Pros & Cons of being a Junior Partner
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I am with MSSB and have just finished up my licensing. I have been approached by a long-time advisor about the possibility of becoming a junior partner.
As a brief background... I am not a kid. I had my own business which tanked due to the credit crunch. I have a good amount of contacts, both personal and business. I have NO idea what they will do or say when I approach them about managing their money. With that in mind, what are the pros and cons of being a partner? How is it normally structured? Any input is appreciated.[quote=MrUnsure] I am with MSSB and have just finished up my licensing. I have been approached by a long-time advisor about the possibility of becoming a junior partner.
As a brief background… I am not a kid. I had my own business which tanked due to the credit crunch. I have a good amount of contacts, both personal and business. I have NO idea what they will do or say when I approach them about managing their money.
With that in mind, what are the pros and cons of being a partner? How is it normally structured?
Any input is appreciated.[/quote]
Con
You split all of your business 50/50 and get fired for only getting half way to your goals.
My recommendation would be to avoid partnerships until you’ve gotten an idea of what you can do on your own. Most junior / senior partnerships don’t work. This is because most brokers build their book with a fair amount of good luck / fortune. Anyone that’s looking to partner either has too much good fortune, or their luck has run out. If the broker you’re talking to has more business than they can handle and wants you to capture leads too small to follow up on, then it’s another matter. But, if what they describe is that you’ll build relationships together - then what’s the point?
Unfortunately, most of these Senior guys are looking for someone to cold call for THEM and build their book. And yes, he wants your accounts when you leave.
If he is SERIOUS and sincere, then he should put part of his assets under your code. I would not enter into this kind of relationship with out a black and white agreement regarding assets and revenue. Good luck.All I have seen is the Jr. guy getting screwed. Unless he's willing to give you a much better deal than you are getting from MSSB he's a scumbag trying to build his book on your back.
I have found again and again in life if another person/firm is not willing to vest themselves i.e. give you everything they can to insure your success they are pretty much a leach. These scenarios are quite common in the insurance world.Everything written here makes total sense. I thought I remembered reading somewhere on this forum about how hard it is to succeed in this business unless you can be part of a team, etc. That’s why I raised the question… but CON it is!! Thanks!
Pro- I am a junior partner.
We split business, but it works. I am 26 been in the biz for 3 years. I cold call get them interested, and they close. ( older guys with a lot of experience) I get 1 % of the book to work with smaller clients, and I split 50/50. We've closed big accounts I wouldn't have been able to solo......I wouldnt get more info before you rule it out.I got a question for this board, I am 26 years as well. i have no problem getting prospects through cold calling through the door but I can't close them due to my age & lack of experience. AM I getting screwed as I split my new accounts with 2 other team members .... 50% me & 25% , 25% them. They price very cheap, sometimes they charge 90 bps on a 300k account (blended mix fixed & equity). I have to bring in 1.6 million a month to hit my goal of where I want to be in 5 years. I literaly have to bring 1 million a month just to get keep my job if they fee-base everything, what should I do.
P.S. I talked to them about inncreasing there fee on accounts I bring in or doing some tranasactional business & they said they won't change there business model that has worked for them.
[quote=ricky32478]
I got a question for this board, I am 26 years as well. i have no problem getting prospects through cold calling through the door but I can't close them due to my age & lack of experience. AM I getting screwed as I split my new accounts with 2 other team members .... 50% me & 25% , 25% them. They price very cheap, sometimes they charge 90 bps on a 300k account (blended mix fixed & equity). I have to bring in 1.6 million a month to hit my goal of where I want to be in 5 years. I literaly have to bring 1 million a month just to get keep my job if they fee-base everything, what should I do.
P.S. I talked to them about inncreasing there fee on accounts I bring in or doing some tranasactional business & they said they won't change there business model that has worked for them.
[/quote]
it's not much of a team when u don't have any input. those fees are ridiculously low. you claim that you can't close due to lack of age and experience? i'm doubting those are the reasons. get all the knowledge you can about the products and services that your firm offers. i'm 28 and have no problems closing. hell, i was a bank manager at 24. if i'm ever asked my age, i make a joke....'well, i just shaved for the first time this morning, how'd i do?'. focus on products and services and speak intelligently....(most) people won't care about your age.
Mr. Unsure, you are very, very wise to ask this beforehand.
I was a junior partner twice in my career, and I've also had numerous licensed assistants and a jr. partner. The jr. partner is still with me. My previous firm, got really serious about partnerships, and I felt they did it the right way, in writeen legal fashion. Beware of no contract, handshake deals, and take the advice here and elsewhere before you agree to something like that.
Very few partnerships work, and they usually are doomed from the beginning. If you search the archives here at RR Forums, you can read about a bunch of horror stories.
At this point, you don't know enough about what you are/going to be in this biz. Probably best to go solo for a while at least. The best partnership deals are the one that have mutual benefits, and one person is a type a personality, the other a type b.
My current firm, indy, had a nice presentation about this at a meeting, they actually help people find producers, create agreements, and it goes into personality as much as talent/skills.
How about those young kids in Augusta this weekend. They are looking to partner directly with success. At some point you just make up your mind and go for it.
How often do these types of offers from other senior advisors happen at wirehouses? From what I've been reading, some are like hawks.
I just want to be fully prepared in case it happens to me in the future.
It can work in your favor, makes sure he understands what your goals are. Share with him how your compensation works and what your hurdles are for tier 1,2, and 3. Try to find out what his motivation is for teaming and share with him your concerns that working his c book for a small split isn't going to get you out of the FAA program. pm if you want to talk more.
Unfortunately, most of these Senior guys are looking for someone to cold call for THEM and build their book. And yes, he wants your accounts when you leave.