Edward Jones/Jim Phillips
For those of you former Jonesies that might be in the NC area, Jim Phillips, one of our top 3 advisors in the nation, passed away of a heart attack at age 58 two days ago.
He was number 1 when I went through training in 2006. They showed us his commission screen at PDP. God bless him and his family.
Wow…he spoke at one of our meetings. Very nice person.
You want to talk about a scramble for an office......[quote=noggin]Wow…he spoke at one of our meetings. Very nice person.
You want to talk about a scramble for an office......[/quote] I think we're talking plural here. At last count, someone told me over $600mm AUM.The vultures are circling now. Waiting to take over assets, jump to Seg 5, and speak about "what is working" for them at the next FA meeting.
That’s just too f***ing young…
I wish all the best to his family, and screw the vultures who fight for his book... thinking...I should probably lay off the coke.Maybe too much stress from too many accounts? I never met him, but he had a huge volume of business. Didn’t he open like 30 accounts a month?
Yeah, he was opening like 30 a month. Had like 1500 households, and that was after like 10 Goodknights. He’s probably responsible for bringing in over $1B to the firm. His deal was that he didn’t turn ANYONE away, regardless of account size. He has like 5 assistants I think. And he has a pretty good process.
Nice guy from what I hear.[quote=B24][quote=noggin]Wow…he spoke at one of our meetings. Very nice person.
You want to talk about a scramble for an office......[/quote] I think we're talking plural here. At last count, someone told me over $600mm AUM.[/quote] What will his family get? I know that was a reason for some people leaving in the past. RIP.[quote=Mr.Blonde][quote=B24][quote=noggin]Wow…he spoke at one of our meetings. Very nice person.
You want to talk about a scramble for an office......[/quote] I think we're talking plural here. At last count, someone told me over $600mm AUM.[/quote] What will his family get? I know that was a reason for some people leaving in the past. RIP.[/quote] Well, a huge amount of general partnership and limited partnership shares. And my guess is that they will do some sort of "retirement" package, similar to what they do when the transition anyone into retirement. But that's just speculation. I have never heard what happens if someone passes. Maybe Spiff knows.What was his T12?
Jim Phillips was a good man. I had lunch with him one time.
Man are they going to cannibalize that book. Some new FAs just got a nice fat raise. I hope they sunset it or something.
Unless they treat employees differently (which I doubt they would), those partnership shares are returned to the company for their current market value.
Now with the GP shares they may have the right to move to SLP. And that might allow for heirs to continue to receive the income. Maybe a GP would care to comment...
As far as transition income to heirs, that would be the first time I have heard of that but it wouldn't suprise me that they offer something to the big producers. Certainly the family would be elgible for his deferred comp and retirement dollars. There must be a precedent for this, it would be interesting to hear what kind of policy Jones offers.
I know of a brand new rep who died during KYC last year and all that was offered was the group life insurance, but it wasn't even a rep who had started producing. Spiff any thoughts...
In 06 his T12 was around 2-2.5 mil if I remember correctly.
Can any of you guys give details on this process ? An LP I know told me that if he were to pass that his wife would just get a check for the LP, his book is absorbed by the firm and his family is no part of anything moving forward. Can that be true ?[quote=Ron 14]In 06 his T12 was around 2-2.5 mil if I remember correctly.
Can any of you guys give details on this process ? An LP I know told me that if he were to pass that his wife would just get a check for the LP, his book is absorbed by the firm and his family is no part of anything moving forward. Can that be true ? [/quote] I knew of one person who left for RJ specifically because his wife wouldn't get a dime of 8 years of work. The info was second hand, but this was a 40 million dollar book, I can't fathom leaving 600 million and getting 0. Anyone?Regardles of what transpires with the book, he probably has millions in GP and LP, millions in his 401K, and millions in his deferred comp. And this doesn’t include his personal investments and the real estate he owns (he owns the building he works in). I am guessing he is worth north of $10mm. But the question remains what will happen to the book. I know it will get split up, but hopefully they’ll get a transition package. My guess is that at that level, you have talked to someone about that situation.
Unfortunately I believe the suspicions about getting nothing for his mega book are more than likely true. I hope I’m wrong. That’s one thing I don’t understand about EDJ and our supervets within a few years of retirement. Why guys like this don’t go indy at the last minute so they can sell their book is suprising. I understand why Jones doesn’t address it, but it why those guys like Jim don’t take steps to figure it out is beyond me. I’m really suprised we don’t lose more of them that are 60 years old. Perhaps I just don’t run in the right circles to know why those guys think the way they do.
LP gets cashed out. So, if he had $100K in LP, his widow gets three checks that total $100K. I don't know what happens to his GP. I've never asked a GP what were to happen to his partnership if he died. My guess - and it's a pure guess - is that a check gets cut just like the LP. The benefit to our partnership is the income stream it creates. It's not the market value. There isn't one. Jim's widow isn't going to have any say over what happens to his book. Chances are it will get split up between 4 or 5 FAs in the area. Someone will probably get a really big chunk of it. I'm voting for his younger brother that is there in that town too. Keep it in the family at least.See David Lane’s divorce proceedings for the ability of anyone other than a GP to own GP. It can’t happen. I’m sure a check would be sent for the value. As I’ve said before, Jones could give a 20% payout to the “buyer” and 20% to the “seller” for some period of time and everyone would be MUCH happier, and Jones wouldn’t even have to give up any more cash.
This is the primary reason I left Jones in 06. I couldn’t see working all those years only to leave my family with nothing for my hard work.
What a shame that the firm hasn't put more value in the reps sweat equity. It wouldn't make me feel very good about representing a firm that treats it's FA's like this. Spiff...I know we disagree alot on these forums, but I think you can see that you and others like you need to protect your families with alot of life insurance for obvious reasons , not the least of which is to compensate your heirs for your hard work building your practice. It's highly likely if the firm won't help the top producers family, they aren't going to help anyone.I honestly don't know what they'll do for Jim's wife. If I were in his shoes, with every GP check I got, I'd be buying some more life insurance. You make $2+ mil a year just from your biz, you can put all that GP money to work with some leverage.
We're jumping to conclusions about what Jones is or isn't going to do for Jim's wife. None of us are at that level and we don't have the ear of Jim Weddle or John Bachmann. I would certainly think that this conversation is a frequent one at Managing Partners conferences or Partners meetings or RL meetings. Perhaps someone will send a suggbox wire to Weddle and ask about Jim's widow and his monster of a book.Technically he was an employee, if they treat his family different than any other employee’s family…the lawyers will be all over it.
The days of backroom shenanigans are long gone. Weddle and Bachman probably want nothing more than to help that family but I would guess they can't. Sadly, this illustrates the real conundrum at Jones. Do you build it for them...or do you find another alternative to build it for yourself or in the case of Mr. Phillips his grieving family.Indy in two years for me.
Windy Investments ... We'll blow you over with our bullsheet[quote=Spaceman Spiff]Unfortunately I believe the suspicions about getting nothing for his mega book are more than likely true. I hope I’m wrong. That’s one thing I don’t understand about EDJ and our supervets within a few years of retirement. Why guys like this don’t go indy at the last minute so they can sell their book is suprising. I understand why Jones doesn’t address it, but it why those guys like Jim don’t take steps to figure it out is beyond me. I’m really suprised we don’t lose more of them that are 60 years old. Perhaps I just don’t run in the right circles to know why those guys think the way they do.
LP gets cashed out. So, if he had $100K in LP, his widow gets three checks that total $100K. I don't know what happens to his GP. I've never asked a GP what were to happen to his partnership if he died. My guess - and it's a pure guess - is that a check gets cut just like the LP. The benefit to our partnership is the income stream it creates. It's not the market value. There isn't one. Jim's widow isn't going to have any say over what happens to his book. Chances are it will get split up between 4 or 5 FAs in the area. Someone will probably get a really big chunk of it. I'm voting for his younger brother that is there in that town too. Keep it in the family at least. [/quote] It's much tougher to move a huge "Jones" book versus most huge wire books for a few reasons....the typical monster JOnes book is a lot like Jim's....1000+ households, an average account of a few hundo's. If you have spent a lifetime building it, and you never talk to 75% of your clients anymore (but still collect trails, fees, etc.), what are the chances of moving all that? On top of that, his bonus is HUGE because he has so many asset holding and fee credits, and is always doing Goodknights, which absorbs even MORE overhead that it probably covers all his overhead, and then some, so every nickel of commission drops to his top bonus bracket. With GP, LP, net Commissions, Bonus, Profit Sharing, he is probably bringing in $2.5mm in net income. When we're in the top bonus bracket, his incremental commissions are coming in at like 80% payout. So at age 60 he is going to build an empire outside of Jones to try and move all that? Not saying it can't be done, but WTF would you want to?? As you said, why not just buy a monster life insurance policy in case you die, and do the transition package if you retire. Or why not just keep doing Goodknights forever, and let someone else do the work, and work until you're 70? OTOH, if you have 100 clients at $1.5mm each fee-based, it's probably MUCH easier to move, and could be VERY profitable in the indy world. You could do that with 2-3 staff people. In reality, that's why most Jones vets don't leave at that stage. Inertia, gravy train, too many clients, too simple a life (for most). In addition, you don't just transition your book then sell it a week later. It's a much more involved process. And remember, a "Jones" business is not qorth quite as much on the open market (a shares, stocks, and bonds), you woudl probably get 1-1.5 times gross.I met Jim around 5 years ago when I was working in St. Louis and he was in town for a GP meeting. One of the other GP’s introduced me to Jim, just saying LA this is my friend Jim. I had no idea who the guy was at the time. He had a wrinkled shirt, somewhat messy hair and was very friendly and seemed to care who I was. Later in the day when I found out who he was I was shocked that such a large producer seemed like just another guy. I think it is safe to say he was not in it for the money. A year later a good buddy of mine joined his region in NC as a new FA. He said Jim attended every single new FA meeting!! This was a top 5 guy in the firm who took time to help FA’s many who would probably not make it in the business.
As far as his assets go I remeber several years ago I big producer around 150 million with Jones in south FL passed away probably around late 50's also. His wife was one of the BOA's of the office and had a son around 30 who had just started studying for the 7. They split the branch in 2 and gave half to the wife (who became a Jones FA) and half to the son. The son turned out to be a dead beat who refused to show up to PDP, gave trainers and other FA's hell and eventually got fired one year in. Not sure what happened after him but I would imagine they gave the other half to the wife.I didn’t know the man, but maybe he figured that other people helped him get his start so he would like the idea that others can be helped by his legacy.
I wouldn’t shed any tears for his wife. Like B24 said, he probably left her in very good financial position.
The whole notion of leaving piles of money behind is bad fora society and for the economy. There is a lot more dead, trust fund money in Europe, for example, than in the U.S.
If my son or daughter wanted to be an advisor I would want to leave them a business, but I sure wouldn’t want to leave them my trails.
[quote=B24][quote=Spaceman Spiff]Unfortunately I believe the suspicions about getting nothing for his mega book are more than likely true. I hope I’m wrong. That’s one thing I don’t understand about EDJ and our supervets within a few years of retirement. Why guys like this don’t go indy at the last minute so they can sell their book is suprising. I understand why Jones doesn’t address it, but it why those guys like Jim don’t take steps to figure it out is beyond me. I’m really suprised we don’t lose more of them that are 60 years old. Perhaps I just don’t run in the right circles to know why those guys think the way they do.
LP gets cashed out. So, if he had $100K in LP, his widow gets three checks that total $100K. I don't know what happens to his GP. I've never asked a GP what were to happen to his partnership if he died. My guess - and it's a pure guess - is that a check gets cut just like the LP. The benefit to our partnership is the income stream it creates. It's not the market value. There isn't one. Jim's widow isn't going to have any say over what happens to his book. Chances are it will get split up between 4 or 5 FAs in the area. Someone will probably get a really big chunk of it. I'm voting for his younger brother that is there in that town too. Keep it in the family at least. [/quote] It's much tougher to move a huge "Jones" book versus most huge wire books for a few reasons....the typical monster JOnes book is a lot like Jim's....1000+ households, an average account of a few hundo's. If you have spent a lifetime building it, and you never talk to 75% of your clients anymore (but still collect trails, fees, etc.), what are the chances of moving all that? On top of that, his bonus is HUGE because he has so many asset holding and fee credits, and is always doing Goodknights, which absorbs even MORE overhead that it probably covers all his overhead, and then some, so every nickel of commission drops to his top bonus bracket. With GP, LP, net Commissions, Bonus, Profit Sharing, he is probably bringing in $2.5mm in net income. When we're in the top bonus bracket, his incremental commissions are coming in at like 80% payout. So at age 60 he is going to build an empire outside of Jones to try and move all that? Not saying it can't be done, but WTF would you want to?? As you said, why not just buy a monster life insurance policy in case you die, and do the transition package if you retire. Or why not just keep doing Goodknights forever, and let someone else do the work, and work until you're 70? OTOH, if you have 100 clients at $1.5mm each fee-based, it's probably MUCH easier to move, and could be VERY profitable in the indy world. You could do that with 2-3 staff people. In reality, that's why most Jones vets don't leave at that stage. Inertia, gravy train, too many clients, too simple a life (for most). In addition, you don't just transition your book then sell it a week later. It's a much more involved process. And remember, a "Jones" business is not qorth quite as much on the open market (a shares, stocks, and bonds), you woudl probably get 1-1.5 times gross.[/quote] Pretty fair comments, though I think these monster books are few and far between. What about the guy who's 55, spent 15 years building a decent practice (first 3-5 of which could end up costing him money) which could comprise a much larger % of his estate if he were to die? Those are the questions I would be asking if I was at that stage of my career.A little off topic but, this reminds me of when I was at Eval/Grad in Tempe, one of the Jones guys wondered across the street drunk and a 21 year old girl (drunk as well) ran over him and killed him. He was sitting in the little bar with us 20 mins before. Talk about an awkward week. According to the GP’s that came and spoke with us, his family will be “taken care of”. I’'m sure that means monetary, and I’m sure a big producer such as this guys family will also be taken care of.
“taken care of” as in please please please don’t sue us family. I would think a good attorney could find Jones at fault for that in some way. Maybe a visiting vet bought the guy a beer or something, who knows…
LA,
You've probably seen that I am not the first one to jump to the defense of Jones, but I have seen and heard of many, many situations where Jones has done FAR more than would be expected of an employer in difficult times for an employee. I've seen it wityh BOA's and FA's alike. As much as people like to bash Jones, they really do some good things for their employees. As far as "captive" B/D's (wires, regionals, etc.) are concerned, I think Jones is probably at the top as far as how they treat their employees. It would be nice of they wold "formalize" some of these things, but that becomes a bit tough in certain situations....how do you treat a guy that worked for you 2 years, and built a $5mm book the same as someone with 30 years and a $200mm book? That gets sticky. So, if you die with the firm you get X% per year? per $1mm of AUM? There's really not a simple solution.[quote=B24]LA,
You've probably seen that I am not the first one to jump to the defense of Jones, but I have seen and heard of many, many situations where Jones has done FAR more than would be expected of an employer in difficult times for an employee. I've seen it wityh BOA's and FA's alike. As much as people like to bash Jones, they really do some good things for their employees. As far as "captive" B/D's (wires, regionals, etc.) are concerned, I think Jones is probably at the top as far as how they treat their employees. It would be nice of they wold "formalize" some of these things, but that becomes a bit tough in certain situations....how do you treat a guy that worked for you 2 years, and built a $5mm book the same as someone with 30 years and a $200mm book? That gets sticky. So, if you die with the firm you get X% per year? per $1mm of AUM? There's really not a simple solution.[/quote]This is true. However, it always seems the things Jones does for people has no rhyme or reason. I never really understood it.
[quote=hotair1]Indy in two years for me.
Windy Investments ... We'll blow you over with our bullsheet[/quote][quote=B24]LA,
You've probably seen that I am not the first one to jump to the defense of Jones, but I have seen and heard of many, many situations where Jones has done FAR more than would be expected of an employer in difficult times for an employee. I've seen it wityh BOA's and FA's alike. As much as people like to bash Jones, they really do some good things for their employees. As far as "captive" B/D's (wires, regionals, etc.) are concerned, I think Jones is probably at the top as far as how they treat their employees. It would be nice of they wold "formalize" some of these things, but that becomes a bit tough in certain situations....how do you treat a guy that worked for you 2 years, and built a $5mm book the same as someone with 30 years and a $200mm book? That gets sticky. So, if you die with the firm you get X% per year? per $1mm of AUM? There's really not a simple solution.[/quote] I'm beating the drum, but 20%/yr for five years would be fair, and Jones would probably retain far more of those referred to earlier that leave so they can sell their book in the future. I see no reason it couldn't be treated this way for a Goodknight or any other transition plan. It would garner much more respect for those that take over books, too.Luv, you get 100% over 3 years for the retirement transition plan. What’s the difference between that and 20% for 5 years?
It was a crazy ordeal. GP's were flying out to visit his family and everything. This was the Sat before Eval/Grad started. Usually everyone comes in on Sat and has a night to chill. This guy went a little overboard on the Miller Chill...Sat at our table for the majority of the night and then for some reason wondered off into the Arizona night alone at 1 in the morning. Funny thing though, when I went back for PDP, there were no more Sat flights. Everyone got there on Sunday.“taken care of” as in please please please don’t sue us family. I would think a good attorney could find Jones at fault for that in some way. Maybe a visiting vet bought the guy a beer or something, who knows…
Windy, you have all of the answers so you should have known he was going to get hit by a car and warned him ahead of time.
[quote=Ron 14]
Windy, you have all of the answers so you should have known he was going to get hit by a car and warned him ahead of time.
[/quote][quote=B24]Luv, you get 100% over 3 years for the retirement transition plan. What’s the difference between that and 20% for 5 years? [/quote]
That’s new since I left, I didn’t know that was the plan. That’s fair enough. Mathematically, it may be more or less to pay out over a longer period, more assuming growth over time, but that’s academic.
If they offer 100% over 3 years to a transition advisor, they should do the same to a Goodknight or deceased advisor.
To clarify, is this 100% of gross commission?
Luv
I take that back. It’s actually150%. The first 3 years you get 70%, 50%, 30%, so 150%. But you are also still getting full benefits, 401K, profit sharing, trips, profit bonus, etc. So it can actually be MORE than 150% with the bonus. Then in the 4th year you are no longer on payroll and get a 10% “consultant fee”. So all in, you are getting 160% gross plus bonus and 3 years of benefits.
I'm not sure what you mean by a Goodknight doing the same. Do you mean the "giving" advisor should get that much? I guess I see your point. However, for the year (or 18 months for larger plans) the GK is in your office, you get 75% of the net commissions they produce (Jones grosses them up for both parties), PLUS they take all your overhead, so your bonus goes up dramatically. For example, the year I did a GK plan, my vet probably netted an additional 75K. Now, some was from my commissions, and some was from a much higher bonus (about 65K of overhead hit my P&L instead of his), and then some was from increased commission he generated because he was more focused (he unloaded a ton of teeny accounts on me). For some of the huge producers, some of them are doing two GK plans at a time, all the time. So if you aer constantly doing that, your net increases dramatically. In some cases, bigger producers are able to net out (with everything) over 70% because the artifically high bonus and added net commissions from the new GK FA's.[quote=Spaceman Spiff]
I honestly don't know what they'll do for Jim's wife. If I were in his shoes, with every GP check I got, I'd be buying some more life insurance. You make $2+ mil a year just from your biz, you can put all that GP money to work with some leverage.
We're jumping to conclusions about what Jones is or isn't going to do for Jim's wife. None of us are at that level and we don't have the ear of Jim Weddle or John Bachmann. I would certainly think that this conversation is a frequent one at Managing Partners conferences or Partners meetings or RL meetings. Perhaps someone will send a suggbox wire to Weddle and ask about Jim's widow and his monster of a book. [/quote] I know what they would do for your wife or mine for that matter. I disagree with that part of the system as well. This is a sad reminder of our industry. Working long hours, type A personality. Be careful out there and make sure you are taking care of yourself. I know Jim had a heart attack like 6 yrs ago and he was still working 50-60 hours a week. Very sad but at some point everyone needs to recogonize their success and slow the machine down. His youngest just started college too, again take care of yourselves so you can live long and healthy.Which is why I have taken care of my wife and kids if something happens to me. Sometimes I catch her looking at me with that glint in her eye almost counting the money she’d have if she could just get away with it.
Oh no doubt ! Its only a matter of time before I wake up to the sound of a baseball bat bouncing off my forehead!Which is why I have taken care of my wife and kids if something happens to me. Sometimes I catch her looking at me with that glint in her eye almost counting the money she’d have if she could just get away with it.
Regarding that rep who died in Tempe…
I don't live far from where he was from and I know the rep who was goodknighting him. The only thing Jones did to help was provide the life insurance proceeds from the group policy.There wasn't anything additional they could do. But they made it sound as if they did something extraordinary. The harsh reality again, B24, is that they really can't do anything other than treat all employees in the same manner. Maybe back in the old days, before employment litigation became the concern it is today, they would go beyond the call. It is a shame from all perspectives. And to be fair, I have a client who is a drugstore manager with CVS and been there 30+ years. He went out on a disabitliy with a knee replacement. During his rehabilitation they replaced him without even notifying him. One of his employees called him at home to tell him. It's just the nature of corporate business. We all have stories or personal experiences that remind us that as an employee we are replaceable. Hell, even as an indy we are replaceable (someone could buy our biz if I died etc... but at the very least my family would be taken care of because I planned for that transition). Spiff- Go buy more insurance because you are worth it!! Don't insure for the value of your biz today, project out 10 years and that's the number. Then watch your back!Not true regarding Jim’s family. Treated differently than a vet with $50MM AUM but not even near what his business was worth if he owned the book. But now that was Jim’s choice and not the fault of Jones.
This is partly why we are looking at making the change in the next year. You don’t know when your number will be called and if your plan is to go indy when you hit an age or have a “no brainer” book you may never see that day and your family is out of luck.
This is partly why we are looking at making the change in the next year.
EDJ is making this change? What are the specifics?
[quote=MovingUp] This is partly why we are looking at making the change in the next year.
EDJ is making this change? What are the specifics?[/quote]
NEVER-MIND! Dumb question. I read your previous comment incorrectly. (It's late at night; sorry.)
Let me point out the obvious: All these questions about “what will Jones do?” “what will his family get?” “what will happen to his clients?” all sound like the type of questions he should have reviewed with a qualified financial professional a long time ago!
But he worked at Jones so that wasn’t possible…
It is possible for ANY firm to pay a rep's widow (or estate) continuing commisions if the proper contract is in place prior to the rep's death. Most firms don't want you to know this. Check out FINRA notice to members 09-69 and proposed rule 2040 which restates earlier rules and IMs. Read the rule and ask your firm for a contractural arrangement allowing this, our firm has done this in a number of cases.
It is possible for ANY firm to pay a rep’s widow (or estate) continuing commissions if the proper contract is in place prior to the rep’s death. Most firms don’t want you to know this. Check out FINRA notice to members 09-69 and proposed rule 2040 which restates earlier rules and IMs. Read the rule and ask your firm for a contractual arrangement allowing this, our firm has done this in a number of cases.
Great tip. I am going to look into this.
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