I agree that the idea of a small "boutique-like" independent practice is becoming more and more attractive in certain markets and with certain client segments (the more educated & affluent ones). Another segment of the public that likes this approach are professionals such as CPA's & Attorneys since they are used to this concept from their own careers and particularly like to refer clients to independent professionals that don't have to sell product to work with clients.

I believe this "smaller is better" message really works against the large firms if you have a niche and offer specialized services & customization that the large firms simply don't offer. In my opinion is the wealth management model that is best suited for this business model where you have 1 or 2 partners along with a small "support" team around you and you partner w/ CPA's, attorneys, and other professionals to bring a full breadth of solutions to clients and can charge commissions, AUM fees, retainers, planning fees, and/or hourly fees depending on what the client's needs are.

[quote=indywanab]

I believe this "smaller is better" message really works against the large firms if you have a niche and offer specialized services & customization that the large firms simply don't offer.

[/quote]

However much money a person has, it's all they have and I believe that most of them do not buy into the idea that "smaller is better" regarding a finanical planning firm than they would a bank.

I would be interested in hearing a recounting of how one of the indy brokers landed a signifiicant account AS AN INDY.  I'm not interested in anybody who knew you, your family or even came as a referral.  That is a finite number of possibilities.

In order to really make it big you have to be able to approach complete strangers with some sort of message--what is that message when all you have to offer is your teeny weenie sole proprietorship?

I can ASSURE YOU that when the market makes significant corrections the clients are very likely to conclude that the reason they took a bath was because they had cast their lot with a guy who has no support system.

I don't care what you say, to a client a guy working at Merrill Lynch is a professional and a guy working out of his car, garage, shared office with a local CPA or any of the other arrangements that are not a wirehouse branch office is going to appear to be unable to compete.

I can assure you that, judging by the number of good sized accounts I moved from Mother Merrill during the last correction, that I am already starting to talk to some of those complacent big name wirehouse clients.

In order to really make it big you have to be able to approach complete strangers with some sort of message--what is that message when all you have to offer is your teeny weenie sole proprietorship?

DA, the reputation and experience of the advisor is the message. Mature people with money can see through the branding. Established advisors work by referral, they don't have to sell anything. Don't expect a lot of successful independents come running over here to tell you this.

All of the beautiful rich people on the world's best beaches and golf courses right now are not going to come rushing to this forum to prove any particular point either. You'll know, in time.

[quote=roostertale]

Mature people with money can see through the branding.

[/quote]

I'm a mature person with money.  My intellect tells me that I should not worry about branding--but my emotions tell me something else.

When it comes to investing--especially when times are not such that even fools like you can choose winners--intellect takes a back seat to emotions.

If you were charged with a serious crime would you seek out an attorney in a dingy office above a garage--or would you be knocking on the door of the most prestigous law firm you cold afford?

If you got registered since 1982 you've never had to hold a client's hand, much less talk one down who was hell bent on killing you.

[/quote]

I'm a mature person with money.  My intellect tells me that I should not worry about branding--but my emotions tell me something else.

When it comes to investing--especially when times are not such that even fools like you can choose winners--intellect takes a back seat to emotions.

If you were charged with a serious crime would you seek out an attorney in a dingy office above a garage--or would you be knocking on the door of the most prestigous law firm you cold afford?

If you got registered since 1982 you've never had to hold a client's hand, much less talk one down who was hell bent on killing you.

[/quote]

I don't typically waste time replying to ignorant posts on this board but I just can't control myself w/ your posts...

You're either completely ignorant about our industry (wirehouse & independent) or you're simply looking for threads where you can post a senseless comment and see what reaction you get.

Regardless, I know all I need to know about you from your last post... If you've had clients "hell bent on killing you" then you have very little in common w/ successful advisors regarless of channels (wirehouse, independent, or RIA) so you're opinion is pretty much useless in topics like this one.

When it comes to investing--especially when times are not such that even fools like you can choose winners--intellect takes a back seat to emotions.

We have the same investment products available - what is your point, that you are smarter because you affiliate with Mother Merrill, or does MM choose investments for your clients?

What do you know about managing emotions with your intellect?

[quote=joedabrkr]

By my estimation your cheese moved at least
5 years ago.  You just haven’t realized it yet.  You and your
bretheren are like the slowly boiling frogs…too stupid to jump out
of the pot to save yourselves…
[/quote]



I like that analogy. It’s very true.

I'm still waiting for a successful wirehouse broker to sign onto this forum and explain the math from their point of view.

If the independent channel is going to truly compete it has to make sense to guys and gals who are doing more than barely hanging on.  That is not the case now, and the independent broker/dealers are feeling the crunch of needing to increase income per rep in order to survive--much less excel.

For a clue watch what happens when Ray Jay sells itself.  Do they have to look for two suitors because the buyer of the traditional firm component doesn't want to touch the indy channel?

Is Wachovia's approach working as well as they hoped?  If so why did they buy AGE instead of RJF?

The idea is not new, the Ray Jay indy channel is actually the combination of several smaller channels that have been around since the late '70s and early '80s.  One of the early firms was Investment Management and Research (IM&R) which tried for years to attract successful wirehouse brokers with only modest success.

That was in the days when there were not dozens of other firms competing for the attention of the needle in the haystack disgruntled big hitter.

There is more to this business than hatred of compliance officers and other forms of supervision.

These are smart and successful people.  They know how to run numbers.  Paying office rent, mail, salaries, etc. can be very expensive.  There is a great deal of security in being at a branch. 

Chris B is right.  PLEASE HIRE A MODERATOR FOR THIS BOARD.

[quote=vbrainy]

These are smart and successful people.  They know how to run numbers.  Paying office rent, mail, salaries, etc. can be very expensive.  There is a great deal of security in being at a branch. 

Chris B is right.  PLEASE HIRE A MODERATOR FOR THIS BOARD.

[/quote]

I think we just found our homo of the month winner!

[quote=san fran broker]

 I think that most major producers at wirehouses ($2.5 million and above) are generally more brokers than financial advisors. They seem to engage in business that is based off one or two products or activities (lending, insurance, institutional, one fund company, munis, whatever) that are based on sales commissions. Accordingly, the move to anything other than another wire or independent b/d would equate to a massive change in their business plan. That just doesn't make sense if you're making $500k+ a year and working 30 hours a week. 

[/quote]

Nail-head

[quote=Indyone][quote=Whomitmayconcer]I will also add that I think they Indy paradigm is mis-sold.

The idea of a single guy sitting in a single office with a single secretary/assistant etc makes for a bleak picture. IMnotsoHO The promise of an Indy practice is interdependency. The ideal should be building a firm and not building an office.

When the concept is sold this way, a big producer could see the advantage of leveraging his wealth and his book to create an income stream with a net payout of 100+% to the head of the company.

Getting people to see this opportunity is decidedly difficult, for sure. But as time goes on and there are success stories of this type, then there could be more to follow.[/quote]

Well, as we often have in the past, I'm going to have to completely disagree with you on this one.  The idea of flying solo is very appealing to me.  Granted, I wouldn't be classified as a heavy hitter, but IMnotsoHO, I doubt if I'm the only one sick of the shark tank and ready to fly solo.  Sure, I have plans to MODESTLY expand the business, probably to a maximum of four...me, licensed assistant, Jr. series 7 and receptionist.  That's the maximum number of personnel headaches I ever want to deal with and I could see some heavy hitters wanting just enough support staff they can be left alone to produce.

Your version of independence is not at all appealing to me and sounds like one personnel headache after another.  Obviously, it appeals to you and that's all that matters.  Good for you.  Your "bleak" picture of independence is my version of paradise and that's just another one of the appealing elements of going independent...you can create your ideal firm...whatever it may look like.

[/quote]

As regards your history of being disagreeable, some people never learn. (He quipped without a wiff of sardonic intent) 

The question I was answering was why big producers don't go Indy in big numbers. We'll assume that this is true for the sake of the discussion (but we'll also keep in mind that we have just come through a period of "Checks" where the bidding for brokers has encouraged a large number of defections, which encourages higher checks which... and yet the number of check takers versus the number of Indys is huge.) and answer that question as best we can.

So if the premise is correct, and you feel the way you do about the indy option, well, that indicates to me that you are the target market for the indy option and that you are not in the market in question. (Don't take this as a personal jibe at you or your business, because it's neither.) 

If indy firms want to get the whales they're going to have to change a few things. First off, I think, is the ticket charge. I did a spread sheet for a 1.2-2 million dollar team (depending on how I configured it) with a 600,000 producer who did a ton of tickets (he has a bazillion accounts that have bond ladders where he has to buy smaller positions, he is not a guy who lets cash stay as cash.) hey, he's old school and he's making a good buck, this issue here isn't"how can he do a better job?" it's "Can I make money off him?" and the answer was "No!" I can't make money off the guy due the high ticket charges on transactional business.

Indy firms might want to start packaging ticket charges like the cell phone companies bundle minutes. Sell me 10,000 transactions for $10 per that I pay for up front and regardless if I use them or not. (as an example).

As far as the "headaches", fine, take that off the guy's head. Offer a service that provides for those issues. I can have all my payroll done by having my ass't come to me through a temp agency, bingo, no filing. The B/D can certainly offer a contracted rate for an agency to indy offices.

The question isn't "Why did you buy it?" (it being indyhood) it's why aren't they buying it in bigger numbers. I think it's valid to say that Indy isn't being marketted correctly.

I will also agree and disagree with the "Botique Firms" element and point out to the nay sayers that a WHOLE lot of BIG BIG money found its way into Hedge Funds that have nothing to do with (holding the perverbial snooty snoot which is directed skyward) "retail". This is money going away from brand and into non brand (the brand that only those in the know know), so it's not accurate to assume the contrapositive.

IGNORE BOBBY HULL

[quote=vbrainy]

IGNORE BOBBY HULL

[/quote]

Posting that is not ignoring.  Please try to live up to your username.

[quote=staffwriter2]I am a staff writer for RR, I thought my username would give that away. Why do you think top-producers stay at wirehouses? [/quote]

Most top commission producers are with wirehouses.  Most top producers (revenue) are RIA only.  Pick up the September issue of Worth Magazine and it lists the top 100 advisors in the country from RR's (wirehouse and indy) as well as RIA's.  Over 2/3rd are not wirehouse or indy affiliated.

[quote=brandnewadvisor]

 Pick up the September issue of Worth Magazine and it lists the top 100 advisors in the country from RR's (wirehouse and indy) as well as RIA's.  Over 2/3rd are not wirehouse or indy affiliated.

[/quote]

Tell us, brandnewadvisor, how were they selected?

"I'm still waiting for a successful wirehouse broker to sign onto this forum and explain the math from their point of view."

I'm in my 7th year at a wirehouse and will do about 500k this year.  I will land in the 2nd quintile at the end of the year, which means I'll be on what is historically the healthy side of the "Mendoza Line" for brokers at my firm, the largest wirehouse in existence (figure it out).

I love my firm.  I have pride in carrying my business card with that firm's name on it.  That firm took a chance on me several years ago right out of college, gave me the training and support I needed to succeed, gave me a bunch of stock for sticking around for a while (not to mention a $100k 10-year retention bonus which I'll earn in a couple of years), and to this day I feel a strong sense of loyalty to my firm.  Is my firm "perfect"?  Far from it.  But it's the best place in the business to work, evidenced by our average production being higher than FA's at any other firm, possibly with the exception of the PCS guys at Goldman.

Of my 500k production, I'll keep about 40% cash this year and another 4% will go to deferred compensation.  So I'll earn about $200k this year, in my very early 30's, and I have the strength of the World's 21st most recognized "Brand" (according to FORTUNE) behind me.  I have a very nice office in a very nice office tower in one of America's 5 largest cities.  I have two great assistants that I share with my three business partners, and I have headhunters calling me every week as I continuously tell them that I'm not going anywhere.  You know what?  I could probably make a little more as an Indy.  But why?  Why desert the firm that gave me my wings?  Why subject my clients to months of second-guessing about who the heck LPL or Raymond James or Ameriprise is?  I'm much happier working at a world-class INVESTMENT BANK, with "Vice President" on my business card.  And at this current pace, I'll be at $1 Million in production by the time I'm 37.  Life could be much worse.

I think that says it all. As long as one is happy, one doesn’t look. Only when I was thoroughly pissed off did I start looking at life beyond my current employer.



That’s probably the #1 reason big producers stay put…their firm is taking care of them. The firm may be pissing on the small producer, but if they have any business savvy at all, they are taking care of their whales because (1) whales are more profitable and (2) take much longer to produce.



I didn’t go independent for the money…I went independent to get away from some of the most incompetent, penny-pinching management I’ve ever dealt with. The money was just gravy for me. I felt a strong sense of loyalty to the man who hired me and I told him when I left that if I were still working for him, I doubt if I ever would have left. Like Cub says, he took a chance on me and I was loyal to him. Only when things changed dramatically for the worse did I ever even look.



Big producers = taken care of = happy and not interested in looking elsewhere. Sure, there are exceptions, but I think this “rule” is reality for the most part.