Hello all!I'm new to the FA business and am hoping you, much more knowledgeable and experienced people, can help answer a few questions for me.I came from the B2B environment where I sold and designed 401k and Defined Benefit plans. I have my Series 6, 63, Life and Health and Property and Casualty licenses. Currently, I'm also studying for the Series 7 exam - which will be followed by the Series 66 exam. The Series 7 exam is coming up on March 14th. Wish me luck...Before my questions, a bit of background. I left my previous employer because I was required to travel a lot. I wanted to find a job that allowed me to be with my family more often. I decided to accept a position at a local firm in my South Dakota city. We're a Registered Financial Advisor firm with approx. $250 million in assets under management. We're also primarily a fee-based firm but still have around $100 million in commission/transaction-based accounts. However, all new accounts are only fee-based. We have approx. 1700 active clients but around 500 of them have what our firm calls 'small' account values - under $100,000 total.Additionally, the owner of our firm is the only 'Rep' registered from a commissions standpoint with our B/D. The other Advisors (all 2 of us) earn commissions plus a base salary but they are paid out of the owner's pocket rather than through the B/D. The owner has decided that we already have more than enough clients and he only wants to add new clients on a referral-only basis. Our target client is at least 50 years old and our firm's minimum 'investable assets' is $100,000...meaning if the client doesn't have $100,000 to move to us, we don't want them. We do a few 'retirement' seminars throughout the year and get prospects through those seminars as well. Over the years, a fairly decent prospect list has been created and each of us get our own piece of the alphabet as our prospect list to call on.With all of that said, I need your help in putting this into perspective as it relates to other firms...such as the A.G. Edwards and Edward Jones's of the world.Q: What are the average commissions percentages at other firms? OUR FIRM: As it stands today, I receive 40% of GDC (minus our B/D's cut which I believe is around 15%) if I get one of my prospects through the doors, hold the 1st meeting with them and eventually get the business. However, our owner is very controlling. He keeps any clients (or potential clients) if they have over $300,000 in 'investable assets'. He also handles 90% of the 1st meetings I mentioned. In those cases, if he handles the 1st meeting and eventually gets the business, assuming they're assets are under $300k, he'll 'refer' the new client to me if they're from my prospect list. In those cases, I get 20% of GDC (minus the B/D's cut). I also get a base salary of $40k.Q: If you work at other firms, do the FA's typically 'own' their clients? Meaning, if they choose to leave the firm, do the clients go with them?OUR FIRM: Since our owner is the only Advisor registered for commissions with our B/D, he maintains he 'owns' the clients. Should I leave in the future, I take nothing with me.Q: Do other firms pay for license renewals (such as Life and Health) and continuing ed classes? Also - what about fidelity bond coverage (or other insurance) premiums?OUR FIRM: Yes - for now but it could change in 2009.I know this is a really long post but I'm so new to the business that I need some help understanding how things work at other firms. There's discussion in our firm of moving to 100% commissions next year and I want to better understand what I'm possibly getting into. Since I'm still new (only a month into the job) I don't have any existing clients assigned to me. That will happen in about 3-4 months but I have no clue how many clients or what average asset level they'll be in.I've been discussing investments and mutual funds for about 10 years - just not as a Registered FA - only as part of 401k plans. I feel very comfortable with that part of the business - I just don't understand the commissions side very well since I've never worked under that arrangement before.
I'd sincerely appreciate any info anyone can share with me. My apologies for the extremely long post. I won't make a habit of it. :)Thanks in advance for your help and advice!