Related Posts
I'm curious what the average salary is for an Associate Agent. I'm licensed & do everything after the sale is made as well as refer new business. I have 14 years in the industry but have been at the current company less than a year, so I know that plays a part as well. Anyone in a like-position by chance?State Farm Allstate Travelers
More Posts
What are your top 3 favorite restaurants in LA?
Accenture hiring for following SAP AND JAVA skills experience range 2.years to 12 years. Folks who are genuinely interested in working with Accenture and looking for referral, please share your resume at helpacenreferral@gmail.com along with DOB and location preferences and I shall refer.
Job location: All Accenture delivery centers , India.
Thanks.
January Digital is hiring across a variety of teams! We lead businesses to grow and adapt through strategic consulting, digital media excellence and data driven analytics. Additionally, we are proud to be named a Best Workplace by Ad Age, Fortune, and Inc. for our focus on building great people and cultivating an innovative culture. Learn more + apply here! www.januarydigital.com/careers?hsLang=en
Additional Posts in Financial Advisors
Mentor
How are you celebrating 4th of July?
Anyone in the Houston area?
New to Fishbowl?
unlock all discussions on Fishbowl.
What you're missing is that most people have bills to pay: rent, student loans, food, cell phone, gas/parking/monthly train pass. And it takes time to make enough on commission to pay these. So if you don't have a parent or spouse footing the bill, as much as you'd like to be able to be commission-only, many times it is not realistic
These kind of questions really get me pissed. First, and Advisor is not an entrepreneur. At least not if you are interviewing them. Also, you don’t want an entrepreneur there, you want an employee. Hence why you are interviewing.
Also, base only decreases earnings if you some how call it a draw and they have to pay it back.
Set it up this way, what split do you want to make? I assume you are a 24 or manager, so what ever their cut is, say 60% (lower than our office but higher than a wire house). Then give them a “base” of 50k forgivable draw. So, until they are bringing in 85k in revenue, they are getting 50k. Your overhead is deceased (the base) with every new client that rep brings in.
Now you two are on the same team. You are motivated to train them to be successful, to get off your draw. They are motivated to do better because as soon as they bring in 85k, the sky is the limit. It’s a win/win!
I think candidates are getting smarter, to be honest. 100% roles can be lucrative but it’s a grind and people can smell hunger and desperation for the next bonus check. I work for a decent size wirehouse and I make 50k flat plus what they call a discretionary bonus. Last year I made close to 100k after bonuses. I think the entrepreneur trend is dying and people want stability
Times have changed. Straight commission out of the gate just leads to high turnover numbers. Make an investment in a solid employee via salary and give them time to succeed. They will contribute much more to the bottom line over time than what you have to pay them in salary to buy them time. Plus they can help with other office work, like research, financial plans, etc.
Being an "entrepreneur" is a luxury reserved for those who can get financial support and living expenses paid by a parent or spouse. For the rest of us, we are burdened with the responsibility of paying these bills and if the commission doesn't hit in time we can be homeless or have or cars repo'd by the dealer and then not even be able to come to work! And health insurance and car insurance aren't free.
There is no place in our industry for someone feeling "hungry”. We should all be fiduciaries and if you “need” a paycheck it causes an inherent conflict of interest. The advisor own interest over their client.
This isn’t Glengarry Glen Ross. Putting young advisors in that position is the exact reason why the DOL rule was invented and NEEDs to be implemented.
FA3, I get that. I agree that there are clients that need all of those things. I’m suggesting that someone new in the business, say the first 2 years, might not have the knowledge to know when they are needed and when they aren’t. What they will know is how they get paid. And while they don’t mean any harm, they could end up doing something “wrong” just because they need money. Thats what I’ve been address was Pru’s question about hiring and interviewing.
I’m of the mind that if I’m hiring someone, I’m making a commitment to that person that I will do everything in my power to help them succeed. That’s why you can’t get fired for lack of production at my firm. You could stay on our draw forever if you wanted. But if you aren’t making what you would like, I don’t want you out there knocking on doors or dialing the phone. I want you finding something to be passionate about in our industry! Maybe you feel you want to help teachers with their TIAA CREF account, then you better spend every free minute you have studying it. Because when our firm gets a retiring teacher, guess who’s door we are knocking on.
As managers and people who are “leaders” in our industry, we have a responsibility to usher in the next generation. I believe that we should never teach what we don’t know, and never lead where we won’t go. If I am asking a new hire to dial the phone 100 times a day, I better be prepared to dial 101 times. Just my view, I could be completely wrong but that’s the kind of place I wanted to work at and the manger I wanted to work for. So I built the place and I’m trying to be the manager. Nothing wrong with other places.
New FAs gotsta eat, too!!
Not to mention, do you really want someone working for you that NEEDS to pay their bills this month. He could suggest a diversified portfolio after assessing the risk of the client and get paid 1% annually on it or say F it, I need to eat! Here is a VA!
FA3, this is how I look at it. I was an idiot my first 3 years as an advisor even after several years as a trader. I just didn’t know what I know now. If I am hiring someone, I want them to be like me now, not the idiot. If that takes money out of my pocket to get them there faster, I’m ok with that. But those decreasing salaries (like at a wire house where I worked) don’t work for the majority.
Take Merrill right now. 3 year decreasing from 36,24,12 a year. You are 23 y/o, new to the business. Let’s hope by year 3 you have your feet under you. That final year you make 50k (12k base and 38 payout). Your payout is made up of clients that are friends of friends or friends of family because that’s all the people a Now 26 year old knows that has money. Now, year four you lose the base and the high payout %, plus Now you don’t get paid for accounts less than 250k. You could easily see you income go from 50k to 25k. You quit because you can’t eat and Merrill gives those accounts to another rep.
So Merrill used you to prospect (the hardest part of our job) and then you leave and some rep (who probably thinks you were just lazy and didn’t make enough dials) gets your 3.8MM of new assets.
To me, that is a shame!
If someone can generate their own book of business, why pay a company 60% or more of the fees. Why not pay a base salary or a percentage of the fees generated from the clients they are responsible for and a higher percentage of the first year fee if they are responsible for bringing them.in
I actually have a selfish reason... I’m going to retire in 20 years, if I can build a firm of like minded advisors, when I retire, I know my clients will be taken care of the same way I took care of them.
Once we get to the point where we are “comfortable” with income, it’s not hard to make an extra 10% a year more. With the time that we now have that isn’t out prospecting, we could spend it training a mentee (which has by far been the most rewarding part of my career). So it’s selfish that I get to do what I love. But I’m at peace with that! Have a great day all, heading out in a few for date night with the wife!
Not to mention that today’s commissions have been stripped out compared to the “old timers” comp grids. It’s a lot more difficult to get up and running these days.
You don’t want to be desperate in this business. It stressful enough as it is.
Hence why they are seeking employment
The industry wants us to change to fee based and away from commission. Feels like 60%+ of the people on here say "go indy RIA". I don't disagree with it, but as has been said, it's difficult to start as a young advisor.
Managing partner 1, I like that, thank you. I appreciate all the feedback on here!
@Managed Partner 1 I couldn’t agree more. I can always tell when my competitors are commission only because you can smell the grimy desperation from them. I would NEVER want someone desperate for their next check to manage my money. Quality advisors won’t settle for shitty pay structure!!!!
MP1, thanks for the post. Good structure of pay vs incentive
Just so we are clear, I have no problem with commission only advisors. My comments are directed to the topic of new FAs looking for a salary.
There is nothing wrong with Commission only and if I was still with a BD only, I would probably be commission only because using their RIA is ridiculous cost (it was around 30 bp). We are actually a hybrid and leave it up to the advisors which side they would like to use.