Edward Jones History
By 1970, Ted Jones had built a firm of 100 brokers, mostly in the region surrounding St. Louis. He had also laid the foundation for the principles by which the firm would be run. As a partnership, the firm was built on the power of individual entrepreneurs in offices with one financial advisor (FA) and one branch office assistant (BOA). He maintained that owners should be employees of the firm and even denied his sisters a share in the firm, as they did not work there. When asked after his retirement why he never sold out and became as rich as Sam Walton, Jones replied that he was the richest man in America: “I have a wife who loves me in spite of all my faults. I have four dogs. Two love only me. One loves everybody. One loves no one but is still very loyal. . . . I enjoy my business. I love my farm and my home. I have a few close friends, and money has never been my God.”
About this time, John Bachmann, a partner and FA hired in 1963, suggested to Ted Jones that the firm pursue an ambitious expansion strategy. The letter he wrote to Ted describing the key features of that strategy and suggesting a goal of 1,000 offices became part of the lore of the firm.
In the next 30 years, with Bachmann as managing partner after 1980, Edward Jones grew rapidly. Leveraging the insights of Peter Drucker, a consultant to the firm, Edward Jones focused on serving the individual investor in a personal relationship. It entered metropolitan areas after 1981 over the objections of Ted Jones, who believed that the firm should locate “where there is no competition.” Drucker countered that competition only demonstrated how different the firm was from most brokers and that metropolitan offices were actually more profitable. The firm faced occasional challenges, such as in the 1980s when real estate partnerships that the firm distributed turned out to be bad investments. This episode triggered the development of a product review department charged with the responsibility of approving new products and given authority to decline the firm’s participation in such investments if it deemed them too risky.
However, for the most part, the firm adhered to a straightforward business practice that allowed for geographic expansion through the replication of the standard Edward Jones office. In 1994, the firm opened its first office in Canada, modeled after a typical Edward Jones office in the U.S., and in 1997 it similarly entered the U.K. market.
During the boom of the 1990s, Edward Jones’s strategy paid dividends. The firm increased its market share of brokers threefold and outperformed the industry average profitability by 10%. In 2000 and 2001, Edward Jones was named the best place to work in America by Fortune magazine.
When Bachmann passed the position of Managing Partner to Doug Hill in 2004, his successor’s task appeared to be one of “steady as she goes.” Regulators, however, soon accused Edward Jones and other brokerages of accepting payments based on the volume of business placed with mutual fund companies (a practice known as revenue sharing). Regulators worried that this would influence brokers to recommend certain funds and they alleged that this potential conflict was not adequately disclosed to investors. The company, without admitting or denying any of the allegations, eventually agreed to settle regulatory actions and class action suits for $202 million. Doug Hill voluntarily retired as Managing Partner, and Jim Weddle took the reins in January 2006.
And you point is what???
???
Lambda, what's with that?Spiff is proud of you. I think.
That sure was a lot to type…you practicing a speech for the Summer Regional?
Spiff, I guess my 200 million number was right on.
Nice story. It’s too bad that after all “Ted” put into your firm, you still have brokers (not advisors) splitting breakpoints and what not.
No knock on you EDJ guys here that do the right thing.Ahhh there is so much more to add Mr. Lambda…
Question- Anyone care to take a stab at why the General Parnters of EDJ have another broker dealer under their umbrella called Conestoga Securities? The key GP's are the principals according to the State filing.[quote=footsoldier]Ahhh there is so much more to add Mr. Lambda…
Question- Anyone care to take a stab at why the General Parnters of EDJ have another broker dealer under their umbrella called Conestoga Securities? The key GP's are the principals according to the State filing.[/quote] What no mention of EDJ Ventures, LHC, Boone National S&L, Passport Research, or CIP? Perhaps this will help with the conversation. I doubt it, but I'm sure foot will espouse his conspiracy theory momentarily: EDJ ownes 100% of the outstanding stock of Conestoga Secs, Inc who owns 100% of the outstanding stock of CIP Management, Inc who is the managing general partner of CIP Management, LP, LLLP who is the managing GP of Community Investment Partners II LP, LLLP, Community Investment Partners III, LP, LLLP, Community Investment Partners IV, LP, LLLP, and Community Investment Partners V, LP, LLLP business development companies. EDJ also holds all the LP equity in EDJ Ventures, LTD. Conestoga Secs, Inc is the GP of EDJ Ventures, LTC. Fire away with the conspiracy theory. I'm sure you've got a good one. I'm sure at some point it ties in with the Knights Templar and Skull and Bones.My name is lambda and I drank the koolaid
OK guys…looks like my attempt to provide some info backed fire and maybe I snuck into the fridge and drank the koolaid a little early !!!
So where does the “Serving Individual Investors since 1871” comes from?
Comes from buying Whittaker & Co who WAS founded in 1871. Common practice was to adopt the starting date of the oldest component of the company. Jones hasn’t been using that tagline for a few years now.
Spiff-
Any idea what all the entities are or what they do? Or how the affect the company bottom line?First, let me say thank you foot for giving me something to do today rather than make calls.
According to Jonesnet, CIP is a business development company that was formed in the 1990's. The majority of the investments the partnerships made were in the medical field. All of the CIP dollars are currently invested, so no additional investments are being made. I have no idea how they affect or if they detract from the Jones Financial Companies bottom line. I found a document that listed CIP along with some other STL based companies as a Venture Capitalist organization. The gist was, STL companies, ie AGE or Stifel or Enterprise Leasing, investing in STL startup medical companies. There is a guy at HQ that Jonesnet says you can call if you have questions about CIP.It probably has something to do with tax or risk/liability management. When I worked at a major hotel company in finance, we were investing in some type of oil co-generation plants because we got these huge tax incentives. Had nothing to do with the core business, it was just one of those tax shelters. And this was just over the past 10 years (ended maybe 2006?), not in the go-go tax shelter days. All big companies use creative financing structures for various purposes. The last firm (non-financial firm) I worked for had over 100 LLC’s, LLP’s and C Corps all intertwined. This was primarily because of tax reasons and partnership involvement. Each LLC had different levels of participation by various individual and entity partners. No cloak-and-dagger stuff, just pure above-the-board financial reasons. It kept PWC and my team quite busy during tax season.
Man, that’s no fun. Not even the hint of a conspiracy theory. Just boring tax stuff.
Spiff-
How did Jones handle directed brokerage when it was a common practice? You were at home office then. Did they have a directed brokerage dept next to the bond desk? I remember the company montra was that there was only one profit center, the IR/FA. How did that revenue get recognized?
Ah the conspiracy theorists are raising their heads now!!!!!!!!!!!!!!Yes, I was at the home office then, but had zero contact with the bond desk.
You can spin that montra however you choose. The reality is that there are several lines of revenue with revenue sharing agreements being one of the largest. I'm sure there was something from directed brokerage. Both of those things were common practice. That's a sad attempt at a conspiracy theory. A good one would be that John Bachman is a member of Skull and Bones. Conestoga was actually a private LP set up under his watch to fund "businesses" whose sole purpose was to influence the monetary system. Their goal is to send our economy into a tailspin, collapse our financial system, and once it does, the shadow government that already exists will take power and reassert our world dominance. Now that's a conspiracy theory. PS - to my knowledge, there was no directed trading desk.That’s a little far-fetched .
Everyone knows that Bachman was a puppet the whole time of Doug Hill. In fact, the only reason Doug Hill stepped down, was to devote more time to stealing money from mutual fund shareholders. Weddle is a pawn in his game to fleece the investing public of all of their money.
And they are not members of Skull and Bones - they are members of the Femurs and Tarsals. A much more sinister organization bent on making St. Louis the country’s capital. Conestoga is a shell company used to funnel campaign money so that “saul4paul” (who is the brains behind “Ron Paul”) can become this new “Jonesmerica’s” all powerful King/Emperor/President/Emir/Pontiff/.
And remember ex-Jonesers, if you’re part of the “saul4paul” solution, you’re part of the problem.
So now you finally know who Saul4Paul is - Doug Hill. I’m afraid I’m going to have to go into witness protection now.
You’re a much better theorist than I am.
I got a peek at the summer regional tape and I am sad to say that did not know any of the top producers shown there. After being gone 8 years I learned how quickly the firm changes!!
IndyEDJEight years is a lifetime in this biz. I’d bet a lot of the top producers you knew are either HQ GPs or just don’t do the videos any longer. Some of the big names are still there, but just not as prevalent anymore.
EDJ has changed A LOT since you left in 2000.Here’s a good one for you Spiff. I sent a nice letter to my old office requesting cost basis on accounts that had transferred to me at my new firm. It was signed by every client and requested that the rep supply that information directly to me their “new” advisor… The person that took over my office sent a letter that was approved by compliance to all clients that said since your account is closed at jones, we have no responsibilty for cost basis.
I would think that all firms have an inherent obligation to supply cost basis when an account transfers.[quote=WestH]So where does the “Serving Individual Investors since 1871” comes from?[/quote]
They just wanted to sound older than AGE lol
Nogs-
I had the same problem 18 months ago. You should send the letter to headquarters. They are required to provide the info. But they won't mail it to you, only their ex-client. It's nothing but a pain in the ass. Most firms participated in the national electronic cost basis transfer process at the time of the transfer. Just another example of the doublespeak on how the customer always comes first.[quote=noggin]Here’s a good one for you Spiff. I sent a nice letter to my old office requesting cost basis on accounts that had transferred to me at my new firm. It was signed by every client and requested that the rep supply that information directly to me their “new” advisor… The person that took over my office sent a letter that was approved by compliance to all clients that said since your account is closed at jones, we have no responsibilty for cost basis.
I would think that all firms have an inherent obligation to supply cost basis when an account transfers. [/quote] That's odd when I took over an office. The previous broker sent letters for cost basis directly to the home office and they provided the information within a month. Try that.. Miss JGet ALL of your clients to request cost basis from Jones. I have been gone about two years, and just yesterday a CPA called me for cost basis. Well, because the Jones account has been closed over 18 months, I’m basically screwed, as Jones will just say “sorry.”
I've had to have clients bring in all of their Jones statements, and me and Excel spend some quality time together. Thanks Jones!I have the same issues when I transfer in accounts from other firms too. So, it’s not just a Jones issue.
I don't believe there is any obligation to share info between firms. Not saying it's right, just the reality of the way it is. I know if a former client called my office I would do what I could to accomodate them. But, once you leave, you are no longer MY client and you DON'T come first any longer. Why should I or my BOA spend ANY time at all doing YOUR work? If the home office wants to do the legwork for you, great. Send them the request. I would think that would be something that should have been thought of before you left Jones.Spiffy-
You are conflicted with your own company. There is an obligation to share info with the clients and it is much more convenient to have that info transferred directly to the clients new advisor. What Jones is doing again, is saying one thing i.e., that the client always comes first...remember before the hard working FA according to management. And what you are saying is that your ex client ( I thought Jones owns the client not you) don't receive that A++ service once they leave. The puddle gets more cloudy when outsiders recognize for you that YOU are an employee of the same company that tells anyone who will listen that when they are clients, the customer always comes first. The reality is that Jones wants you to think independently, but acts as if you don't have a say in the matter. It ain't perfect anywhere, especially at EDJ.I’m not conflicted. And your statement is correct. Once someone leaves my office, they no longer get my A++ service like they did when they were my client. If it’s easy info to get, then great, I’ll do it. Because I’m a nice guy. But if you think I’m going to waste any substantial time calculating something like cost basis, you’re crazy. I have no legal or ethical obligation to provide that info to anyone other than the advisor. Signed letter or not.
So, you're telling me also that if your client moved money to me (must have had a stroke that day) if they call you a year later and ask you for info,you're going to drop everything and help them out? Really? I'd bet if you talk to someone at Jones HQ, they'd say they are more than willing to give that info to the client. But they're not going to provide that info to the new advisor. It's a confidentiality issue that Jones is trying to protect. I do get to act independantly on a lot of things. Some things I don't. I understand the relationship and I'm willing to live with it. You weren't, so you left.[quote=Spaceman Spiff]I have the same issues when I transfer in accounts from other firms too. So, it’s not just a Jones issue.
I don't believe there is any obligation to share info between firms. Not saying it's right, just the reality of the way it is. I know if a former client called my office I would do what I could to accomodate them. But, once you leave, you are no longer MY client and you DON'T come first any longer. Why should I or my BOA spend ANY time at all doing YOUR work? If the home office wants to do the legwork for you, great. Send them the request. I would think that would be something that should have been thought of before you left Jones. [/quote] Spiff- According to the agreement that I signed with Jones, I couldn't take that information with me. I believe in legally and ethically keeping your word so to answer your question there was nothing i could have done about it before I left. Every time I transferred an account from another firm I was supplied cost basis if I requested it. I think it is a Jones issue. You can't really believe that there is no obligation to share information do you?I think we're having two different thought processes here. Nog- I believe that if your client goes to EDJ HQ and asks for cost basis information on their accounts, then they have an obligation to give your client that info. I'm sure they will provide that info.
Now, at the branch level, if you send me the FA a letter asking me to provide you, the recently departed or account stealing FA, cost basis for a former client, I'm going to tell you to go jump in a lake. My office has zero obligation to you as an advisor to give up that info. Now, if my former client comes by the office or calls me, then I'll help. I'll get him the info he needs. And I'll do it with a smile. Actually my BOA will do it. I'll close the door to my office so I don't have to look at the guy.Now, at the branch level, if you send me the FA a letter asking me to provide you, the recently departed or account stealing FA, cost basis for a former client, I’m going to tell you to go jump in a lake. My office has zero obligation to you as an advisor to give up that info.
Spiff...did we strike a personal nerve. Perhaps a situation or two where people left and you took it personal.... Try working out at least three times a week for stress relief.I gotta go with Spiff on this one…I handle it the same way.
No personal nerve. It’s just easy to get you guys going. And we haven’t had a good I hate Jones conversation in a while.
I have only had one former client who really pissed me off this way. He moved to Schwab, then called me asking for help with cost basis. He was a putz anyway, so I told him to have Skippy at Schwab help him. You'll appreciate this one uwec - He's also the guy I sent a copy of Schwab's revenue sharing agreement to when he used that as the excuse for leaving my office. Found it on the web, printed it, highlighted it, and stuck it in the mail in a blank envelope. I see him at church every once in a while. For some reason he doesn't acknowledge my existence.I’ve had to explain revenue sharing a few times. But once people understand that all firms do it - UBS, ML, Morgan Stanley, LPL, etc., it makes sense. Most firms receive revenue sharing from far more funds as well. Fortunately, with the Advisory account we rolled out, we rebate any revenue sharing income back to the client’s account (and 12b-1’s). No double-dipping.
[quote=Spaceman Spiff]
I think we're having two different thought processes here. Nog- I believe that if your client goes to EDJ HQ and asks for cost basis information on their accounts, then they have an obligation to give your client that info. I'm sure they will provide that info.
Now, at the branch level, if you send me the FA a letter asking me to provide you, the recently departed or account stealing FA, cost basis for a former client, I'm going to tell you to go jump in a lake. My office has zero obligation to you as an advisor to give up that info. Now, if my former client comes by the office or calls me, then I'll help. I'll get him the info he needs. And I'll do it with a smile. Actually my BOA will do it. I'll close the door to my office so I don't have to look at the guy. You're incorrect on that my good friend Spiff. The only cost basis that the home office will supply is on the bond positions. Apparently, they aren't capable of supplying the mutual fund positions or the stocks. Check it out and report back......Who cares already. Every firm has their quirks.
A quirk is a funny little amusing habit. Not being able to supply cost basis goes a little beyond quirkiness. I wish you well…
Reality is a copout for those who can’t face drugs…
or admissions that their company acts in a quirky matter...I made up my mind a long time ago I was never going to get involved in this forum because I find it is only used to bash Edward Jones and other companies and I happen to believe most companies in this industry are good.
I decided to register today and will only respond to this whole thing about E.J. and cost basis. As a person that took over a competetive office I know all there is about providing cost basis info to former clients. The information that is being shared here is NOT true. The home office has a department that does nothing but research cost basis for ex-clients. I know this for a fact because we have used it when my boa could not find the information needed. This department can't even be used for present clients so I think we do a great job of helping former clients. The ironic thing is that the only time we can't find the information needed it is because the account was transferred in from another firm and no information was provided. We have never had a situation where the cost basis wasn't provided for a past client and we have had several come back because of our helpful attitude. I will go back into hiding again now and leave the forum to you people that have more time than me to worry about what some other company is doing.O.T.U. -
Why don't you let everyone know the number they can call for former clients. I assume it's an external number, not an internal # number??We've been told by Jones that once the account has been gone for over 12 or 18 months, their job is done, no cost basis for you. Here's my question. Why does jones supposedly employ a "department" to research cost basis when they could transfer the cost basis with the leaving account? If they had transferred over cost basis during the ACAT, THEY WOULD NOT NEED AN ENTIRE DEPARTMENT TO RESEARCH COST BASIS FOR PAST CLIENTS!!!!!!!!!!!! Sorry, that's a touchy subject with me. I know that Jones likes to homegrow it's technology, but I think it could figure out how to transfer cost basis (like almost all other decent firms) fairly easily.… The home office has a department that does nothing but research cost basis for ex-clients. I know this for a fact because we have used it when my boa could not find the information needed. This department can’t even be used for present clients so I think we do a great job of helping former clients. …
The only time finding a cost basis becomes an issue is when the “other decent firms” did not send the information when an account from transferred into Jones. If we made the original sale we can find the cost basis in a matter of seconds.
I don't think that you're grasping the issue. Let's use an example: A client is with Smith Barney in 1995 and buys American Funds, in 1999 he transfers his mutual funds to Edward Jones. In 2004 he transfers his American Funds to LPL (Jones does NOT forward costs basis data with the ACAT). He then needs to buy a house and sells all of his American Funds in 2008. In this example, I would not expect Jones to give me the cost basis of the funds when they were held at Smith Barney. But, it would be nice to get cost basis for when they were at Jones. However, Jones will simply throw up their hands because it has been over 2 years (or 18 months, or whatever) since the account left Jones. VERY frustrating. It would have been even nicer if the cost basis had simply come over with the funds at time of ACAT.The only time finding a cost basis becomes an issue is when the “other decent firms” did not send the information when an account from transferred into Jones. If we made the original sale we can find the cost basis in a matter of seconds.
BZZZZZZZZ, wrong answer!!! It just doesn't happen that way...... All of the cost basis that I submitted to the home office contained purchases only made at Jones and the only cost basis provided is for the bond holdings.The only time finding a cost basis becomes an issue is when the “other decent firms” did not send the information when an account from transferred into Jones. If we made the original sale we can find the cost basis in a matter of seconds.
Again, does anyone know a phone number or contact to get that basis if accounts are within the 18 month window? OTU says there is such a “department”. If so, give them up. Plenty of us have some work that we would like them to do is this relatively sluggish economy.
I don't think that you're grasping the issue. Let's use an example: A client is with Smith Barney in 1995 and buys American Funds, in 1999 he transfers his mutual funds to Edward Jones. In 2004 he transfers his American Funds to LPL (Jones does NOT forward costs basis data with the ACAT). He then needs to buy a house and sells all of his American Funds in 2008. In this example, I would not expect Jones to give me the cost basis of the funds when they were held at Smith Barney. But, it would be nice to get cost basis for when they were at Jones. However, Jones will simply throw up their hands because it has been over 2 years (or 18 months, or whatever) since the account left Jones. VERY frustrating. It would have been even nicer if the cost basis had simply come over with the funds at time of ACAT.[/quote] If SB didn't send that info to Jones in 1999, then how is Jones supposed to send it to LPL in 2004? Are you sure you're not confusing amount invested with cost basis? In your example, Jones would be able to tell you about dividends and cap gains that had been reinvested, but not the cost basis of funds purchased at SB. At some point we have to put the client's responsibilty to keep track of their own financial affairs in question. The fact that brokerage firms keep track of cost basis is a convenience for clients, but according to the IRS, not a requirement.[quote=onetimeuser]The only time finding a cost basis becomes an issue is when the “other decent firms” did not send the information when an account from transferred into Jones. If we made the original sale we can find the cost basis in a matter of seconds.
Spiffy, come on. I don’t expect Jones to send me the cost basis from SB if they don’t have it. However, if the client transfers over 1000 shares, and 100 are from dividend/cap gains reinvestments WHILE at Jones, I would like to know the cost basis of THOSE shares. That is cost basis.
I do find it funny that you think I may be confused about cost basis vs. amount invested. When I was at Jones, THAT'S when I was confused. When I got to LPL, that's when I realized that Jones does not put cost basis on their "standard" statements, they only put "amount invested". That's helpful, but a little misleading. LPL statements show true cost basis, which is WAY more helpful to clients. Basically, Jones could be nice and participate in industry wide cost basis sharing , but for some unknown reason, they have decided not to. Maybe it's because they can't actually talk to other firms, or attend functions with non-Jones people there. Oh wait, that's just the IRs![quote=Spaceman Spiff]First, let me say thank you foot for giving me something to do today rather than make calls.
According to Jonesnet, CIP is a business development company that was formed in the 1990's. The majority of the investments the partnerships made were in the medical field. All of the CIP dollars are currently invested, so no additional investments are being made. I have no idea how they affect or if they detract from the Jones Financial Companies bottom line. I found a document that listed CIP along with some other STL based companies as a Venture Capitalist organization. The gist was, STL companies, ie AGE or Stifel or Enterprise Leasing, investing in STL startup medical companies. There is a guy at HQ that Jonesnet says you can call if you have questions about CIP.[/quote]
Be sure to give him your branch id number when you call.
[quote=Spaceman Spiff]Yes, I was at the home office then, but had zero contact with the bond desk.
That's a sad attempt at a conspiracy theory. A good one would be that John Bachman is a member of Skull and Bones. PS - to my knowledge, there was no directed trading desk.[/quote]
Bachman can not be in Skull and Bones. He didn't go to Yale. Remember he went to that Wabash College that we always had to hear about.
Skull and Bones is East Coast old money intelligentsia. Jones is Mid-West red neck anti-New York.
Need a different metaphor.
What I think is funny is that Ted (or was it Ed sr.?) left the firm he was with to start Jones because he didn't feel he was being compensated properly for his work.
That piece of Jones history is forgotten when someone leaves Jones because they don't feel they're being compensated properly for his/her work...
"Holy Old-Thread Batman!"
[quote=CIBforeveryone]
What I think is funny is that Ted (or was it Ed sr.?) left the firm he was with to start Jones because he didn't feel he was being compensated properly for his work.
That piece of Jones history is forgotten when someone leaves Jones because they don't feel they're being compensated properly for his/her work...[/quote]
While you are technically correct, you're missing the moral of the story. Ed Jones, Sr. didn't get any kudos or finders fee for getting a large bond underwriting for his company. He did sell some of the bonds. He did get paid for that part of the work.
So, today, if you are the FA instrumental in finding a getting a bond issue to go through our underwriting, Jones pays you a finders fee of 75bps per $1000. At 100% payout. Plus you are going to be able to sell the bonds as you normally would. And I think you get some special award at Summer Regionals. Not sure on that one.
Nice try, though.
[quote=American Flag]
[
Bachman can not be in Skull and Bones. He didn't go to Yale. Remember he went to that Wabash College that we always had to hear about.
Skull and Bones is East Coast old money intelligentsia. Jones is Mid-West red neck anti-New York.
Need a different metaphor. How about Scientology?
[/quote]
Wow, your brilliance is overwhelming.
[quote=Spaceman Spiff]
[quote=CIBforeveryone]
What I think is funny is that Ted (or was it Ed sr.?) left the firm he was with to start Jones because he didn't feel he was being compensated properly for his work.
That piece of Jones history is forgotten when someone leaves Jones because they don't feel they're being compensated properly for his/her work...[/quote]
While you are technically correct, you're missing the moral of the story. Ed Jones, Sr. didn't get any kudos or finders fee for getting a large bond underwriting for his company. He did sell some of the bonds. He did get paid for that part of the work.
So, today, if you are the FA instrumental in finding a getting a bond issue to go through our underwriting, Jones pays you a finders fee of 75bps per $1000. At 100% payout. Plus you are going to be able to sell the bonds as you normally would. And I think you get some special award at Summer Regionals. Not sure on that one.
Nice try, though.
[/quote] So CIB's opinion of undercompensation must be the exact same method as Fred Sr's? Otherwise it is just a nice try?
Spiff, I'll grant you recall the facts better than I did. ND is right...it's a question of how you determine what's fair, and Ed disagreed with his employer, so he left, which is viewed as the "right" decision by Jones historians.
I'm trying to stay factual based on the original post rather than drudge up the same old talking points. This is a talking point that doesn't seem to get airtime, but I think is valid.
I think we're talking apples to oranges here. The facts are that Ed Jones, Sr. got to sell the bonds, got paid on them and evidently didn't have an issue with his payout. His beef was that he additionally got zero recognition or compensation for getting the deal going in the first place. He thought he should have received something for those efforts.
What you're talking about is purely a payout discussion. Just because you can get an indy firm to give you a 90% payout, doesn't mean you are undercompensated at Jones. It's a completely different business arrangement, therefore a completely different compensation level. I think some folks leave Jones, or any other wirehouse or regional firm, because they see the bigger payout. Some don't really realize that all the indy firms are doing is pushing off a lot of the work of starting and running a financial advisor office onto your back and compensating you for it. If you're willing to take on those responsibilities, great, you'll make more money.
[quote=Spaceman Spiff][quote=now_indy][quote=onetimeuser]The only time finding a cost basis becomes an issue is when the "other decent firms" did not send the information when an account from transferred into Jones. If we made the original sale we can find the cost basis in a matter of seconds. [/quote]
I don't think that you're grasping the issue. Let's use an example: A client is with Smith Barney in 1995 and buys American Funds, in 1999 he transfers his mutual funds to Edward Jones. In 2004 he transfers his American Funds to LPL (Jones does NOT forward costs basis data with the ACAT). He then needs to buy a house and sells all of his American Funds in 2008. In this example, I would not expect Jones to give me the cost basis of the funds when they were held at Smith Barney. But, it would be nice to get cost basis for when they were at Jones. However, Jones will simply throw up their hands because it has been over 2 years (or 18 months, or whatever) since the account left Jones. VERY frustrating. It would have been even nicer if the cost basis had simply come over with the funds at time of ACAT.[/quote]
If SB didn't send that info to Jones in 1999, then how is Jones supposed to send it to LPL in 2004? Are you sure you're not confusing amount invested with cost basis? In your example, Jones would be able to tell you about dividends and cap gains that had been reinvested, but not the cost basis of funds purchased at SB. At some point we have to put the client's responsibilty to keep track of their own financial affairs in question. The fact that brokerage firms keep track of cost basis is a convenience for clients, but according to the IRS, not a requirement.[/quote]
See highlighted area.....This is going to be a requirement beginning in 2011.
I think in a lot of ways, Edward Jones was the first independent brokerage firm. Long before Linsco was a glimmer in Private Ledger's eye, Ted Jones hit upon the idea of the one broker office. One broker, one assistant, no branch manager, individual autonomy as long as the broker is hitting their numbers... no propriatary products.
Ted Jones used to famously tell the home office folks - the broker is our customer. That sounds a like the independent brokerage philosophy of today.
And back in the mid-seventies when Ted was kicking Edward D Jones into high gear, there were less brokers in America. Less than 4% of the population owned mutual funds at that time. So Jones couldn't fill its ranks by doing what LPL and the other independents do today, and wait for good advisors to get washed out of Edward Jones and the wirehouses. There wasn't a ready made supply of pre-screened, pre-trained brokers complete with their own books ready to do a turnkey startup.
So they had to hire and train their own brokers. Jack Phelan headed the sales side of the company and he was another great man from everything i have read. And Jones became a superb selling organization, pioneering the door-door approach and introducing middle class America to mutual funds and investing.
Just my perspective on early Jones history. Jones was in many ways the first independent brokerage.
Wow what a good read...yawn. Spiff, how big of an office did you take over after smooching so much hiney in the home office all those years ago? Let me guess, 50million aum? Make a few service calls each day, and that frees you up to post 5 good ones daily. A supreme time waster. Funny thing is, the gp's are probably trying like hell to find out which branch in the stl metro area you took over so they can ixne your web browsing and get you to sell sell sell more more more.
Funniest thing is, it sounds like deep down, you want to go indy... but can't because you were given a big gift and also enjoy sipping on kool aid.
Really, what does Conestoga do?
Doug Hil was someone who was easy to talk with and comfortable to be around while Jim Weddle is someone I'd never even want to have a conversation with. He tries to say the right things but I always felt like every word in public and private was scripted and he has always seemed to me to be a fraud. I wish I had left Jones sooner.
Is Jones really that bad? Other than for the fact that they put new guys that took over $20mil on a pedestel, what is that bad about it? And what makes being indy that much better?
@who...first off you have to understand the EJ does a great job of making new 'advisors' feel that they are the only firm doing the right thing for the clients, only ethical firm, yada, yada, yada. There comes a point when you realize that all the effort YOU have put into prospecting and building a book (realize I didn't say YOUR book) has not been rewarded compensation-wise as well as it could be as an independent (or maybe even at one of the wire houses, I don't know since I haven't worked at a wire..just ej and indy). Yeah sure the couple trips a year to Europe or Hawaii are nice..but nothing you couldn't do yourself as an indy and get the tax write off as well if you mix in some business. Besides, who wants to be surrounded by 50 other people sucking up to the GP parroting 'what a great firm we work for!'
Some other things to consider:
The product offerings are pretty limited as Jones brings in A BUNCH of brand new people in every year. I have access to mutual funds and outside investments that have low corrolation to the market..they can make sense for some investors.
If you look at your P&L (or whatever they call it..I've blocked much of this from my memory in the last couple years), you will see that you pay a huge overhead to St. Louis before you even become bonus eligible. In my practice, if I manage my costs effectively..alot more $ drops down to the bottom line.
I don't have to open a bunch of dink accounts just to hit some number that the region or St. Louis wants to see. As an indy, I determine the type of clients I want to deal with. My average account size is much larger as an indy. Don't get me wrong, if someone come in with a 25k rollover check and want to invest, I'll open the account. But I am not out actively seeking anyone with $100 and a heartbeat just to get an account open.
Trails
When it comes to retirement..MY book of business is a marketable commodity. It is worth something out there in the marketplace. If I want to sell it..I can price it to move, or high-ball it. If I want to give it to someone and 'consult' part-time for a few years in transition I can do that. The bottom line here is I have the control in what happens with my clients..not a regional leader or some gp in s.l.
As an indy, (and again maybe the wires too) I have access to alternative investments that allow me to successfully go after endowments and charitable accounts.
I have access to many platforms AND outside money managers for fee based accounts..I also can set up my own investment mix inside a fee based account with or without discretion. Here again, I don't have to settle a handfull of cookie cutter allocations from a gang of in st. louis.
Here's a big difference..if you like the idea of being a business owner..(with all of its ups and downs) go indy. Yes, you will be doing alot more than just prospecting and taking care of your clients..but that is part of the challenge. If you like just going in..not having to worry about paying bills, hiring, quarterly tax reporting, etc, etc..stay at EJ..all of it is done for you, but at a cost. For me, the cost was a bit too high...
@ Done - great summation. When you crunch the numbers, you leave a lot on the table at Jones. For me, ultimately the fact that I would never own my efforts, even after 20-25 years of hard work, was never something I could accept.
I don't think it's that great a summation.... Sounds pretty one sided to me.
OK Hulk, let’s hear your side…btw still laughing at the original post, lambda must have been very bored at home, with no cable tv. just picture it, he’s holding up that red ‘edj history’ book and typing verbatim.
[quote=Spaceman Spiff]
I think we're talking apples to oranges here. The facts are that Ed Jones, Sr. got to sell the bonds, got paid on them and evidently didn't have an issue with his payout. His beef was that he additionally got zero recognition or compensation for getting the deal going in the first place. He thought he should have received something for those efforts.
What you're talking about is purely a payout discussion. Just because you can get an indy firm to give you a 90% payout, doesn't mean you are undercompensated at Jones. It's a completely different business arrangement, therefore a completely different compensation level. I think some folks leave Jones, or any other wirehouse or regional firm, because they see the bigger payout. Some don't really realize that all the indy firms are doing is pushing off a lot of the work of starting and running a financial advisor office onto your back and compensating you for it. If you're willing to take on those responsibilities, great, you'll make more money.
[/quote]
Spiff- You actually have no idea that anything that you wrote is correct. Zero idea, You never spoke to Mr. Jones. I think this is the reason that people don't take your posts seriously. As far as the situation with Mr Jones, he started Edward Jones on the principle that the financial advisor should be the most important member of the organization. That is what we know. As far as our firm today, that certainly isnt the case.
Hey I still work for Ejones as angry as they make me sometimes I am still here. Why? It is a good deal for me and my family RIGHT NOW.
I do agree with Doggie Daddy about Doug Hill, he is a great guy. Sincerely a nice gentleman. As far as Jim Weddle goes, he is just like Barack Obama. I mean that as funny as it is, they are two in the same. Since he took over our clients pay much more in fees, our financial advisors get a lower payout and the minimum commission amount has changed and is 22% higher. I am pretty sure Ted would fire him. But I understand why he makes the decisions that he does.
Real World, you hit the nail on the head, the FA used to be the customer, sort of like the independent firms. Now the FA is a second class citizen, and the gradual evolution toward this has not gone unnoticed. FA’s are not dumb, at least the ones who can still think for themselves aren’t.
[quote=Incredible Hulk]
I don't think it's that great a summation.... Sounds pretty one sided to me.
[/quote]
I didn't figure YOU would. You hate everything I post. Still have a warm fuzzy for you, though. :)
[quote=Donedrinkin]
@who...first off you have to understand the EJ does a great job of making new 'advisors' feel that they are the only firm doing the right thing for the clients, only ethical firm, yada, yada, yada. What firm in what industry doesn't spouse the greatness of the company to their new hires? There comes a point when you realize that all the effort YOU have put into prospecting and building a book (realize I didn't say YOUR book) has not been rewarded compensation-wise as well as it could be as an independent (or maybe even at one of the wire houses, I don't know since I haven't worked at a wire..just ej and indy). How many of us could have built their business from scratch at an indepedent with no brand to stand behind? Yeah sure the couple trips a year to Europe or Hawaii are nice..but nothing you couldn't do yourself as an indy and get the tax write off as well if you mix in some business. Besides, who wants to be surrounded by 50 other people sucking up to the GP parroting 'what a great firm we work for!' I've been on roughly a dozen trips, including Hawaii and Europe. Outside of the 2-3 hour business meeting, I don't hear any of this sucking up to GPs, now talking about how good the firm is, probably happens. I would think it rude not to be thankful to the firm that provided my family vacation (even if taxable) again.
Some other things to consider:
The product offerings are pretty limited as Jones brings in A BUNCH of brand new people in every year. I have access to mutual funds and outside investments that have low corrolation to the market..they can make sense for some investors. You may be able to offer more products, which I admittedly don't like, but at least I can talk to my clients with confidence about the correlation of investments in their accounts, knowing what it means and also how to spell it. ---> Spelling is a cheap shot, I know, but it's all I got.
If you look at your P&L (or whatever they call it..I've blocked much of this from my memory in the last couple years), you will see that you pay a huge overhead to St. Louis before you even become bonus eligible. In my practice, if I manage my costs effectively..alot more $ drops down to the bottom line. B24 had some great points several months or years ago about the p&l overhead. It's irrelevant. They could lower the overhead number to zero and lower the % payout. I hope you didn't leave Jones because of the $5750 overhead charge.
I don't have to open a bunch of dink accounts just to hit some number that the region or St. Louis wants to see. As an indy, I determine the type of clients I want to deal with. This business is all about production, if you are hitting your production bogey, then the account bogey is irrelevant. My average account size is much larger as an indy.I would hope that it would be, you left the small stuff behind, we call that a Goodknight here. Don't get me wrong, if someone come in with a 25k rollover check and want to invest, I'll open the account. But I am not out actively seeking anyone with $100 and a heartbeat just to get an account open. Me too.
Trails I like to run on them.
When it comes to retirement..MY book of business is a marketable commodity. It is worth something out there in the marketplace. If I want to sell it..I can price it to move, or high-ball it. If I want to give it to someone and 'consult' part-time for a few years in transition I can do that. The bottom line here is I have the control in what happens with my clients..not a regional leader or some gp in s.l. Yes you do have these options. We have a very competitive Sunset plan. north of 100% payout over a 3 year period with lots of guarantees.
As an indy, (and again maybe the wires too) I have access to alternative investments that allow me to successfully go after endowments and charitable accounts. I didn't realize these were required... Obviously a huge part of my business...
I have access to many platforms AND outside money managers for fee based accounts..I also can set up my own investment mix inside a fee based account with or without discretion. Here again, I don't have to settle a handfull of cookie cutter allocations from a gang of in st. louis. I have at least a dozen hand crafted advisory accounts that I've put together from a list of a couple hundred funds/ets. Believe it or not, the cookie cutter allocations work great for a lot of people.
Here's a big difference..if you like the idea of being a business owner..(with all of its ups and downs) go indy. Yes, you will be doing alot more than just prospecting and taking care of your clients..but that is part of the challenge. If you like just going in..not having to worry about paying bills, hiring, quarterly tax reporting, etc, etc..stay at EJ..all of it is done for you, but at a cost. For me, the cost was a bit too high...
[/quote]
Feel free to tell me how naive and ignorant I am. I'm used to it....I'm married.
i feel like a business owner. sure edward jones offers a product for a price but if i walk my non goodknight book is coming with me. that is what is great about the industry we service.
A real business owner would fire half of the GP’s, increase payout to the salesforce, and eliminate all the g@y azz programs i.e. client svc excellence, etc.
The firm does not send us on trips. Its counted as compensation so therefore we send ourselves.
[quote=JohnEdwardJones]The firm does not send us on trips. Its counted as compensation so therefore we send ourselves.[/quote]
...And the business meeting that goes with them are for the firm to be able to deduct its portion of the cost of the trip, and then pass on the rest to the employee, who gets to pay the top tax rate (bonus income) for it. How in the world anyone could compare a div trip to a tax-deductible "business" trip as an indy is beyond me.
[quote=RealWorld]
i feel like a business owner. sure edward jones offers a product for a price but if i walk my non goodknight book is coming with me. that is what is great about the industry we service.
[/quote]
Recently in my region a guy who started new/new 5 years ago and built a 30+ million office was let go by Jones. They flew in a TR that walked in the branch and took it over while the FA was on the phone being fired. Jones then marked up his U4 so he can't find a new place to work. This guy was a hero in our region - a great guy, winner of a bunch of awards the weekend before they fired him - and worked his tail off for over 5 years. And in the blink of an eye, and at the whim of the firm, he had it taken away from him.
That was the final straw that pushed me to go indy. Don't kid yourself - you are not in business for yourself, and they are not your clients. You will never own your work. Even if you do leave, their attorneys will make sure you won't have an easy time moving much business.
It's not a big happy family, it's a business.
[quote=inlandTX]Recently in my region a guy who started new/new 5 years ago and built a 30+ million office was let go by Jones. They flew in a TR that walked in the branch and took it over while the FA was on the phone being fired. Jones then marked up his U4 so he can't find a new place to work. This guy was a hero in our region - a great guy, winner of a bunch of awards the weekend before they fired him - and worked his tail off for over 5 years. And in the blink of an eye, and at the whim of the firm, he had it taken away from him.
That was the final straw that pushed me to go indy. Don't kid yourself - you are not in business for yourself, and they are not your clients. You will never own your work. Even if you do leave, their attorneys will make sure you won't have an easy time moving much business.
It's not a big happy family, it's a business. A pretty ruthless one that hides behind a thick green veneer of Culture & Kudos articles, div trips, and Kumbaya. At least other firms have the temerity to go ahead and announce how cut-throat they are in the beginning. Jones does the group hug thing and proclaims how different they are. They're not different.
[/quote]
You know what they say...PIP'n aint easy (performance improvement plan).
that's messed up. What was the reason for getting the ax, was it the idiotic 3 strikes and your out PIP deal? It's pretty damn hard to not go on the Pip program at least once being a new/new even if you are killing it.
I know Jones has a lot of bad aspects to it. Some of you UBS people may know who the X ecex is that was on MSNBC the other day said something like "There are many many great ethical people in our industry working as FAs but there is no great ethical firm in the industry." I agree with that.
I have always worried that any independent place would make my life hell as well. maybe someone can enlighten me but it seems there are always going to be worries in this industry.
As far as Edward Jones is concerned, it has the makeup to be a GREAT company... It just has it heart in the wrong place currently.
How would an independent firm "make your life hell as well"?
Also, curious to know why the rockstar fa got canned by big green, right after receiving all the crappy i mean totally awesome awards...did he have to return his jack phelan blue blazer?
[quote=ClarenceBeeks]
How would an independent firm "make your life hell as well"?
Also, curious to know why the rockstar fa got canned by big green, right after receiving all the crappy i mean totally awesome awards...did he have to return his jack phelan blue blazer?
[/quote]
I'll give you 3 choices.
Legal
Ethical
Profitable
@Hulk: BAAAAAHAAAAHAAAAAHAAAA…you still believe that cliche?
Out of those 3 choices the third one is the only one that Jones cares about.
There was a seg 3 guy cut loose last week in our region and possibly another one gone soon. It does make you realize that your book really isn't your book...just Jones'. And they will let the next warm body in your office add to it if they can and maybe the third or fourth schlub that moves in will be able to last more than 3 years after he churns the old clients and gets them to move to AS.
Wonderful system.
Ted would never approve of firing a hard working newer fa and replacing him with some newb who didn’t do the work. Heck, he wouldn’t even let his sisters become partners since they weren’t doing the work. Funny, seems like we forgot our history and culture.
Someone would have to be incredibly ignorant of our business to think that Jones or any firm in would fire a broker running a profitable business that wasn't breaking any laws or breaching ethical standards. What sense does it make? The industry fail rate runs north of 75% and we're going to fire that one in four that makes it? I guess one doesn't have to have common sense to post on an anonymous internet forum.
And mobile2, you really think that running a legal and ethical branch is not a top priority? I guess the GPs enjoy paying out settlements when an advisor has broken the law or industry standards....
Easy there Hulk. I'm positive that Jones wants FA's to run legal & ethical businesses and every FA I've ever met would have it no other way.
Perhaps my wording was a bit provocative but the point remains: regardless of how long you've slogged it out any given FA can get the hook. Now, if the profitability isn't there then it makes sense to move out an FA that isn't willing or able to get up to snuff.
But seeing that played out in reality is much more harsh than written out as an obvious point.
First off, I agree with Hulk. Jones doesn't want to fire anyone who can produce even 150K gross. They certainly don't want to lose anyone over 250K and they get really pissed if they were to loss anyone above 500K.
I don't agree that ALL edward Jones advisors run a legal and ethical business. In fact, one of the key complaints I have is the focus on PROFIT, PROFIT, PROFIT instead of ETHICS, ETHICS, ETHICS... It is a key piece that we are missing from the top down.
I use the analogy of when Bush was president and wanted to "make America safe" by killing all the terrorists in the world. While he was doing that he allowed Barney, Dodd, Frank to push Fannie and Freddie into buying up CRAP mortgages, he allowed our debt to spiral out of control, he allowed our schools and infastructure to begin to fail.
He had one goal in mind and although many would say it is a admirable goal. It put blinders on him that caused HAVOC in America.
That IMHO is EJones' problem. We were so concerned in 2008 with profitability as a firm and with bonus levels being high to keep big producers that we pushed for more money(raised expectations not just on old slackers but on newbies 1-5 yrs out me included at the time), and we started filling offices with anyone who could/would move to the town where the office was now open. We began to award these "take over branches" advisors with Fast Start awards, and showed them the only thing of importance is their gross production. Now in my region we have numerous people with Very Little professional/financial experience managing books well over $50,000,000. And worst of all, we have rewarded their lack of knowledge and professionalism with trips, plaques and "Look what so and so did in only 9 months"....
IMO these people will not be loyal to Edward Jones, will never know what it is like to struggle in this business, money is their GOD, and have no knowledge or experience in the products and services they are providing.... When a crisis happens at this firm and it will again one day the people we have in these offices will really shit the bed and we will look a lot like America looked after Bush stepped down (stepping off of soapbox).
to many ex jonesers it simply came down to the simple fact that you can 'run your own business' and build a book of business that is YOURS. There are going to be crumb bums at any firm, wire house, or indy shop. I just like the ability to decide for myself how much I need to produce..(of course my wife has some input in that as well..)
[quote=RealWorld]
First off, I agree with Hulk. Jones doesn't want to fire anyone who can produce even 150K gross. They certainly don't want to lose anyone over 250K and they get really pissed if they were to loss anyone above 500K.
[/quote]
This sounds like a kinder - gentler policy than I have heard is there now, given the move to 10 segments and the increased production standards... Where are you getting these numbers?
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