| Topic Name: |
Internal Competition |
| Message Name: |
You're beginning to understand |
| Date Posted: |
01/17/2006 |
| In Reply To: |
Thanks. Great post. So if I have very few high net worth contacts going into this--and am young (basically right out of college) how hard is it going to be to "make it"?
Would it be better to be in a market with more wealth (NYC)but more competition? Or less wealth in general (Phoenix) but less competition?
Also any idea about how joining an existing "team" of FAs at a firm like ML would work? As far as getting new clients is it easier? But I guess the pay is less??
Thanks. |
| Message: |
Having very few high net worth few contacts used to be hinderance to success, these days it's more like a roadblock. When I started at Merrill in 2000 (straight out of college) I cold called business owners and rich neighborhoods from 7am to 9pm virtually every business day for two years in order to build the nucleus of my existing client base. From there I have leveraged referrals from existing clients based on good service and good relative performance. The cold calling portion of that process cannot be replicated in today's environment because of "do not call" restrictions. The alternative that some employ these days is seminars, where you send invitations to groups of suspected high net worth prospects and pitch them on your expertise over dinner or lunch. The drawback to this approach is that it is expensive (around $2,500 per event) and the yield varies (I usually get anywhere from 1 to 4 new clients by hosting a seminar for 6 or 7 buying units (husband a wife are conisered one client/buying unit). Given that you need, at Merrill anyways, a minimum of $12 million in assets to survive the 2 year training program and $40 million under management to make a living, the math makes the seminar route very expensive as a primary asset gathering tool. As far as the market area, I would say most market areas an equal relative potential for success. My theory behind this, based on my experiences and conversations with peers, is that specific market areas are always going to be populated with a number of FA's that is proportionate to the local opportunity. The big firms do considerable research to find out what kind of presence they need in a particular area, then they hire based on that research. Therefore you should choose a city in which you think you'd have the best chances for success based on your infrastructure of friends & support. You should also choose a city where you can be happy living indefinitely, as the PWM business tends to anchor people to one area, unlike I Banking or I Management. As for the team situation, you would be a rented mule on a team at Merrill, given that you're coming to the table with no expertise, no experience, and no rich contacts. The best environment in which your hard work and ingenuity could allow you to build a book of business is probably in a bank, where leads can be generated from existing retail bank customers. Once you become successfull and build your own client following, you can do as you wish from there.
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