Questions for taking over a MS book |
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wmguy
Rookie Joined: Nov/08/2014 Status: Offline Points: 4 |
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Posted: Nov/08/2014 at 5:34pm |
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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
Senior Member Joined: Nov/03/2014 Status: Offline Points: 2752 |
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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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Jersey33
Senior Member Helado Jr. Joined: Jun/09/2013 Status: Offline Points: 789 |
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+1
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Without struggle there is no progress
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wmguy
Rookie Joined: Nov/08/2014 Status: Offline Points: 4 |
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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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Crimson
Senior Member King of the Wicker People Joined: Feb/03/2013 Status: Offline Points: 2057 |
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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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Iamlegend
Platinum Member Joined: Mar/09/2010 Status: Offline Points: 22532 |
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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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RipRock
Senior Member Joined: Oct/29/2013 Status: Offline Points: 1807 |
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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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ClarenceBeeks
Senior Member Joined: Aug/31/2011 Status: Offline Points: 14334 |
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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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Sportsfreak
Platinum Member Wise Old Perv and CTO of AH Joined: Mar/09/2010 Status: Offline Points: 25704 |
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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 . |
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If you eat an entire cake without cutting it, then technically, you only had one piece
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wmguy
Rookie Joined: Nov/08/2014 Status: Offline Points: 4 |
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This is all very helpful Thank you very much.
I'm glad I posted the question. |
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DaveW
Senior Member Joined: Feb/15/2013 Status: Offline Points: 1060 |
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I was told that too once. didn't believe it then, so I wasn't hurt when it never came to pass. |
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"80% of lottery winners go bankrupt because 100% of lottery players are retarded."
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B24
Moderator Joined: Mar/09/2010 Status: Offline Points: 25754 |
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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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Hacksaw
Platinum Member Joined: Mar/27/2010 Status: Offline Points: 31482 |
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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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rooboy1010
Member Joined: Dec/03/2013 Location: Southeast Status: Offline Points: 168 |
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wmguy, why are you thinking of making a change to begin with?
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Iamlegend
Platinum Member Joined: Mar/09/2010 Status: Offline Points: 22532 |
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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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ClarenceBeeks
Senior Member Joined: Aug/31/2011 Status: Offline Points: 14334 |
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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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pvchopra
Greenhorns Joined: Oct/09/2014 Status: Offline Points: 27 |
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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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ClarenceBeeks
Senior Member Joined: Aug/31/2011 Status: Offline Points: 14334 |
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Yes. Yes. I like what you've done here......
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MichaelBurton
Senior Member Joined: Jun/02/2014 Location: Austin, Texas Status: Offline Points: 1089 |
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Hawkeye! |
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