[quote=MacDaddy]Thanks for the sound advise, Indy.  I will spend some more time with this gentleman to see if he has the makings of being a good mentor.  Given your lack of time in the industry, I think this is pretty important.  This guy can give you the platform...but can he give you the right angle to get clients and perform well once you have them?  Also I will check out some other firms that might offer a me a similar mentoring relationship with an option to fully solo in 2 or 3 years.

I have checked out the books you have mentioned, and will be purchasing them.  I found them enlightening...haven't adopted even close to everything, but got some great ideas from both of these guys... 

With regards to becoming a CFP.  Is this a difficult test to take?  Compared to the series 7...yes.  Compared to the CPA exam...no.  Two days...ten hours total, but not bad if you've been through the material.  I think the pass rate is better than half.  It appears that thru the College of Financial Planning homestudy course that it takes a minimum of 3 months of study, per thier schedule to test.  That's per module...and I think there are five modules (at least there used to be).  This is probably a two year project for you from start to finish if you are disciplined.

Is this a program that actually provides education that is applicable? (if you know what I mean).  In other words, would I walk away from this program empowered with the knowledge, absolutely or will I more or less just become more credible to my clients because my business card says "CFP"?  That's an added side benefit.

The FP that I have referred to does not have his CFP and says that he has yet to have a client ask him if he did.  However I will say that his bread and butter clients are the typical mom and pop retirees.  I believe your FP, but I've had more than one tell me that was one reason they came to see me.  My guess is, some potential prospects are bypassing your friend because he lacks the credential.  The number may be small, but it could also be the larger clients.[/quote]

Nothing wrong with the way this guy does business, but nothing wrong with differentiating yourself either...

I apologize if I am coming across as arrogant.  That is not my intention.

I would not do TV and radio as they are a waste of money.  I know, I have done them both in the past.

My thinking would be to do targeted direct marketing with a focus on annuites, ltc, life insurance, free retirement advise, etc.  I know how to do the direct marketing that would result in up to 15 appointments per week(I couldn’t handle any more).  I am thinking that many of these folks can be converted from just a sale of an insurance product to a full client, if not immediatly, then in the future, now that we have a business relationship.

What are your thoughts on this strategy?  Please poke holes.

Another strategy that won’t make them knock your doors down, but is useful is making sure that your company name starts with the letter A so that when advertising in the yellow pages your company will be first under “financial planners” and “retirement consultants”.

Instead of me espousing my theories,  please tell me what your careers were before you got into the biz, how you got into the biz, and knowing what you know now, what you would do differently?

That may be the most insightful info of all.

Would you spend money on marketing if you could figure out how to get in front of your 15 people a week for free?

You'll get no calls from your yellow page ad, so don't worry about calling your firm Aaaaa Best Financial.

[quote=anonymous]

Would you spend money on marketing if you could figure out how to get in front of your 15 people a week for free?

You'll get no calls from your yellow page ad, so don't worry about calling your firm Aaaaa Best Financial.

[quote=MacDaddy]I apologize if I am coming across as arrogant.  That is not my intention.

I would not do TV and radio as they are a waste of money.  I know, I have done them both in the past.

My thinking would be to do targeted direct marketing with a focus on annuites, ltc, life insurance, free retirement advise, etc.  I know how to do the direct marketing that would result in up to 15 appointments per week(I couldn’t handle any more).  I am thinking that many of these folks can be converted from just a sale of an insurance product to a full client, if not immediatly, then in the future, now that we have a business relationship.

What are your thoughts on this strategy?  Please poke holes.

Another strategy that won’t make them knock your doors down, but is useful is making sure that your company name starts with the letter A so that when advertising in the yellow pages your company will be first under “financial planners” and “retirement consultants”.

Instead of me espousing my theories,  please tell me what your careers were before you got into the biz, how you got into the biz, and knowing what you know now, what you would do differently?

That may be the most insightful info of all.

[/quote]

You should start by learning the difference between “advise” and “advice”

Joe, thanks for pointing out my error.  The older I get, the worse my spelling becomes.

[quote=MacDaddy]I apologize if I am coming across as arrogant.  That is not my intention.

I would not do TV and radio as they are a waste of money.  I know, I have done them both in the past.
[/quote]



Yep.

[QUOTE]
My thinking would be to do targeted direct marketing with a
focus on annuites, ltc, life insurance, free retirement advise,
etc.  I know how to do the direct marketing that would result in
up to 15 appointments per week(I couldn’t handle any more).[/quote]



As much as people need insurance, they don’t want to buy it. Have you
ever gotten direct mail about insurance? I collect this stuff, and have
gotten almost none over the years.



Financial planning is so much a referral based business. If you had to ask a prospect one question it would be “Do you have rich friends?”

[QUOTE] I am thinking that many of these folks can be converted from
just a sale of an insurance product to a full client, if not
immediatly, then in the future, now that we have a business
relationship. [/quote]


Almost life insurance company follows that model, and its not very
sucessful. People see an insurance agent every 2-5 years, which not
often enough for investment advice.



Given the sales tactics used by insurance agents, most people don’t
like them. One would think that insurance agesnts would be more
sucessful than  FA’s b/c more people need insurance than
investments.



However, insurance agents do have a very very very good product that could be a gold mine if you put the right angle on it. SPIA aka Single Payment Income Annunity aka Retirement Income Annuity.



You promote this as a personal life time defined benefit pension plan.



You can combine SPIA with VA to fund it and have a real doozy. Go look
at Prudentials Retirement Red Zone for some idea’s on how to pitch
this.

[quote]
What are your thoughts on this strategy?  Please poke holes.

[/quote]


I suggest you attend a few recreuting seminars given by insurance
companies, to get a sense of what they want agents to do. Ask about
investment planning and so forth.

[quote]
Another strategy that won’t make them knock your doors down,
but is useful is making sure that your company name starts with the
letter A so that when advertising in the yellow pages your company will
be first under “financial planners” and “retirement
consultants”.[/quote]


Like “AllREIT and Co?”

Actually the insurance mailings work very well if done properly.  My best friend makes his living with insurance and averages around a 5-7% response per mailing.  The prospects mail a card back to him indicating they are interested and he calls and sets the appointment.  He usually sells about 4-8 policies per week of life insurance.

His Master General Agent is a former American Express Financial Planner.  He concentrates on annuity seminars and also takes trails on the clients other investments when he can, as well as any other needed insurance products.

I agree with you that FP is mostly referral based, and those will be your best clients.  But, we all have to start somewhere. 

The EDJ guys are told to contact 25 prospects per day, and while that is not fun, it is a means of marketing to get started and perhaps after a couple of years you they never need to “cold call” again(if they go solo that is).

A different business model is The Mutual Fund Store, and while we all agree that the name sucks, it appears they are generating thier prospects via the radio program.  You may not like them, but I can at least appreciate the marketing aspect of what they are doing, because this is out of the box thinking.

Thanks for the tips on the Red Zone.  I will check it out.

AMEX is gone.



Man… Good luck.



You are confident with 0 AUM. Lets see who does better.

I also have a solid background and have advised numerous people on taxation and business development.



Go!

[quote=MacDaddy]Actually the insurance mailings work very well if done
properly.  My best friend makes his living with insurance and
averages around a 5-7% response per mailing.  The prospects mail a
card back to him indicating they are interested and he calls and sets
the appointment.  He usually sells about 4-8 policies per week of
life insurance. [/quote]


I find this response rate abnormally high. I guess he must be using
some kind of super targeted method. With most direct mail you are very
lucky if you crack a 1% response rate.

[quote]
His Master General Agent is a former American Express
Financial Planner.  He concentrates on annuity seminars and also
takes trails on the clients other investments when he can, as well as
any other needed insurance products.[/quote]


AEFA is now ameriprise. They are very big on seminars. Attend one of
their cattle calls (recruiting sessions) and ask alot of questions
about marketing. You will quickly get a sense of how they do it.



AMP is basicly an insurance/annuity salesforce disguised as
broker/dealers. The flog VA/VUL at everyone, promote crappy Riversource
mutual funds, and use mildly deceptive seminars.



I warn you that most AMP folks know nothing about what they sell. I asked an AMP recruiter (Regional VP) if AMP stock paid dividends, and he didn’t know.



Major PITA doing seminars. My understanding is that effective client aquisition cost is quite high.


[quote]

Thanks for the tips on the Red Zone.  I will check it out.
[/quote]



Make sure you have your annuity pitches down cold. Practice with the
wholesaler. And don’t be an annuity shark who sells them to everything
that moves. Most of the time they are not the right solution.



You want to have a list of products that you can take pride in, and
sell with conviction vs promoting whatever the current focus list is.

[quote=AirForce]AMEX is gone.



Man… Good luck.



You are confident with 0 AUM. Lets see who does better.

I also have a solid background and have advised numerous people on taxation and business development.



Go![/quote]

Amex is now Ameriprise arn’t they? 

The AUM will come with time. There are several other residual income streams that can be created during the process.

Airforce, how long have you been in the biz?  When, and how did you get your start, and how are you doing today?

[quote=AllREIT]I find this response rate abnormally high. I guess he must be using
some kind of super targeted method. With most direct mail you are very
lucky if you crack a 1% response rate.[/quote]

His particular strategy is not new.  He goes to the courthouses in
about 5 neighboring counties(rural, and that may be the key to the
higher response…less agents working the area) and copies the latest
recorded mortgages.  The mailing is specifically asking the mortgager
if they would be interested in mortgage protection insurance(decreasing
term LI).  Many buy just that, and those that can afford to, upgrade
themselves to level term or permanent insurance.

He has no training in LTC, or annuities, so those products are not even offered(pity).

[quote=AllREIT]Major PITA doing seminars. My understanding is that effective client aquisition cost is quite high.[/quote]

Okay, what is PITA? No gyro pita bread jokes, please!
I am personally not interested in seminars.  It’s not my style, and I
have heard the same about the cost.  Make no mistake,if done well they
work great.  There are a number of annuity producers doing
seminars/workshops, making over a million bucks per year.

[quote=AllREIT]
Make sure you have your annuity pitches down cold. Practice with the
wholesaler. And don’t be an annuity shark who sells them to everything
that moves. Most of the time they are not the right solution.[/quote]

I have no interest in hard selling annuities, however if the client has a
need, and it fits well into thier financial picture (and saftey,
security, and guarantees are desired), then fine. I do think they are
oversold for selfish reasons by the greedy.

Getting in the door via an
annuity lead gives the advisor the ability to educate the client about
all the options available to them. 

[quote=AllREIT]
You want to have a list of products that you can take pride in, and
sell with conviction vs promoting whatever the current focus list is. [/quote]

Absolutely, I could not agree with you more.

[quote=MacDaddy]

[quote=AllREIT]I find this response rate abnormally high. I guess he must be using
some kind of super targeted method. With most direct mail you are very
lucky if you crack a 1% response rate.[/quote]

His particular strategy is not new.  He goes to the courthouses in
about 5 neighboring counties(rural, and that may be the key to the
higher response…less agents working the area) and copies the latest
recorded mortgages.  The mailing is specifically asking the mortgager
if they would be interested in mortgage protection insurance(decreasing
term LI).  Many buy just that, and those that can afford to, upgrade
themselves to level term or permanent insurance.

He has no training in LTC, or annuities, so those products are not even offered(pity).[/quote]


And to think I used to plug life insurance at funeral homes.

[QUOTE]Okay, what is PITA? No gyro pita bread jokes, please!
I am personally not interested in seminars.  It’s not my style, and I
have heard the same about the cost.  Make no mistake,if done well they
work great.  There are a number of annuity producers doing
seminars/workshops, making over a million bucks per year.[/quote]


Pain in the a**. I like seminars, but if I do them, It’s because I want to and not because I’m aiming to get business.


[quote]
Getting in the door via an
annuity lead gives the advisor the ability to educate the client about
all the options available to them. [/quote]



I think, though cannot prove, that that is a questionable assumption. I
conjecture that the people who buy annuities are not the people who buy
investments. The converse is also true. Although alot of “FA’s” try to
blur that line though.



The only annuity that makes sense for 90% of people is SPIA, and VA’s (with an upwards ratchet) that convert to SPIA.

[quote=AllREIT]
You want to have a list of products that you can take pride in, and
sell with conviction vs promoting whatever the current focus list is. [/quote]

Absolutely, I could not agree with you more.
[/quote]



This is why I love brokered CD’s. Everyone with cash at the bank in a
MMA/CD can honestly use a higher yielding CD. Granted that you will
open up alot of smaller accounts this way, but still a funded account
with a happy customer is a good thing.

Allreit I must admit I’m confused.  You make comments now and then that make it sound like you have some experience and knowledge in this business…but then you have this obssession with brokered CD’s and “funded accounts”…and in reality I would contest that these smaller accounts are a likely waste of time unless you have good reason to believe that they have more business behind them…just food for thought.

[quote=joedabrkr]Allreit I must admit I’m confused.  You make
comments now and then that make it sound like you have some experience
and knowledge in this business…but then you have this obssession
with brokered CD’s and “funded accounts”…and in reality I would
contest that these smaller accounts are a likely waste of time unless
you have good reason to believe that they have more business behind
them…just food for thought. [/quote]



I don’t think any account (well most of them) are a waste of time. That’s what junior rep’s are for .



I think of myself like a trawler. I drag my net along the sea floor and
then I bring it on deck and sort through the catch. Once the CD
matures, you can then have a talk about bigger things or else roll them
into a new CD. Someone who has just bought a 5K CD is far more likely
to be a good prospect than a random person in times square.



For someone starting out, I think you can do alot worse than trying to
hustle up new accounts. I think a CD is a good starter product, alot of
people have no clue abount muni bonds.



Don’t think its just me who’s hot for CD’s. ML is hot too, for example they offer an intro 5.65% CD to new clients

[quote=AllREIT][quote=joedabrkr]Allreit I must admit I’m confused.  You make
comments now and then that make it sound like you have some experience
and knowledge in this business…but then you have this obssession
with brokered CD’s and “funded accounts”…and in reality I would
contest that these smaller accounts are a likely waste of time unless
you have good reason to believe that they have more business behind
them…just food for thought. [/quote]



I don’t think any account (well most of them) are a waste of time. That’s what junior rep’s are for .



I think of myself like a trawler. I drag my net along the sea floor and
then I bring it on deck and sort through the catch. Once the CD
matures, you can then have a talk about bigger things or else roll them
into a new CD. Someone who has just bought a 5K CD is far more likely
to be a good prospect than a random person in times square.



For someone starting out, I think you can do alot worse than trying to
hustle up new accounts. I think a CD is a good starter product, alot of
people have no clue abount muni bonds.



Don’t think its just me who’s hot for CD’s. ML is hot too, for example they offer an intro 5.65% CD to new clients

[/quote]

Well you make a few interesting points.

But…rookies on their own at a wirehouse can go broke(and lose their jobs) focussing on gathering assets with brokered CD’s without the support of a senior advisor…so it’s somewhat of a symbiotic relationship…

[quote=joedabrkr]

Well you make a few interesting points.

But…rookies
on their own at a wirehouse can go broke(and lose their jobs) focussing
on gathering assets with brokered CD’s without the support of a senior
advisor…so it’s somewhat of a symbiotic relationship…
[/quote]



I think the wire houses have it all wrong for newbie FA’s. Honestly the
business model’s at many wire houses is that many will enter, few will
win. And the old-timers collect all the spoils from the books of the
FA’s who didn’t make it.



This system is biased against newbie FA’s in favor of old timers.



As I see it, taking deposits from banks is mining the acre’s of
diamonds in your own back yard. Once you have opened the relationship,
then you gather assets.



Instead of working in natural sequence, alot of FA’s try to do this in parralell, and they come on too strong.



Now it is true that you can seemingly waste alot of time this way, but
that is why a good organization will have a structure by which new
accounts are assigned to single FA, and if they are uninteresting,
handed off to farm team.



But honestly, most people with 5K of liquid cash to put in a CD, have
other assets, and now you have a direct link to them and can further
develop the relationship.



You have alot more self-directed investors these days, and these people
would have been the natural market for the classic hot tip about a bond
or stock etc.



 

Personally, I think that opening small unprofitable accounts is a smart thing to do if, and this is a big if, the person has enough assets to warrant them being a client whom you'd like to have.  Get the small business.  Give them great service.  Get the rest of the account.  The one thing that you don't want is to spend the time when there is no business to get.

The wirehouse model certainly works for the wirehouse since they are making lots of money, but  it's a terrible model for new reps, especially young ones.  These young reps should have the ability to grow with their peer group.  Unfortunately, they'll never gather assets at a quick enough pace to do this.   The insurance companies reps have not been in the investment business for that long, but they are now the ones working with all of the young attorneys and CPAs.  They have no competion from wirehouse reps.

The young attorney simply has no assets to gather, but makes a great client.  A wirehouse rep will starve and fail out of the business if they go after this person.  The insurance rep sells him supplemental DI to protect his income ($400 commission), Life Insurance to protect his future insurability (combination of term and permanent ($1000 commission, and sets up a Roth IRA ($100 commission).  The insurance rep just made $1500 in transactional business, is getting about $150/year in trails, has lots of term life insurance to convert without medical questions, has a future spouse to insure, and most importantly the young attorney will be making more money every year and transition into a position of power.  By the time that the wirehouse rep wants this person, they have a 10 year relationship and have given lots of referrals.   This same initial $1500 commission in a wirehouse setting would be less than $400.

My real point is that it is a shame that young wirehouse reps can't afford to grow with their clients.

[quote=anonymous]

Personally, I think that opening small
unprofitable accounts is a smart thing to do if, and this is a big if,
the person has enough assets to warrant them being a client whom you’d
like to have.  Get the small business.  Give them great
service.  Get the rest of the account.  The one thing that
you don’t want is to spend the time when there is no business to get.
[/quote]

Right, this is why you keep a "farm team" on hand to take care of small accounts.

[quote]
The wirehouse model certainly works for the wirehouse since they are making lots of money, but  it's a terrible model for new reps, especially young ones.[/quote]

It's also a "tragic" model because it leads to lots of unnecessary "failure" and stress. The failure rate for new hires would be considered absurd in any other industry. It's a shame the total amount of psychic damage that occurs.

[quote]The insurance companies reps have not been in the investment business for that long, but they are now the ones working with all of the young attorneys and CPAs.  They have no competion from wirehouse reps.[/quote]

Same as someone like me busy dialing for CD's

Insurance reps are still not a good fit for this business since investments require a bit more oversight/touch than insurance. But A combined insurance + personal investment management model could work very well.

[QUOTE]My real point is that it is a shame that young wirehouse reps can't afford to grow with their clients.[/quote]

Agree 100%, this is where the wirehouse model breaks down. It's not based on long term relationships between clients and employee's, which is where the really big money is.