EJ (another) compensation question
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[quote=Hey Kool-Aid] <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I do see how, especially with the new payout (i'm in one of the "5" states) it may be beneficial when you reach a certain AUM or Gross Comm to move to the indy model. I hope to find out soon and have to make that decision. This new payout is really beneficial to the new FA...
[/quote]
How does this new payout work compared to the old one?
Thanks
[quote=mnmaze10]
[quote=Hey Kool-Aid] <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I do see how, especially with the new payout (i'm in one of the "5" states) it may be beneficial when you reach a certain AUM or Gross Comm to move to the indy model. I hope to find out soon and have to make that decision. This new payout is really beneficial to the new FA...
[/quote]
How does this new payout work compared to the old one?
Thanks
[/quote] The new payout pays the FA 36% (new FA under 200K gross annual comm) as opposed to 40% previously...the difference is that now the firm pays some other expenses i.e. postage, advtg, networking group dues, as well as several other necessary expenses that were not previously P&L charges...for the new FA, since our Gross is less than veteran FA's, the amt. saved by them paying those expenses exceeds the 4% less of payout...however, when you reach a certain point, probably seg 4, your loss of payout is more than they are saving you by paying the expenses. Therefore, you are paying, and subsidizing if you will, the newer, less-productive advisors.[/quote]
Thanks, Do they usually explain the payout system and different segments in detail before hiring or after? I’d really like to get more info on exactly (detailed) how you are compensated and take home pay compared to somewhere like Raymond James and somewhere like Morgan Stanley.
I also have a few more questions if anyone knows about the three different firms and wouldn’t mind taking a few minutes of their time. Please let me know if it would be okay to send a private message.
Thanks
[quote=mnmaze10][/quote]
Thanks, Do they usually explain the payout system and different segments in detail before hiring or after? I'd really like to get more info on exactly (detailed) how you are compensated and take home pay compared to somewhere like Raymond James and somewhere like Morgan Stanley.
I also have a few more questions if anyone knows about the three different firms and wouldn't mind taking a few minutes of their time. Please let me know if it would be okay to send a private message.
Thanks[/quote] Not really sure since this whole "5 states" deal is pretty new. It isn't necessarily based on Segment as it is on Gross Production.. As everything else I have seen with Jones, the payouts are clearly stated in the info on the website and they will go over it with you in detail before you are hired. I don't know how the other firms do it so I won't be able to help you with that. good luck!
"however, when you reach a certain point, probably seg 4, your loss of payout is more than they are saving you by paying the expenses. Therefore, you are paying, and subsidizing if you will, the newer, less-productive advisors. "
Actually, I think this is probably wrong. In looking at it it seems that you would make out better the higher your production. For example, let's say you produce 900K. Your payout is now 38% instead of 40%. So on 900K, that's a haircut of 18,000. Your expense reimbursement credit is between 17,500-19,000 (900,000 is a cutoff between the ranges). So actually, if you use your entire credit (which you would), your AFTER TAX pay is better, since you are lowering your taxable income by 18,000, but you do not need to satisfy the 2% requirement to claim the expenses on your taxes (since they are itemized deductions). Now, may facts or calcs may be wrong, but I believe that's how it works. I am not in one of those states, so I spent all of 2 minutes to research it.[quote=B24]"however, when you reach a certain point, probably seg 4, your loss of payout is more than they are saving you by paying the expenses. Therefore, you are paying, and subsidizing if you will, the newer, less-productive advisors. "
Actually, I think this is probably wrong. In looking at it it seems that you would make out better the higher your production. For example, let's say you produce 900K. Your payout is now 38% instead of 40%. So on 900K, that's a haircut of 18,000. Your expense reimbursement credit is between 17,500-19,000 (900,000 is a cutoff between the ranges). So actually, if you use your entire credit (which you would), your AFTER TAX pay is better, since you are lowering your taxable income by 18,000, but you do not need to satisfy the 2% requirement to claim the expenses on your taxes (since they are itemized deductions). Now, may facts or calcs may be wrong, but I believe that's how it works. I am not in one of those states, so I spent all of 2 minutes to research it.[/quote] Acutally, B24 is correct....I was using Seg 3,4 and some Seg 5...when you start to approach million dollar producer...yes...you are better off...but, the majority of Brokers fall in the middle...like B24, my numbers are guesstimates...you would have to sit and do all of the math to figure out at which points you are losing...and then again at what production you would again be advantageous.sorry…just reread that and my grammar really sucked…was writing quickly. But you get my gist???