FAs/PWM Guys - Can We Get The Real Scoop? THX
So I know many HF/PE guys, mid to late 20s, who at some point during college interned with a retail broker/financial advisor ("FA")/private wealth manager. You know, those resume padding internships (many unpaid) where you are an FA's gopher for a summer "learning about the stock market"!
Despite the job being a bit Short intellectual stimuli (and uber Long cold-calling), people have rather fond memories of their FA boss. "He was very wealthy, super sociable, took vacation when he wanted...." A lingering curiosity sometimes surfaces, where one imagines what it would be like to effectively monetize contacts+friends+family into some kind of PWM client book, collect management fees.
I literally just stumbled on this site: http://forums.registeredrep.com/....there is some hilarious content:
I dress sharp, have succeeded in every job I have ever had and built a nest egg of over 400k before entering this [ ] business. I am 40. I was about making money, investments, providing education and taking care of clients. My work ethic was never in question. .
My honest opinion is this business is a piece of shit. I could write a book on this. I am 4 years into a piece of shit career built on the hope and hype that was relayed to me.
Lets say you charge 1 percent on fee based you get paid to grid 30 to 40 percent. So if everything goes perfect your client invests 100k and everything is under fee you raise $1000 for the firm. You get paid to grid 30, 35, maybe if your lucky 40%. That's $300 – $400 per year for that. How many $100,000 accounts do you need to make $50k or 60k a year. Exactly.
-So is this true - you make <0.40% on your book's AUM?
-What if someone guaranteed you 0.60% @ a startup RIA - would you go?
-Would your clients go?
-What is stopping the largest FA producers from leaving these BBs (ML, MSSB, UBS, etc) and setting up their own shops (e.g. do they have multi-year guarantees)?