Thank's to all the Jones Haters

I just left Jones.  Was there good and bad, of course.  Are their serious problems, you bet.  Not everyone at Jones is bad or unfriendly, but keep in mind they are on a big growth push.  You will be surprised how those "nice people" change once you are hired and working.

Good luck.  Your eyes will be opened soon so keep that in mind.

p.s.  It's LP not MP.  Makes me wonder just how much you know about Jones.

Enjoy your office being next to a subway and nail salon. That really impresses HNW clients.

I was actually in an old friend’s office yesterday. He works for an unnamed regional. Here I was in foyer waiting for him to come out. His office (and 10 others)—marble floor in foyer, oriental rugs throughout, 2 conference rooms with A/V equip. mahogany furn, etc,etc,etc. And across the street in the standard run down strip mall was guess who? jones with the cheesey signs promoting I don’t know what hanging in the windows. Well, I have a 7 figure portfolio and IF I wasn’t in the biz, guess which office would convey the proper message to me if I was a potential client? Huh, which one??   

Kool Aid,

Jones does a good job in the training arena. You sound like I did back in '01. I am sure you will see the light. I left and went Indy and have never looked back.

Sure, drink the kool-aid but dont get drunk off of it.

Good Luck,

Reg

[quote=Revealer]I was actually in an old friend's office yesterday. He works for an unnamed regional. Here I was in foyer waiting for him to come out. His office (and 10 others)---marble floor in foyer, oriental rugs throughout, 2 conference rooms with A/V equip. mahogany furn, etc,etc,etc. And across the street in the standard run down strip mall was guess who? jones with the cheesey signs promoting I don't know what hanging in the windows. Well, I have a 7 figure portfolio and IF I wasn't in the biz, guess which office would convey the proper message to me if I was a potential client? Huh, which one??   [/quote]

Correct me if I'm wrong but isn't that the business model that Jones has chosen to pursue? To go after those who are mid/mass market clients and grow them to become high net worth? To try to blend into a community like a small business? Most of that market would probably be intimidated by an office that is not as modest as your average Jones branch.

Kool-Aid-I agree with you 100% - Jones had a very good training model.  If it's the right choice for you, then that's fantastic.  I would urge, though, that after you are a few years in and other firms come knocking to speak with you, listen to what they have to say.

As a recruiter, I urge reps to do this all the time.  It's not so that I help someone transition.  In fact, I would say that 9 times out of 10, the reps that speak with other firms, learn that they are happier where they are.  What this will do, however, is enlighten you to other organizations and how they work.  There is good, bad and ugly everywhere you go. 

Just my thoughts.  I interviewed with many other competitors in my previous career and I stayed put 90% of the time.  The best thing to do is have an open mind and KNOW for sure that the business model you are in is the best for you. 

Jones is a great place for some reps.  If that's the right model for you and you're happy, more power to ya and congratulations - so many people walk into work everyday hating their boss, their company, their pay, whatever.

Best of luck

jones chooses that by force due to the lack of choice in platforms, vendors, and everything else to do w/ financial planning.  The bottomline on your comment is THEY choose v having the products and platforms to choose yourself.  Doesn’t that really tell the story?

You keep sipping that Kool-Aid, and maybe someday, you too can be part of the Military Police ...

Maybe when you grow up, you can migrate over to REAL independence...but you'll have to unlearn a lot of bad habits...

Ilovedogs,

LP would be great, but I'm going to work my tail off for a chance at MP in years 5 through 10.

Kool-Aid Lover,

There are three levels of partnership at Jones: LP (Limited partner); GP (General partner) and MP (Managing partner).

Since you are new to Jones I wouldn't count on becoming Managing Partner in 5-10 years (since there is only one MP)

You may want to become a little more educated before you head off to KYC and embarrass yourself!

Good luck

Indy,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Thanks for taking time to point out my mistake.  I did mean GP and not MP.  I don't know were my head was when I wrote the original post, probably too wrapped up into trying to figure the difference between bearish and bullish butterfly spread options. 

Setting a goal to become MP would be way too “pie in the sky” as it would take as much fate as hard work to make MP.

As far as making mistakes, what better time to make them than in training.  I have no doubt that I’ll be making more mistakes in the weeks to come, as well I have no doubt that I will not be embarrassed for making them.

KAL,



You’ve got a great attitude!



Keep studying for the 7. That’s the easy part.



BPD

I have nothing against E Jones, but your comment “– I’d rather be excellent at a few things than mediocre at everything”  does not cut it.



It
is too limiting.  You carreer may last 25 years, why go with a
firm that  apparently is not equiped to handle the most profitable
of client when so many others can do both?



Good lcuk either way!

I hate to spill your Kool-Aid but here are some facts:

1.  Jones still has the California AG office coming at them for over $300 million on this revenue sharing deal. Where AG is asserting that Jones crossed the proverbial conflict of interest line.  There is also at least one other major class action suit pending in State of MO. 

2.  Because of this pending litigation Jones can not raise any more capital through their BS limited partenship scheme.  How you going to be GP when you can even be a LP?

3.  I know of one hell of a law suit being contemplated on some very credible and new legal theories that could easily hit them for another $100 million.

As I said several times on this post; it is not the performance, or what some survey says about financial service companies.....it comes down to one thing THE CAPITAL!  Take it away and adios EDJ!

Mr. Legstrong,

 <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

After finishing “the NASD” rules section of my Series 7 training, I read your post, and since it dovetailed nicely into my training.  I decided to analyze the Statement of Financial Condition that every firm has to provide their clients and prospective clients.  Here’s what I found:

As of June 24, 2005 the firm has Net Capital just shy of $600 million to meet minimum requirements it would only need $50 million.  So if the $400 million of pending and contemplated litigation you wrote about went against the firm then “the Capital” would still be there, to the tune of 3 times the requirement.   Not to mention that since Jones is a Partnership the general partners are on the “hook” for loses, and I seem to recall the general partners paid the bill the last time.  With Doug Hill paying the largest share, and where I come from that is what the leader should do.  

So I’m pretty sure the firm will be around in 3 years when I’m first eligible for LP, and I’m confident we can weather Bill Lockyer and his quest to become Governor of California.  

aahh Grass Hopper

Unfortunately you do not know how to compute minimum net capital.  When capital goes down the required capital goes up.  Some fancy stuff called customer reserve calculation.  Look it up!  

Anyway EDJ is in the plaintiff class action attorney and AG cross hairs; these attorney fellas want that capital.   Do yourself a favor and research the fall of Drexal Burnham - it was a lot bigger than EDJ both in capital and profits...Then BOOM - Gone! after the nice people from the AG office got to them.  Research the fall of Drysdale Securities, did some bad stuff BOOM! gone in a week!  Research General American Life Insurance in St. Louis...BOOM! gone in three weeks! Look at Executive Life it was rated AAA then BOOM gone -the California AG took it away.   Reseach Stock Walk (aka Miller Johnson) up in MN a few years ago - 200 million hit to capital - gone in three days. 

You see Grass Hopper financial services companies game plan is to make as much as they can without getting caught.  When they get caught - it can create a meltdown of capital so quick that it can be fatal.

Mark my words if and when EDJ gets hit for $100 - $300 million and all of the LPs are trying to get their money out and the GPs are trying to move all the cash they made to Uraguay or something - it will be MELT DOWN time.  I would say that there is about a 40% chance of this happening.  Do the research on the financial services companies that have melted down the last 25 years....I am not making this stuff up.  Ken Lay at Enron was convince that it was a PR problem right into bankruptcy..a judgement comes down the pipe on EDJ and that is a direct hit to capital.  Also compare the capital base to other BDs -

EDJ is CON game.  The reps drink the Kool Aid and then believe that they are going to help people.  The Reality is most of them are steering their customers into things like ICA where it is statistically impossible to beat the market over the long run...Why?  Because ICA has over 90% correlation to the S&P.  The customer would be much better in low cost index funds...but now that would not be in the best interest of EDJ Geeps and Reps now would it.  Does that sound just little like a CONflict of interest?

So here is the EDJ (and others) game plan:  Lets try every concieveable line of BS to CONvince the clients that we are not skimming money from them.

Also ask the guys pooring the Kool-Aid for you why EDJ has not issued any LP units lately.....The answer is simple- Because they can't.  Their attorneys will NOT sign off on the nescessary legal opinion that their is NO material liabilities.

The GPs are just a bunch of racketeers, the built an organized system of skimming money from hard working Americans and they are making a lot more money than they deserve!  And they use the rep base as a tool to do this. Nature has a way of weeding out these models and the unsatiable greed that the GPs have demonstrate over these revenue sharing (kick back) schemes could be the end of EDJ.

Of coure I could be wrong...but I bet it is just a matter of time!

Good Luck CONvincing your clients that you can actually help them!

Regardless I get a good laugh reading about the Kool-Aid kids on this board.

All right Mr. Legstrong,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I've got some time now that I'm on the review portion of my training.  I'll take on your challenge, and do a deeper dive into that fancy customer reserve calculations thing.  Lets see if I can move that boiling pot of hot oil from one pedestal to the other and open the door to the temple.

Don’t forget to research the other “melt downs” I noted…that is more important than the customer reserve rules! It will illustrate just how fast well capitilized profitable firms can fall apart.  Just throw in a judgement or two…BOOM - Gone!

The problem with these forums is that people can speak with an air of authority when in reality they haven’t got a clue.  Lance after looking into the issues you presented I’ve concluded that you really don’t know what you are talking about. Lets start with your statements about how minimum capital requirements are calculated.

 <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

SEC rule 15C3-1 allows for different types of firms to meet minimum capital requirements in different ways.  At Jones we must maintain minimum net capital equal to $250,000 or 2% of aggregated debit items arising from customer transactions.  So your statement that as net capital decreases, the minimum capital requirement increases is false.

Further your assumption that litigation and settlements effect the firms capital position is false s well.  As with the settlement with the SEC and the AG of Missouri the GP’s paid the fine from their own pockets.  Keeping the firms capital intact.

In the cases you mentioned in your post.  All of them involved serious financial catastrophes that resulted in litigation, and not litigation that lowered capital. 

1990’s Drexal Burnahm – the inventor of the Junk bond portfolio, and over-funding schemes.

1982 Drysdale Securities – Firm under funding that directly led to the 1986 Government Securities Act creating rules for Capital Requirements for all broker/dealers.

Late 90’s General American Life Insurance (now owned by Met Life) – Submitting false claims to Medicare.

Early 90’s Executive Life – Multi billion dollar portfolio of junk bonds.

Late 90’s Stockwalk parent of “MLK” – Out of compliance with federal rules regarding minimum capital requirements.

In a nutshell they committed serious financial errors or fraud that resulted in their loss of capital and their downfall.   This isn’t even close to being the case with EJ. 

The litigation brought by AG of California is regarding failure to ensure that our clients were informed that EJ received profit sharing from the “preferred funds”, and that profit sharing payments were distributed to IR’s in direct proportion to the funds sold.  This in no way reflects as bad investment of our net capital, nor were we skimming from our clients as our customers did not pay more for their funds than someone who bought the funds through a broker not receiving profit sharing. 

Maybe you should get off the Jack Daniels and start drinking the Kool-Aid.

KAL, you & I will never share any Kool-Aid (I don’t like the taste), but I am impressed with the effort you put into your response and am anxious to see Lance’s response…nothing better than a good, educated debate…

KAL,

So now you're a Fin-Op?  Is that what the Series 7 is all about?

Kool Aid,

You can not fool me or the rest of us with the thin spin you put on your post...

1. Baed on the amount of recieveable from customers noted on the EDJ fianancial statement their required min is estimated to be about $200 million.  Go back and study 15c3 a little more

2.  Drexal Burnham went under becuase of a judgements from a civil court as well as SEC fines.   Can anyone explain the difference between junk bonds and undisclosed revenue sharing - of course it depends on what spin you put on it. Personally we made a killing buying junk bonds after the meltdown

3. General American did not go under becausse of medicare fraud although that was alledged later.  It went under because of a capital run on the outstanding GICs that they had issued.  The clients wanted their money back after their ratings dropped.  Of coure the PR at GA was to try to blame the rating agency.  This sounds a lot like the PR at EDJ blaming the SEC for chasing them down on Revenue Sharing.

4.  Drysdale Securities was shut down because they did not have the copital to stand behind the trades they made after a huge back office blunder.

5.  MJK in MN went under becuase they got tagged with a $200 million debit (hit to net capital) after a bad stock loan deal.

My point to your goofy EDJers is that no matter what kind of capital ase you have...at the end of the day it can be taken away.

FACT:  EDJ minimum capital in at least $200 million based on the financial statement.  Just ask your GP for a copy of the FOCUS II reoport that they have to file monthly.  Of coure they will not give it a kid from the sticks like yourself

FACT:  EDJ can not raise any capital.  BECAUSE of the pending litigation.  Again just ask  why they have not had a LP offering lately ...they can not get a legal opinion!  Can any one refute this?

FACT:  When their is a judgement against a BD it is a direct liability and direct hit to the capital base.   What the GPS would do if and when that would happen....DEPENDS...they could run for the hills or they could take the cash that they have pillaged from the CO. and put it back...What would you do?  I think I would take the cash and not look back! head to a beach somewhere.  CON over

FACT if their is a $300 million judgement form class action or AG then all of the GPs will be saying Novena's. 

You knuckleheads just refused to believe that this can happen.   It is very plausible given the circumstances.  Then y'all will blame it on the AG or the plaintiff bar or something other than the GP greed and arrogance!  Then we will all have a nice laugh.

Merry Xmas!

Lance, great counter-punch...it's like watching Borg & McEnroe all over again...

KAL...it's you turn...

Lance thanks for proving my point about you not having a clue.  You made claims of certain items as “Facts”, yet they aren’t even true.

 <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

1)      Your claim that the minimum capital requirement is $200 million, is in direct conflict with what Jones has stated in the “statement of financial condition”.  So who to believe, you or the Jones.  Lets see if you’re wrong what’s the penalty, now if Jones misrepresents that document what’s the penalty?  Hmm, I think I’ll drink the Kool-Aid.

2)      Jones can’t raise anymore capital, hmm where would profits from ongoing operations go. 

3)      “When there is a judgment against a BD it is a direct liability and direct hit to the capital base.” Yet in the settlement with the SEC and the AG of Missouri, the GP’s paid for it from there own pockets.  The reality of a partnership being that the GP’s are personal liable for the partnership.  I do think you made a good point though.  When things get tough criminals run, honest people stick around.  I’m going to draw the conclusion that my GP’s are good people, and based on your response that your not.

4)      “FACT if their is a $300 million judgment form class action or AG then all of the GPs will be saying Novena's.”  It’s nice to know that you have a crystal ball and you can state a hypothetical as fact.

Kool Aid Kid,

Maybe your are right and I have no clue of what I am talking about! 

But it says on page 4 of the ED Jones June 30th statement that Min Net Capital (using the alternative meathod) was $550,223 and that the currrent Net Capital was $598,669.  [all of these numbers in '000s) So I was wrong they only got $48 mil in excess capital!  Wow if they get hit with another judgement or fine!  Can this be right?  Does anyone have historical financials to compare the published June 30th '05s with?  Here is the link to the June 30th numbers - y'all take a look.

http://www.edwardjones.com/cgi/getData.cgi?file=/pdf/stateme nt_financial_condition.pdf

If this is right the GPs at Jones are already saying Novena's with only $48 million excess!  Any kind of signficant fine or settlement or award could put them out.

You see Koolie the more margin balances they take on the higher their net capital requirements go.

You are completely confused about this partnership nonsense. The SEC, NYSE and FED look to the company (regardless of the strucure)for regulatory capital. 

Another interesing aspect is the bank loans..it would be fun to look at those loan indentures....I wonder what event would trigger those loans to be called - a net capital violation would be one that comes to mind! 

Capital Call - Capital Call - Capital Call  Could you imagine the GPs scrambling over that one! They can't go to the drones and clowns for LP financing...the lawyers will not let them! They would have to dig in!

The FACT is that if they are not saying Novena's they should be. 

Good Luck Koolie!

Cheers

Lance

Ding, ding, ding!

The judges have awarded a split decion.

And the winner and still champion is...LANCE LEGSTRONG!

 Thanks Malcolm!

Lance, this isn't my battle, but I did read the EDJ financials you linked to.  You're misinterpreting things.  The notes say:

"At June 24, 2005, EDJ’s Net Capital of $598,664 was 24.7% of aggregate debit items and its Net Capital in excess of the minimum required was $550,233."

I'm no fin-op, but I think you're miss-reading this when you said their minimum net capital was $550,233,000.  Based on that note, that's their EXCESS net capital over the required minimum.  Stated another way, it looks like their required minimum net capital is something around $48 million. They're also saying their net capital was 24.7% of aggregate debit items, when the minimum net capital requirement is only 2% of debit items.  So, it looks like they're net capital is about 12 times the required minimum.

Have to laugh about the 'lawsuits' that are pending.  They are falling down on merit everywhere.  When clients had the chance to run from the 'travesty that was profit sharing' only about 2-3% did so. If you generously figure that half of those were people legitimately bothered by the revenue sharing, it still would show that apparently very few felt 'injured' enough to actually leave the investments!

The CA case is dying a slow death and everyone now knows it.  It will never see court and is on its way to the heap of paper in the basement. 

Edward Jones may be one of the top 3 most secure investment firms in America today...Love 'em or hate 'em...they aren't going anywhere. 

Hey Duke Maybe you are right....I could be wrong. I wonder what those loan indentures say...Foot Notes are so much fun.  Please read left column of page 4 again it states that the minimum Partnership Capital that must be maintained is $400,000 (000s) and that the minimum net capital was $181,616.  Maybe a nice person at Jones HQ can post their recent FOCUS II .  But I think what this means that IF the capital drops below $400 million then the bank loans are called....MELT DOWN!  Of course I could be wrong.  This is just an internet chat room!

Proud LP....why can't EDJ issue any LP units?  You know you sound just like Dick Liddy when General American was going under, NO you sound like Ken Lay setting the troups straight at the Enron meeting! "Nothing can happen to us we are too great, too big...blah blah blah"

You Jones   are so much fun to deal with!  Y'all get so sour when we suggest that there could be pee in those jugs instead of Kool Aid.  The GPs are peein' in y'all LPs jugs! 

Touche' Sonny Clips 

Of course there is the other side of that equation...

Willing it NOT to happen does not mean it will NOT happen

You are why I love this board

Have a great day! 

how many ej fin-ops are there posting on this site?

Read the On Wall Street article this year regarding Regional Firms, which is what Jones was classified as.  We need to get a neutral view on this firm.