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Dear Financial Advisors of Water Cooler

Program is designed to help develop the right skills you’ll need to work as an advisor. Done over time, to help you refine and grow the skill set. Base pay, at least for the first 12 months to get you going. One on one coaching through each part of the program 

Mike79 wrote:

Program is designed to help develop the right skills you’ll need to work as an advisor. Done over time, to help you refine and grow the skill set. Base pay, at least for the first 12 months to get you going. One on one coaching through each part of the program 

I’m going to at least follow through with the math test then. I have a couple firms wanting interviews right now. Don’t know what my next move is, but it needs to be as close to 100K as possible. Which makes the advisor route seem like the wrong move.

¯\_(ツ)_/¯ It be like that sometimes.

^I seriously doubt that Merrill Lynch will pay $100k in salary to an entry-level financial advisor with no book of business.  

82 > 87
Simple math.

Googling around, ML FA development salary is about $60k. I bet if someone gets the minimum a few years straight, they’ll throw them out

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

Greenman72 wrote:

^I seriously doubt that Merrill Lynch will pay $100k in salary to an entry-level financial advisor with no book of business.  

Well, there is no (explicit) cost to him finding out more information, making connections in the industry and so forth. Perhaps he gets more information now, maybe its just not the right fit (for right now). I looked at getting into this business at a younger age (~24) as I made a few contacts through some family connections, but just felt the timing wasn’t right. Ended up getting in at age 30 and here I am (almost) 10 years later. 

I’ve seen development programs for advisors at the big banks in Canada, one was offering a base salary of $50k for a time period until you build up the book of clientele. The point is, you need a good program and mentors who are going to help guide you along as you learn how to manage money, financial planning etc. 

Greenie - maybe you should look into this program. Not sure where your comp level is right now, but this could be an opportunity to actually move from accounting into WM (which is what I think you actually need to do, but that’s another conversation). You also made some good points on the grid payout for WM firms - but each firm will have a different grid and expenses covered, so it’s not a bad idea to compare the various broker dealers to gain an understanding of what costs are covered by the broker dealer and costs you are resopnsible for as well. 

the chance of success as an advisor is low if you dont come from an affluent family. trust me. i used to sell cutco knives. only 12 percent of people who do the program succeed. shoot your shot. also i dont understand ppl who charge an hourly rate. if their account does not generate enough fees at 1 percent. then you prolly dont want to deal with them. charging them an hourly rate prolly hurts them more and does not add value.

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

the chance of success as an advisor is low if you dont come from an affluent family. trust me. i used to sell cutco knives. only 12 percent of people who do the program succeed. shoot your shot. also i dont understand ppl who charge an hourly rate. if their account does not generate enough fees at 1 percent. then you prolly dont want to deal with them. charging them an hourly rate prolly hurts them more and does not add value.

Ya success rate probably around 20%-30% after five years. Bank hires 100 advisors to start into their program, after five years probably 20 - 30 advisors left. 

What happens to the accounts the 70-80 who quit brought in? How do y’all reassign?

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

hpracing007 wrote:

What happens to the accounts the 70-80 who quit brought in? How do y’all reassign?

They would in most cases get transferred to another advisor within the same branch.  

I’m not familiar with the resignation process - but I assume you have a discussion with the branch manager and registrations department to get the ball rolling. They may want you to speak to any existing clients you have to let them know you are transitioning out, and another advisor will be looking after you moving forward. 

Mike79 wrote:

Greenie - maybe you should look into this program. Not sure where your comp level is right now, but this could be an opportunity to actually move from accounting into WM (which is what I think you actually need to do, but that’s another conversation). 

No thanks.  If I went to ML, I’d start at 32% and I’d have to do things their way.  Couldn’t do any of the planning stuff that I like to do.  

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

82 > 87
Simple math.

an ml advisor will sell you ml products to generate more fees so they have more monies

I love my cheese. I got to have my cheddar.

Greenman72 wrote:

No thanks.  If I went to ML, I’d start at 32% and I’d have to do things their way.  Couldn’t do any of the planning stuff that I like to do.  

Yeah that’s a yuge turnoff.

¯\_(ツ)_/¯ It be like that sometimes.

hpracing007 wrote:

Googling around, ML FA development salary is about $60k. I bet if someone gets the minimum a few years straight, they’ll throw them out

It’s been several years since I had any direct dealing with the wires, but it was $50k a year for two years and you have to raise $25mm in that time or you’re out. It may be $50mm in AUM now…I can’t recall. 

Greenman72 wrote:

Mike79 wrote:

Greenie - maybe you should look into this program. Not sure where your comp level is right now, but this could be an opportunity to actually move from accounting into WM (which is what I think you actually need to do, but that’s another conversation). 

No thanks.  If I went to ML, I’d start at 32% and I’d have to do things their way.  Couldn’t do any of the planning stuff that I like to do.  

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

Why wouldn’t you be able to provide the financial planning services your way, if you were at ML? 

Nerdyblop wrote:

an ml advisor will sell you ml products to generate more fees so they have more monies

I know you’re probably just being…you. But that’s not how that works. Your average ML advisor is selling the exact same thing an Ameriprise advisor is. Yes, ML has better access to illiquid products like hedge funds, PE, etc. but that’s a tiny part of their overall advisory business.

Going back to the model discussion, ML reps (along with every other FA out there) are encouraged to sell ML’s model portfolios, but that’s mainly to keep their advisors at ML. 

Greenman72 wrote:

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

from a client’s point of view, what happens if something happens to you, god forbid? How do you get around the objection of going with a small start up vs a large institution with redundencies in place?

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

hpracing007 wrote:

Greenman72 wrote:

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

from a client’s point of view, what happens if something happens to you, god forbid? How do you get around the objection of going with a small start up vs a large institution with redundencies in place?

It’s called succession planning and is a huge topic of every financial advisor conference over the last several years. Either you have a plan to sell to someone you like and trust, stay on part-time for a few years to be sure your clients are happy and retention is high; or, you don’t have a plan and your clients will get a call from either a random FA that picked up Greenie’s book or, more likely, some kid working the home office of Greenie’s BD trying to get them to stay. The clients will leave and find a new advisor.

Sweep the Leg wrote:

Nerdyblop wrote:

an ml advisor will sell you ml products to generate more fees so they have more monies

I know you’re probably just being…you. But that’s not how that works. Your average ML advisor is selling the exact same thing an Ameriprise advisor is. Yes, ML has better access to illiquid products like hedge funds, PE, etc. but that’s a tiny part of their overall advisory business.

Going back to the model discussion, ML reps (along with every other FA out there) are encouraged to sell ML’s model portfolios, but that’s mainly to keep their advisors at ML. 

But ML isn’t using a two tiered payout grid right? (i.e. if you sell ML product the grid payout is (higher at xx%, if you sell a different solution the grid payout is lower at yy%). 

Sweep the Leg wrote:

hpracing007 wrote:

Greenman72 wrote:

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

from a client’s point of view, what happens if something happens to you, god forbid? How do you get around the objection of going with a small start up vs a large institution with redundencies in place?

It’s called succession planning and is a huge topic of every financial advisor conference over the last several years. Either you have a plan to sell to someone you like and trust, stay on part-time for a few years to be sure your clients are happy and retention is high; or, you don’t have a plan and your clients will get a call from either a random FA that picked up Greenie’s book or, more likely, some kid working the home office of Greenie’s BD trying to get them to stay. The clients will leave and find a new advisor.

Well this is part of the point that I’m trying to get across to Greenie. He wants to make the move into WM, but its a slow transition for a whole list of reasons. By going into a firm like ML, they have all the support in house, opportunities to take over from retiring advisors etc. He could get a base salary to help pay for his lifestyle costs, while he builds up some AUM in that first year or so. 

I’m with an independent firm as well. Ya my grid is higher, but I pay for all the overhead from the higher grid. At ML, they pay for the overhead. You need to actually sit down and list out what expenses are covered and what you have to pay for each broker dealer. 

Mike79 wrote:

Sweep the Leg wrote:

Nerdyblop wrote:

an ml advisor will sell you ml products to generate more fees so they have more monies

I know you’re probably just being…you. But that’s not how that works. Your average ML advisor is selling the exact same thing an Ameriprise advisor is. Yes, ML has better access to illiquid products like hedge funds, PE, etc. but that’s a tiny part of their overall advisory business.

Going back to the model discussion, ML reps (along with every other FA out there) are encouraged to sell ML’s model portfolios, but that’s mainly to keep their advisors at ML. 

But ML isn’t using a two tiered payout grid right? (i.e. if you sell ML product the grid payout is (higher at xx%, if you sell a different solution the grid payout is lower at yy%). 

What type of product does ML produce that would be appropriate for an average investor? I’m not talking about PBIG teams or private banking. I mean for the regular ML FAs sitting in branches trying to get up to $300mm in AUM, what do they sell that’s a proprietary ML product? 

Mike79 wrote:

Sweep the Leg wrote:

hpracing007 wrote:

Greenman72 wrote:

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

from a client’s point of view, what happens if something happens to you, god forbid? How do you get around the objection of going with a small start up vs a large institution with redundencies in place?

It’s called succession planning and is a huge topic of every financial advisor conference over the last several years. Either you have a plan to sell to someone you like and trust, stay on part-time for a few years to be sure your clients are happy and retention is high; or, you don’t have a plan and your clients will get a call from either a random FA that picked up Greenie’s book or, more likely, some kid working the home office of Greenie’s BD trying to get them to stay. The clients will leave and find a new advisor.

Well this is part of the point that I’m trying to get across to Greenie. He wants to make the move into WM, but its a slow transition for a whole list of reasons. By going into a firm like ML, they have all the support in house, opportunities to take over from retiring advisors etc. He could get a base salary to help pay for his lifestyle costs, while he builds up some AUM in that first year or so. 

I’m with an independent firm as well. Ya my grid is higher, but I pay for all the overhead from the higher grid. At ML, they pay for the overhead. You need to actually sit down and list out what expenses are covered and what you have to pay for each broker dealer. 

It’s not worth it to get hung up on the payout grid. Once you account for the things you mentioned above it’s pretty much a wash. The biggest differences, now, are culture (do you want to own your business or work towards that corner office in a big ML branch?), and what products are offered. ML cut a huge amount of investment options from their platforms. Independent and especially RIAs have way more investment options than wirehouse guys.

Sweep the Leg wrote:

Mike79 wrote:

Sweep the Leg wrote:

Nerdyblop wrote:

an ml advisor will sell you ml products to generate more fees so they have more monies

I know you’re probably just being…you. But that’s not how that works. Your average ML advisor is selling the exact same thing an Ameriprise advisor is. Yes, ML has better access to illiquid products like hedge funds, PE, etc. but that’s a tiny part of their overall advisory business.

Going back to the model discussion, ML reps (along with every other FA out there) are encouraged to sell ML’s model portfolios, but that’s mainly to keep their advisors at ML. 

But ML isn’t using a two tiered payout grid right? (i.e. if you sell ML product the grid payout is (higher at xx%, if you sell a different solution the grid payout is lower at yy%). 

What type of product does ML produce that would be appropriate for an average investor? I’m not talking about PBIG teams or private banking. I mean for the regular ML FAs sitting in branches trying to get up to $300mm in AUM, what do they sell that’s a proprietary ML product? 

Ya I have no idea on the product side (I’m in Canada). I heard of a broker dealer in Canada who offered a higher grid payout if the advisor sold their own product, vs a lower grid payout on third party funds. (This practice has been stopped from what I understand). 

^Yeah, I think the DOL scare did away with that here in the US. Advisors have to disclose any conflicts now, which would include getting paid more for a similar product. 

Mike79 wrote:

Sweep the Leg wrote:

hpracing007 wrote:

Greenman72 wrote:

As an independent, my payout starts at 72% from dollar #1 and goes up from there.  And I get to brand my own business and run it the way I want.  

And if you look at my B-D platform, I doubt that ML offers anything of value to the client that we don’t offer.  There may be some proprietary hedge funds or UIT’s or something, but I wouldn’t sell them to my clients anyway.  

from a client’s point of view, what happens if something happens to you, god forbid? How do you get around the objection of going with a small start up vs a large institution with redundencies in place?

It’s called succession planning and is a huge topic of every financial advisor conference over the last several years. Either you have a plan to sell to someone you like and trust, stay on part-time for a few years to be sure your clients are happy and retention is high; or, you don’t have a plan and your clients will get a call from either a random FA that picked up Greenie’s book or, more likely, some kid working the home office of Greenie’s BD trying to get them to stay. The clients will leave and find a new advisor.

Well this is part of the point that I’m trying to get across to Greenie. He wants to make the move into WM, but its a slow transition for a whole list of reasons. By going into a firm like ML, they have all the support in house, opportunities to take over from retiring advisors etc. He could get a base salary to help pay for his lifestyle costs, while he builds up some AUM in that first year or so. 

I’m with an independent firm as well. Ya my grid is higher, but I pay for all the overhead from the higher grid. At ML, they pay for the overhead. You need to actually sit down and list out what expenses are covered and what you have to pay for each broker dealer. 

If I got hit by a bus or fell out of an airplane–there is only one other Cambridge advisor anywhere close to here, so they would serve my clients while I was out.  And if I never came back, they would buy my book of business.  It’s in the agreement.

And like Sweep said elsewhere, when you’re with Merrill Lynch, you do things Merrill Lynch’s way.  When you’re independent, you do things your own way.  I like doing things my own way.  

I don’t mind paying for all my own overhead.  If I had every software tool known to man and had to pay for my own office, I could still get away with less than $30k in business expenses.  (That includes Microsoft 365, Morningstar Office, financial planning software, Thomson Reuters tax software, document management, AICPA dues, CPA license, travel, continuing education, rent, office supplies, license, tech fees, etc.)  If you’re on a budget, you can do it with less than $10k.  

So if you’re at $50m and charge a flat 1% = Merrill Lynch brings home $225k, and gets everything paid for.  I bring home $425k, because I’d be at an 85% payout.  Subtract my $30k in business expenses, and I make $395k per year.  I’d rather have $395 than $225.  I guess I’m funny that way.  

82 > 87
Simple math.

I’d imagine it is pretty tough to just raise money on your own with no referral network. I know a lot of the custodians have an MFO referral network for more complex clients they cannot easily service and I’d imagine working at a big place like ML gives opportunities to have friends of clients refer you or to participate in marketing events. Just hanging out a shingle without any anchor capital and placing ads in the classifieds sounds like a much higher risk of failure.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

For the OP, they are probably just trying you get off the phone without hanging up on you.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

brain_wash_your_face wrote:

I’d imagine it is pretty tough to just raise money on your own with no referral network. I know a lot of the custodians have an MFO referral network for more complex clients they cannot easily service and I’d imagine working at a big place like ML gives opportunities to have friends of clients refer you or to participate in marketing events. Just hanging out a shingle without any anchor capital and placing ads in the classifieds sounds like a much higher risk of failure.

yeah, the assumptions for the pay in greenman’s post assumes you can pull the same AUM and charge the same as an independent or with a big name. Why wouldn’t everyone go independent if that were the case?

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

^Everyone IS going independent.  

That’s the big push these days.  Build up a clientele at the wirehouse, then launch your own RIA (or in my case, be a registered rep at an independent BD).  

82 > 87
Simple math.

Don’t misunderstand me.  There are benefits to working at a big brand-name wirehouse.  And if I were in sell-or-starve mode, I’d probably go to the wirehouse too.  But I have a day job that lets me do both.  

edit - let me correct myself - I have a day job that allows me to grow my practice organically, and develop my practice the way I want it to be developed.  I get to choose my own vendors, customers, processes, business model, and investment philopsophy.  I don’t have to do things “the Merrill Lynch way”.  

82 > 87
Simple math.

Ain’t bberg like 20k a year? coincidentally i interned for a person with 600m in assets b4 at 1 of the bbs. i then worked for a consulting co and had access to pay data… liek every person. so it was pretty interesting. 

i also have a buddy that generated 2m/year for one of hte major banks as an advisor (but he told me 70% of biz was from slinging mortgages). i think his payout was about 1m. and he prolly netted 500k.

I love my cheese. I got to have my cheddar.