Skip navigation

Qualified Prospects

or Register to post new content in the forum

22 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Dec 21, 2006 5:22 pm

[QUOTE] In your original statement you said cold calling opening up 1%

accounts all day. The person will likely fail out of the business starting

out 100% fee based. I know you know a guy who made it and I am sure

there are a few but the fact is the firms are building up a nice revenue

streams while recycling motivated rookies who are good to bring in 5 or

10 million and drop out becuase they are broke, burned out and learn

there are better opportunities to get rich quick. It ain’t the old days, no

porsche at 25! 10 mil at 1% is 100K broker is making about 35K when he

loses his salary yeha [/quote]

This is what happens when I try to skip some steps. I over simplified the

process to get the point across that cold calling is not fruitless.

To be clear I’m not talking about using fee biz to open accounts. We open

on product. My opinion is, unless a newly minted rookie opening fee only

accounts gets lucky, they are not going to make it. Too long a lead time

to reach critical mass. That they bring in 10 to 15 million in fee biz before

they pack their bags fits perfectly with Majors business plan. Thank you

very much failed rookie for giving us more fees to collect, we’ll handle it

from here, don’t let the door hit you on the way out. And, for the slow

learners out there, I don’t believe fee business is always in the client’s

best interest. Interestly, Elliott Spitzer agrees.



As a trainee, your ROA will be higher than that of an established FA. It will

reduce as you add assets. For example: If a newly registered FA lands

million dollar annuity with a 4% payout on their first day, their ROA is 4%.

OTOH, when we added a million dollar annuity earlier this month,

practically speaking, it didn’t move the ROA scale. So the 1% number I

used is what the book will return overall after 5 years. That number could

be significantly higher, say 1.5% or even more depending on product mix.

As for burnout, it happens. The key is to stay focused and to stop doing

every product/program in the book. Find something you like, tax free

bonds for example, know them cold, totally focus and go for it. Bring in

10 million over the next twelve months doing only bonds with 2 points

and that’s $200,000 gross and $80K net at most houses. Then do it again

next year adding in new money added from accounts you opened this

year. Just shooting out some possiblities here , say 10 mil from new and

3 mil from existing, all at two points, now we’re up to $260,000 gross

with 100k net. The next year, you know the drill, and the gross goes

north of $300k. By year four, bonds from year one may start to be called

this will only increase every year, think of it as a business annuity. Add in

ancillary biz, clients calling with special needs, or your branching out into

other product area and working to penetrate the book. It all adds up.



Maybe the Porsche in 5 years is out. When I came up as a rookie opening

20 to 30 accounts a month was the norm for those who worked their

butts off. I opened 72 accounts one month. My best friend opened 90 in

his best month. Today that number is between 8 and 15 accounts a

month for a focused trainee. That number is being achieved by top

trainees in my branch. If your results are less, time to reevaluate what you

are doing.

Dec 21, 2006 5:47 pm

"In your original statement you said cold calling opening up 1% accounts all day. The person will likely fail out of the business starting out 100% fee based. I know you know a guy who made it and I am sure there are a few but the fact is the firms are building up a nice revenue streams while recycling motivated rookies who are good to bring in 5 or 10 million and drop out becuase they are broke, burned out and learn there are better opportunities to get rich quick. It ain't the old days, no porsche at 25!

10 mil at 1% is 100K broker is making about 35K when he loses his salary yeha "

If all you do is fee-based or C-shares, as somone starting out you will starve. Unless of course you land a couple whales and you can fee up $40M at 80 BP's.... The key is to have a business mix, using several products that fit the clients needs.

Take 500K. Put 350K in C-shares or a SMA at 2%. That kicks off 7K/year if you go the SMA route. Add in 50K into an AI program, possibly a managed futures fund. That kicks in 500-1000 in transactional production. With the remaining 100K, perhaps a Step Up Bond if the client wants income and higher interest rates than a CD. That adds production, perhaps 2000 PC's.

What you have done is add value for the client, placed them in the best investment ideas you have that is appropriate for them, and you have created a nice mix of production for your business.

Win Win...