Thank You

Profound-

Here's the potential opportunities I currently have thanks to small accounts. None of these things came up prior to the person becoming a client.

-75k rollover (highly likely)
-poach a small rural church's account from a lazy advisor (and talk to all their 60-80 year old members in the process)
- open multiple small trust accts. for clients at a local place that serves handicapped people. This would mean throwing my estate planning buddy work and talking to the client's families, and those are both very good things.

None of those might happen or might take years. All of them might happen within a month. There's no telling. Which is why it's not worth a vet's time but is worth mine.

The RL you talked to probably has a lot of the ones left that never went anywhere and he has forgotten how the ones that became worth his time started.

This is why you get your nose in every crack in every door, regardless of the smell.

jtp wrote: Profound- Here's the potential opportunities I currently have thanks to small accounts. None of these things came up prior to the person becoming a client. -75k rollover (highly likely) -poach a small rural church's account from a lazy advisor (and talk to all their 60-80 year old members in the process) - open multiple small trust accts. for clients at a local place that serves handicapped people. This would mean throwing my estate planning buddy work and talking to the client's families, and those are both very good things. None of those might happen or might take years. All of them might happen within a month. There's no telling. Which is why it's not worth a vet's time but is worth mine. The RL you talked to probably has a lot of the ones left that never went anywhere and he has forgotten how the ones that became worth his time started. This is why you get your nose in every crack in every door, regardless of the smell.

If you are going to do this, this forum will be your biggest asset...by a landslide.

I'm a licensed WM. Looking forward to reading the threads. 

Profound, you sound like a very sincere, nice guy and I hope that serves you well over the long term in this business. I believe it will. In the near term being a nice guy is likely going to help a little but as others have pointed out salesmanship is more important and activity trumps all.

Since # of new accounts/HH are critical to your early survival, I think given your background that you might find some success with this idea. It is not meant to be a staple of your longer term plan as teachers can be difficult to work with as prospects and usually have much less in assets than others their age/income b/c they are counting on pensions. However, keep in mind that I have also found the good ones to be amongst the best loyal clients and great referral sources to their peers/family.

Where I live, and I suspect across the entire country, most teachers contribute to 403(b)plans as a payroll deduction into variable annuity (VA) products that carry M&E/admin charges of 1 - 1.50%/year and most often the funds/sub-accounts available within the VA carry additional 12-B1 expenses of an additional 25 plus basis points (bps). In addition to having annual expenses of 125 - 175 bps per year on top of the actual investment management costs for a total expense which will usually run 2.5- 3% w/o any additional "rider" costs for guarantees which are often not worth having in my opinion given the nature of the ongoing contributions, timeline until retirement and watered down benefits due to low interest rate environment. You can propose a portfolio of C share mutual funds as a superior alternative b/c it will likely lower their annual costs 50-100bps , will only lock them up with a 1% Contingent deferred sales charge (CDSC) for 1 year vs. the annuity CDSC of 5-12 years with charges often starting as high as 8% before declining. If you are dealing with someone who wants a fixed account, the VA will likely offer one, I see 2-4%, and then that product is best for dollars that they want with no volatility. Mutual funds over VA products is a no brainer for the investment piece. If you need the commission or strongly believe the A share structure to be superior over the long term, then showing them how buying an A share is better over the long term than the C share - go for it. Just don't move the same person back into fee based program any time soon. I do think showing them c shares compared to the VA is best transition as it shows them clearly how they save and then you could offer them choice of A or C depending on their situation. I primarily use C shares for those in mid to late 50's and then move the funds out to managed account when they hit age 59 1/2. Unlike many 401(k) plans, 403(b)'s can be rolled out to an IRA when client hits 59 1/2. Be careful of CDSC charges on VA's from insurance companies if moving VA funds as well as any built in benefits at death or for income that the VA contains. Of course you will need a bit more training to understand this, but it is basic stuff and most of this should sound familiar after you've passed the S-7 and Insurance exams.

As a prior teacher you should have contacts in your prior system as well as a better ability to relate to many of these people. Teachers have benefits at the local BOE level that few of them understand. You can learn these by looking at their contracts. Examples; Do they get paid for sick time when they retire and if so can they roll it over to a qualified (retirement) account, how does their insurance work, which 403(b)'s are available for them to invest within their system (( where I live their are over 100 BOE and each one has it's own unique list)). Similarly, be able to explain to them how their pension from the State system work and what benefits they may have through the retirement system. Give the teachers a lower cost option working with someone (you) who will do their best to put the client's interest first.This will differentiate you from most of the VA sales people trolling through the lunch rooms making everyone uncomfortable.

Best of luck!

OK - that came off horribly. My Last post was a reply to jtp for his post, not my own.

Hopefully I'm doing a better job with financial planning that posting to the forum.