[quote=Gordon Gekko]Good point, Vet20. At this point we are weighing 50% of the options (the “leaving” options) with the other 50% unknown. The rumor mill seems to indicate we’ll know something anywhere from today through year-end. Have any high profile AGE guys left the firm lately? [/quote]

A huge team in my region left or is about to leave for Ray Jay top 10% prodcer at AGE

If the big guy from Rochester NY ever leaves, it will get real interesting.

I apologize for being wordy – I just rattled it off… The point is what is the REAL net after expenses percent payout for an average independent and how does it compare to 43.5% or more at WS?

[quote=Gordon Gekko]If the big guy from Rochester NY ever leaves, it will get real interesting. [/quote]
Mark Dick?

You got it. That guy is still the gold standard on the Legacy AGE side.  By the way, would it be tacky to have my own business cards printed with “Legacy AG Edwards” on it? I am sure St. Louis, San Francisco, whoever would love it!

[quote=Sell High]I apologize for being wordy – I just rattled it off… The point is what is the REAL net after expenses percent payout for an average independent and how does it compare to 43.5% or more at WS?
[/quote]
It wasn’t the wordiness that made it painful to read it was running everything together with no paragraphs.  The return key is your friend.  Like this.

Amazing what a little bit of white space will do for you!  But I digress.

If you do a search you’ll find a couple recent threads about this same topic about nets.  Short answer is it varies tremendously mainly based on your revenue level and  - critically - how much you choose to spend.  This is, after all, a business, and your results depend on the decisions you make.

If you want a large staff and a huge Class A office outfitted with top of the line furniture, your net will be much lower.  However,  the guy you mention sounds to me like he would certainly be on the lower end of the net spectrum.  Either he spends more than most, or his gross isn’t sufficient to cover enough of his fixed costs, i.e. if his rent is $30,000 per year, that represents only 3% if his gross is $1 MM, but 10% if he grosses only $300K. 

Percentages alone can be deceiving, and averages don’t get you very far in this, just as using average production numbers where you are now don’t mean much for you individually.  You need to run proformas for your projected gross and your projected expenses.

Fortunately you’re used to doing financial projections and plans … right?

Morphius, you must have taken extra writing courses in college as you clearly write well. That might sound smart-assy but I am serious.

Thanks, Gordo - not so much for the unnecessary compliment but for the laugh I got when I saw your “{Return Key}.”  That was great! 

Class A office space is just a category of the fanciest/most expensive office space.  Actually it doesn’t necessarily have to be fancy - it more refers to the amenities in a building.  Most urban high rises built in recent years would generally be Class A.  Not surprisingly, Class B space is generally in older buildings and rents for less, and so on.

Here’s another down and dirty exercise that some might find simpler: calculate the dollar amount that your B/D currently takes from you, using rough averages such as your 60% based on your gross.  Calculate a specific dollar amount.  Write it down.  That’s your bogey.

Now that you know what you are paying them to provide you with everything they provide you, you can estimate how much you would choose or need to spend to replace those things you want to replace.  Pay particular attention to staff costs and rent costs, as well as your new B/D overrride (if any) as those represent the lions share of your future expenses.  Anything left over potentially is yours to keep for taking the effort to do the rest.

If the additional amount available to go into your pocket doesn’t seem like it’s enough to compensate you for the hassle and whatever you feel you lose, don’t move.  If it does, do.

Didn’t some of the rochester guys go to RBC?

Didn’t some of the rochester guys go to RBC?

I would think the few regionals left (RBC, Stifel, Hilliard, Ray Jay) will get the bulk of the departing AGE guys, not including the indy converts. All of them will say they are just like AGE used to be, which from what I recall is a debt-free b/d with high marks from its client base and brokerage force. If someone without the name James takes over at RJF, watch out (reference Tad Edwards).

Tom James has two sons both in the business.  On top of that the people right under Tom are first class not like Bagby.

At least 3 $million+ producers left northeast in last 2 weeks

[quote=Vet20]

The hardest part is to wait. 

[quote=YHWY] [quote=Vet20]

The hardest part is to wait. 

I’m happy as a clam, but thanks for concern, shreddder. I made a great decision that, in hind sight, was made to look even better, almost prophetic. My friends (and the rest of you) that are still at WB post AGE are working for an insolvent parent company and are being slowly screwed to the wall and are just taking it. I feel badly for them (and some of you) now that I see what the business looks from this side and am intentionally being provocative to try to help those who might benefit greatly from a move to quit taking shit and just do it. This WB situation is BAD for legacy AGE folks. That is a fact.

[quote=nestegg]

[quote=Gordon Gekko]If the big guy from Rochester NY ever leaves, it will get real interesting. [/quote]
Mark Dick?
[/quote]

Mark is the real deal, fo sho.

I spoke with a person at an independent firm, one of the bigger independent firms… He confided that if you cast aside all the BS his payout after expenses such as rent, computer, staff, etc… it was about 55% - 63% gross before taxes.  It never went over 64% or so he said and he’d been in it for about 22 years.  I don’t think that included the additional 6% in social security you have to pay out in taxes.  Am I accurate with those numbers?  Next the new payout plan eliminates ticket charges on non-discounted trades - so, as I said, 40K seems to be paying 43.5% - isn’t that somewhere in the area of AGE?  Finally, in the past I moved from a real big firm to a smaller one.  The smaller was eventually taken over and became a real big firm once again.  I prospect more than many and the difference in response from a big well known firm to a smaller but still recognizable firm was nauseating.  When we were acquired and became big again, I said Thank God for that.  My business then increased substantially.  Maybe it was all in my perception but numbers are numbers.  My point is, if your business is based on new money, even a 10% perceived difference in status of the firm you work for can add up to $40,000 a year in revenue.  If the 40K figure is too high for you, don’t estimate 1 year.  Assume an average life of client of 7 years and calculate the dollar difference name recognition makes.  Just 1 extra million dollar account per year can add up.  Coke spends hundreds of millions a year on brand and name recognition, if it doesn’t matter why are they wasting all that money?  I think a big name and big advertising (if done correctly) is a big deal but you might disagree.  If independent to wirehouse makes no diffence at all, answer this:  Why is the average independent broker production is around $140,000 average wirehouse producer at $500,000 or more.  My point is that if the spread on payout nets to about 11% (that’s 17% less 6% extra Social Security tax), why not have the big name?  Thanks to independents and the apparent ease of going that direction, I feel payouts at the big firms will now have to be close enough to be just below the net payout from going independent.  That’s a good thing.  I feel as though WS recognized this trend and opened up choices of independent, profit formula, or the standard grid to brokers.  Here’s what I see down the road:  Million dollar producers will eventually receive over 55% on average at wirehouses.  I could be wrong but that’s the way it seems to be going.  I also feel that WS and Wells will start a big advertising campaign after the December merger date.  The new company should be very well capitalized and thats a great thing.  So, if the payout spread is minimized, the wirehouse approach seems to me to be better for business at this point. So things are good and we just recvd a big raise with the elimination of that horrible ticket charge (if you don’t discount equity trades) thats a significant amount of money in payout for many. But no one on the board has said anything good.  I think its great however everyone on this forum is talking about boiling frogs.  No one has said anything positive.  Again, it seems to me that even if these people were getting 120% payout they’d find something to gripe about. 

[quote=ryedog123] What we gain in monthly cash pay, we lose with the elimination of our annual cash bonus and the addition of ticket charges (for disc. trades). 

What are the managed money incentives? I don’t do any and don’t plan on changing to fit into Ws’s model but I am curious. I know I can look this up at the office tomorrow but hook a brother up!