Broker Dealer Suggestions

[just some f.e.llow]

You dont have to use TPAMs or TAMPs if you want a client in MFs. You can just place them in institutional shares via your Custodian. You still will have account minimums but they are often lower than the ones you mentioned.
Although I know one RIA who exclusively uses TAMPs (who have custody of the assets) and they are not affiliated with a Custodian at all. Of course that model does not work for everyone.

The bigger issue is how involved does the OP want to be in the portfolio management process. And what type of client do they want to work with. For the liability and work you take on as a Fiduciary I would set a $50k min at the very least.... in reality I would have it at $100k unless it was an existing client or they had significant other assets I could get in the future. So if he wants to chase $5k accounts or strictly sell VAs then go the BD route.

Great stuff, and thanks.
I think I'll need a good deal of experience before I get actively involved in management of funds. And while I don't want to chase 5k accounts (and really, who would?) There can be some smaller cases I this 403 market.

You were typing your post before I gave you that extra insight.

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Yes you would need a 6 or 7 if you want to sell individual VAs to this market.

However, you are often able to fund a 403b with Group VAs. And most Group VAs will work with RIAs. The catch is that if a plan already has TSAs in it (individual tax sheltered annuities) then you cant transfer all of the assets over since some will still be under Surrender.

So yes, if you want to work the 403b market you probably should get your 6 or 7. Norwayguy used to work the 403b market heavily in the past. I would reach out to him for further insight. I can tell you all about 401Ks & Pensions, but my 403b knowledge is limited in comparison.

Great, thanks man!

 

[scagnt83]

I'm partial to fia personally, but when all you have is a hammer everything can look like a nail. That's why I'm getting more education.

Wrap fee makes a lot of sense to me and also ties my success to the success of the client, which is good imho.

I meant to have a "not" before the phrase I agree with that... lol. I corrected it.
Both Jefferson & Jackson have some of the best VAs on the market.

But I like IAs over VAs. A VA is just expensive mutual funds with surrender fees.


Also, look at American Equity for IA options in a 403b. I know they allow them in 401k plans. I think they allow 403b as well.

 

[just some f.e.llow]

Yes, you would need a series 6 or 7.

Based on the demographics you are targeting, you may want to consider VALIC. Last I remember, you would also get a book of business to work if you worked for them. https://www.valic.com/home_3240_422903.html

Just remember: when you work for or affiliate with a broker/dealer, you either give up being an independent insurance agent, or you must get approval for it as an outside business activity (OBA). If they have an "in house" insurance company, you'll probably be limited to their offerings and contracts.

Valic is all over the market. Good point.
That could really suck to have those extra hoops to jump through on the oba work.

Thanks sir!

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I meant to have a "not" before the phrase I agree with that... lol. I corrected it.
Both Jefferson & Jackson have some of the best VAs on the market.

But I like IAs over VAs. A VA is just expensive mutual funds with surrender fees.

Also, look at American Equity for IA options in a 403b. I know they allow them in 401k plans. I think they allow 403b as well.

I've gone back and forth on it, personally.
Obviously, I can sell ia now, and plenty of the competition is va. Might just be a "grass is greener" situation where I feel I should have va in my bag. Plus, without a finra oversight license, I can't comment on any variable products. Can be a pain.

AE is awesome, I agree. And they do offer 403b, you're right.

Thanks again.

 

[KRobby]

I'm partial to fia personally, but when all you have is a hammer everything can look like a nail. That's why I'm getting more education.

Wrap fee makes a lot of sense to me and also ties my success to the success of the client, which is good imho.

Have you crunched the numbers regarding your payday on that or is that not necessarily important for a few years?

 

[just some f.e.llow]

Have you crunched the numbers regarding your payday on that or is that not necessarily important for a few years?

Good question.

I've done no crunching at all. In fact, I know nothing about commissions on investment products. I guess I'm just figuring they're roughly similar.

To be forthright, though, the main goal was just to be able to speak intelligently (and legally) about investment products, let the client chose ia or va (or fa, I guess, but I personally don't like them at current rates), ore some other 403 option. So no, the pay isn't too important.

Typically, I've found it's va or ia. That's all.

Why do you ask? Am I about to walk into a bear trap?

 

[Norwayguy]

Good stuff. Thanks so much, dhk.

How about this: I'm going to focus on 403b. For any who don't know, that's not for profit retirement plans. Think police, clergy, firemen...

Their options are usually garbage. You see some fia and fa, but invariably (pardon the pun) there are va options from Axa, maybe metlife.

If I wanted to be able to offer all of these options, would I be correct that I need a 6 or 7?

Would you contract with all of these companies in this market?

Again, any feedback welcome. And a huge thank you in advance.

You might want to review your 403b again police and firefighter would be 457 also not much benefit to nonprofits to go 403b over 401k .

 

[DHK]

Good question.

I've done no crunching at all. In fact, I know nothing about commissions on investment products. I guess I'm just figuring they're roughly similar.

To be forthright, though, the main goal was just to be able to speak intelligently (and legally) about investment products, let the client chose ia or va (or fa, I guess, but I personally don't like them at current rates), ore some other 403 option. So no, the pay isn't too important.

Typically, I've found it's va or ia. That's all.

Why do you ask? Am I about to walk into a bear trap?

Welcome to learning about the B/D grid.

Let's assume that you sell a $100,000 VA with a GDC of 7%. That's $7,000 paid to the B/D.

Now the grid comes into play. It will vary. Let's just assume 35%.

35% of $7,000 = $2,450.

This is GROSS commissions... as you'll still have technology fees, E&O, licensing fees, etc.


But, if you stick with FIA... that 7% is all yours.

 

[scagnt83]

Is a 35% Grid payout actually realistic with a BD other than a captive mutual?

If I remember right LPL starts brokers out around 75%.

 

[just some f.e.llow]

You might want to review your 403b again police and firefighter would be 457 also not much benefit to nonprofits to go 403b over 401k .

You're right, was just trying to think is different examples that fit. As for the benefits of 403 or 457 over 401k, I'm mostly going to be dealing with organizations that have already established these programs, so while I agree that the 403 (and frankly the 457 as well) offer little or no benefit over 401k, they're already established and those are the rules I'll be playing by.

In fact, many of the businesses I've worked with have both 457 and 403 options.

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Welcome to learning about the B/D grid.

Let's assume that you sell a $100,000 VA with a GDC of 7%. That's $7,000 paid to the B/D.

Now the grid comes into play. It will vary. Let's just assume 35%.

35% of $7,000 = $2,450.

This is GROSS commissions... as you'll still have technology fees, E&O, licensing fees, etc.

But, if you stick with FIA... that 7% is all yours.

Wow.
So, basically, it's like Lincoln Heritage life?
That's barfy.

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Is a 35% Grid payout actually realistic with a BD other than a captive mutual?

If I remember right LPL starts brokers out around 75%.

I'm hoping this is a little more common. Add with anything in this industry, I'm sure it varies wildly.

 

[DHK]

To get with LPL... you would have to have proven securities production. Last I checked (a few years ago) it was $300k GDC per year for a couple of years before they would consider you.

Every firm is different, but to get with an independent B/D, you would have to have proven securities production.