[quote=Bear 34] Noggin,

It is a positive for a veteran financial advisor and a negative for a new financial advisor.

Nog…what do you mean?

Though I haven't seen details, I am almost certain that there will be safeguards in place to prevent newbies from building all fee-based business (least of which is the 100K minimum account size).  The problem with Jones is that their new-FA compensation plan does not encourage fee business and asset gathering.  The wires will usually string you along long enough to generate sufficient fees to replace the salary.

B24,

I am waiting for a flight to come in and am keeping myself entertained by reading posts. Here is a tip for building fee based at EDJ



1. Call Mort Browns department - SMA

2. Call Alliance Bernstein & request a meeting with their SMA wholesaler

3. Get involved in networking groups with indy advisors

4. Ramp up your insurance salesmanship



If you are going to build assets under fee based the SMA platform has a lot to offer and so will your Mutual fund platform as compared to what you have right now. Morts office has a lot of good material on building a fee based book. If Susan is still there she will even come to a region and train. Remember it is a difference in what you are doing. The commission broker does just that - makes a commission by selling you something. The fee advisor gives advice and receives a fee for it. Use the financial planning software. Plant the vision for the client that they are accumulating assets ( asset mgmt) and protecting assets (inusurance) against the consequences of lifes risks like disability, death, disease etc. Take a comprehensive approach and expect to move $500k at a time rather than the old $50k commission sell. It doesnt take long and with insurance to enhance and protect you will not feel much of a difference. If you have $70 mil the old EDJ way then in 18 months you will be blowing away your average numbers by just having $20mil in fee.

I know some information about the "fee based" EJ platform is being leaked. I have heard the max fee is 1.35%. Can anyone confirm this? I had heard about 6 months ago that it would be under 1%.

[quote=GT Key]

I know some information about the "fee based" EJ platform is being leaked. I have heard the max fee is 1.35%. Can anyone confirm this? I had heard about 6 months ago that it would be under 1%.

If a rookie can really get after it at Jones and build as much as he can fee-based, then he can utilize the salary for the first year and not really worry so much about eating. He might have to forego the milestone bonuses, but if he thinks long term, in his second year he’ll have five times what a normal jones guy would have had in steady income.



diclaimer: I don’t know much about building fee-based, so I can’t really say for sure.



People in their second and third years might have it rough though.

The original poster asked about going to EDJ and building a fee based business.  My answer is to go to an establishment that has had fee based, a robust platform for many years.  Don’t jump on with a firm that just rolled it out.  I don’t know what the next big revolutionary change will be in the business, although retainers are making more sense to me these days, you don’t want to be at a firm that takes over a decade to read the writing on the wall.

I believe the original poster is already with EJ and is looking at how to better make the transition.

If a rookie can really get after it at Jones and build as much as he can fee-based, then he can utilize the salary for the first year and not really worry so much about eating. He might have to forego the milestone bonuses, but if he thinks long term, in his second year he’ll have five times what a normal jones guy would have had in steady income.

diclaimer: I don’t know much about building fee-based, so I can’t really say for sure.

People in their second and third years might have it rough though.

[quote=GT Key]I believe the original poster is already with EJ and is looking at how to better make the transition.

… I don’t know what the next big revolutionary change will be in the business, although retainers are making more sense to me these days, you don’t want to be at a firm that takes over a decade to read the writing on the wall.

Attorneys have done it for years, doctors are starting to charge retainers, and a lot of other professional firms have minimum fees to be a client of theirs.  The retainer concept is an annual minimum fee to provide services for a client.  Before people attack this concept, realize this is for fee based practices, providing comprehensive financial planning and advice.  Advice means tax and legal advice, along with investment management and everything that comes with comprehensive financial planning.  Firms that handle higher net worth, more advanced planning cases are going this route.  I have peers charging $1200 annual fee for maintaining their advice and planning services.  I have seen planning fees upward of $10,000.  I realize a lot of people can not provide these types of services due to B/D and their own licensing restrictions, I am not limited in those ways, so this may be pretty far off the radar screen for most reading.

In reality, most Jones rookies are going to be heavily skewed toward pay-me-now products to meet production bogeys.  Only when you have a sufficient margin of safety (excess production over requirements) can you really begin to offer fee-based accounts as an alternative for clients to choose.  The bigger your margin of safety, the more often you should offer fee-based as an alternative.  Unfortunately, survival often comes necessarily before client choice, but the further out you get, the more you can afford to offer true customer choice.  Fee-based simply puts you on the same side of the table as the client.  The client no longer wonders when you call, if it’s just to generate fresh commissions.  The level of trust increases dramatically.  Wealthy people, a generally low-trust group, tend to choose fee-based by a large margin.