I can see that happening. Seriously, if you do 200-250K in gross, at 80-90% payout, and you have 50K in expenses, and work 15-20 hours per week (though maybe your wife thinks you’re “working” 45), that’s a pretty good life if you want that.



Problem is that most indy B/D’s payouts are much less than 90%, especially at lower gross levels. I know my friend who just started at Cambridge gets somewhere between 60-70% (he produces maybe 125K).



What would really make sense is being an RIA only. 100% payout. Fewer expenses.

I can see that happening. Seriously, if you do 200-250K in gross, at 80-90% payout, and you have 50K in expenses, and work 15-20 hours per week (though maybe your wife thinks you’re “working” 45), that’s a pretty good life if you want that.

Problem is that most indy B/D’s payouts are much less than 90%, especially at lower gross levels. I know my friend who just started at Cambridge gets somewhere between 60-70% (he produces maybe 125K).

What would really make sense is being an RIA only. 100% payout. Fewer expenses.

I’ve been very steadily at 68% since I started, hovering on the ± side of $300K gross the last two years.  Payout after ticket charges is right about 86-87%.  I have a P/T assistant and rent space from a group of accountants.  I get by on the cheap on several things since I take care of my own payroll/accounting/tax returns and get to use the accountant’s software as a part of my rent.  All in all, a sweet deal with lots of freedom.

I agree with many of the posts here in regard to finding your ‘net - net.’  Many successful emerging RIA Advisory firms I’ve helped often share office space with an allied professional like a CPA, Estate Attorney, etc., and have often entered into a solicitors agreement as well.  It makes for an interesting marketing dynamic all while reducing overhead.  No secret that RIAs earn 100% and I have seen net income percentages close to 90% but the landscape does vary considerably.  I believe Cerulli & Associates produced a very informative report on this very subject not too long ago.

Bob–we’ve discussed the issue before I believe.  We use TDAmeritrade for our discretionary and fee-based business, and pay 20bp for unlimited trades, statements, etc.
Good luck!

Bodysurf are you at Harbour?

Harbor, not Harbour.

Sorry… How do you like it… I looked into them last year but wasn’t sure what was included in that monthly fee, and never considered it enough to move…

I pay $1100 a month for pretty much everything as far as the B/D is concerned.  I also pay $1000 to them to rent a beautiful office; other FA’s pay more, but he saw me as a way to reach other Smith Barney FA’s who work a few floors down.  The thousand covers computers, phones and fax, an assistant which I share, some postage, etc.

The $1100 covers my compliance and clearing, basically, but also gives me a 100% on everything, with no haircuts.  I sell an annuity, I get 6-7%.  I do almost exclusively managed account business, and charge 2-3% on assets, and I get it all.