Wet_Blanket:

There is the occasional client that wants to hold something that isn’t in the investment model.  Drives me crazy from a compliance/liability perspective.

  Can't they just sign a waiver/acknowledgement letter?

B24:

Chief, I think he means, for example, what if they have 50K in company stock that they don’t want to part with (regardless of your recommendation or strategy), and you are managing 500K with your own “strategy”.  Can they just hold the stock in the account while you manage the rest for a fee.

  Again it depends.. I had some clients with clients with some large company stock holdings and we wrote covered calls to decrease the position and create income off of it.   But if they are going to never sell I open another account, and hold it there(has never happened before though)   Disclaimer: Most of what I deal with is qualified

B24:

[quote=Wet_Blanket]There is the occasional client that wants to hold something that isn’t in the investment model.  Drives me crazy from a compliance/liability perspective.

  Can't they just sign a waiver/acknowledgement letter?[/quote]   Currently we strongly discourage / tell them to open a retail account.  But when it does happen, we will tell them that we will not manage the position, will not bill on it, and will not even be able to view it (because we put it below the line).  We give them the impression that if the stock tanks, we will do nothing about it.  We discuss this with them, and send a letter of confirmation.   I would rather just never allow it....ever.   I have more client situations that drive me crazy too - if interested.

So does anyone know if, how and where I can begin to learn about becoming the money manager and the FA so I can capture 100% of the fee charged to the client?

[quote=NEVER_proprietary][/quote] [quote=sfez]

   You are mixing 2 types of accounts.......   Unlimited trades for a set fee - If the account is over 500K, you won't be competitive if you are over 1%...........If under that, I try to go with 1.5%......But, sometimes I need to do 1 or 1.25% to  be competitive.....   Managed Money - Putting the money with money managers......usually 100K minimum per manager (250K minimum for muni managers).......You can go from 1.5 to 3.....They usually keep around 1/3 of it and you get the rest to your grid......So, charge 1.5, give up .5 and keep 1%......[/quote]       I guess what I'm describing is a managed account where I am the money manager too. I don't want some other financial professional touching or dictating how and where to invest my clients funds. I would maintain the client/broker relationship and manage the money (on a non-discretionary basis while I'm just starting out) while charging a fee in return for this service/advice. I love managing money and this way I wouldn't have to give 1/3 of the fee away.   My managed account minimum would be 50k, if the client wants to test out my performance they are welcome to open a smaller commission based account and later convert to fee based when reaching the 50k mark.   Am I missing anything or is there any advice you could give?   Thank you   [/quote]   Some firms have a minimum account balance and a minimum charge on these types of accounts........So, they may allow $50,000 and up, but they may require the minimum fee to be $1,000 annually......   For example, $1500 or 2%, whichever is less, on accounts.......   Most firms charge quarterly.........on either a quarter end balance or on an average month-end balance during the quarter.........   I like these accounts......BUT, you have to be careful of 2 things: 1- Traders who will take up a ton of your time, call you to enter trades for them regularly, and possibly blow themselves up when they are wrong, or when we hit a correction.....   2- The accounts who never make a trade and wake up a year form now and want out, since they paid a fee and hardly traded........   Also, anytime there is market volatility and statement values go down month after month, clients get upset over the quarterly fees.......since they are losing money...   Just some random thoughts on the stuff.....   Good Luck.....  

 Thanks for the reply. I'm ok with with traders calling in because they rarely do. I guess it's because whenever my clients call I ask for more money. I'll be honest if a client make no trades for the year I'd call the client and fire them because I'm really not interested in feeling like I'm taking money from someone. How do you handle a situation where the account value keeps decreasing and they bring up the fee?....I would think it would be worse on a commission based account because the overall charges would be higher a year. I charge atleast 2% per transaction.       [/quote]   Some firms have a minimum account balance and a minimum charge on these types of accounts........So, they may allow $50,000 and up, but they may require the minimum fee to be $1,000 annually......   For example, $1500 or 2%, whichever is less, on accounts.......   Most firms charge quarterly.........on either a quarter end balance or on an average month-end balance during the quarter.........   I like these accounts......BUT, you have to be careful of 2 things: 1- Traders who will take up a ton of your time, call you to enter trades for them regularly, and possibly blow themselves up when they are wrong, or when we hit a correction.....   2- The accounts who never make a trade and wake up a year form now and want out, since they paid a fee and hardly traded........   Also, anytime there is market volatility and statement values go down month after month, clients get upset over the quarterly fees.......since they are losing money...   Just some random thoughts on the stuff.....   Good Luck.....  [/quote]

[quote=NEVER_proprietary]

 Thanks for the reply. I'm ok with with traders calling in because they rarely do. I guess it's because whenever my clients call I ask for more money. I'll be honest if a client make no trades for the year I'd call the client and fire them because I'm really not interested in feeling like I'm taking money from someone.   How do you handle a situation where the account value keeps decreasing and they bring up the fee?....I would think it would be worse on a commission based account because the overall charges would be higher a year. I charge atleast 2% per transaction.       [/quote]   How do I handle it? I explain the benefits and tell them that most accounts come out ahead in the long run by paying a fee instead of transaction charges.......   Sometimes they insist on getting out and becoming transactional, usually they say OK, stick with it and move on to another topic.....