Financial Advisors

Question for other non-owner Financial Advisors at RIAs... What % of client revenue do you receive for managing your AUM and/or planning clients? And do you receive a salary on top of that?

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I guess we all have an incentive to make everyone else produce more. Say you are a 250k producer. That’s 75k to the firm. I produce 1mm that’s 300k. Our over head is 200k. Firm now has 375k to cover 200k, leaving 175k. You represented 20% of our total rev. You get 35k and I get 140k in profit share. Now, through training and acquisition, you now produce 500k and I’m at 1mm. Same deal. But now you are putting in 150k and I’m putting in 300k. We have 450k to pay 200k, leaving 250k. You represent 33% and get 82.5k, I get 167.5k. So I got a “raise” of over 20k for doing nothing but helping you get better. No extra clients or assets. So I guess that’s how I make money.

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Always looking to expand but the problem with big cities (I’m from Indy) is this doesn’t work. We can’t compete in those cities for talent because of the names. Right now we are in Rochester/Tampa/Columbus. I’m always looking to expand but I need two things, a retiring rep I can buyout and a young advisor to give that book to. So when I expand, the firm buys the book, give the new rep 40% (of course with the 50k floor) and they get to work that book with any new money going to their “personal” book. 5 years and my book is over 120MM, with the total over 400MM for the firm. I’m only 40 so I hope in 10 years our entire industry looks like our firm. I believe it’s better for everyone (clients and advisors).

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I don’t... that’s not the point. We are a team. “I don’t teach what I don’t know, and don’t lead where I won’t go.”

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40%, no salary. No book ownership. Yes, I'm looking. Trying to separate the wheat from the chaff.

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80% no salary. Covers full time staff and great office. I pay for marketing myself but I also get all the leads. Have Partnership with the firm, profit sharing. Succession plan for my heirs and Agreements to buy books from retiring advisors to expand the business.

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Everyone at our Hybrid (including the owner) gets 70% on their production. Everyone owns their own book, all expenses are paid by the firm and left over is profit share. Usually net around 80%.

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Also, everyone makes a forgivable 50k draw to help new advisors so there is a floor.

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We need firms with better models like yours in the big cities - Philadelphia, Jersey City, Chicago, Denver. I've been looking around (as a millennial and not wanting to leave the big city I'm in) and it's difficult to find more ethical firms hat compensate their advisors so fairly and allow clients needs to be served (by doing so)

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85% GDC payout.

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Thanks, guys! Brings up more questions... What % are fee-only Advisors getting? And do you own your own book?

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No one at our firm is “fee” only.

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But there “GDC” is 100% in the RIA side and 90% on the BD side. Most only use the BD side for annuities so the majority is in the RIA side and our company wide average fee is 1.32%. Yes, everyone owns their own book and there is no noncompete. Their retirement is a 2x 12 month trail of their production to the firm. That allows them to walk away when ever they want without having to find a successor or qualified buyer.

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Managing partner what state are you in?

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NY,FL,OH.

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If your paying out 70pct then how do you as the owner make money other than your own production?

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I’m not “paying out” anything. I have the same deal as everyone else.

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FA3, there is no such thing as a bad model or firm. Just bad fits between an advisor and that model/firm. If I can give you any advice, take some time to know EXACTLY what you are looking to do with your career, then start looking.

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I'm a new adviser in a smaller town. $40k base plus 35%. Lots of opportunity for growth in the firm I'm at, so I'm happy.

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