Truist Investment Services lost its’ largest producer last week. Not surprised. People were already on the fence about leaving, but when they were forced to raise their fees across the board, the door swung out. This is only the beginning.
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@jz Fair point. Deposits are profitable (especially zero-interest DDA and business accounts) but not stable. Need a mix for sure.
@q8 I worked in tis ops in Richmond at Semmes. I saw the paychecks of all tis reps. Not going to name drop or even dox a little the reps but 70% does apply to a few and their T12 is right at and near the top so it’s not hard to figure out. Some of that is from legacy agreements that are still honored.
@pq no advisor is making 70% of the revenue. Simply not happening. 50-55% is the upper threshold.
@pq name them. You can’t.
@d0 how about look it up? It’s not hard.
@jq I will agree that what you described is true. And we had water removed from the office that costs at the most $40/month.
@pm Yeah. 70%. Some of the top producers have this negotiated.
@js 70%? so many id--ts on this thread
It’s in the news today. Google it. CapTrust bought them
@js missing a major point on the spread. Yes it may be only 40bps. But it’s 40bps on assets that should be growing 8% per year. Wealth assets are a significantly more valuable revenue source than deposits
@eh your point is correct but one thing about the “revenue”: the FA takes anywhere from 35-70% of that depending on his grid and recruiting deal. So they’re not really losing all of it…. Probably about half. Add the expense of carrying the team and overhead, TFC isn’t losing a whole lot (especially if he’s the headache he sounds like).
And to the extent the AUM came out of deposits, that’s the day they started losing. Going from a product with a 150 bps spread to an AUM product with MAYBE 40 bps spread never made sense.
@hb “Generate relationships”, “drive revenue” and “drive the growth” are all for the benefit of the firm and the broker. And any advisor thinking he or she alone can serve the high net worth space with nothing more complex than an options layover is exactly the problem I and your other new buddies are pointing out. You’re all about you, and the client is merely your means to an end. Generate a healthy T-12 and get a check from the next firm; stay 5 years, rinse and repeat. An entire generation of “advisors” play this game and it has hurt our industry to no end. Better you just say thank you and be on your way.
That group was wanting to leave for years and threatened it daily. Management would often take them out to $20k dinners (not exaggerating) to try and keep them engaged but I guess it was finally time. They never liked having any constraints post merger. Btw. Those dinners would be attended by sales leadership and supervision and compliance. For top producers, there is a lack of walls or barriers and it gives the whiff of corruption and compromised supervising. Just my thoughts. I couldn’t even buy my folks coffee, let alone multi thousand dollar per dish meals.
@jb The majority of bank financial advisors fall into these buckets
- Insurance salesmen
- A-Share merchants
- Faux advisors
1 & 2 are what give bank advisors a bad rep and make up a huge percentage of all advisors at this firm.
3 is the bucket where the rest fall. They don’t do planning. They put their clients into high fee / illiquid investments under the shroud of complexity. And they gatekeep investing education just to underperform simple indexes.
Most people could just throw their money into a target date fund and forget about it. The biggest value add for an ACTUAL advisor is to put them into those basic funds and do the behavioral coaching to keep them invested when the markets go sour.
@hb+1m4rpqmyt - give me a break, you can call an apple a banana, but is still an apple. Financial Advisor is another name for broker. I know there are a number of FAs that care about their clients.
But, FAs are generally NOT trust experts, it tax experts which entails a law degree and/or CPA. He-l, they aren’t even really investment experts, as that entails a CFA. How many have that designation? They are generally just very good sales people.
Paired with a good financial plan, 99% of individuals would be infinitely better off taking that plan and utilizing (for example) Vanguard target date fund and paying .07% annually than 2.0% into the FA’s “chosen” funds (that are almost guaranteed to underperform the index funds). That is not my opinion - there is a mountain of evidence that supports it.
@hb Appreciate your biased passion but anyone paid on commissions or a percentage of those “substantial fees” charged is not objective. Thank you for at least not throwing the “f word” (fiduciary) in there. There are absolutely some excellent financial advisors there, of which I’m sure you’re one, but the vast majority are simply looking for more assets for more fees for more income. They themselves are not managing the assets but rather spend most of their time looking for new clients (or selling the ones fed to them by their internal partners). I work for money, and so do they. No problem there. But don’t paint them all with such a beneficial brush as providing the financial and estate planning and strategies wealthy families need.
@fs Truist doesn’t have “brokers.” It has financial advisors who serve everyone from the mass affluent to the ultra-high-net-worth. These clients need far more than investment advice. They need comprehensive financial planning, tax strategies, estate planning, trust services, and sophisticated wealth management.
What Truist does have is an expensive layer of salaried financial planners and so-called trust experts whose value, in my opinion, is questionable.
Financial advisors are the ones building businesses, developing relationships, attracting clients, and bringing assets into the firm. They are the revenue generators. They’re out every day competing for business and earning the trust of wealthy individuals and families. Their teams then coordinate and deliver these comprehensive services, for which clients pay substantial fees.
What you’re describing is a relatively straightforward investor who can be served through a diversified portfolio of funds. That is an entirely different client from the one successful wealth advisors are pursuing.
The distinction matters. Financial advisors create the relationships, generate the revenue, and drive the growth. The support structure exists to help them serve those clients, not the other way around……Dummy!
I simply don’t understand the allure of brokers in today’s world. In a world with target date funds, low cost balanced funds, index funds, etc. why pay SO much to a broker/salesperson that in many cases is just putting you in higher cost alternatives.
I get the need for financial planners and Trust experts. But the investing part has been pretty much solved for the average person for a while now. I just don’t get it.
@eh Sounds like there was a half off sale
$14mm in revenue and $3 billion AUM.....he may have been an a--hole, but he's not the only one leaving. TIS has lost well over $50mm in revenue form FA's leaving just this year. Truist is a dumpster fire and clients are demanding better. these FA's have no choice.
How big was he/she/they?
Who are you talking about??