Doing 600K Independent Verse 600K at Wirehouse
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a wirehouse FA doing 600K would probably take home about 270K. Also, they get profit sharing and some paid benefits, so not all apples-to-apples. You are probably more comparable to a 450-500K wirehouse FA.Left a wire a couple of years ago, now doing 300 at a small firm, my net last year was about 65% the firm paid for all fixed expenses, tech is so much better, don’t need an assistant. Ticket charges etc, I took home over $190 last year, about the same as a wire doing 600. Less stress and overall better enviroment.
Shania…you’re funny, UBS=U Been Screwed
That is me...But I am in a large suburban area(300K+ people in in 3 surrounding zipcodes) and all wires are represented. I have no asst, run a primarily fee practice(with some EIAs and REITs mixed in).. My b/d gives me 90% payout... I have no asst... small office(executive suite 300sqft) in a nice building... My overhead is around $35K/year including tickets. For those of you who have an asst what does it cost you(not including cost for me to get a bigger office)? I don't really want to offer benefits, just straight salary.. 1099 style... ?This is a great option. However, in my area, with the exception of a few monster indy firms (not the types that would let you join them), almost all the indies are solo/no asst (maybe 1/2 time asst) and not really interested in adding someone. We are very suburban (and not near any major city), so not a lot of firms other than wirehouses and insurance agents.
My asst is $14/hour, no benefits. Find one with a spouse who gets family health insurance. She doesn’t care about the insurance, and it saves me $500-1000/month. She has 10 years experience, but I also live in a relatively low rent/low income part of the country.
[quote=chief123]I think that is based on a upfront check to go to a new wire.[/quote]
That’s correct - an important consideration is the check in the overall calculation of comp. That having been said, you have to assume some loss of production with each move.
[quote=B24]Also, they get profit sharing and some paid benefits, so not all apples-to-apples.[/quote]
The benefits at a wire are mainly health insurance and equity comp. 401(k) match counts if you don’t jump ship too. It really depends on several factors unique to the producer and the firm what their value entails.
I never made any money on my options and the restricted shares weren’t worth a great deal.
[quote=B24]
San Fran, you mention that the margins on RIA's are lower than indy brokers. I always thought it was the other way around. Why the large overhead for an RIA?[/quote]I think it generally is the case, but most RIAs I know are solo and most indy brokers seem to be in a situation where the brokerage pays most of their overhead. I biased my assumptions against the RIA, but there isn't any particular reason why an RIA couldn't run extremely cheaply.
[quote=Shania Twain]This all sounds great…but do have the UBS name?
What’s that worth? huh?
I know that will shut you guys up.
[/quote]
Wow. No fanatic like a convert Shania.
UBS is a good name and it tends to have nicely decorated branches and good technology. They support production, unlike SB or MS, which pretty much got to be anti-business. I know most of the wires pretty well and IMHO it’s the best of the big firms. (For what that’s worth)
[quote=Moraen]
I think San Fran is referring to scale. Indy B/D’s usually have a lot of advisors and so spread the cost of technology around.
But depending on how you structure your business, it can be more, or less than an indy.
[/quote]
Exactly, but the tech isn’t what costs so much - it’s real estate.
[quote=Northfield]
As others have pointed out by sharing the local overhead component with another advisor, or joining an existing indy shop, you canincrease your total payout by about 10%. [/quote]10% seems slim. Why not more?
Do you give her a 1099? or do you pay her taxes(well the employer part?)My asst is $14/hour, no benefits. Find one with a spouse who gets family health insurance. She doesn’t care about the insurance, and it saves me $500-1000/month. She has 10 years experience, but I also live in a relatively low rent/low income part of the country.
[quote=san fran broker] [quote=Northfield]
As others have pointed out by sharing the local overhead component with another advisor, or joining an existing indy shop, you canincrease your total payout by about 10%. [/quote]10% seems slim. Why not more?
[/quote] yeah but 10% over a 40% payout is a nice % increase. Probably more like 10-15% on top of the 40%.
That is me...But I am in a large suburban area(300K+ people in in 3 surrounding zipcodes) and all wires are represented. I have no asst, run a primarily fee practice(with some EIAs and REITs mixed in).. My b/d gives me 90% payout... I have no asst... small office(executive suite 300sqft) in a nice building... My overhead is around $35K/year including tickets. For those of you who have an asst what does it cost you(not including cost for me to get a bigger office)? I don't really want to offer benefits, just straight salary.. 1099 style... ?[/quote] How can you get away wtih 1099'ing an assistant? I can't think of any way to do it, unless she comes and goes as she pleases. I don't think the IRS would allow it, under almost any circumstance, unless it was an outsourcing agency, remote assistant, shared assistant (with another employer) or something like that. In my situation, my assistant work about 30 hours (part time), and gets no benefits (yes, Jones will let you do this). She does get 401K match/profit sharing due to working 1000 hours per year. I find that the best type of person to hire is someone older (like 50-55+), who is just looking to get out of the house and get some spending money. Either that or a young Mom with kids in school looking for mother's hours (if it works for your business). This could get you someone good (college educated, intelligent, some work experience), without costing too much. A lot of my friends (female) are startign to go back to work now that all their kids are in school full-time. Most have college degrees and worked for 10+ years before having kids. They are way over-qualified for an assistant job, but would take it because they need the flexibility that comes with it. They are all secondary incomes to their husbands, and don't need benefits. But a 25-50 year-old that wants full-time is likely looking for bene's.[quote=B24]This is a great option. However, in my area, with the exception of a few monster indy firms (not the types that would let you join them), almost all the indies are solo/no asst (maybe 1/2 time asst) and not really interested in adding someone. We are very suburban (and not near any major city), so not a lot of firms other than wirehouses and insurance agents.
A lot of people are contract workers and get 1099s instead of w-2s, trying to compare a EDJ employee to what we can do is a little insane…
I know some older people who work at private golfcourses and other family run establishments that show up for 30 hours a week and get paid cash.. Not that that is what I want to do, but I don't want to take on the cost of adding an assistant(bigger office, more furniture, phones, supplies) and then also pay for health insurance and taxes... looking for someone to show up during trading hours or later (9-3pm) get $12/hour for 30 hours of non labor intensive work and then go home(better then the homedepot,starbucks or walmart, library, these older women are settling for now..Chief, I hear what you’re saying and I think it will work…until you get audited. With state unemployment funds hurting, don’t be surprised if your auditor tries to reclassify your lawn boy as a W-2 employee. The W-2 route costs you maybe 10% in payroll taxes, so my advice is, pay 'em $11/hr instead of $12 and do it right. Tax forms are fairly easy once you get set up. You could train your assistant to take care of the forms and just sign checks.
Thanks I didn’t realize it was that small…(not sure why, when you put it in terms of dollar/hr amounts it seems miniscule)…
Yeah, most payroll taxes are simply withheld from the employee's check. In my state, only social security/medicare (7.65%), state unemployment (varies by state, but not a big deal in my state...at least not yet), and federal unemployment (0.8%) are the only things that actually come out of my pocket.Thanks I didn’t realize it was that small…(not sure why, when you put it in terms of dollar/hr amounts it seems miniscule)…
[quote=chief123]A lot of people are contract workers and get 1099s instead of w-2s, trying to compare a EDJ employee to what we can do is a little insane…
I know some older people who work at private golfcourses and other family run establishments that show up for 30 hours a week and get paid cash.. Not that that is what I want to do, but I don't want to take on the cost of adding an assistant(bigger office, more furniture, phones, supplies) and then also pay for health insurance and taxes... looking for someone to show up during trading hours or later (9-3pm) get $12/hour for 30 hours of non labor intensive work and then go home(better then the homedepot,starbucks or walmart, library, these older women are settling for now..[/quote] Chief, I am not comparing an Indy setup to Jones. I was a corporate controller for 12 years before coming to Jones. I dealt with 1099/W2 issues all the time. This has nothing to do with me comparing to Jones. I simply don't see how the IRS would allow an admin to be classified as a 1099 employee (again, unless they were employed through a 3rd party agency that was employing them as a W2 employee). There are specific criteria for 1099 vs. W2 employees. You might want to brush up on your tax law before you call ME insane.Actually, you can 1099 an assistant depending on the hours they work and whether or not they work at the office all of the time.
For instance, you could use three part-time assistants and 1099 them.
De minimus; on-call Look, what I'm saying is that yes, there are some peculiar ways around it. And if you have minimal need for hours. But for the extra buck or two an hour (in taxes), it's not worth trying to skirt around the system (for a relatively full-time person - say 25+ hours). I can tell you from experience, the DOL and IRS will DESTROY you financially if you are caught/found to be in violation of the law. Some of the things they have the ability do seem very unfair (i.e. extrapolation), but can cost you plenty of money. I have experienced it in my previous career. Fortunately, the dollars were irrelevant to our sized business, but could be devestating to a small business. And don't let a "creative" CPA dupe you into thinking you can get around it. Piling up tax deductions is one thing. Skirting around labor law is another. I wouldn't try it unless your plan is "bullet-proof".Actually, you can 1099 an assistant depending on the hours they work and whether or not they work at the office all of the time.
For instance, you could use three part-time assistants and 1099 them.
B24 - You are certainly right. I have those assistants and I still pay them as W-2 employees. Not only is it really not worth it to 1099 them, they have more ownership if they are employees. I can get part time people to do all kinds of things when you tell them they are employed as opposed to contractors.
I was just saying that it is possible is all.