Broker Dealer Suggestions

[scagnt83]

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.

You are correct. It is either a per year requirement or a AUM requirement. The work around is if you contract under an existing LPL firm (OSJ)... of course to do that the firm would need to have reason to believe you will bring in assets. And many OSJs will have min requirements for new brokers, especially the large ones. But you could possibly find a local guy who is willing to take a chance on you.

But seriously, what is the average Grid payout to start with most BDs? What is ONESCO?

Also, I think that Gradient (the imo) has a BD that is very agent friendly. I know that they have an RIA that is very agent friendly.

 

[DHK]

Insurance B/Ds will have higher payouts... but you usually have to be captive to them. I remember MassMutual (MMLISI) would go as high as 75% or so based on tiered production during the year.

In his state (Ohio), I think ONESCO would be very similar, and he'd have to be contracted through a local career agency.


Oh, and to continue on with how much securities pays, let's talk about mutual fund A-shares.

A-share mutual funds have an up-front cost with a lower expense ratio ongoing. In essence, you are 'pre-paying' management expenses.

Let's assume $100,000 and an A-share load of 3.5%.

The client is charged $3,500 up front of their $100,000. However, the firm doesn't get 3.5%. They'll get a % of that - generally about 2.75% or $2,750. Then that $2,750 goes through your grid. Assuming 35% again, as I did above, that would be $962.50 GROSS to you.

Not a great payday compared to fixed indexed annuities, or even variable annuities.

 

[Golfnut2112]

Insurance B/Ds will have higher payouts... but you usually have to be captive to them. I remember MassMutual (MMLISI) would go as high as 75% or so based on tiered production during the year.

In his state (Ohio), I think ONESCO would be very similar, and he'd have to be contracted through a local career agency.


Oh, and to continue on with how much securities pays, let's talk about mutual fund A-shares.

A-share mutual funds have an up-front cost with a lower expense ratio ongoing. In essence, you are 'pre-paying' management expenses.

Let's assume $100,000 and an A-share load of 3.5%.

The client is charged $3,500 up front of their $100,000. However, the firm doesn't get 3.5%. They'll get a % of that - generally about 2.75% or $2,750. Then that $2,750 goes through your grid. Assuming 35% again, as I did above, that would be $962.50 GROSS to you.

Not a great payday compared to fixed indexed annuities, or even variable annuities.

Don't worry about the payday put your clients best intrest first and you will be fine.

 

[plannerman]

Insurance B/Ds will have higher payouts... but you usually have to be captive to them. I remember MassMutual (MMLISI) would go as high as 75% or so based on tiered production during the year. In his state (Ohio), I think ONESCO would be very similar, and he'd have to be contracted through a local career agency. Oh, and to continue on with how much securities pays, let's talk about mutual fund A-shares. A-share mutual funds have an up-front cost with a lower expense ratio ongoing. In essence, you are 'pre-paying' management expenses. Let's assume $100,000 and an A-share load of 3.5%. The client is charged $3,500 up front of their $100,000. However, the firm doesn't get 3.5%. They'll get a % of that - generally about 2.75% or $2,750. Then that $2,750 goes through your grid. Assuming 35% again, as I did above, that would be $962.50 GROSS to you. Not a great payday compared to fixed indexed annuities, or even variable annuities.

I produce about 20k in commission to myself each year, so not a big baller. A 100k income/bond fund with Franklin templeton will have about a 4% sales charge. My firm does get the 4% and I get 80% of that with a trail of 15 bps. The commission is less but the results have been better for the clients. Also my firm doesn't give me a bunch of troubles because I use what is called a limited bd, basically the only offer funds and annuities. My comp is also dead even on fixed annuities. I have been through two other bd's to find this one which is a match for my limited production. My advice is get the 6 and 63 and look for a limited bd. I'm not pimping my bd and I won't bad mouth the others.

 

[just some f.e.llow]

Thanks for all the data, everyone. Much appreciated!

 

[KRobby]

Don't worry about the payday put your clients best intrest first and you will be fine.

Maybe he should work for free.

 

[DHK]

And sometimes, depending on all the costs, overhead, compliance, skills, and service work needed for this part of the business... it can make sense to just refer that business to someone else.

 

[just some f.e.llow]

And sometimes, depending on all the costs, overhead, compliance, skills, and service work needed for this part of the business... it can make sense to just refer that business to someone else.

I'm starting to agree, for sure.

Let me ask this: if I were to get a 65 and find an RIA I could set up under, could I execute an AUM based agreement regarding funds with ANY carrier, or is it carrier dependant? I'm referring specifically to a % of policy value type of agreement, and ideally, a carrier controlled wrap fee that they would withdraw on an annual basis.

Anyone with experience or insight on this?

----------

Maybe he should work for free.

Got a ways to go for that, my friend!

 

[DHK]

I'm starting to agree, for sure.

Let me ask this: if I were to get a 65 and find an RIA I could set up under, could I execute an AUM based agreement regarding funds with ANY carrier, or is it carrier dependant? I'm referring specifically to a % of policy value type of agreement, and ideally, a carrier controlled wrap fee that they would withdraw on an annual basis.

Anyone with experience or insight on this?

It depends on the RIA. However, you'll want to get familiar with the terms "Strategic" and "Tactical" asset management.

It's not as much about the fund companies when you're an RIA as it is about the 3rd party asset managers and how they manage assets on a risk controlled basis.

That being said, you can also work with mutual fund companies as an RIA/IAR and sell their "F-shares" or "R-shares" or whatever they call them for fee-based asset management. The only way I think I'd be doing that would be for clients that had 529 plans with current balances. Everything else could be done by the 3rd party asset managers.

AUM fees are charged either monthly or quarterly, and the custodian does that for you. If you're an IAR for an RIA, the RIA has the custodian do that and disperses the fee to you.

Just make sure that you find out with the RIA the answers to your questions.

 

[KRobby]

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

Of course not, fee based is a great way to go. But you have to understand how little you'll make until you build it large.

I may have jumped the gun a bit, just making sure you understand the pay.