Your clients will get the following letter when you change to a new firm:

Issues to consider when your broker changes firms
You’re receiving this notice because your broker has changed firms. If you’re thinking about whether to follow your broker or stay with your current firm, it’s a good idea to examine key issues that will help you make an informed decision. A good relationship with your broker is surely valuable to you, but it’s not the only factor in determining what’s in your best interest.
Before making a final decision, talk to your broker or someone at your current firm about the following questions, and make sure you’re comfortable with the answers.

Could financial incentives create a conflict of interest for your broker?
In general, you should discuss the reasons your broker decided to change firms. Some firms pay brokers financial incentives when they join, which could include bonuses based on customer assets the broker brings in, incentives for selling in-house products or a higher share of commissions. Similarly, some firms pay financial incentives to retain brokers or customers. While there’s nothing wrong with these incentives in either case, they can create a conflict of interest for the broker. Whether you stay or go, you should carefully consider whether your broker’s advice is aligned with your investment strategy and goals.

Can you transfer all your holdings to the new firm? What are the implications and costs if you can’t?
Some products, such as certain mutual funds and annuities, may not be transferable if that’s the case, you’ll face an additional decision if you follow your broker to the new firm: whether to liquidate the non-transferable holdings or keep just these holdings at your current firm. Either way, there couId be costs to you, such as fees or taxes if you liquidate,
or different service fees if you leave some assets at the current firm. Your broker should be able to explain the implications and costs of each scenario.

What costs will you pay, both in the short term and ongoing if you change firms? In addition to liquidation fees or taxes if you sell non-transferable assets, you may have to pay account termination or transfer fees if you close your current account , or account opening fees at the new firm.(Even if the new firm waives its fees as an incentive to transfer, that wouldn’t reduce any transfer or closure costs at your current firm.) Moving forward, the new firm may have a different pricing structure for maintaining your account or making transactions (such as fee-based instead of commissions ,or vice versa),which could increase or lower your account costs.Your broker should be able to explain the pricing structure of the new firm and how your ongoing costs would compare.

How do the products at the new firm compare with your current firm?
Of course, not all firms offer the same products. There may be some types of investments you’ve purchased in the past or are considering for the future that aren’t available at the new firm.
If that happens, you should feel comfortable with the products they offer as alternatives If you tend to keep a lot of cash in your account, ask what investment vehicles are available at the new firm for the cash sweep account and whether the interest rate would have an effect on your return.

What level of service will you have?
Whether you follow your broker to the new firm or choose another broker at your current firm, consider whether you’ll have access to the types of service, support and online resources that meet your needs.

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The wealthiest clients not only have more demands and needs across both sides of the balance sheet – they increasingly want those needs served wherever they are.

“The world has become more global and clients have become more global. They expect to be able to work with the entire bank,” says Chip Packard, co-head of wealth management at Deutsche Asset & Wealth Management.

Read full article here

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Every financial adviser—whether practicing at a wirehouse, bank, RIA or as a sole proprietor—needs a personal brand.
Your personal brand should differentiate you in your firm or in the marketplace and position you as an expert.
“Finding my inner specialist is how I switched from ‘producing’ to ‘building’ my business,” Michelle Smith, co-founder and CEO of Source Financial Advisors, told an audience at a recent conference. “People Google for specialists. People refer others to specialists.”

Developing an authentic value proposition is worth the effort. Knowing your personal brand will focus your attention on the clients and activities that will help you grow your practice.
4 Ways Branding Will Help You Build Your Business

Read full article here

 

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Excluding the players in the World Series, there are many contenders for a baseball list that no one wants to be a part of…..

The toughest question for the general manager of any baseball team is whether to pull the trigger and offer a player coming off a big year a huge contract. No matter what fans think there’s no way to tell for sure if a player will continue at the top of his game after re-signing. The World Series features two teams, the Kansas City Royals and the San Francisco Giants, who eschewed off-season splurges and relied on smaller contracts and young, untested, players — particularly the Royals.

Read full article here.

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A $150 million book of business Wells Fargo promised him never materialized — and then the wirehouse took him to arbitration…..

A wirehouse promises a veteran advisor a $150 million book of business and a $450,000-plus upfront bonus to come on over. The wirehouse resigns the FA’s job for him at his current firm, then e-mails his clients to tell them he’s leaving.

This strange and unusual real-life scenario begins to boarder on the bizarre when the book of business turns out to be only $10 million and five months after the advisor joins the firm, the wirehouse takes the vexed FA to arbitration by the Financial Industry Regulatory Authority (FINRA).

Read full article here.

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Advisory firms and recruiters weigh in on their 10 best interview questions and answers when hiring advisors.

What can you tell me about yourself?

Mickey Wasserman, founder and president of Michael Wasserman & Associates, Agoura Hills, Calif.

“Perhaps the oldest job interview question, but it’s still the most powerful. While prior measured accomplishments are the best predictor for future success, this open-ended question separates the great FA from the merely good FA. A good response gives me a glimpse of the candidate’s poise and communication skills. I want to learn about their work ethic, vision, passion, family, humility, community involvement, goals, stability, etc. The best response includes language about serving clients. The worst response is non-communication, uncomfortable silence, folded-arms, and defensiveness.”

 

See full slide show here.

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Here’s some positive economic news, for a change. A new study shows that financial advisors are continuing to grow their practices, take in more clients, and make more money.

RegisteredRep’s 2011 Compensation Survey reveals that 78 percent of the people surveyed took in more money in 2010, and 84 percent of them said they expect to take in even more in 2011.

However, there is one caveat to the good news. RegisteredRep reports that “the industry is also training advisors to expect comp ‘candy’ all the time in the form of recruiting and retention bonuses and, as we know, candy all the time is not healthy.”

The survey also discovered that the gap between different types of investment advisor businesses, such as “wirehouses, regional firms, independent broker-dealers (IBDs), RIAs and banks” is narrowing, with many of them using similar terms to describe themselves, and offering similar types of services.

So who makes the most? The article says that “IBD advisors report the highest overall compensation, with a median of $220,000, compared to $199,000 for RIA advisors and $173,000 for wirehouse advisors.” The article also notes that “regional firms had average income of $164,000 per advisor and bank brokerages generated median income of $139,000. “

Interestingly, the survey also discovered that “take-home pay is surprisingly similar for wirehouse advisors and IBD advisors, after expenses.” 

Written by Lisa Swan

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UBS may have had a difficult financial quarter, between a tough financial environment, and the loss of $2.3 billion due to one of its trader’s shenanigans, but the company’s wealth management operations “were a notable bright spot in an otherwise dismal earnings report,” InvestmentNews.com reports.

Robert McCann, head of UBS Wealth Management Americas, said in a memo to his staffers that even though the firm faced “reputational head winds,” UBS happened to be “in the midst of a meaningful turnaround.”

UBS showed more growth in wealth management earnings that its competitors Bank of America Merrill Lynch and Morgan Stanley Smith Barney did. While UBS isn’t close to reaching the $1 billion in profits goal that McCann set when he took over as CEO of UBS Wealth Management Americas in 2009, the revenue for the third quarter was $1.54 billion, which was a 2% increase from the previous quarter, and up 16% from last year’s third quarter.

The company also hired more financial advisors, picking up 51 over the third quarter, with 117 more than the previous year. They currently have 6,913 advisors. And for each advisor, UBS has $103 million in assets, more than any other such firm.

McCann wrote to staffers to congratulate them on “of the more impressive turnarounds I’ve witnessed in all my 30 years in financial services,” saying that UBS was “poised for even greater success.”

Writty by Lisa Swan

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Click here to read full article at Investment News

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The wirehouses are always on the hunt for top talent.  Experienced Financial Advisors are in demand and have been for some time.  In 2005, the wirehouses employed 57,262 advisors and at the end of March 2011, the wirehouses employed 50,743 advisors.  This represents a 12 % headcount decline over a five- year period.

The number of advisors at the “Big 4” UBS, Wells Fargo, Morgan Stanley Smith Barney and Merrill Lynch are stagnant at best. They used to poach from each other, but now that retention deals have been put in place and the pools are shrinking, the wirehouses are aggressively recruiting from alternate and multiple sources. Independent brokers, RIAs, brokers from boutique size financial firms, have all been targeted. 

There are vast culture differences that still need to be overcome if the wirehouses plan to continue to recruit the Independent B-Ds. The wirehouses bring less freedom, layers of additional management, less access, and a lower payout. All this needs to be compensated for in the form of a nice “up front” check, and their superior support systems, and protection from regulation.  Is that enough? It is rare to see an independent advisor move to the wirehouse world, according to many recruiters. 

What can the wirehouse do? 

The “Big 4” need positive press, and a lot of it, if they plan on luring brokers from the independent channels.

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