How do you start from scratch?

[athena]

Please no sarcastic comment.


If I knew I had no chance to take any clients (the ones I helped the firm to land) from the existing firm, how can I start from scratch to satisfy any BD's min. production requirement?



The longer I work w/ the firm, the less I fiind I will have a future w/ the firm. I would love to work for somewhwere else to get more exp., but currently there's no opening to match my skill & interests. I'm a trained general practioner of comprehensive financial planning & absolutely love what I do to help clients plan for their financial future. Even though I have all necearry licenses, but I don't recommend ins. unless the client has a dire need. Thus, I don't want to take an entry level ins. sales job. To start on my own, I must be w/ some B/D. Yet, no BD wants to take me w/ no clients.



W/ no other pos. a/v, what other choice do I have? Please help.

[Bob H]

First thing i would do is buy the Nick Murray book... The Game of Numbers. Its about prospecting for financial advisors.

Been in the biz 20 years and I'm a big fan of Nick.

Good luck.

Bob

[Nancy5]

Have you considered getting your RIA and opening your own practice? It certainly isn't easy and you may starve the first three years or so, but it is an option.

[athena]

I appreciate all your comments. However, it's not practical for me to open my own RIA for the lack of exp. & asset. I definitely would read the book, but what do I do meanwhile? Every client I acquire, it belongs to the employer. So, no matter how much clients/assets I get for the firm, I can't take it w/ me. I'm back where I start again.

[Bob H]

I appreciate all your comments. However, it's not practical for me to open my own RIA for the lack of exp. & asset. I definitely would read the book, but what do I do meanwhile? Every client I acquire, it belongs to the employer. So, no matter how much clients/assets I get for the firm, I can't take it w/ me. I'm back where I start again.

You're over thinking this. You have two options. 1) Leave now and look for clients; 2) Bring in clients you leave behind.

Bob

[the observer]

Let everyone know which State you are from.

BTW, starting your own RIA is not that bad... PROVIDING you are a self starter and go getter that can market your practice. It can be done if you are prepared to work at it. I know of at least two companies that will allow you to open your RIA door with $0 in assets based on your willingness to work hard and make it happen.

[athena]

Would you please let me know which two RIA requires $0 to start? I have all the knowledge of financial planning, zero exp. in back office (we have a great secretary handles so well that I never need to do all paperwork). I'm willing to learn & work hard for myself. Thanks

[Bradly T.]

Do you have a fully equiped home office (at your home) with integrated software for planning and asset management and quality printers, scanners, copiers, file cabinets, desk, etc.? It would be much easier to transition from a foundation of actual capabilities regardless of your chosen business model. A functional process will be required from first client forward. You will be required to network like crazy for next year or two....you may need to do "free" or deeply discounted planning for friends, attornies, CPAs, charities, churches, nonprofits initially to broaden your referral base - have your rate sheet and share it....but what you need is work more than money. Don't know if your securities licensed but dual registration offers some advantages to early start up earnings.....management fees pay the most - later and over time, but commissions for small account A shares, annuities, REITs, etc. can jump start professional income - 10 $100K A share accounts would pay you about $40,000 in commission or about $12,000 in managed. The beauty of managed is the $12k keeps coming year after year (right out of your clients' pockets of course). Put your large accounts in managed and small and bucketed/pocket accounts in commission and benefit from both models in one firm - yours. STUDY - business, consulting, psychology, marketing......and meet everybody you can and tell your compelling story and value proposition.


Think specialization over the next two years while you find your open doors, receptive audiences, and professional niche passions. Like Bob said, you may be overthinking this. It's not easy but many of us with more determination than forsight made it. It's your character that makes you successful, it's your craft that keeps you that way.

[the observer]

You can try Scottrade, I believe they will allow someone coming in with $0 dollars right now.

I personally use Trade PMR. I like their system. There are pros and cons to everything, some like it, some don't. They allow people coming in with $0 right now too. At Trade PMR you should talk to Fred Van Den Abbeel at 888.579.8640. I would suggest you stay home one day and attend one of his regular webinars where they walk you through how there on line system works. You can create a virtual environment from day one and stop the paper.

(Disclosure: I use Trade PMR and am very happy. They have the right mix of services for me. They may or may not be right for you. I am not otherwise affiliated with or compensated by Trade PMR)

[athena]

I do have Series 7, 66, & life & health licenses, and I'm also a CFP. If I'm reading your comments correctly, I can literally walk away right now & open my office w/o associating w/ any BD. What about my U4? Whom do I consult to regarding to compliance issues, etc?

[Bob H]

It's not easy but many of us with more determination than forsight made it. .

Damm Bradly... I laughed my butt off on that one. It's absolutely true. You just get to a point where you say... I'm doing it.

Bob

[Bradly T.]

If I'd had foresight.....I'd be a plummer!! =)

[the observer]

Hi Athena,

" I can literally walk away right now & open my office w/o associating w/ any BD. What about my U4?"

NO... not without a PLAN of action. Do the homework FIRST. Talk to Fred, do an on line seminar. If you don't like them, talk to Scottrade.Do it all FIRST. As long as you've been good, you'll get a U5 at termination from your old B/D and you are free. Check with your State, you may or may not need your 65. You DO NOT need to be associated with FINRA or a B/D to take the 65.

Unless you are REALLY good at the minutia, You're going to need a compliance consultant to help you with your paperwork.

Like I said before... let us know which State you are in it really helps. I know people on the West Coast, others know people on the east coast etc.

[Twig]

I would find an independent B/D and ask them to plug you into a local branch office. The Branch Manager would have the supervisory responsibility but you could get a higher payout because you are riding the coattails of other peoples production numbers. Get in writing that once your production hits certain targets, you get higher payouts. Also get in writing that your clients are your clients and you can take them with you should you decide to leave to form your own office. I don't know how others feel but I am ecstatic when one of my producers gets big enough to go off on his own. That means I helped them grow and got paid along the way plus they helped lots of families too. Believe it or not, there are people left in this industry who aren't greedy!

[the observer]

Sorry Twig...

but why would someone who has been in the business a while want to deal with that, when they can walk away from the B/D world concentrate on building their own client base and not give up a dime to any B/D. Compliance consultants are not expensive and having a virtual office does away with paperwork. With the right relationship, you can affiliate, take no haircut on anything, 100% payout all round, and pay a compliance guy a lot less than the percentages to make sure you're not violating any laws. Some companies do not charge for their trading platform and if you have a clean CRD leaving FINRA, your E&O will be cheaper.

For example, I have the same coverage as before but with a $2,500 deductible for IA AND financial planning for nearly a grand less than my old B/D charged me. My old deductibles, for a grand more money, were $10K by IA and $50K by financial planning and no "Affirmative obligation and duty" to defend. In other words, the B/D could have settled any matter over my head and it would have been on my CRD record. Now I get to decide whether to fight or not. I've been in the business 25 years and have never had a letter of complaint, let alone an arbitration or lawsuit, but if I ever did, I'd want to be able to defend myself.

Additionally as an RIA, there are no production targets to meet, no fear of getting terminated for lack of production, no corporate internal politics to deal with etc.etc.

I love being free and the only thing that makes me really angry on reflection is... WHY THE HELL didn't I do it sooner!

[Proctor]

Athena-


I made the leap to an independent two years ago. I am now a producing registered principal. I would be willing to speak with you and introduce you to our platform. I'm went with ING FP after doing alot of research. Looked into RIA etc.

emial me - [url=mailto:ezraproctor@ingfp.com]ezraproctor@ingfp.com[/url] and I'll share with you my experience with the different platforms and how I started finding business when I was not able to bring a lot of clients over (coming from a bank platform).

[Athena Diva]

Athena, I went blindly out on my own 6 years ago (Name of my firm is Athena!). Unless you have some iron clad non-compete you can usually attract some old clients. While you can't solicite them if they find you they are free to associate with whomever they want. The key is to be a marketing crazed person, be prepared to spend nearly every waking moment promoting your business. I joined the chamber and went to every event, joined other networking groups, etc. Does it cost money yes. If you don't have some line of credit or other sources of income to get your through the first couple of years you really can't do it. What you can do is start to put a plan together, marketing, putting yourself out there etc so that when you are ready you can pull the trigger successfully. If you are not good at marketing, prospecting but good at working behind the scenes then you shouldn't go out of your own but search for a firm that is more in alignment with your values. I would be happy to speak with you directly. [url=mailto:diane@theathenagrouponline.com]diane@theathenagrouponline.com[/url]

[kurtz3173]

www.usaa.com

[athena]

Thank you for all your helpful suggestions. I'm really overwhelmed by your kindness. Just a few days ago, I felt so alone & had no where to turn to. Now, I can see a glimpse of light of my future--be able to do what I do the best: have my own firm and provide clients financial advice they truely need. I may not be able to bring any clients I helped land w/ my current firm, but w/ hardwork, I think I can find other clients. I hope you don't mind if I email some of you individually for further opinions & exp. Once again, I'm grateful for the discussion board and the helpful hints you shared w/ me.

[northwoodsjoe]

Athena,
As mentioned before……do not over-think this. Based on what you have said, you are clearly already out of there. Once you are emotionally not-connected to your firm, you need to move on. That said, make sure you do your research, bag plenty of cash, make your decision and don’t look back. There are several firms that will take you………….clients or not. I know my firm has no Minimums. Your biggest goals will be your own. True liberty and freedom to go your own way.
Start putting together a to-do list. Make a budget and ask trusted professionals in your area. The decision will come to you and it should be abundantly clear. Once it does, embrace it and get excited. The details will fill in as you go. Expect bumps in the road…..that is part of the learning process.
Good luck and God speed. It is truly a blessing.

[norcaladvisor]

Athena,
I come from a public safety background and have recently retired and gone into this profession full-time. I have a lot of experience in public sector retirements and deferred comp plans. 4 years ago, I started looking for a company to work for that was not a pressure cooker, with GDC minimums and captive product lines. I had to go thru one bad company before I found HBW. They are a non-captive company with three major divisions including life, LTC and DI insurance, Broker Dealer and Investment Advisory. They are a great company! You will find them to be very client oriented, having a extremely generous compensation and an open non-captive approach with a full breadth array of products and companies represented. It is very much an entrepreneurial model so you need to be a self starter but for that type of person there is no better organization. I would be glad to help you learn more about this great company if you are at all interested. I am very happy with HBW as they are growing and offer a tremendous business building opportunity. From my own experience, you will need to have some money saved as building assets under management is a slower method of income; but it will lead to a very comfortable income stream for you once you build some assets under management. You can immediately kick start your income stream with very competitive life insurance, living trusts, DI and LTC if you want to learn those product lines. It is a great business model, and worth exploring. I would be glad to share my journey with you if you would like. I have been recruited by local and regional brokerage companies and they all offer much less in compensation and sizable min. GDC requirements. Plus the marketplace is going away from commissions as fee based management is growing rapidly. If you are going to build AUM in a fee based model why not go where the compensation is much higher, totally non-captive and very good support and training to build your own business book that you own.

It sounds like you have mentally made the decision you just need to find that right business model. Make the move; go for it! We spend our entire adult life working, so do what you love and work for a company that gives you the freedom to follow your passion!

[march-22]

Let everyone know which State you are from.

BTW, starting your own RIA is not that bad... PROVIDING you are a self starter and go getter that can market your practice. It can be done if you are prepared to work at it. I know of at least two companies that will allow you to open your RIA door with $0 in assets based on your willingness to work hard and make it happen.

To what two firms are you referring? I to would like to do some research.

[namusadvisor]

hello athena & all


just like athena, i am debating whether i should start my own RIA or join as RR with a B/D & IAR w its RIA. I am very happy upon reading all the responses to athena on this forum. I realized that now there is HELP out there when I need it. Thank you all for the valuation information.



How do I start up my own RIA ? Which compliance consultant should I work with ?



to the observer ... is TRADE PMR better than Scottrade ?

to norcapadvisor ... please advise website for HBW.

[dshutts]

Athena-

You have some good, thoughtful suggestions given here.
If you want, djshutts@cox.net is my email. I trained Reps for 12.5 years
Might be able to shed some light for you.
Don

[thedebthound]

Your write up is sincere in a universal problem for Financial Planners that are committed to help and assist clients, friends and referrals, on How money works and what Financial products can help attain their goals. The issue is not many BD's care about that. Their focus is Assets under management, coupled with transactions for commissions. The minimum revenue requirements are actually going up and so a Financial planner, like you and I have a difficult time finding a synergy relationship BD.
I am looking into this also right now and may have narrowed it down to someone that may be able to take our license and at the same time, help us get re-started in this economic uncertainty.
I feel your pain,
DH

[dshutts]

Your write up is sincere in a universal problem for Financial Planners that are committed to help and assist clients, friends and referrals, on How money works and what Financial products can help attain their goals. The issue is not many BD's care about that. Their focus is Assets under management, coupled with transactions for commissions. The minimum revenue requirements are actually going up and so a Financial planner, like you and I have a difficult time finding a synergy relationship BD.
I am looking into this also right now and may have narrowed it down to someone that may be able to take our license and at the same time, help us get re-started in this economic uncertainty.
I feel your pain,
DH

DH- How true you are! If you don't meet the minimums you can lose your practice (by no fault of your own) by some "questionable filing" by the BD.
I found out being Independent wasn't really being independent. My practice was comp'd by AUM. That cost me dearly.

[V_G]

You might also want to consider charging planning fees up front, or hourly fees for certain work. You can set up your own RIA using http://www.ncsonline.com/. Get your software in place (and have a budget for it). Sell Term policies. Join civic groups. Join the Chamber. Look into FTJ FundChoice and Envestnet. You want to use model portfolios with professional mgt so you can spend time face to face instead of face to trading screen.

What state are you in?

[blackie]

norcaladvisor.


please advise what do your bd hbw stand for?

how do we contact them?

thanks

john

[dshutts]

To V_G, Athena, AND ALL...
You ALWAYS charge for Financial Planning UPFRONT. Without the Client paying for the Financial Plan, they have NO vested interest in Planning.
You are a Professional and are going to spend a great deal of time putting together a TRUE Financial Plan and Proposal for Implementation. If the Client hasn't "Bought in" to the process both Financially & Emotionally, you will not be successful in implementing your recommendations!
IMPORTANT FACT!!!! The Goals NEED to be the Clients! DO NOT set them yourself. Probe to find out what's truly important to them, set them in an order of importance, then set your implementation plan (Proposal) for that chronology.
Without this agenda, 100% Implementation will be almost impossible.

[thedebthound]

Starting over is the Planning business anyway, as not only do Trends change, but tax reforms etc. Remember when Tax-deduction was key to IRA's. Now they move to Roth IRA and decided it is more cost effective to get tax free income in retirement, especially with unknown future tax levels.
So which is it anyway? Tax-deductions, Tax-deferred, Tax-Free? Hey anyone interested in what if my principal is down 40% when I am ready to retire. Risk Reward is now on the table when Greed was most important.
We have moved over to focusing on the household cash flow management. Removing high debt costs first and increasing cash flow in retirement. Most people retire still having 15 or more years left on a mortgage. No fun when the value of equity dropped 40%.Stuck staying in the home and still paying for it until age 80 or more. UGLY

Even worse is dying and leaving a debt ridden home with the spouse or children and they can't sell it. We need to focus more on reducing our Debt and Leverage concepts that worked before. Not anymore!

The Industries we are in, are all about THEM, not the client. Ala, the BIG M, I used to work for in the 90's. Good luck to all of us Independents and our clients.

[Cricket]

Look into the Broker Dealer Genworthworth Great company with go minimum sales.

[Marie Swift]

Some additional resources for you:

http://www.advisorintransition.com
http://www.joinsai.com
http://www.tdainstitutional.com
http://www.garrettplanningnetwork.com
http://marie-swift.blogspot.com/2010/12 ... these.html

[FuturePerfect]

Hi Observer:


Thank you for the knowledge you've provided. I have been in the business for 3 years. I have moved into fee-based business and looking into being my own RIA. Can you please email me your contact information? My email address is [url=mailto:tkung_001@hotmail.com]tkung_001@hotmail.com[/url]



Thank you.

[kwr11]

My situation is very similar. I spoke with Scottrade last week, and expect to hear from Trade PMR tomorrow. Does anyone else have any good suggestions other than those listed in previous messages in this discussion? I welcome all input. FYI- I am in California. Thank you!

[Dagrees]

There is no such thing as starting from scratch if scratch is only temporary cause no begining will not stop the sideways eight Orb of eternal spiritual immortality.One mind creates less by the law of compensation.

[the observer]

Sorry, I've been busy and finally now, I'm on vacation and in Europe so I can catch up.

namusadvisor

As far as Scottrade vs. Trade PMR goes I cannot give you an honest answer right now, sorry...

When I moved, Trade PMR ended up with the best bang for the buck "for me" with a far greater selection of funds and other services. Shortly after I moved out on my own and went with Trde PMR, Scottrade upgraded everything and added thousands of products they did not have previously. Not sure about the costs involved for everything but things seemed to even out back then.

Trade PMR is just in the process of switching custodians and clearing firms. (August 2011) Their transaction prices on certain things are going down, certain costs are disappearing altogether and they will be offering more institutional funds at lower levels.

It's not just about "the client" when it comes to picking a clearing firm though... it's all about you as well so choose carefully and consider carefully. One quick example... Some firms do not have billing and you need to accurately bill all your clients, send bills to custodians and clients and there's paperwork up the ying yang and lots of compliance paperwork to be stored to get paid. Trade PMR's billing system is simple, clean and "free" of charge for you. They E mail out your bill notifications and you get the money one day after you confirm and process. I bill on the first of each new quarter in arrears and process on the 10th, giving my clients plenty of time (legal requirement) to review the bill and object if they want. You download everything in PDF format with a couple of clicks, place it in a folder, back it up and you're done. Same goes for all the other docs you need to produce such as confirms, statements, etc. all PDF all downloadable with a couple of clicks. This saves a LOT of YOUR money paying third parties or having someone do all the work. Placing the client's interest first as a fiduciary also means controlling your costs so that you don't need to charge an arm and a leg because your expenses are so high. So once you know that either Scottrade, Trade PMR or someone else is the best fit for your client, then go back and do it all again, this time see who offers you the best support and services so you can lower costs to the client without compromising your fiduciary duty to the client. Get the best mix and you'll have a winner. Trade PMR is great for start ups and those with significant assets and you have next to nothing in terms of fees to pay them on a 100% payout of your fees. Your main fees will be the ones you would want to pay every year that you can obtain either directly or through a Trade PMR partner... like E&O that covers financial planning and insurance work etc., Also, you should pay a third party like Redtail technology to capture and store your E mails... this service is about $9 a month.

(Disclosure: As previously stated, when I undertook this journey, Trade PMR offered the best mix, I'm happy with them)

To anyone else considering the move... Understand that I had 20 years in the business already, many of them as a 24, so I was really sharp on compliance issues as a long time IAR as well. In addition I was dually registered with a B/D as a broker and IAR, as well as running my own RIA separately and concurrently for 7 years before breaking free completely. Compliance is king when you go out on your own so either get the experience as a 24 first, go dual or triple like I did for a while, or, hire a consultant who has worked in your State's Dept of Corporations as a compliance officer and examiner (I have a contact in CA) or attorney in your local State to make sure your paperwork is spot on and more importantly... aligns with your actual practice.

Hope this helps...

[polariscompliance]

Hello All,

I have assisted many advisors in starting their own RIA. I'm a compliance consultant and in addition to my years of experience with firms, I am a former regulator. If any of you need any assistance or any advice on the compliance requirements for starting your own RIA, please contact me. I provide registration services with the SEC and states, as well as assist new firms in establishing their compliance programs to meet all regulatory requirements. Please visit www.polariscompliance.com and please feel free to contact me directly.

Regards,

Tiffany Chamberlain
Managing Director, Polaris Compliance Consulting, LLC
tchamberlain@polariscompliance.com