Update for the curious...halfway through my third month...assets at about $16 million...last four weeks commissions...gross about $20K...net of $17K...$13K after expenses.  That's roughly 65% of gross.

Grossing less than I was at the bank, but making more...and it's early in this game.  Best yet, I actually look forward to going to work in the morning...can't put a price on that...

Indy,

What % assets did you take from the bank? What was your AUM at the bank? How many years in the biz? Are you paying for an assistant? How about posting your expenses for the curious?

EZ,

I left with about $47 million AUM.  Of that, about $22 million is either "sticky" (bank named as trustee, etc.), small unprofitable accounts or short-term CD rate whores that I don't have any interest in moving over, so if you look at what I consider in play (about $25 million), I've moved or received committments to move about $14 million thus far.  The rest is completely new business.  In short, I've moved a little over half of what I'm interested in thus far, and I could easily see 80-90% of what I am interested in before the dust settles.

Being free of all the unprofitable/time-consuming accounts that in hindsight I should have never opened, has freed up time to prospect new relationships and my pipeline is literally larger than my book at this point.  My goal is to be at $30 million by next summer (12 months in) and have a much more profitable book of business.

I've been in the biz approx 6 years.  I have a part-time assistant that costs me about $1,500/month.  All other expenses including office rent averages about $2,300/month.

freedom to run your own business the way it should be...priceless...

As an update to anyone curious how things are going, I crossed 18 million AUM today, less than five months in.  Sent out Christmas cards earlier this week with a note of appreciation for past support to some clients that I haven't touched and the phone is ringing off the hook today with promises to come by and bring statements...

Merry Christmas to me...

bump.  Interested in current thought about rj vs. lpl

Well, I'll speak to half of that issue...the half I have some understanding on.  One of the bigger questions I have right now on LPL is how possibly going public may affect my business.  LPL recently sold a substantial share of the company to a couple of VC firms, and the story was all about how the influx of cash would improve the technology platform, etc, etc, etc.  My concern as a relatively new producer with LPL is that productions minimums to maintain your own OSJ will increase substantiallty in an effort to improve profitability.  While my production is certainly going the right direction and I don't think I'll have any problem hitting their current bogey ($125K), I hope they'll be patient with me if I'm a little short of the raised bar.  My guess is that if your trend is moving the right direction, they will.  Other than that, I think the technology and product offerings are good, and compliance (thus far) has been reasonable (unless you're trying to replace a VA...the compliance form to get that done is pretty nasty).

Other than that and a few glitches that are to be expected, my experience has been pretty good and I'm well satisfied.  I am at about 22 million in assets now and as of today, have only 11 clients that I have any level of interest in that have not made the move with me.  If they come, fine, but I'm putting my efforts into taking care of the clients that followed and several good referral prospects.  I think purging my book of a lot of dead wood was a good move and after hearing some successful producers recommend it, I'm in the process of implementing a substantial (for me at least) account minimum...probably $250,000.

That's all I have at the moment...perhaps someone in the due diligence process and/or someone at RJ can complete the picture for you.

[quote=Indyone]

Update for the curious...halfway through my third month...assets at about $16 million...last four weeks commissions...gross about $20K...net of $17K...$13K after expenses.  That's roughly 65% of gross.

Grossing less than I was at the bank, but making more...and it's early in this game.  Best yet, I actually look forward to going to work in the morning...can't put a price on that...

[/quote]

Very good info.  Please keep us posted.

can you give a general idea of your biggest expenses?  are you sharing with anyone?  thanks.

Overall, my expenses are running about $5,000/month.  This is with a shared office with an unrelated professional, and shared assistant.  My half of the assistant runs $1,500-$1,800/month and is my largest expense. Rent/utilities/phone runs about $1,300/month, advertising, about $500.  I keep the overhead low by design.  As production ramps up, that will probably change, but for now, it works well for me.

Indy,



Did you consider going into the type of office in which you would be paid a flat 60% with no overhead. I am looking at LPL and think thats the route I will go. Im at 275-300k at BAC and do not want the risk and expenses of starting my own office. The broker at that office says I will have my own number and the clients are mine he just takes 40%. What are your thoughts

[quote=bankfa10]Indy,

Did you consider going into the type of office in which you would be paid a flat 60% with no overhead. I am looking at LPL and think thats the route I will go. Im at 275-300k at BAC and do not want the risk and expenses of starting my own office. The broker at that office says I will have my own number and the clients are mine he just takes 40%. What are your thoughts[/quote]

I didn't consider that, mostly because it wasn't an option locally.  I'm running right at 70% of my gross thus far this year, so a no-risk set-up at 60% sounds reasonable to me, particularly when you are just starting out as an indy.  The devil is in the details...make sure that the termination clause in your agreement is user-friendly if you decide that things aren't working out like you'd hoped.  You might also run a worst-case scenario that your production is half of what it is today and consider that you may go awhile without any paycheck (I went about six weeks), particularly if you leave in the summer (which is what I recommend).  Build up your cash reserves, and learn to live a little leaner for a few months and you should be fine.

Assuming you have a good rapport with the indy advisor, that sounds like a set-up that you will be much happier with, but as you ramp up your production, that 40% may start to look pretty expensive...

Indyone,  Any updates to share about how it’s going at LPL?

OK, here's your update...at 11 months in, things are going about as well as I could expect.  I have just under $25 million in assets under management, and am on pace to get to $30 million by my year end 2006 goal, and probably before then.  I am on pace to do about $180-$200K gross this year, and my average net through the first six months after everything except income taxes, is right at $10K/month.  I'm still moving accounts on a regular basis, which is a bit of a surprise, as I expected the asset migration to be pretty much done by now.  For a variety of reasons, I took this opportunity to purge my book of less desireable clients and ultimately targeted just over half of my book, and the last time I looked, there wasn't much left that I was even interested in moving, so the expiration of my non-solicit (assuming that it is enforceable) next month looks to be a non-event.  There are perhaps 2-3 accounts that I'll make contact with in an effort to move them.  Otherwise, I find my time much more productively spent working new business prospects.

Overall, my transition to indy included some long hours last summer, but thus far, it's been a very satisfying move and I only see it getting better going forward.  For anyone considering a transition to independence, read "Starting Your Own Practice" by Robert Fragasso, and make your move in the summer...it's difficult enough when things are supposedly slow...I can only imagine what a nightmare my move would have been if I'd done it in January or February...yuck.

Indyone--great post.

Expiration of which non solicit?  The one at your old firm?  Can you tell a bit more about it?  Was there any "training costs" they came after you for?

Congratulations on a job well done.  Best wishes for continued success.  AND may the account fairy bring you a HUGE account this month.

Our non-solicit didn’t have any provision for training costs, but if it had, I think being there for more than five years would have covered that.  Yes, the non-solicit was for my old firm, and even included a non-compete for my territory.  From what my legal advisor told me, it would have proven to be a bigger problem had it been signed prior to my employment, or signed after my employment began, but with an inducement (such as stock options).  Since neither happened, it was his opinion that it wasn’y any good.  Even so, he advised me to at least honor the non-solicit part of the agreement just to be on the safe side.  I did newspaper ads and radio and signed up clients as they came and it worked out just fine.  Most of what I wanted found me without being aggressive about their business.

Indyone-

I know you are fairly new with LPL..do you have plans to expand your business?  Does LPL encourage, pressure or incentive you to add new RRs under your OSJ (w/ or w/o book)?

Just curious, as I'm looking at approaching an Indy/LPL to start off with.

Thanks,

Rugby

The only encouragement/pressure, etc. that I'm aware of is the $125,000 minimum annual production for maintaining your own OSJ office.  I think there is a small payout bonus over the standard 90% once some higher production hurdles are hit.

As far as staffing goes, as near as I can tell, that is left up to the OSJ, providing that there are no compliance problems.

Just back from LPL's national conference and aside from some serious jet lag today, I'm feeling pretty good about things.  For a newbie to LPL, the national sales conference can be a bit intimidating at first, but by the end, I was pretty blown away by the quality of the conference.  I spoke with another guy I'd previously met during due diligence and he was similarly blown away.  He'd been with Raymond James and indicated that their national conference was nice, but nothing like he was seeing in San Diego.  Aside from the huge number of vendors, I had some good tech sessions (although it was 70% review of what I'd managed to figure out for myself during the year), and targeted some product sessions to replace some of the tech sessions when I realized that they were a bit basic if you were already familiar with the system.  For things I hadn't used (securities tracker), I found them to be beneficial.

LPL did an excellent job of helping us run our business while we were at the conference.  Just about anywhere I looked, there were internet kiosks that allowed one to easily access LPL email and the LPL system.  I placed trades between classes and it worked beautifully.

Announced enhancements such as increased payouts (which don't affect me all that much at my current production level), and the potential elimination of the branch trade report for direct business were welcome news.  I found the increased payouts refreshing at a time when I'm hearing about competitors cutting payouts on VA's, etc.

The entertainment and food was excellent.  In between Kool & the Gang on Monday night and Kenny Loggins on Wednesday, several of us took in the Padres-Astros game on Tuesday night and had an excellent time.  Wednesday afternoon was spent on the decommissioned Midway aircraft carrier...complete with F-14, F/A-18, and many other planes and helicopters...very cool...I recommend seeing it if you're ever in the SD area.

All in all, a high quality experience that left me feeling pretty pumped up about things (jet lag notwithstanding).  LPL has a good understanding fo how to balance education and entertainment, and approximately one year in, I still feel like they are a great place to affiliate with.

I’m not an Indy but after reading your post, I would like to attend the next LPL conference. Sounds like allot of fun & education. Is it always held on the west coast near the corp. HQ or do they rotate it around different regions?

From what I understand, the main sales conference that I attended (for all LPL reps) is always close to headquarters in San Diego.  They have a separate trip in the spring for higher production levels, and that is rotated around to various islands, etc.

[quote=Registered Rep]I’m not an Indy but after reading your post, I would like to attend the next LPL conference. Sounds like allot of fun & education. Is it always held on the west coast near the corp. HQ or do they rotate it around different regions?[/quote]

First you have to join LPL!!
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