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richchick View Drop Down
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    Posted: Aug/24/2021 at 2:43am
Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

Edited by richchick - Aug/24/2021 at 3:09am
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 5:32am
What up richchick?!

Hope someone can give you some good advice.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 8:19am
If it’s a “long time from now”, why fret about it? The business, and your business might look VERY different by the time that happens. 

But please comment more around here. I’m getting tired of the same banter back and forth. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Nathan Explosion Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 8:28am
So with the new RTP at Jones...they are incentivizing you to split the book up more to really cash in.  Are you worried about finding more than one successor?  I dont see how growing your book is being stifled by Jones.  
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Post Options Post Options   Thanks (0) Thanks(0)   Quote WarPig Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 9:20am
There will always be a buyer for a practice.  I'd suggest just figuring out what is important to you in the business and going down that path. Unless you are planning to sell in the next 5-7 years, to Hack's point, don't worry about that yet.

Do you wan to be an owner or an employee?  Both have advantages and disadvantages.  

Figure that out and your decision should be easier.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 9:27am
Originally posted by WarPig WarPig wrote:

There will always be a buyer for a practice.  I'd suggest just figuring out what is important to you in the business and going down that path. Unless you are planning to sell in the next 5-7 years, to Hack's point, don't worry about that yet.

Do you wan to be an owner or an employee?  Both have advantages and disadvantages.  

Figure that out and your decision should be easier.

I think that's the critical question. If someone can't handle being an owner, then trying to transition to your own practice, structuring the practice for sale, and then actually consummating a sale would be a nightmare for them. And ultimately, they would probably net less through the whole process because they fuck something up.

If you stay with Jones, they will find SOMEONE willing to take the practice (assuming it's a good book). 
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

"Jags/Vikes Super Bowl. Write it down" - Sportsfreak 01/19/18
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bc2051 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 9:27am
Don’t train and hire anyone unless you’re looking to be reallyrichchick the GP.  Like others said, the business is changing and Jones is changing faster than that with Penny 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bc2051 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 9:58am
One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iamlegend Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 9:58am
Originally posted by WarPig WarPig wrote:

There will always be a buyer for a practice.  I'd suggest just figuring out what is important to you in the business and going down that path. Unless you are planning to sell in the next 5-7 years, to Hack's point, don't worry about that yet.

Do you wan to be an owner or an employee?  Both have advantages and disadvantages.  

Figure that out and your decision should be easier.

Fortunately with EJ she can be an owner and an employee/LP! LOLLOL
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:07am
Originally posted by bc2051 bc2051 wrote:

One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time

You mean, if you give away $125M to an advisor, the retiring advisor only gets paid on $100M of it?
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

"Jags/Vikes Super Bowl. Write it down" - Sportsfreak 01/19/18
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bc2051 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:18am
Originally posted by B24 B24 wrote:

Originally posted by bc2051 bc2051 wrote:

One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time

You mean, if you give away $125M to an advisor, the retiring advisor only gets paid on $100M of it?

Supposedly, but it's gray like all things at Jones.  There have been a couple of big producers quit, when they couldn't give their kid their entire book

I think Delbs knows of specific examples: big book, small town, and the advisor is paid on the entire thing because there is just no advisors to take it
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Post Options Post Options   Thanks (0) Thanks(0)   Quote luvindy Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:23am
Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 11:19am
Originally posted by luvindy luvindy wrote:

Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.

Awesome! One more recruit and you qualify for a trip! LOL
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

"Jags/Vikes Super Bowl. Write it down" - Sportsfreak 01/19/18
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Post Options Post Options   Thanks (0) Thanks(0)   Quote luvindy Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 11:41am
Originally posted by B24 B24 wrote:

Originally posted by luvindy luvindy wrote:

Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.

Awesome! One more recruit and you qualify for a trip! LOL

That's always my goal!
8/31/12,Sportsfreak:
"If Barak wins this election, or appears to be clearly winning, we are all fucked. Market will tank big time."
Dow 13,090 S&P 1406
5/23/13 UC:Dow 20k before 20% crrectn Dow 15,
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Post Options Post Options   Thanks (0) Thanks(0)   Quote DucatiSportGT Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 11:42am
Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

I bet you'll find someone willing to move to handle your book eventually. I'd imagine it's harder to find a start up advisor in a smaller town. That said, how big is your book? How big in the town you're in? How far from a major city is your town?

Most likely it's harder to find someone to grind in a small town because business opportunities might be a little more limited. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote MsBroker Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:05pm
Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 


Hey RichChick, I'm in a similar situation, and just transitioned to RJ last year. Feel free to send me a PM. With the right structure, you can cut out a lot of the typical "business" stuff that scared me. I've found that if you want help with selling your book, RJ will actively work to do so. But only if you want them to, it's obviously never pushed on you in any way. 

The difference between actually your book and building a book for EJ is hard to overstate. They do not, and will not ever see those clients as yours. 
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If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...

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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:21pm
Originally posted by BigCheese BigCheese wrote:

If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...


10X EBITDA is reasonable for a lot of businesses, especially those with reliable recurring revenue. But it is also possible that there are economies that will be realized in this type of transaction. If there's really $1.6M in expenses on a $3M book, I bet a lot of that can be reduced. So maybe the "true" number is more like 8x or 7x a larger EBITDA number.

That's still 4.5x revenue, so still a huge number. Not sure I would pay $13M for a "traditional" $3M book though. There's got to be upside that isn't mentioned in here. Like if there's a bunch of small, younger clients in the book with big upside in the future. Or institutional clients with a lot of assets to be had. But no way someone is paying 10x EBITDA for a book of 70 year-olds.
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

"Jags/Vikes Super Bowl. Write it down" - Sportsfreak 01/19/18
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:49pm
Originally posted by B24 B24 wrote:

Originally posted by BigCheese BigCheese wrote:

If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...


10X EBITDA is reasonable for a lot of businesses, especially those with reliable recurring revenue. But it is also possible that there are economies that will be realized in this type of transaction. If there's really $1.6M in expenses on a $3M book, I bet a lot of that can be reduced. So maybe the "true" number is more like 8x or 7x a larger EBITDA number.

That's still 4.5x revenue, so still a huge number. Not sure I would pay $13M for a "traditional" $3M book though. There's got to be upside that isn't mentioned in here. Like if there's a bunch of small, younger clients in the book with big upside in the future. Or institutional clients with a lot of assets to be had. But no way someone is paying 10x EBITDA for a book of 70 year-olds.

I talked with a business attorney recently who does deals.  He laughed at this on the valuations.  He's seen two he has done where the buyer came in with high "___x EBITDA".  They did initial negotiations and sign an initial contract with a non-disclosure that allows for due diligence to start.  Then they start whittling down the number piece by piece.  

Average age isn't 55 with large outside assets (listed)?  Now it's 8.5x

Don't have all the listed beneficiaries as clients too?  Not it's 7x

You aren't the only person working with the client? Now it's 6.5x

Basically they beat it down as far as they can for whatever reason they want to give.  And after 6 months to a year of this, the final price ends up about the 2-2.5x we all know. But the seller doesn't want to go through it again, so they finalize the deal and sell.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote newbieRIA Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 3:31pm
you guys are lucky this was a bump of an older Edward Jones thread because Kevin Durant on the brooklyn nets would be the topic of a new thread
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