One of the first things I did when news about the merger hit was contact Finet. They were barred by WS from taking on any AGE employees. This makes sense since WS needs to keep as many AGE FC's in the employee channel to make the deal financially appealing to shareholders (more profit & control in the employee side of things). What they don't realize is that by opening up Finet to AGE employees they would at least have the CHANCE of keeing those reps (along w/ clients and revenues) who like the independence & freedom AGE has. By closing Finet it forces those reps to look elsewhere! And since their retention package is well below market rates they are also making the reps who like being an employee have to consider the much higher packages coming from the UBS, ML & SB of the world.

[quote=Whomitmayconcer]

That is a shame and it sounds like Wachovia will be losing a good fellow (I'd ask around for an exception if I were you).

This does go to show, however, how disattached the indy platform is from the WS paradigm. WS does not want to become a feeder system into the Finet platform. Truely, the Finet system trades on it's own merits.

Agreed. It's tempting but between higher payout, more freedom to run the business the way I think it should be run, and building equity in MY OWN business, the financials show that I would more than make up that upfront $$$ w/o having to be tied to any one firm. When you add the non-financial benefits then the spread gets even better.

Based on my analysis the money you will make by going indy over the wire house comes out in your favor going indy in a matter of less than 7 years...even when compared to 200% upfront money by the wirehouses.  And most of the contracts now are for 9 years at the wirehouses.

[quote=maverick/goose]Based on my analysis the money you will make by going indy over the wire house comes out in your favor going indy in a matter of less than 7 years...even when compared to 200% upfront money by the wirehouses.  And most of the contracts now are for 9 years at the wirehouses.[/quote]

Unless you are lousy at running your own business and managing expenses, I don't think there's any question that going indy nets better.  All you have to do is ask yourself why an employer would give you a better deal than you could get working for yourself.  Their profit motive makes that a nearly impossible proposition.

Any indy's out here care your thoughts/experience on why the average production for independents is so much lower than regional/wirehouse reps? As I get ready to make the move to independent myself I wonder why this is and frankly is one of my biggest concerns.

My guess is that most independents are 1 man/woman offices and without that "office environment" there's nobody there to motivate them to grow. Anyone agree or have different opinions?

I think because they are making the same net money on lower production. Once the average advisor gets to the point they are making around 100 grand a year or so they are happy and quit growing. You can get there at around 150k gross if you have low overhead as an indy.

The above is true...also, just the fact that it is POSSIBLE to gross 100k or 150k indy will drag the averages down, compared to the de facto minimum at wirehouse of around 200k.

If you look at those surveys of indy b/ds in the trade rags, note the Top 20% Average Production and you'll be surprised how high it is compared to the overall average (ex:  LPL top 20% is around 790k).  That shows the range and flexibility of the indy model.

I'm kinda surprised that you ask this question, I thought you were samrter than this.

While CIB is not right, his descrpition of an attitude is right. The issue is that for many years the indy paradigm has been filled with wirehouse failures that couldn't find a new home at a regional.

Look at athe nums for both LPL and RJS and nearly half of their reps gross LESS than $100,000. This pulls the average for indy producers as a whole into the hole.

Further, as Indy as a platform for the successful broker has a much shorter story arc there aren't the numbers of big producers in this environment (sufficient to raise the overall average). While indy firm offer big monthly paychecks, wires offer a substantial producer a substantial paycheck AND a gigundo up front bonus check, so again, it's hard for the big producer to make this decision (especially if he's the knuckleheaded type that doesn't see the possibilities (hiring junior brokers etc etc etc), which in my experience, is generally the guy in the corner office (that single minded determination/conformity is what put him in that office in the first place.) 

Yes I know a lot of these avg. figures has to do w/ the fact that in the indy world there are a lot of ver low producers that drag the avg. down. And yes I imagine it's also due to the fact that it takes lower production # to make the same personal income as an indy rep vs. wirehouse (due to payout %) BUT what I also guess is that most/many indy reps work ALONE and don't have that discipline/motivation to continue to grow as you may get when you work in the larger firms. We all have our guesses of why this is the case. Frankly, I am hoping some indy guys write about their OWN personal experiences.

I made the move to the Indy side first of this year.  I have found the main hurdle to moving everyone is the investments.  Having done well for your clients they will be reluctant to move, thinking they CAN’T bring the investments with them.  That’s right, they think the investments are only found at the firm.  After explaining this to MANY of my top clients, the light bulb went off…and the moves happened.  I find this odd…but as long as you explain to them you manage the portfolio, you decide on the investment mix…etc…they will have no problem with the move.

Article in On Wall Street about going Indy.

Average Rev per Rep at Finet is $416M, Commonwealth $310M,  RJFS $285M  FCS Securities $249M, LPL $226M  Securities America $220M and Royal Alliance $193M after that it falls to 150, to 115 to the 50ish area.

The top 3 represent 3,900 reps. The bottom three represent 10,000 reps doing less than $46,000 on average.

[quote=CIBforeveryone]

I think because they are making the same net money on lower production. Once the average advisor gets to the point they are making around 100 grand a year or so they are happy and quit growing. You can get there at around 150k gross if you have low overhead as an indy.

[/quote]

I think I talked about this in a thread several months ago, but it seems to me that independants are at both ends of the spectrum (and everywhere in between).  Many can afford to do business at 100K gross (more or less), but you could never survive at a B/D with those numbers.  At the other end, because of scalability, you can have hundreds of millions (or more) in AUM as an independant.  We have two huge independant firms within 25 miles - one has over $1B in assets, the other has in the $500mm range.  Though it can be done at the high end wirehouses in the right environment, with the right team and the right clients, it is much more rare.

That's one of the beautiful things about indy life - you can be as small or large as you want (depending on how much you want to work and grow a team).

I agree w/ you regarding the ability to build a team being much better as a private practicioner vs. as an employee. I was already bumping into this w/ my current BD. I have a FT assistant but I wanted to bring in a part time paraplanner and a full time CPA. Bottom line is that the part time planner was basically impossible to do and the CPA could only be brought in if I was willing to make him a partner in my practice. This made me realize just how difficult it would be for me to build a team because I can not just pay someone a flat salary or hourly (part time help). As a business owner I can do this.

[quote=Broker24][quote=CIBforeveryone]

I think because they are making the same net mon/ey on lower production. Once the average advisor gets to the point they are making around 100 grand a year or so they are happy and quit growing. You can get there at around 150k gross if you have low overhead as an indy.

[/quote]

I think I talked about this in a thread several months ago, but it seems to me that independants are at both ends of the spectrum (and everywhere in between).  Many can afford to do business at 100K gross (more or less), but you could never survive at a B/D with those numbers.  At the other end, because of scalability, you can have hundreds of millions (or more) in AUM as an independant.  We have two huge independant firms within 25 miles - one has over $1B in assets, the other has in the $500mm range.  Though it can be done at the high end wirehouses in the right environment, with the right team and the right clients, it is much more rare.

That's one of the beautiful things about indy life - you can be as small or large as you want (depending on how much you want to work and grow a team).

Yes I saw this too and although averages are good to know they have their downsides/innacuracies. "Average production" at a broker dealer is as useful in determining production for an individual as "market average returns" or "average life expentancy" is in determing how well an investor has done or will do and how long someone will be around. "Average production" has a lot more to do w/ the ability and hard work of the rep not what the other reps at that BD are doing.

[quote=Whomitmayconcer]

Article in On Wall Street about going Indy.

Average Rev per Rep at Finet is $416M, Commonwealth $310M,  RJFS $285M  FCS Securities $249M, LPL $226M  Securities America $220M and Royal Alliance $193M after that it falls to 150, to 115 to the 50ish area.

The top 3 represent 3,900 reps. The bottom three represent 10,000 reps doing less than $46,000 on average.

Resurrecting a very old post, I know, but in doing my due diligence for a move, this post always stuck with me, and had me wonder at times whether or not I was making the correct move.  Well now, I can say with my experience, nothing below was accurate for me.  I have less time in the industry, am younger than the Troll's prescribed age, and had little to no trouble bringing over my best clients.  The only trouble I had was with smaller accounts who:

1: I was not able to give the requisite amount of attention, and;

2: Ended up with very aggressive rookies who would say and do whatever it took to keep them.  It is funny...the exact opposite of the Graybeard.  The Graybeard's tried the least, seemingly the most comfortable and out of "aggressively competing for business", mode.

I am so glad I made the move prior to getting deferred comp shackles, and having the book get to the point where it became too big to maintain the level of contact needed to keep relationships strong.  Waiting until YOU are the Graybeard is a mistake. 

It always comes down to this, if you have a great relationship with the client, 9 out of 10 times, they will come with you.  Don't let fear keep you from a great career move.

[quote=troll]

4 years in and you're going indy by yourself?

Familiarize yourself with the question "would you like fries with that?"

Forget it, you'll look like a hopper, your existing clients will be picked off by Mr Greybeard in the corner office who has a lifetime of skills up his sleave and will just love the opportunity to speak with your HNWclients.

If you were going along with a greybeard or two then you'ld look like someone making a smart business decision. As a loner you don't.

High net worth people do absolutely want to know what is standing behind you. (I feel a slam on RJ,LPL and the lesser knowns coming on) and don't for a second think they won't. You are going to be spending a lot of time explaining how accounts are protected and what happens to their money if you get hit by a beer truck going home one night (Things that you owe it to your client to consider too by the way).

If you are 4 years into the business and you are then only still in your tender years (less than, say, thirty three) you will be having even a harder time of convincing your clients to follow.

I wish you all the luck in the world, and I don't expect you to thank me for my dour assessment, but I think you need to hear the Devil's side of the argument too and not just listen to the Pollianna Angel on your other shoulder.

I also think that Indy is the business paradigm that makes the most sense in this business. But I think you have two strikes against you and fouls are counted as third strikes in this game. You may get a hit, it might be a home run, you may be put out at first!

Weighing risk reward, you'd be well advised to sit tight and/or come up with a better game plan.

[/quote]