[quote=Moraen]

Having more flexibility is going to be king going forward. Wirehouses and regionals simply have their hands tied when it comes to marketing their practices. RIA’s and indy’s for the most part just don’t.

The sky is the limit in the Indy world. You can mold your practice how you see fit. The indy’s who produce mediocre amounts are those that still model their practice after where they learned their trade (Jones, wirehouse, etc.). Let me qualify that: If you were producing around 150k at another firm, you are likely only producing 200k - 250k if you are still running the same program. Those who were running stellar practices at the wires and regionals, will likely still be running stellar practices.



Those indy’s that create several lines of business. Choose to grow not only their personal practice, but their business in general are going to become this country’s next millionaires.[/quote]



Great point. Most indies in my area are either really small producers (like under 250K), or large wealth management firms (we have two of the largest 10 in the nation in my area).



But you’re right - those little indies are pretty much doing the same thing and not really trying to grow (or not trying real hard). The larger firms I am referring to have 26 and 45 employees. One has like 500-700mm AUM, the other has like 850mm. One is fee-only, one is fee-based. So it’s not like you have one guy doing all that production, but they are very different firms than a little solo shop or wirehouse guy.

[quote=noggin] I like the back and forth of b24 and spacemanspiff. Spiff says it is very unusual at Jones to have 100M AUM and b24 says that that is very common. I wonder who is right? Personally i believe it varies by where you are located and how long you have been in production and frankly whether you are any good at it. I have never understood how Jones will be able to replace those 20-30 year vets and increase production. The ones that i saw coming in the pipeline were no great shakes.

The essential formula is that we will give you about 38% of what you produce and if you have Lp and trips then we will give you back another 10-15% of your money. The LP is a very illiquid investment much like non traded REITs that pay about the same amount as partnership. Jones people don’t know about them because they are not allowed to sell them. I know for myself as a result of having two partners in the business for over a year now that I have definitely learned more about how to be a well rounded financial adviser since being independent. i think the direction that Jones is doing with legacy and goodknights is a step in the right direction and maybe it will slow the turnover in their new advisers. There really are worlds out there not dreamt of in your philosophy…[/quote]



Actually, I didn’t mean to suggest that 100mm AUM is common. I was talking about what the average guy at Jones WITH 100mm looks like as far as the structure of their practice.

Don’t forget, most advisors coming into this business in general don’t look that great. They are molded and gain experience over the years. I am sure if someone looked at you the day you started, and compared it to today, their opinion would be much different.



And the way they will replace those 20-30 year vets is simple. You can’t do a “Sunset Plan” (or whatever the retirement deal is called) with a retiring veteran until you are with the firm 3 years (and profitable I believe). So the veterans are turning over their books to experienced advisors (many will have far more than 3 years under their belts). In addition, many of those vets have already done Goodknights, and established an office for other rookies as well. It’s just like the way wirehouse teams perpetuate themselves, except in different offices.

B24-

  When the one and only rep in my old region decided to do the sunset program, the RL brought in a rep in the red from a different region and then to add a little salt in the wound put his own goodnight and close friend in the same office. Handed both 100M and now they are leaders in the region.   Made the other reps in the same small town feel so good. To this day three years later the reps in the town are not working together and have created a sense of competition between them. Maybe its different in your region.

I haven't looked at the policy regarding the Sunset plan, but I do know we have a guy in our region who was starting from scratch and was picked up by a vet to do the plan with him. Pretty good gig.

The 3 years and profitable deal doesn't make sense to me. If I'm profitable, I doubt I'm going to be interested in abandoning my office and moving to another town just to have a chance at getting a bigger piece of the pie. Maybe, but probably not. 

[quote=B24]So here’s what I see…down the road, the “serve everyone” model is dead.  Most firms that are successful will fill a specific niche…UHNW investors (UBS, Goldman, etc.), HNW Investors (“wirehouse”-type model), mass-affluent (Jones,  Ameriprise, etc.).  There will be indy firms that can cross all spectrums, since they have more flexibility - large UHNW “boutique” firms down to small, solo “mom & pop” shops.

  I think the firms that do not define themselves well will falter.  I think this may be what we are seeing at the wirehouses right now.  They on one hand, want to serve the HNW client, but on the other hand, they have 10-20,000 FA's (Morgan/SB, WF, Merrill) all vying for the same clients.  There aer only so many investors with $2mm+ out there, with a LOT of FA's chasing them.  Think about it - you have like 50,000 FA's just at those 3 firms chasing HNW investors around the country.   I think Jones could ultimately win the "mass-affluent" war if they stick to their niche serving the under-$2mm client, and the wirehouses continue trying to swim upstream, and abandoning their lower-producing FA's.  Marketing and focus will be key here.   I think the rise of indies and RIA's will create confusion in the market, as every indy/RIA out there is unique, so investors will have a hard time identifying what it is they do.  So marketing/branding will be critical for indies.   Thoughts?[/quote]   How is Jones going to win the "mass affluent" $2mm and under, when the average current client has $50k?  It's a big move upstream to attract and retain $500k+ accounts.

[quote=footsoldier]B24-

  When the one and only rep in my old region decided to do the sunset program, the RL brought in a rep in the red from a different region and then to add a little salt in the wound put his own goodnight and close friend in the same office. Handed both 100M and now they are leaders in the region.   Made the other reps in the same small town feel so good. To this day three years later the reps in the town are not working together and have created a sense of competition between them. Maybe its different in your region.[/quote]   It isn't different in other regions. It is the same crap everywhere. Obviously those assets need to go to someone and that is fine. What drove me from Jones is the instant leadership roles that these FA's who get handouts accept. I am not going to sit in these meetings every other week and listen to some jagoff tell me how to build my business when he didn't even build his own.

[quote=Ron 14]

  It isn't different in other regions. It is the same crap everywhere. Obviously those assets need to go to someone and that is fine. What drove me from Jones is the instant leadership roles that these FA's who get handouts accept. I am not going to sit in these meetings every other week and listen to some jagoff tell me how to build my business when he didn't even build his own. [/quote]   Why doesn't the Jones leadership realize or understand how divisive and destructive this practice is to the guy or gal who is actually living the example they were told about in the beautiful brochure titled, "Your Jones Opportunity".  I've said it before, and I'll say it again.  If you reward and recognize the right behaviors, you will condition the new advisors to go and try to be successful, to work hard, and to build their businesses the right way.  When you drop $100MM in some dumbsh*t's lap whose was failing the day before, and make him a Regional Leader a year or two later, people start to think, "WTF?"  The fix is never going to be perfect, but they cannot continue to ignore one of their biggest weaknesses. 

The small brokers under 500K will all go to regional  or independent firms with higher pay-outs or just leave the business.

  The wire-houses, ML, MSSB,UBS, Wells will be home to brokers 500K and up, but many larger brokers, 1 Million+ have a huge incentive to go independent since the pay-outs are so good, and they can also sell their businesses when they retire.   The problem the big wirehouses have is that large producers are not cheap.  They get a higher-pay out, more support, more office space.      There might not be wealth management at big firms in 10+ years.  All those small producers made the wirehouses a lot of money in the past, but the game has changed.