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Questions for taking over a MS book

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wmguy View Drop Down
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    Posted: Nov/08/2014 at 5:34pm
I've been in a planning role at a boutique wealth management firm for the past decade, doing investment planning, estate tax planning, etc. I was an attorney in a prior life and I was an FA with my own clients for several years before moving into more of a planning role.

I applied for a wealth planning/marketing position at a Morgan Stanley office. I got a call back for an interview, and they said the position would be supporting a 2 person FA team. However, they said one of the FAs will be retiring in "3 to 5 years", so this position would also involve a lot of developing relationships with clients and a transition into taking over his book when he retires.  

I don't have a book of business to bring to the table. I have a lot more estate planning, insurance and tax expertise than the current team, and I've been advising HNW clients for nearly 20 years, including sales presentations. However, I've not been involved in getting my own clients for around 15 years.  That said, this sounds like it's an opportunity worth investigating, at least.

What kinds of things do I need to ask?

What should I be worried about or need to watch out for?

I presume the retiring FA will be taking some profit sharing percentage.  What's normal in this situation, both in terms of % and length?

What kind of compensation split might be typical in this kind of team situation?

What do people think of being part of an FA team at Morgan Stanley?

Many thanks.























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Monkey View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Monkey Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 5:44pm
Unless you get it in writing I wouldn't even factor it into your decision on taking the job. I'd never trust a wirehouse.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Jersey33 Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 5:54pm
Originally posted by Monkey Monkey wrote:

Unless you get it in writing I wouldn't even factor it into your decision on taking the job. I'd never trust a wirehouse.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote wmguy Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 7:39pm
That makes sense.  As an attorney, that's clearly the biggest issue. However, I'm trying to learn as much as I can so I can make an educated decision if it progresses and turns out to be a legitimate and good opportunity.  

Any other advice or answers for some of the questions?  I have much more experience on the independent side and very little on the wirehouse side.

Many thanks.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Crimson Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 8:01pm
Why do you want to make the move? On the surface, sounds like you're in a great position that uses your knowledge and experience, and probably pays decent.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iamlegend Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 8:27pm
Originally posted by wmguy wmguy wrote:

I've been in a planning role at a boutique wealth management firm for the past decade, doing investment planning, estate tax planning, etc. I was an attorney in a prior life and I was an FA with my own clients for several years before moving into more of a planning role.

I applied for a wealth planning/marketing position at a Morgan Stanley office. I got a call back for an interview, and they said the position would be supporting a 2 person FA team. However, they said one of the FAs will be retiring in "3 to 5 years", so this position would also involve a lot of developing relationships with clients and a transition into taking over his book when he retires.  

I don't have a book of business to bring to the table.<span style="line-height: 16.7999992370605px;"> I have a lot more estate planning, insurance and tax expertise than the current team, and I've been advising HNW clients for nearly 20 years, including sales presentations. However, I've not been involved in getting my own clients for around 15 years.  That said, this sounds like it's an opportunity worth investigating, at least.</span>

What kinds of things do I need to ask?

What should I be worried about or need to watch out for?

I presume the retiring FA will be taking some profit sharing percentage.  What's normal in this situation, both in terms of % and length?

What kind of compensation split might be typical in this kind of team situation?

What do people think of being part of an FA team at Morgan Stanley?

Many thanks.
























My comment would be that the second person on the team who isn't retiring would seem to have a better chance of getting the majority of the split after the other guy retires.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RipRock Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 9:10pm
Originally posted by wmguy wmguy wrote:

I've been in a planning role at a boutique wealth management firm for the past decade, doing investment planning, estate tax planning, etc. I was an attorney in a prior life and I was an FA with my own clients for several years before moving into more of a planning role.

I applied for a wealth planning/marketing position at a Morgan Stanley office. I got a call back for an interview, and they said the position would be supporting a 2 person FA team. However, they said one of the FAs will be retiring in "3 to 5 years", so this position would also involve a lot of developing relationships with clients and a transition into taking over his book when he retires.  

I don't have a book of business to bring to the table. I have a lot more estate planning, insurance and tax expertise than the current team, and I've been advising HNW clients for nearly 20 years, including sales presentations. However, I've not been involved in getting my own clients for around 15 years.  That said, this sounds like it's an opportunity worth investigating, at least.

What kinds of things do I need to ask?

What should I be worried about or need to watch out for?

I presume the retiring FA will be taking some profit sharing percentage.  What's normal in this situation, both in terms of % and length?

What kind of compensation split might be typical in this kind of team situation?

What do people think of being part of an FA team at Morgan Stanley?

Many thanks.


MS is good, the problem is that there is no chance you would get first crack at that book so easily. There is also the problem that the guy hasn't turned in his retirement papers just yet so the "3-5 years" means absolutely nothing. 

Management wants you to come in and bring your contact list, the team wants you to roll these relationships into their production #, then they wait you out while stalling (and you are starving) until you leave and then they do it again and again.

If you go you should 100% be able to do it on your own without any help and then choose who to partner with.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote ClarenceBeeks Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 10:01pm
I agree with iamlegend; if one person of the 2-FA team retires, guess who is going to expect to take over that book of business?  

Based on your experience, I would say go independent as a solo FA and grow your own book with higher payout.  It seems to me that a wirehouse would be good for either a totally raw rookie, or an experienced vet - with a book clients - to take a big check.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Sportsfreak Quote  Post ReplyReply Direct Link To This Post Posted: Nov/08/2014 at 10:35pm
Originally posted by Iamlegend Iamlegend wrote:


My comment would be that the second person on the team who isn't retiring would seem to have a better chance of getting the majority of the split after the other guy retires.


This 100%. The younger FA on the team will inherit the book, under a Sunset agreement" that MS offers to their retiring FAs.

It's likely that that was the reason they teamed up to begin with

That doesn't mean it might not be a good opportunity, but tread carefully. The most important thing for you is to judge the character of the junior partner. Because at some point he will be the senior partner and you'll be the junior .
If you eat an entire cake without cutting it, then technically, you only had one piece
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Post Options Post Options   Thanks (0) Thanks(0)   Quote wmguy Quote  Post ReplyReply Direct Link To This Post Posted: Nov/09/2014 at 12:41am
This is all very helpful  Thank you very much. 
I'm glad I posted the question.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote DaveW Quote  Post ReplyReply Direct Link To This Post Posted: Nov/10/2014 at 1:06pm
Originally posted by Monkey Monkey wrote:

Unless you get it in writing I wouldn't even factor it into your decision on taking the job. I'd never trust a wirehouse.
 
I was told that too once.
 
didn't believe it then, so I wasn't hurt when it never came to pass.
 
"80% of lottery winners go bankrupt because 100% of lottery players are retarded."
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Nov/10/2014 at 1:46pm
Originally posted by ClarenceBeeks ClarenceBeeks wrote:

I agree with iamlegend; if one person of the 2-FA team retires, guess who is going to expect to take over that book of business?  

Based on your experience, I would say go independent as a solo FA and grow your own book with higher payout.  It seems to me that a wirehouse would be good for either a totally raw rookie, or an experienced vet - with a book clients - to take a big check.

I disagree.

Yes, wirehouses can be scummy. But with his experience he could most likely command a decent starting salary and a small book of business moved to his number (likely the low-hanging fruit on this teams book, but still...). What would he get if he went independent with ZERO clients and no experience prospecting??

I would guess that the team's combined assets are too big for one guy to manage, so when the older guy retires, you know you are going to get SOME of it (again, get this in writing). In the meantime, learn from two experienced FA's, and build your own book.

If you look at the "worst-case" scenario, it's much worse going off on your own if you are starting from scratch. And if MS can't guarantee him something in writing (including a decent starting salary), then he just walks away. But if he goes indy by himself, he could blow through his savings and STILL have nothing to show for it.

BEST case scenario is likely similar for both options. Best case at MS is that he inherits a huge book (or at least big enough to make great money). Best case going solo indy is that he finds a way to bring in tons of new assets very quickly (and has a higher payout).

Which seems more likely?


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Nov/10/2014 at 2:53pm
Originally posted by wmguy wmguy wrote:

I've been in a planning role at a boutique wealth management firm for the past decade, doing investment planning, estate tax planning, etc. I was an attorney in a prior life and I was an FA with my own clients for several years before moving into more of a planning role.

I applied for a wealth planning/marketing position at a Morgan Stanley office. I got a call back for an interview, and they said the position would be supporting a 2 person FA team. However, they said one of the FAs will be retiring in "3 to 5 years", so this position would also involve a lot of developing relationships with clients and a transition into taking over his book when he retires.  

I don't have a book of business to bring to the table. I have a lot more estate planning, insurance and tax expertise than the current team, and I've been advising HNW clients for nearly 20 years, including sales presentations. However, I've not been involved in getting my own clients for around 15 years.  That said, this sounds like it's an opportunity worth investigating, at least.

What kinds of things do I need to ask? How long has the team been together?  Are they currently under a retention/transition deal?  What role are they seeing you fill?

What should I be worried about or need to watch out for?  Are they a team as a matter of convenience (When I was there, a team would get a higher payout)?  Is MS saying he will retire in 3-5 just because of his age, or does he has a transition agreement already worked out?  Watch out for them looking to you to "bird-dog" for clients for them, while saddling you with their crappy clients.

I presume the retiring FA will be taking some profit sharing percentage.  What's normal in this situation, both in terms of % and length?  I think they are custom, but when I was there, the deals I knew about were 2-3 years where they are technically still an employee (still eligible for benefits, bonuses, etc).  One specifically was 3 years with 75%-50%-25% (of original split).

What kind of compensation split might be typical in this kind of team situation?  Depends a lot on what they want you to do.  Most of the teams I knew of offered 50% of assets given to you, and 50% of your new assets you bring in.

What do people think of being part of an FA team at Morgan Stanley?  Sooo many variables.  The right team can be a great situation.  I know a guy who walked into a team at MS and his position was to work their sub $500k prospects.  They were a well oiled machine and brought in a lot of referrals.  3 years in the team was took a check for UBS.  He is still there and loves it.  When I joined MS, I was told I would be put on a team.  A month later, another guy was hired who the team decided they wanted instead.  The manager just came to me and basically said "You're out, he's in, good luck".  Luckily it was before I had started bringing in accounts to split with them.

Many thanks.



Responses in red

As was mentioned before - This is a way to entice people to join.  It sounds good, but just remember that should things go south, you WILL be the odd many out.

There are some truly good situations out there that happen, but more often than not the new person ends up getting screwed.  

My question is why not talk to the people where you are and see if they would allow you to start building a book of business for yourself?
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wmguy, why are you thinking of making a change to begin with?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iamlegend Quote  Post ReplyReply Direct Link To This Post Posted: Nov/10/2014 at 4:41pm
Originally posted by B24 B24 wrote:


Originally posted by ClarenceBeeks ClarenceBeeks wrote:

I agree with iamlegend; if one person of the 2-FA team retires, guess who is going to expect to take over that book of business?  

Based on your experience, I would say go independent as a solo FA and grow your own book with higher payout.  It seems to me that a wirehouse would be good for either a totally raw rookie, or an experienced vet - with a book clients - to take a big check.


I disagree.

Yes, wirehouses can be scummy. But with his experience he could most likely command a decent starting salary and a small book of business moved to his number (likely the low-hanging fruit on this teams book, but still...). What would he get if he went independent with ZERO clients and no experience prospecting??

I would guess that the team's combined assets are too big for one guy to manage, so when the older guy retires, you know you are going to get SOME of it (again, get this in writing). In the meantime, learn from two experienced FA's, and build your own book.

If you look at the "worst-case" scenario, it's much worse going off on your own if you are starting from scratch. And if MS can't guarantee him something in writing (including a decent starting salary), then he just walks away. But if he goes indy by himself, he could blow through his savings and STILL have nothing to show for it.

BEST case scenario is likely similar for both options. Best case at MS is that he inherits a huge book (or at least big enough to make great money). Best case going solo indy is that he finds a way to bring in tons of new assets very quickly (and has a higher payout).

Which seems more likely?



I agree with B24. I just wanted him to know that he will be starting on the bottom of the team.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote ClarenceBeeks Quote  Post ReplyReply Direct Link To This Post Posted: Nov/10/2014 at 6:49pm
My point was that, reading his original post, if he has been an attorney and been in the business before and has all this experience, and a lot of contacts, just go independent and market to all his past connections, and be his own boss.

Why bring all those contacts to a wirehouse, if you aren't going to be getting a big transition check?
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Just do a good analysis on all the option. You can also find someone else to partner with. MS is not the only one in the market. You can find other people to work with. 

If one is interested than definitely other will. Try reaching other people whom you can work with. 

Evaluate every option carefully with pros and cons with your personality in mind. It will help you to take the decision.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote ClarenceBeeks Quote  Post ReplyReply Direct Link To This Post Posted: Nov/17/2014 at 8:39pm
Originally posted by pvchopra pvchopra wrote:

Just do a good analysis on all the option. You can also find someone else to partner with. MS is not the only one in the market. You can find other people to work with. 

If one is interested than definitely other will. Try reaching other people whom you can work with. 

Evaluate every option carefully with pros and cons with your personality in mind. It will help you to take the decision.



Yes.  Yes.  I like what you've done here......
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Post Options Post Options   Thanks (0) Thanks(0)   Quote MichaelBurton Quote  Post ReplyReply Direct Link To This Post Posted: Nov/19/2014 at 3:23pm
Originally posted by Iamlegend Iamlegend wrote:

Originally posted by wmguy wmguy wrote:

I've been in a planning role at a boutique wealth management firm for the past decade, doing investment planning, estate tax planning, etc. I was an attorney in a prior life and I was an FA with my own clients for several years before moving into more of a planning role.

I applied for a wealth planning/marketing position at a Morgan Stanley office. I got a call back for an interview, and they said the position would be supporting a 2 person FA team. However, they said one of the FAs will be retiring in "3 to 5 years", so this position would also involve a lot of developing relationships with clients and a transition into taking over his book when he retires.  

I don't have a book of business to bring to the table.<span style="line-height: 16.7999992370605px;"> I have a lot more estate planning, insurance and tax expertise than the current team, and I've been advising HNW clients for nearly 20 years, including sales presentations. However, I've not been involved in getting my own clients for around 15 years.  That said, this sounds like it's an opportunity worth investigating, at least.</span>

What kinds of things do I need to ask?

What should I be worried about or need to watch out for?

I presume the retiring FA will be taking some profit sharing percentage.  What's normal in this situation, both in terms of % and length?

What kind of compensation split might be typical in this kind of team situation?

What do people think of being part of an FA team at Morgan Stanley?

Many thanks.




My comment would be that the second person on the team who isn't retiring would seem to have a better chance of getting the majority of the split after the other guy retires.


Hawkeye!

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