I think that you are way off on your estimate of what it takes to get an upscale office remodel. I would say $100,000 for that line item. We had an estimate for $250,000 for 3500 square feet of remodel in order to get ‘A’ space.



The printer will not run $4,000. I’d say $500 to $700 for an HP laser printer. Way off on that… you don’t need to go crazy with the printer. Outside consultant and legal will run $10,000. Your copier should function as a scanner. Also, don’t forget the costs of research (i.e. Morningstar) for $3,000 per year. I think your compliance costs are a bit light - should be $3,000 to $4,000 per year - And, don’t forget about your legal expenses for setting up your LLC - another $2,000.



Where are your 401K contributions for your assistant? 3% of their wages in order to meet the top heavy requirements. Also, your ‘benefits’ number needs to be increased, since healthcare expenses, alone, will run $700 per employee, including yourself.   Also, don’t forget about paying the other portion of your assistant’s Social Security taxes, including your own (now that you would be responsible for both sides). Also, don’t forget about your state business taxes, etc.    I’m not sure you need a quote service for $200 per month.   I’m also assuming that your ‘decorating’ line item includes office furniture? If not, you might add a few more $$'s.



Edit: I noticed your income figures (you must have edited your post?) - if you go with an Independent BD, you don’t need to have a compliance consultant.



But, from your comment about ‘SEC’ registration, you were planning on going full RIA? If so, your starting payout numbers aren’t correct. Your payout starts at 100%, not 80 or 85%.



C

What kind of printer are you getting for $4k?

Also, double check the indy payout. If you do alot of trading, ticket cost may lower that to 75%. That payout number can vary ALOT.



I agree with Captain, some of the numbers seem too low. Remodeling can cost quite a bit, especially if you change something mid project (which you will once you see it start forming)



Have you run the numbers if you go indy now on the cheap (ie using an exec office suite, or under another rep).



Also, in 5 years, compliance cost may be way up (hopefully not)

OS, as a midwest indy, I can give you some pretty good info, although assuming you are in a larger metro area than I am (which is very likely), some of my numbers will be light.

Question for all…if you are at an indy B/D, and are the broker/agent of record on a 401K plan, are there any ticket charges or other costs associated with that? 

Nope…no ticket charges for direct business and all my retirement plan business (except for solo(k)s) is direct.  Solo(k)s at LPL…yep…ticket charges.

Not that I know off.  I have group annuities where I became the broker of record and it will take a little while for it to show up but the transations that occur in participant accounts go through the vendor not you, thus you don’t have ticket charges.

As I suspected.  I was just curious. Thanks.

It seems that msot plans are paying between 25 and 50 bips to broker.  Obviously, huge plans would generally pay less, and little plans may be C-shares or something similar, but is 25 to 50 what most plans generally are paying?  I have a few Hanc*** plans and a Hartford plan, and they have all kinds of options for payout.  That's the nice thing about GA plans, they have hefty payout options and lots of bells and whistles.  However, on the smaller, fund based plans, I find the payout not worth the effort unless it's a bunch of doctors or attorneys or something.

Yeah, I was looking more at ERISA work.  I have some SIMPLE’s and SEP’s, but generally can’t stand those.

[quote=B24]

As I suspected. I was just curious. Thanks.

It seems that msot plans are paying between 25 and 50 bips to broker. Obviously, huge plans would generally pay less, and little plans may be C-shares or something similar, but is 25 to 50 what most plans generally are paying? I have a few Hanc*** plans and a Hartford plan, and they have all kinds of options for payout. That’s the nice thing about GA plans, they have hefty payout options and lots of bells and whistles. However, on the smaller, fund based plans, I find the payout not worth the effort unless it’s a bunch of doctors or attorneys or something.

I actually don’t do that. Most are 25 bips, some are 35, and one is 50. The one that’s 50 includes TPA. Not sure 25 Bips is considered “jacking employees”.

Also, I live in an insurance-heavy state, so nearly every plan I take over or bid on is already insurance based. And sometimes it’s not worth saving a few basis points in MFD fees by changing the entire plan. I have ac tually negotiated 3 times with Hanc*** to lower the expenses by lowering my comp on existing plans that I took over.

Yes, the annuity wrapper adds a layer of fees - usually about 15 bips - to the expense ratio (and to this day, I am not sure why there are group annuity 401K’s - I’m not sure what value it adds, other than nice websites and tons of fund choices). But trying to change a plan for a busy medical practice or a manufacturer that can’t even figure out payroll is often very tough. So it is most often better to try and work the providor in place and improve the plan and the service.

I think most would agree, you can provide much more value by providing service and education to participants, getting them to invest properly (or at minimum logically), more than saving them 15 Bips.