is just repapered. Clients keep their account numbers and no one calls your clients during the transition cause you are still with Wells. Unlike if I left to go to another firm.

Thanks in advance...

Northfield's picture
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Joined: 2007-04-10

I cant speak to the PCG to Finet transition. But I can give you a little general Finet operational perspective. I opened my practice thru Finet in 2008, coming from a competing wirehouse.First, you'll have some transitional client loss although most of it will be clients you dont really want.If you assume 90% retention your production Finet production might be about $1,300,000 or so.All in, fixed and variable costs, Finet keeps about 25%. So you would be paid about $975,000 per year from Finet.From that you pay your local expenses. Rent, employee salary, benefits, health coverage, utilities, etc. I'm guessing to replicate the coverage you have now would cost you about $200,000 per year in local expenses.So your pre-tax is about $775,000. This may or may not be appreciably higher than your current pre-tax..The real financial incentive of independence is the leverage. Your local costs would stay roughly the same even if you increased your production back to $1.5 or $2 million.There are a few important non-financial issues to consider as well:How self-confident are you and are you OK with not having the direct backing of Wells? Some folks really prefer having the employer cloak over them and feel too exposed as an owner.How dependent are you on your fellow employees for social interaction? Many advisors are social/herd creatures and need the interaction of an office. As an independent, there are no other brokers dropping in or having lunch with you everyother day. It's a more solitary environment.Whats your exit plan? Are you interested in creating a practice that has value, or more interested in a dependable income stream. Again, many people would just prefer the dependable income stream over the wealth building ability of being an owner and they would, therefore, be better off staying an employee.PM me if you have any other specific Finet questions.

ShredderSr's picture
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Joined: 2010-07-23

You won't regret the move, it has no downside.Do your due diligence before you even mention it to your manager. If your production represents a big % of the branch revenue, they can block you from moving.AT $1.5MM you will make MUCH MORE $$ in the FiNet channel. At those levels your net before local expenses should be well over 80%. Depending on how you run your practice, how many FA's, staff, location, rent, etc, you will probably net out over 60% after ALL expenses.You have several steps involved: 1. Notify your manager and then get Regional approval. 2. Complete a proforma that will break down your business and give you an idea of net pay (not very accurate). 3. Attend the 2 day DD meeting at HQ. They won't try to scare you away, only your BOM and complex mgr will 4. Tell them you want to change channels. 5. Move 3-4 months later.You get to keep retention and forefront money and your loan paperwork is repapered as an 8 yr note. Very simple 1 page paper for clients to sign and the process requires no additional paperwork or repapering of client account.PM me if you want to discuss further. 

Element's picture
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Joined: 2011-12-28

This is a no brainer.  I talked to FINET when I went INDY.  Really well run but there are better channels if you were not a Wells Fargo advisor prior to.  If you are a Wells advisor this is 100% the best option unless you just hate the firm.

icebear48's picture
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Joined: 2008-08-25

 Gordon, with your production find an "INDIE" fit with a 95% (or greater) payout, and please remember to do proper due dilly on the firm and its principals.  In your situation, nothing else make sense to me, assuming you are prepared to run your own business (a good deal more work for the first year or so).

GordonGecko's picture
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Joined: 2007-06-06

Thanks to all of you for your comments...

To begin with I made a typo in my initial post...my 2011 production was $1,700,000.

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Since I am already at Wells and going Finet requires a simple signature Im thinking I will take all of my clients I wish to take...I mean I'm still with wells it's not like I'm at another firm going to Finet with an office full of brokers calling my clients. Right?

What if I own the building? Is there anything against that?

What if someone else (another advisor) in my office wants to o Finet...can we share an office/costs despite not being a team?

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I am very confident and I thought Finet was a way to be "independent" but still have all the benefits of wells to lean on! I don't need managers to motivate me...

I'm actually excited about the idea of having my own office as my branch currently is as exciting as a morgue...morale is low and their is virtually no work ethic by the other advisors. Manager wants everyone to do more but most work maybe 3 days a week. I can tell you nobody motivates me in my branch and they wonder why they are not growing their business.

My exit plan doesn't exist at this point as I'm in my 40's and intend on working 20 more years as I love what I do! I want to continue to build my practice and with that will come a growing stream of reoccurring revenue.
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I don't hate Wells just the bs at PCG...moving to Finet may not be the best "indie" choice but in an effort to keep my book intact it seems like the best way to taste independence, make more money and have more control...to be able to go Finet.

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Question...if you know - what is the fee or transition cost they make you pay when you go to Finet from PCG? I understand it's for two years now...previously one year.

Question ...the fact that I have 75-80% reoccurring in production now...I would think that would boost my comp in Finet?

Question ...because I'm still affiliated with wells at Finet...do advisors at Finet get new retention money if wells buys another firm?

Question...if in the future PCG gets a haircut in comp does that happen in Finet?

Question...once you go Finet...how long is the commitment? ...say 3 years in can you then convert your Finet office to say an LPL office???

To all of you that have posted I am forever grateful ! Thanks in advance for all your input!!!

DonkSlayer's picture
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Joined: 2011-12-16

Hey Gordon, I know this has nothing to do with your question at all, but I'm sure there are some people on here like me who would love to hear you share some information about how you grew your practice to the level your at now. If you have the time and inclination that would be greatly appreciated. Specifically, how did you get started? Thanks,  DS

Element's picture
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Joined: 2011-12-28

Gordon,When I talked to the team over at FINET they were able to field every question I have.  If you have not already, give them a call and set up a meeting.  With a hitter like you I have no doubt they will make the transition as smooth as they can.  I can however answer the last question .. if you don't take a check there is no commitment as far as I know.  That is coming from outside the family though... there might be something if you are  a legacy producer.   Like Donk .. I'd love to hear your story.  How did you get to 1.7mm in production?  How much of it was your own book? Etc. Etc.      Good luck!!!

Element's picture
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Joined: 2011-12-28

doublepost

GordonGecko's picture
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Joined: 2007-06-06

For those that asked...

Built my book via cold calling and seminars. First five years I worked 6 days a week, only taking Sundays off. On a day like Presidents Day or MLK day ...I'm in the office. You can't imagine how many accounts I have opened because of being in the office on days like that. I'm involved in my community (Kiwanis, Big Brothers Big Sisters, my church, etc)...networking all the time. From day one I have focused on reoccurring revenue... at this point I'm getting close to 80% of my production in fee based or trails. I'm more of a planner so I have always brought up topics that many of my clients have stated were never brought up by their previous advisor like (long term care, life insurance, estate planning, Ira distributions, etc). Over my career I have always been the first in the office and the last to leave. I love doing what I do and on top of that have a loving and supportive wive and three kids.

Pm me if you want more specifics.

GordonGecko's picture
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Joined: 2007-06-06

PS...100% of my production I have earned thru hard work...I have not purchased any other books and no one has left my office during my career. Rookies have come and gone but left w/ only family accounts in place. I happen to be a CFP and all my clients know it and my community does too as I do a fair amount of marketing.

Baron Automatic's picture
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Joined: 2011-04-26

Gordon, Almost all 1099 versions of this business have ticket charges or admin fees on fee based business. Ticket charges are from 0-30 bucks a trade and/ or 10 to 35 basis points on assets. This will cut your payout to 65 to 75 % on fee based business. Still not bad but not an increase like you might think.The highest payouts are on trails.True indy and RIA are higher but a huge risk to transition your book. Why risk it after all the hard work you have put in.   

Trying Hard's picture
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Joined: 2012-01-10

GordonGecko wrote:For those that asked...

Built my book via cold calling and seminars. First five years I worked 6 days a week, only taking Sundays off. On a day like Presidents Day or MLK day ...I'm in the office. You can't imagine how many accounts I have opened because of being in the office on days like that. I'm involved in my community (Kiwanis, Big Brothers Big Sisters, my church, etc)...networking all the time. From day one I have focused on reoccurring revenue... at this point I'm getting close to 80% of my production in fee based or trails. I'm more of a planner so I have always brought up topics that many of my clients have stated were never brought up by their previous advisor like (long term care, life insurance, estate planning, Ira distributions, etc). Over my career I have always been the first in the office and the last to leave. I love doing what I do and on top of that have a loving and supportive wive and three kids.

Pm me if you want more specifics. Quite impressive. How long have you been in the industry?I am not sure if I would take a haircut of 25% for a name. No one cares about a name since the reputation of all US bank's are in the toilet anyway.  

RWM's picture
RWM
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Joined: 2010-06-08

Did you ever move?

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