WB FINET Program
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Why is it that you are so unwilling to consider the informed opinions of those who actually have experience with going indy?
Sure it might be easier to go to FiNet, and they are structured to be pretty much like an independent firm. Having said that, you need to consider that you are still owned by a bank, and you are competing with bank-channel advisors and full-service advisors. WB’s “margin” on those other advisors is much higher than on the FiNet advisors. So, if push comes to shove when competing for resources or capital…who do you think will get the nod?
I am willing to consider all opinions, that is what I am doing here. At this point I have really only had QUALITY insights from 2 people, Morph & Indy4life. Who I think is gonna get the nod for starters is the nearly 4000 brokers that WB just picked up that do well below 300k a year. I think I will not even be making a decision for 4-6 months but I am doing my due diligence here and trying to collect as many different ideas as possible. If I have 3 people respond to my initial question all the same, is that what I should take and close the door? You can, but I certainly will not. I have worked too hard and long in this business and I would like to make the upcoming bumps as small as possible. I don't really have a preference at this point which way I go, I just know that I will have to do something within the year.
Bud, As a wirehouse guy who’s doing a lot of due diligence towards going independent in the next 6 months, I think I understand what you may be trying to accomplish.
You're trying to get from point A (wirehouse culture) to point B (independent culture) with as little risk and disruption as possible to your practice into which you've invested a lot of blood, sweat and tears. I get that. There is a lot of static on this post about your potential choice of point B. Everyone has a natural desire to promote and defend their particular choice of point B, when the truth is that the most important decision is likely just to leave point A. Here's how I might view your primary risks if I were you: Reputational Risk. Here Wachovia is both a blessing and a curse. They may initialy be a blessing and make it easier to transition clients, but for all you know in 6 months they get pulled further into the credit abyss and need to be rescued by a bank in Korea. Good ol' American Raymond James would look pretty good then. Wachovia is a wirehouse and will always have the wirehouse genetic disposition to screw up every 5-6 years. Platform Risk. The risk that you move to a b/d or custodian only to find that they simply don't have the platform necessary to service your clients. If you go with finet, and have no qualms with Wachovia's current platform and product offering, there would seem to be little risk to you. However, you should do some tire kicking, because you will find that some other platforms have offerings you may have not even thought of. Finet should be great for replicating your practice, but not so good if you would like it to evolve into a true RIA model. Financial Risk. You will have some risk here no matter where you affiliate with. However, your situation is unique, and it strikes me that the least financial risk to you in making the move independent is to stay within the Wachovia platform. Others will likely disagree on this point, but I wouldn't look a gift horse in the mouth. Cultural Risk. Affiliating with Finet may retain some of the cultural aspects of a wirehouse. Is that ok with you? If not, best to move toward a boutique independent b/d (such as Commonwealth or Cambridge) which are decidedly non-wirehouse in culture or direct to RIA as Morphius suggests. Given the above, if I were in your shoes, I'd be leaning toward Finet as well. Best of luck.North & Ice, Great info & comments. I really appreciate all of the diversity of the input hear. This remains a tough decision and will definitely weigh on my mind for a while yet before a decision is made. I only wish I could get some ideas from some Jonesers…Just kiddin…
Ice, I sold myself to my clients in the beginning to be able to manage their assets, lately I have had to sell them on the firm that we won't have to file for a bankruptcy anytime soon and how their assets are protected, blah,blah,blah... I hope... I am getting kind of burned out on having to sell the firm or soothe fears about the firm. I simply should not have to spend my time doing that. I really would like to get back to selling myself, product, and proper planning. I only hope things smooth out with WB and I can get back to doing what has made me successful up until this point.[quote=Northfield]
There is a lot of static on this post about your potential choice of point B. Everyone has a natural desire to promote and defend their particular choice of point B, when the truth is that the most important decision is likely just to leave point A. [/quote]I think I know what you mean here, northfield, but I'm not sure. If you really literally mean the most important thing is "just to leave point A," I disagree. It's not enough to know what you don't want anymore, you need to know what you DO want. Otherwise you will simply be running away from something without a clear destination instead of running TO something, like the hoards of frequent job changers who know they don't like what they're doing but never take the time to be sure that their next job is a better fit for them.
[quote=Bud Fox]
Ice, I sold myself to my clients in the beginning to be able to manage their assets, lately I have had to sell them on the firm that we won’t have to file for a bankruptcy anytime soon and how their assets are protected, blah,blah,blah… I hope… I am getting kind of burned out on having to sell the firm or soothe fears about the firm. I simply should not have to spend my time doing that. I really would like to get back to selling myself, product, and proper planning. I only hope things smooth out with WB and I can get back to doing what has made me successful up until this point. [/quote]Bud-
Look at your own words and spend some time contemplating them...if clients are that freaked about WachEdwards current status, do you really think it's wise to choose FiNet just because the paperwork is easier?
"Mr. Client, I made this change for many reasons, not the least of which is that you have the opportunity to custody your assets at a firm which is financially stable. I was getting sick and tired of worrying about what kind of writedowns would show up in each quarters earnings report, and I'm sure you were too. Now, just sign here."
I look at the current status of WACH-AGE and I have to wonder if the worst is behind us or yet to come. Too hard to say and we won’t know until we are beyond it. I am feeling that the worst is probably over and I have already had to deal with the shock & awe of the firm being in the news almost daily. Sure I could leave right now and go to LPL or Commonwealth or RayJay, all of whom have not really had their bad day in the news. And then that hammer could fall for that firm obviously making me wonder what the heck I just did. I will definitely be holding back till the markets, economy, writedowns across the board all improve and I collect more opinions.
Client worries, paperwork, sharks in the office, Wall Street brand names, lousy markets, the economy, credit write downs … boy, the list just never ends, does it?
He who truly wants to do something always finds a way, while others always find an excuse.
Bud,
Keep doing your due diliegence. I'm a little worried about all the AGE guys coming over and swamping the back office and operations. HymanRoth's post is absolutely incorrect that Wachovia Securities two other channels, the bank channel and the Private Client Group channel, are more profitable than the FiNet/Indy channel. It is the opposite. The FiNet offices are more profitable (both to the FA and WS). The average FiNet FA is a large producer and typically is largely fee-based/advisory. The minimum production to be considered for affiliation is $250k but most FA's are significantly beyound this. FiNet pays no overhead (no branch manager, no office, benefits, etc). Even though they may only make 10-15% of our gross, they don't have much in the way of overhead. The higher ups at Wachovia Securities have indicated that the Private Client Group channel is the least profitable and the industry and Wachovia Securites is moving toward the indy model and the bank channel model (if they have bank branches). The other thing you may want to be aware of as far as culture goes is that it is nice to go to the FiNet annual conferences and collaborate with primarily larger, very successfull producers. We've had some guys come over from some of the other indy firms and have indicated they don't like their old culture because there are still lots of smaller, part-time producers, that "work out of their basement" and don't seem as professional. Please realize this is a major generalization and probably not a fair one, but it can be an issue with some of the indy firms. One real nice feature of going RIA that I don't have is the ability to charge hourly fees and flat fees for say, helping somone with their 401k allocation or helping them set up a 529 plan or small IRA direct with a no-load fund company. I wish I could do this as it would be a nice way to accomadate smaller accounts. FiNet is rolling out a hard dollar fee set of services but I don't think it will be everything I want and I can't customize fees and services like I could if I were an independent RIA. Most of my revenue comes from asset based fees and 12b-1s so it is not a huge issue for me, but it may be for others. More food for thought...Your Father did busness with Hyman Roth, your Father respected Hyman Roth, but your Father didn’t trust Hyman Roth.