[quote=mikebutler222][quote=Knows Wall St.]My career has been spent looking ahead, ....[/quote] Your career was spent accounting for the petty cash receipts, hiring receptionists, making sure the coffee service was satisfactory and abusing the new hires (because you knew the ones that succeeded would be making more than you in just a matter of years, and would treat you like the employee/drag on the bottom line that you were) in an attempt to find someone you could (even monetarily) look down on…<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />[/quote]

Mike, you forgot ordering paper clips for the office!!!

Regarding Frank. Something I do in situations like this that are very rare is simply ask at what point they sell.  10%, 20%, 40% down?   That is where we put the stop loss.   A stop loss is such a simple thing to use yet brokers for some reason don't use them frequently enough in my opinion.  If they think the stock will go up for ever I'm fine with that.  Maybe they are right but just in case lets put a stop at the point where the pain is too great to hold any longer. 

I had a young guy transfer in a pretty large account he got from grand dad recently.  Grand dad said hold forever and that was the clients mentality. I'm fine with that but I also asked at what point would he want to sell.  After much thought he said well I guess I would want out of individual positions if they drop 20%.  So that is where the stops went.

Funny thing is one of the stocks is QCOM.  I pointed out that grand dad had riden that thing all the way through the tech bubble and at one time it was worth a couple hundred k more than it is now.  I think clients understand when you use stop losses in this manner. 

[quote=BrokerRecruit]

I'm guessing that not all of the posters here have the time to either run spellcheck or proofread their posts before submitting.  Perhaps they just don't care when it comes down to it.

[/quote]

If you're talking about me, I do care. The reality is I'm a horrible speller and life is just too short to check every post. I've got an excellent service assistant to save my butt with clients. If that doesn't do it, there's my partner, who is my wife, with dual BAs in English and Business. These people make up for the shortcomings of a grammatically challenged advisor.

As for newbie calling me out on using the wrong word, he got me. I used the wrong word, over and over and over. So what! Don't like my malaprop mastery, straight ahead, keep walking!

[quote=tjc45]

I have a friend, Frank, who is a college professor. 

The epilog is just as ugly. Frank and I are no longer friends.

[/quote]

Stories lose credibility when things like that show up.

That said, the story--true or not--is illustrative of an all too common event.  Clients will never give you credit for the winners and will always give you blame for the losers.

It's not fair, but that's the way it is.

Something that new brokers should keep in mind.  Never tell stories about big losses that you oversaw--even if they're not your fault.

[quote=tjc45][quote=BrokerRecruit]

I'm guessing that not all of the posters here have the time to either run spellcheck or proofread their posts before submitting.  Perhaps they just don't care when it comes down to it.

[/quote]

If you're talking about me, I do care. The reality is I'm a horrible speller and life is just too short to check every post. I've got an excellent service assistant to save my butt with clients. If that doesn't do it, there's my partner, who is my wife, with dual BAs in English and Business. These people make up for the shortcomings of a grammatically challenged advisor.

As for newbie calling me out on using the wrong word, he got me. I used the wrong word, over and over and over. So what! Don't like my malaprop mastery, straight ahead, keep walking!

[/quote]

I wasn't picking out anyone in particular.  I simply think it's a little silly to pick on grammatical errors on this forum.  I think there are better topics to be discussing rather than pointing out that someone used "advise" instead of "advice".  If everyone here feels that they have some value to add, add it - quit picking on people for their grammar/word choice. 

[quote=Knows Wall St.]

[quote=tjc45]

I have a friend, Frank, who is a college professor. 

The epilog is just as ugly. Frank and I are no longer friends.

[/quote]

Stories lose credibility when things like that show up.

That said, the story--true or not--is illustrative of an all too common event.  Clients will never give you credit for the winners and will always give you blame for the losers.

It's not fair, but that's the way it is.

Something that new brokers should keep in mind.  Never tell stories about big losses that you oversaw--even if they're not your fault.

[/quote]

Newbie, you got me again. Wow, twice in one day. Want a job as a service assistant? it will give you something else to do with your time. Big benefit, you can tell me what an idiot I am everyday. I'll even let you harrass people on the internet. just no porn sites. Dust off that resume, pm me and I'll tell you where to send it.

On the core issue of fees, I agree with you. On the core issue of fee for value I disagree with you. Of course you don't seem to be much for wanting to discuss core issues. Pot shots, distraction, pettiness, grammer police, that's what gets you off?

[quote=tjc45][quote=Knows Wall St.]

[quote=tjc45]

I have a friend, Frank, who is a college professor. 

The epilog is just as ugly. Frank and I are no longer friends.

[/quote]

Stories lose credibility when things like that show up.

That said, the story--true or not--is illustrative of an all too common event.  Clients will never give you credit for the winners and will always give you blame for the losers.

It's not fair, but that's the way it is.

Something that new brokers should keep in mind.  Never tell stories about big losses that you oversaw--even if they're not your fault.

[/quote]

Newbie, you got me again. Wow, twice in one day. Want a job as a service assistant? it will give you something else to do with your time. Big benefit, you can tell me what an idiot I am everyday. I'll even let you harrass people on the internet. just no porn sites. Dust off that resume, pm me and I'll tell you where to send it.

On the core issue of fees, I agree with you. On the core issue of fee for value I disagree with you. Of course you don't seem to be much for wanting to discuss core issues. Pot shots, distraction, pettiness, grammer police, that's what gets you off?

[/quote]

KNW, where are you? It's been a whole half hour since I misspelled harass and started a sentence without capitalizing. Or is that capitolizing, that always confusses me. Kinda like ly down and lay down. So where are you? Dinner break? Earley bird special down at the Golden Corral? Earley doesn't look right ot me. When you read this could you check on that for me and let me know?

Job is still open and yours if you want it.

Enough playing with the idiot savant. It's getting on to be 8 o'clock here on the east coast, so I think he's gone to bed anyway. This is an unforunate hijacked thread. I played into it trying to get this guy into a dicussion because HE'S A BROKEN RECORD ON EVERY THREAD. Predictibly, it went how it always goes with him.

SEE NEW TOPIC "OUR VALUE"

[quote=Knows Wall St.][quote=mikebutler222]<O:P></O:P>

Perhaps someone should let this "expert" in on the fact that mutual funds have problems enough of their own given their recent brushes with regulators and the threat posed to them by SMAs and ETFs. The last thing they want to do is pick a fight with the sales force...

[/quote]

Why should you be paid a percentage of an account's value instead of a sales charge for selling the fund's shares? [/quote]

Sounds like you;

1) Don't realize that clients already have that choice

2) Think mutual funds are the be all and end of of what we do

[quote=Knows Wall St.]

Do you think that mutual funds ever did it that way--pay a broker dealer, say, 8% for selling the shares and that was it? [/quote]

Huh? That was in fact the only way it was done when there were only A shares, no managed accounts, little competition (thus higher front loads then seen today) and tiny trails...

[quote=Knows Wall St.]

I think it's a revolutionary idea.  There is no reason on earth that you, or anybody else, should have a claim on a percentage of a client's assets simply because you sold the client some investment products once upon a time.

[/quote]

You sound deeply confused. Clients who pay an ongoing fee avoided that massive upfront charge you mentioned, are not locked into a single mutual fund family, and at least with most everyone I know, don't buy funds to begin with.

[quote=Knows Wall St.][quote=mikebutler222]

[quote=Knows Wall St]There will come a day when arbitration demands will get white hot, the fund families will be named defendants along with your broker/dealers and you. [/quote]

Of course, because arbitration cases on mutual fund sales are "white hot" and there's no way firms could build suitability screens into their sales and ticketing processes.

[/quote]

If Mr. and Mrs. Client lose money and contact an attorney in an attempt to get it back all the suitability screens in the world will not help. [/quote]

It's rather funny to hear a washout from the "good old days" of commission-driven stock pushing talk about the horrors of mutual fund arbitration cases...

[quote=Knows Wall St.]If thousands of clients approach attorneys the mutual funds will be named too--[/quote]

And this wave of mutual fund arbitration cases will have merit based on what, exactly?

[quote=Knows Wall St.]It could be the broker/dealers who decide that there is too much exposure in collecting the middleman fee and seek to return to the simple one time sales charge that absolves them of most of the liability for the ongoing results of the funds.[/quote]

Have you discussed this legal theory with anyone with a law degree? You really figure you'd be less liable if you sell funds and collect an 8% pop than if you don't get a front load and instead charge an ongoing fee? Really?

[quote=Knows Wall St.]

There is also the image that the client's money is being "managed." The average guy is being led to believe that he is getting treatment similar to what trust departments give their trust clients. [/quote]

Like a trust department? You mean paying massive fees for poor management using in-house common trust funds? That treatment?

BTW, what's with the fixation on mutual funds? Are you of the opinion that most ongoing fee accounts use mutual funds?

[quote=Knows Wall St.]

People are funny about their money.

[/quote]

That's the other part of your argument that's just laughable. The idea that mutual funds are more likely to lose money for clients than the border-line boiler-room "you wanna stock, I gotta stock, you wanna bond, I gotta bond" operations of the "good old days" you keep going on about....

I know you think you’re being sly and provocative, but I have to tell you, you sound ignorant of both the past and the current practices of the business…

[quote=Indyone]

[quote=mikebutler222][quote=Knows Wall St.]My career has been spent looking ahead, ....[/quote] Your career was spent accounting for the petty cash receipts, hiring receptionists, making sure the coffee service was satisfactory and abusing the new hires (because you knew the ones that succeeded would be making more than you in just a matter of years, and would treat you like the employee/drag on the bottom line that you were) in an attempt to find someone you could (even monetarily) look down on…<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />[/quote]

Mike, you forgot ordering paper clips for the office!!!

[/quote]

Dang, I did!!! 

[quote=Malcolm]

Regarding Frank. Something I do in situations like this that are very rare is simply ask at what point they sell.  10%, 20%, 40% down?   That is where we put the stop loss.   A stop loss is such a simple thing to use yet brokers for some reason don't use them frequently enough in my opinion.  If they think the stock will go up for ever I'm fine with that.  Maybe they are right but just in case lets put a stop at the point where the pain is too great to hold any longer. 

I had a young guy transfer in a pretty large account he got from grand dad recently.  Grand dad said hold forever and that was the clients mentality. I'm fine with that but I also asked at what point would he want to sell.  After much thought he said well I guess I would want out of individual positions if they drop 20%.  So that is where the stops went.

Funny thing is one of the stocks is QCOM.  I pointed out that grand dad had riden that thing all the way through the tech bubble and at one time it was worth a couple hundred k more than it is now.  I think clients understand when you use stop losses in this manner. 

[/quote]

Stop loses are an important part of our risk management process. The simplistic case is to buy a client five stocks using a 20% stop lose. That way the most any one wrong buy can cost the client is 4% of total invested assets. We can come back from 4%. In this case there were no stop loses. No stop lose on non listed stocks and besides Frank wouldn't have it anyway. he was a true beliver, and his position was that his life wouldn't change regardless of the outcome of BLDP. My recco to sell was clouded not only by the market euphoria, but also by my own (at the time) wirehouse firm. They had a strong buy on the stock. Even though I'd spent endless hours teaching clients to disregard the firms buy/hold/sell reccos and use the info as background only, Frank couldn't get past it. That's part of the reason he is/was pissed at me. He's really mad at the firm, but I'm the image of that firm so I get it full force in the face. That's life! I told him that the buy was MY decision, not the firm's and that so was the sell. No go. Frank was use to relying on research analysts. It hurt him. of course that very same firm rated Enron a buy until one day before the end. See, I told you not to rely on their buy reccos.

Good management, your using stops.

[quote=tjc45][quote=Malcolm]

Regarding Frank. Something I do in situations like this that are very rare is simply ask at what point they sell.  10%, 20%, 40% down?   That is where we put the stop loss.   A stop loss is such a simple thing to use yet brokers for some reason don't use them frequently enough in my opinion.  If they think the stock will go up for ever I'm fine with that.  Maybe they are right but just in case lets put a stop at the point where the pain is too great to hold any longer. 

I had a young guy transfer in a pretty large account he got from grand dad recently.  Grand dad said hold forever and that was the clients mentality. I'm fine with that but I also asked at what point would he want to sell.  After much thought he said well I guess I would want out of individual positions if they drop 20%.  So that is where the stops went.

Funny thing is one of the stocks is QCOM.  I pointed out that grand dad had riden that thing all the way through the tech bubble and at one time it was worth a couple hundred k more than it is now.  I think clients understand when you use stop losses in this manner. 

[/quote]

Stop loses are an important part of our risk management process. The simplistic case is to buy a client five stocks using a 20% stop lose.

[/quote]

Correct to read "stop loss". Of course you knew that.

Dang, TJ…that sounds like the research I was using…CSFB?

san fran broker



thanks for your help, I’m still learning and I want to make sure I’m doing things right for my clients.

[quote=Indyone]Dang, TJ...that sounds like the research I was using...CSFB?[/quote]

UBS/PW

The BLDP analyst left after the stock collapsed. As usual, we got left holding the bag.

[quote=Knows Wall St.][quote=Mike Damone]

NWS,

Are you suggesting that financial advisor better start finding new ways to provide value or this line of work will become extinct? <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

[/quote]

I think so.  I think the day will come very soon when a financial advisor will charge a flat fee--say $100 per month--to be available to a client who may have a question or wish to adjust his portfolio.

My career has been spent looking ahead, trying to decide what will upset the status quo and attempting to get into the mindset of the clients.

I don't buy the idea that investors with significant assets are not bright enough to do what needs to be done to rebalance his portfolio according to a "plan" that he devised with the help of an advisor who charged him $150 per hour for three or four hours.

I believe that in a bull market lots of things are easily overlooked and/or justified.

I also believe that when you're young and working to add to the portfolio it is easy to lose sight of the money being siphoned off in fees--but when you retire you become fixated on maintaining what you have and if somebody has a portfolio worth $1 million they're going to resent thousands of dollars beinig siphoned off for very little "value added."

They'll decide if they fire the middle man they can take a cruise every year with what they save.

[/quote]

I believe a career in Financial Sales / Asset Gathering is here to stay and financial companies will always need a sales force.

[quote=Mike Damone]

I believe a career in Financial Sales / Asset Gathering is here to stay and financial companies will always need a sales force.

How about this.  If the buyer of the financial product wants service or planning via a 1-800 number or the internet, no annual fee / trail paid to the rep who originally sold the product or service.

However, if they want a dedicated person they have to pay a fee / trail to the rep.

<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

There is no right answer to the compensation question.  Just different ones.

I'd rather build ongoing relationships and charge a yearly fee as opposed to having simply a transactional business.

I think it's a win win for all parties involved.

Sure, the client could save money doing their own thing that is true of any good or service.

If the client feels it's worth paying an additional 1% a year in fees to have an advisor then that is their choice.

scrim