Questions for EJ guys
Looking at our region commission screen this morning – one word, very discouraging. OK, that’s two words. I see lots of guys under the red line, even those out 5 to 10 years. I see guys I respect who are struggling.
Do you see any catalyst that will get this turned around? Because I don’t. Economy is getting worse and investor sentiment is awful. I think a lot of guys are surviving by taking existing clients and selling them annuities.
How long before HQ starts whacking guys, or struggling FAs just walk. I see the classes of 2004 to 2007 as being very vulnerable.
And you get the feeling the vets are unhappy about so many new guys still being thrown out into the field.
I don’t talk to many people, but I wonder if the GPs will do something drastic if we stay in the negative bonus bracket. Or what if we start losing money?
My two cents… you will hear unofficial talk of people being “coached out” over the next couple of months but official word will be “were supporting you” until September or so when this new Goals Program starts cutting people.
The one thing they don't want is a big exodus all at one time. Nobody can afford that. ARs RLs and everyone else is hoping the new Transfer Broker compensation program will help soften the blow and keep experienced people backfilling the offices as FAs wash out. The other challenge is keeping the volunteer program going. I know many who have "Battened down the hatches" and focused 100% of their time on their personal health at the cost of some newbe coming in who may or may not last.THanks, FA. Do you think they’ll consolidate offices – close the office when the guy with 10 million leaves and give those assets to the guy with 15 million so instead of having two vulnerable offices you have one FA with a good chance of succeeding? If you put a new guy into the 10 million office, you’re really not getting anywhere, imo.
In short, these market conditions are exposing the shortcomings of the Jones business model. I believe there will be significant changes to that model by this time next year. It’s basically a pyramid scheme that has been outed.
[quote=Soothsayer]In short, these market conditions are exposing the shortcomings of the Jones business model. I believe there will be significant changes to that model by this time next year. It’s basically a pyramid scheme that has been outed. [/quote]
If that’s the case, what happens then? If the GPs don’t get paid, do they sell? Is there a market for EJ?
I’m thinking there is a plan “B” to do just that. All depends on the cost of each office, the lease structure, etc., and the ability to leave it open based upon regulations. Without a licensed person in it, there is only a short period it can be unlocked with a BOA sitting there. In Florida, it must be closed immediately. Maybe some other states too that I am not familiar with.
I am betting if the market doesn't improve and the flow of recruits doesn't keep up with the attrition, forced by Jones or by personal situations, then there will be no alternative. I would think the "Plan B" would have to be initiated in 3rd TM 2009, or 1st TM 2010.I think a slow down of the proverbial “Twenty Mile March” will be the course of action. Maybe stopping to rest, take off the boots and dump the pebbles out, air out the socks, etc. is the likely course if a “Plan B” is intitiated.
As stated earlier, only my two cents.One thing is certain…if there is no bonus the GP’s still make their nut.
If they start losing money and the GP's have to spend their own money then everything is up for grabs. Look for diversification trips to be scaled back or eliminated. That will be the first sign of change. If they can't grow, then health will be the new directive. Consolidation of offices would seem obvious...no new broker needs a full time assistant. The wirehouse share 4 or 5 reps for one admin...not insinuating that Jones will consolidate that much but I wouldn't be suprised if they allow 2-3 brokers per office at some point.[quote=iceco1d]
Why do some of you call EDJ a pyramid scheme?
Either I don't truly understand the EDJ model, or you don't know what a pyramid scheme is...and I think it's the latter.[/quote] Ice, tell me why you think it's the latter (you must've worked there, right?)?[quote=Hus Bin Pharteen][quote=iceco1d]
Why do some of you call EDJ a pyramid scheme?
Either I don't truly understand the EDJ model, or you don't know what a pyramid scheme is...and I think it's the latter.[/quote] Ice, tell me why you think it's the latter (you must've worked there, right?)?[/quote]He means that the previous poster doesn't know what a pyramid scheme is.
A two or three person office at Jones makes total sense to me. I think one of the reasons my region of 60+ brokers has only one person producing more than $700K is the high degree of detachment and isolationism. There’s almost zero competition amongst us and there’s a very low sense of comraderie.
I believe the firm would greatly benefit from merging two or three offices and getting rid of the unnecessary BOAs. (Can you imagine what we'd save in salaries and benefits?) I'm a fairly busy Seg 3 office ($25mm), and my BOA has a TON of down time. She could easily support two additional FAs.Holy cow. I just looked at my region’s performance chart. What a disaster.
Interesting discussion. How about “pyramid”, but not scheme. Real products and services are delivered.
As a bystander, my impression is that the structure in intended to create brand loyalty. When a new advisor leaves, the salaried assistant often has a stronger relationship with the clients ... over multiple trainee blowouts, where a book was "inherited". Thus, aggregating offices would be counterproductive to the pyramid structure, there would be stronger loyalty to individual advisors. By the time an individual Jones rep has become a "brand" to the clients he inherited and found himself, the economics of staying with the firm are favorable. Plus, he goes for the Jones culture of recognition on trips with other Jones reps, junior partnership, and so on. He is a self-selected long term "fit". This will be interesting to watch. Costs must be killing the bottom line in this market, but the firm and partners must have very, very deep pockets. My guess is you won't see much outward change. Big picture, you'd have to say Jones is doing more good than harm, unlike, perhaps, the likes of The Mutual Fund Store.EDJ haters are funny … The firm has made money every month this year. Until you wrap your minds around the fact we have no shareholders you’ll not understand the culture. It was tough for me but not being forced to report quarterly earnings gives EDJ a heck of an advantage to build for the long term.
Here is my best guess on what will happen in the short term: New advisors will be forced or STRONGLY encouraged to share an office for a few extra months. Older advisors that were living on trails and walk ins will either start picking up the phone or be moved out. It’s a VERY healthy time for Jones in my opinion.
I love times like these. There are weak brokers no matter what firm you look at. We have 7 brokers averaging over 45k/month in my region, with two over 100k. As a new broker, If you can’t open new accounts with muni’s and Build America Bonds down the road, it doesn’t matter which firm you’re with. I find it very encouraging when other broker’s numbers are down, the industry is consolidating, and clients are very fearful and looking for advice. The more assets you retain and bring in now, the better you will look when this whole situation is behind us. If this was an easy profession, we’d all be making 30k.
I've modeled my firm off of the 3-4 advisor per office. I for one pray that Jones sticks to the one advisor, one BOA office.
If Jones went to that type of arrangement, made one of them an OSJ, they would likely be unstoppable. And I would say Jones is more ponzi than pyramid. Anyway, it's a great time to be independent.The Jones profit model was explained to me like this: Let’s say a Seg. 5 broker grosses 500k a year. That’s $5 million over 10 years, with about half of that going to the firm. A Seg 5 is very profitable to the firm. So the math becomes: How many failed brokers can we run out there to get a Seg. 5 broker? … And remember, every failed broker brings in some assets and makes it easier for the next guy.
The problem that I see in this particular time is that 1. We have more failing brokers than we normally do, and 2. This puts enormous strain on the Seg. 5s, who will look elsewhere for options if we don’t get into the profitability bonus soon.
Jones FAs like their firm, but they will do what’s in their best interests just like anybody else.
Like I said before, the GP’s always win.
Let's not forget to add the companies that Jones Financial owns that caters to....EDJ retail. It's not a scheme at all. It's well thought out, and incredibly lucrative to the owners in a vairety of ways. Check out the Jones 10K, it gives a glimpse of the other opportunities. Ponder this...Do they really need to be that profitable? Would consolidation hurt their overall revenue (not just EDJ retail)? No wonder RL's out in the field stay forever. It's great to be a partner.A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula. The essential idea is that the mark, Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the “business” expands. --from Wikipedia
So, not a pyramid scheme in a pure sense like say, Primerica. But, not too far off either. "Recruiting" like minded people. "Bonus Brackets" and "LP Returns" and other phony mumbo-jumbo to get you a bigger cut of the action as your tenure, success, and loyalty to the firm grow over time. Then, there's the entire indoctrination of the spouse and family. The continued brainwashing that goes on that only EDJ is right and just. Others firms are somehow morally corrupt, and Jones FAs have to go out and save the bluehairs from the evil competition. All the while, those at the top (GPs) are raking it in. The relatively few tenured brokers are getting profitability bonuses and LP payments which are essentially other people's money getting funneled to the top. I'm convinced the whole thing was contrived by a marvelously intelligent evil genius.To go back to the original intent of this thread, the question is, “How many trimesters can EDJ slog through 0% bonus brackets with a slew of guys under the red line?” Or, maybe put another way, “How long will a $350K producer in this environment settle for no bonus when UBS is waving a $500K check in front of his face, or he starts questioning what EDJ does with that $210K that he ships back to St. Louis every year?” (Besides buying another car for BrylCreem’s collection.)
Going back to the pyramid scheme, I remember getting the wire from Doug Hill where he would write, "I just got off of the phone with Steve Novik, and here's where he says we are after the 3rd month. If the Greatest Sales Force in the World will just push a little harder, we could get to X." It was almost like he was Howie Mandell and Novik was the banker calling with the latest up to the minute numbers. I remember the 3rd Trimester of 2002 when I had more than $100K of net profit on the board, but got $0 bonus because of the 0% bonus bracket. Combine the bonus bracket with the ever-moving-target of LP return, and you have absolutely no control whatsoever over two fairly significant parts of your total compensation. And you see no resemblance to a pyramid scheme? Really? Okay, then go recruit some other like minded people who will compete with you for the same client because EDJ has done extensive research and has found that your community is underserved in terms of number of financial advisors. I've got this really neat brigde for sale.......More funneling of money to the top. The individual in an office can run a highly successful and profitable operation, and yet receive back exactly none of the net profit because of some mysterious bonus bracket financial wizardry. With the LP return, their is that and then there is "GP" return. Check out the GP returns that conincide with 0% bonus bracket trimesters. It's a modified pyramid scheme. Now, stop posting on this forum and go recruit some more downliners. It will add to your LP offering the next time you have one (if ever). Are you starting to see it now?
Sooth-
There is significantly MORE money that goes to the top. Jones Financial Companies is a holding company that has several entities including Jones brokerage. Jones has in the past owned an additonal brokerage firm, Conestoga securities. When I first found out about it, Bachman was the head of it and key Jones GP's were officers. When Bachman retired, Hill and then Weddle became managing partners of Conestoga. I haven't checked in a long time, but I will bet that the 10K still reflects that and a whole host of insurance agencies, real estate companies, and others. Money flows from all sources, and its apparent when one takes the time to read that Sooth is much closer to the truth. If you peel back the layers, it is really intriguing how they make their money. Imagine, just for a second, that a spouse creates a company to provide all the pictures for 10,000 offices. Extrapolate that to all facets of an office, and you may have stumbled upon the reason for the single person office. The more offices, the more pictures etc. It is brilliant and calculated and when you observe it from a holding company perspective, the FA becomes a much less important piece...because it can and is replaceable.[quote=footsoldier]Sooth-
There is significantly MORE money that goes to the top. Jones Financial Companies is a holding company that has several entities including Jones brokerage. Jones has in the past owned an additonal brokerage firm, Conestoga securities. When I first found out about it, Bachman was the head of it and key Jones GP's were officers. When Bachman retired, Hill and then Weddle became managing partners of Conestoga. I haven't checked in a long time, but I will bet that the 10K still reflects that and a whole host of insurance agencies, real estate companies, and others. Money flows from all sources, and its apparent when one takes the time to read that Sooth is much closer to the truth. If you peel back the layers, it is really intriguing how they make their money. Imagine, just for a second, that a spouse creates a company to provide all the pictures for 10,000 offices. Extrapolate that to all facets of an office, and you may have stumbled upon the reason for the single person office. The more offices, the more pictures etc. It is brilliant and calculated and when you observe it from a holding company perspective, the FA becomes a much less important piece...because it can and is replaceable. [/quote] This is getting eerie.It is basic management 101 that if a broker can pay his bills (location gain) and work through it, St Louis will keep them. If they fall below that, that is when St Louis is contributing to the party. Every dollar above Location gain contributes to incremental profitablity and helps the overall firm. If they close up shop, they have a bunch of empty real estate to worry about and that is not fun. IndyEDJI don’t talk to many people, but I wonder if the GPs will do something drastic if we stay in the negative bonus bracket. Or what if we start losing money?
For all of those still at Jones, possibly struggling, wondering if they will consolidate offices in the event of massive advisor failures/departures. Keep dreaming. To the advisor in the field in makes sense that if someone leaves you would divide up his/her assets and dole them out to other young, struggling advisor to put them over the top and help the health of the sales force. They’ve been through this before and they’ll go through it again. They will continue to throw new people in vacant offices because eventually someone sticks and they take that office to profitability and their 10,000 strong sales force hits that goal of 12,500 and then it hits 14,000 and etc… They are a grow at all costs company because it benefits them in the long run. Eventually this market and economy will recover and they’ll go back into a bonus bracket and this job will be lucrative and cool again and new advisors will continue to come.
Check out the GP returns that conincide with 0% bonus bracket trimesters.
GP return is tracking near 14%, so I'm told. So a $1MM INVESTMENT would be paying a return of nearly $140M at the current pace for the entire year.
[quote=footsoldier]Sooth-
There is significantly MORE money that goes to the top. Jones Financial Companies is a holding company that has several entities including Jones brokerage. Jones has in the past owned an additonal brokerage firm, Conestoga securities. When I first found out about it, Bachman was the head of it and key Jones GP's were officers. When Bachman retired, Hill and then Weddle became managing partners of Conestoga. I haven't checked in a long time, but I will bet that the 10K still reflects that and a whole host of insurance agencies, real estate companies, and others. Money flows from all sources, and its apparent when one takes the time to read that Sooth is much closer to the truth. If you peel back the layers, it is really intriguing how they make their money. Imagine, just for a second, that a spouse creates a company to provide all the pictures for 10,000 offices. Extrapolate that to all facets of an office, and you may have stumbled upon the reason for the single person office. The more offices, the more pictures etc. It is brilliant and calculated and when you observe it from a holding company perspective, the FA becomes a much less important piece...because it can and is replaceable. [/quote] YES!! That's it! They have adopted the one-man office model so that John Bachman's wife can sell more framed prints! Are you freakin' for real??!I find it funny rails against anything that isn’t stocks,bonds and select mutual funds. However their “silent” companies are hedge funds, venture capital and other misc…
Sheila Timm (Dan Timm’s wife) started the picture framing business a long time ago. As far as I know, she is the only vendor that we use that does that. Most of our stuff is done through the same corportations that a company like Enterprise would use. That particular relationship with Sheila only benefits the Timm’s. It doesn’t benefit anyone else. Either Sheila or Dan was smart enough to see the writing on the wall and took advantage of it.
Sooth - marvelously intelligent evil genius? Have you seen the old clips of Ted Jones? Brilliant saleman - absolutely. Evil genious - not hardly. How has tenure, success, and loyalty been turned into a bad thing? I have clients that work for Boeing. The longer they're employed, the more successful they are, the bigger the raises get, the bigger their pensions get, the bigger their loyalty grows. You reach a certain level at BA - where your salaray package says your pay grid starts with an E - and you get all sorts of cool things happening. I have one client who got a 1000 share bonus for doing his job well. BA's carrot at the end of the stick is stock options and bonuses. At Jones is LP and GP. At BA, not everyone gets to the Director level with and E grade salary package. Not everyone at Jones gets to have GP behind their name. Those that do, at both companies, are rewarded for...dare I say it...their tenure, success, and loyalty. As for the bonus brackets and LP returns being "phony mumbo-jumbo" - that's retarded and you know it. Any company that pays a bonus to it's employees has some sort of metric that states that if the company hits a certain level, then the bonuses will be paid. They don't just pay the bonus whether there is the money there to do it or not. The LP returns are based on a guarantee for a base amount and then based on whatever the firm brings in for the remainder. It's not phony mumbo-jumbo like Novik just picks a number out of his rear end and says, hey, the LP did 16% this year. Again, like with the bonuses, there are calculations based on the many variables involved to tell him exactly how much the LP returns are. I find it amazing that with all of the filings with FINRA and the SEC that have to be done that you guys still purport that EDJ is some sort of scheme. Ponzi, pyramid, or otherwise. Search for the EDGAR filing for the 10-K. Read it, then come back to me and tell me where the big scheme is. As far as EDJ and how they're going to react to another possible trimester of no bonus...my guess is they're not. They've already made some changes to the Div Trip - have to be meeting expectations to win. That cut the winners down a bit. If they ever get to 60-70% of the FAs winning, they might make it more difficult. But, not now. They're not going to scale back on growth. They are looking harder for transfer brokers and they've made it more attractive for them to come over. They are focusing on new people coming in as GKN's or doing some sort of office sharing for a while. They're not going to start combining offices. Yes, it would save some money, but I'm going to suggest that they think the service level is better with one FA and one BOA. These same conversations were being had in 2002 and 2003. Not too long after that we were back in the bonus brackets and on our way to a 50% stretch. I think the vets are sticking around because they know it's ugly everywhere right now. A lot of them like Jones and they don't want to go indy. Otherwise they would have already. If I'm an area leader, I'm calling all of those vets and offering them a sweet LP deal the next time it comes out if I can convince them to stay. You guys keep throwing those theories out there. When you come up with some facts, let me know.Spiff-
If you took the time to read the 10K, you will see that the GP's admit that they make money acting as an insurance agency, and a leasing corp,and a whole host of other companies. If there is only one profit center, why would this be necessary? Time to wake up and smell the coffee.I don’t think Jones is a ponzi,pyramid or anything else… I just find it interesting… Would like to be involved up top and know how it all works(know the why already… money).
Kind of like the mob(or private law firms that are involved with other things(have a friend from college who gets paid a lot of money at a firm in TN and they do all sorts of stuff outside the context of a law firm).Scaling back would be pretty easy for Jones, even with the real estate obligations. My understanding is that almost all of the leases have a 3 months of rent liquidated damages clause for breaking the lease.
I thought that the FA was the only profit center ?
[quote=footsoldier]Spiff-
If you took the time to read the 10K, you will see that the GP's admit that they make money acting as an insurance agency, and a leasing corp,and a whole host of other companies. If there is only one profit center, why would this be necessary? Time to wake up and smell the coffee. [/quote] We also make money as being a market maker, trading for fund companies, etc. I have read the 10-K. Probably more than most thanks to guys like you. I don't see the GP's admitting anything in that report. I see Jones Financial reporting that they act in an agency capacity and therefore receive commissions on that money. I know that EDJ gets the money before I do when I sell insurance. They've never tried to hide it. They also get my commission dollars before I do on funds, annuities, etc. You don't make a distinction, which I think is very telling about the way you look at EDJ, between reporting and admitting. Admitting implies you've been doing something wrong, or hiding some action. Reporting says you're just telling what happened. No malicious intent or hidden agenda. I'm not looking at this with rose colored (or green) glasses on. I'm looking at this from a buisness that has been around for 70 years, who has 40,000 employees, billions in assets, and millions of clients. Perhaps the phrase should be the FA is the MAIN profit center. BTW, I haven't heard that phrase in a long time. At least not from anyone at home office. I for one am glad that we have more ways than one to make money. There isn't any coffee to smell. In my family I am the one profit center. My wife happens to do a small business on the side, and I'm thankful that it brings in a little money, but if I don't make money we don't pay the bills. I think it's the same way with Jones. If Jones FAs don't make money, the rest doesn't matter. So, from a practical standpoint, there is only one profit center. Everything else is on the side.You don’t make a distinction, which I think is very telling about the way you look at EDJ, between reporting and admitting. Admitting implies you’ve been doing something wrong, or hiding some action. Reporting says you’re just telling what happened. No malicious intent or hidden agenda.
Spiff- You asked for a distinction. I am reporting exactly what is in the 10K...Here goes. Again...Spiff what does Conestoga Securities do? Edward Jones owns 100% of the equity of EJ Mortgage L.L.C., a Missouri limited liability company. EJ Mortgage L.L.C. owns 49.9% of Edward Jones Mortgage, a joint venture. Edward Jones owns 100% of the outstanding common stock of Conestoga Securities, Inc., a Missouri corporation. Conestoga owns 100% of the outstanding stock of CIP Management, Inc., which is the managing general partner of CIP Management, L.P. CIP Management, L.P. is the4 PART I Item 1. Business, continued
managing general partner of Community Investment Partners II, L.P., L.L.L.P., Community Investment Partners III, L.P., L.L.L.P., Community Investment Partners IV, L.P., L.L.L.P. and Community Investment Partners V, L.P., L.L.L.P., business development companies. Edward Jones holds all of the limited partnership equity in EDJ Ventures, Ltd., a Missouri limited partnership. Conestoga Securities, Inc. is the general partner of EDJ Ventures, Ltd. Edward Jones owns, as a limited partner, 49.5% of Passport Research Ltd., a Pennsylvania limited partnership, which acts as an investment advisor to a money market mutual fund. Edward Jones owns 7% of the Customer Account Protection Company Holdings, Inc. (“CAPCO”), a captive insurance group.
Edward Jones is the sole member of Edward Jones Insurance Agency Holding, L.L.C., a Missouri limited liability company, California Agency Holding, L.L.C., a California limited liability company and Edward Jones Insurance Agency of New Mexico, L.L.C., a New Mexico limited liability company. Edward Jones and Edward Jones Insurance Agency Holding, L.L.C. are members of Edward Jones Insurance Agency of Massachusetts, L.L.C., a Massachusetts limited liability company. Edward Jones Insurance Agency Holding, L.L.C. and California Agency Holding, L.L.C. are members of Edward Jones Insurance Agency of California, L.L.C., a California limited liability company. All of the insurance agencies engage in general insurance brokerage activities.
First of all, anyone that knows anything about real estate, risk management, etc. knows that any privately business that holds a lot of real estate has numerous LLC’s and partnerships to hold the various entities. I used to be corporate controller for a real-estate based business that was FAR smaller than Jones. And we had upwards of 150 LLC’s set up. Why? Because everytime another busienss or piece of real estate was added, different partners were in the deal, different partners had multiple LLC’s that they wanted in the deal. There were old entities with old business structures that were outdated. It is complicated. And just because Jones doesn’t announce to all 40,000 employees exactly how the whole operation works, doesn’t mean there’s some sort of cloak-and-dagger hocus-pocus going on. It’s normal business stuff. And they give us the LINK to their 10Q/K’s every quarter. They’re not trying to hide anything. It’s all there.
And as Spiffy said, yes, in the retail world, the FA IS the only profit center. But that should not preclude the firm from being opportunistic in other aspects of the firm. So if Jones decides to lease out some of their offices to another company because we aren't filling them yet, that should be, what, "not-for-profit"? Do it for free, because, hey, the FA is our only profit center? C'Mon Foot. I am fairly certain you are smarter than you lead on to be. I THINK you know business better than you make yourself sound like, but are just having fun trying to poke holes in Jones' business model. And I SERIOUSLY hope you don't think the insurance "businesses" make money. Please Foot, tell me you're kidding. Think real hard about why they exist. I'm sure you'll figure it out. I'll give you a hint.....NONE OF US COULD SELL INSURANCE IF THESE INSURANCE COMPANIES DIDN'T EXIST, YOU KNUCKLEHEAD. THEY ARE THE GENERAL AGENTS!B-
Any idea what Conestoga is all about? The insurance agencies take the amount they aren't willing to split with you.Conestoga and CIP are hedge fund/ venture capital companies. A former director of CIP managment llc, is now at a hedge fund(medical… managing director… see link http://www.oakwoodmedical.com/AboutUs/management.aspx )…
I don't have a prodblem with it.. I think it makes sense for GPs to diversify their money into other things for times like these when they aren't making the numbers they would like to.You guys probably don’t remember this, but in a previous conversation that was strangely similar to this one, I told you that CIP is a venture capitalist firm. The basic concept is that companies like Jones, Stifel, and Enterprise - all STL based firms - started a company to invest specifically in STL based medical startup companies. It’s been around since the 90’s. Nobody has tried to hide it. In fact, there’s an explanation as to what it is on Jonesnet. If you were trying to hide something, you wouldn’t put an explanation out there for over 40,000 people to run across.
Squash - there were actually two EDJ GPs and at least one LP that were a part of CIP. Ray Robbins was also a part of it. Another woman, who's name I don't recognize were officers and directors. Ray was actually on our IPC for years along with Dan Burkhardt. How it became a part of EDJ's family tree, I don't know. My guess: Stan Kroenke (of Rams ownership fame) sat on the board of the Boone County National Bank at one time. That bank eventually turned into the EDJ Trust Company. Maybe those guys got together and started working on it at that point. That was almost 10 years ago, so who knows. The point is there's no conspiracy theory.foot - I still don’t know what Conestoga does. They don’t fine anything with Edgar. Nothing on Google, MSN, or Yahoo about them. Other than our conversations here. They’ve been a part of the 10-k since at least 1994. But, I’ve never heard any conversations about them. It’s still a mystery.
Connestoga – Company that makes covered wagons. Jones has a Hold on it. Growth and Income stock. Business was hurt by the introduction of the combustion engine, but we see the growing emphasis on alternative energy as being a positive. What could be more green than pure horse power.
As for the original question, I assumed that the GPs would be under pressure in this environment and might do something drastic. I had even read that Weddle was only getting salary this year. But if they can squeeze double digit returns out of the GP this year, then they are financial geniuses and have no worries.
[quote=Spaceman Spiff]
Sooth - marvelously intelligent evil genius? Have you seen the old clips of Ted Jones? Brilliant saleman - absolutely. Evil genious - not hardly. I always loved how they would invoke Ted Jones as if to say that he (Ted) would approve on all levels, morally and otherwise, about how the company was being run in the present. If you know much about Ted, I think the poor bastard is rolling over in his grave about how. He'd kick Jim Weasle right in the nuts--my opinion. It's not phony mumbo-jumbo like Novik just picks a number out of his rear end and says, hey, the LP did 16% this year. And, yes, that is what I am suggesting. Novik pulls numbers out of his ass. EDJ manages to a number. If you're so naive to not see, believe, and understand that, then you're not half as smart as I was giving you credit for being 5 minutes ago. [/quote]I love how visible LP return % is and how invisible GP return % is.
Exactly.I love how visible LP return % is and how invisible GP return % is.
If it smells like blank it probably is.
B-
Your comment about the insurance agencies once again shows how naive one can be. Jones agencies takes a cut before they split your commission. In the case of annuities (even A share) the payout is 6%. Which means on every annuity ticket before the split they take 1.25%. Typically on life insurance the general agent takes at least 10% before the money falls to gross commission. From the recent 10K Jones said the following about its insurance business; Insurance. The Partnership has executed agency agreements with various national insurance companies. Edward Jones is able to offer life insurance, long-term care insurance, fixed and variable annuities and other types of insurance to its customers through its financial advisors who hold insurance sales licenses. As an agent for the insurance company, the Partnership receives commission on the purchase price of the policy.After looking further at the risks to the firm portion I thought this was interesting to post.
International Expansion — The Partnership's foreign operations are not yet profitable; they will require significant infusions of capital and may never become profitable.The Partnership's branch system has expanded into Canada and the United Kingdom. Operations are at substantial deficits in these two countries, and it is anticipated that it will be a substantial number of years before the Partnership's expansion in these countries will reach a sufficient scale of operations to achieve profitability. Additional investments will be incurred in the interim, which will be substantial. Despite the substantial past and prospective investment in the foreign branch system, the Partnership's Canadian and U.K. operations are not yet profitable, nor is there any assurance at this time that either operation will ultimately attain profitability. _________________ After all these years, one would think Canada operations would be in the black. According to the 10K, they may never be...Why would they continue to throw money down the drain (what impact do you think international expansion has had on your bonus bracket?)
Foot - first of all, I have neither the time nor inclination to rip apart the 10K. Frankly, I don’t care what they are doing in Canada or the UK. It’s really not my problem right now. What I care about is what I can do to improve my production. Maybe THAT is naive, but I can only focus on so many things at one time.
Now, WHY someone that doesn't even WORK for Jones cares so much about it that THEY have the time and desire to rip through a private partnership's annual filing is beyond me. And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.Isn't this the kind of business relationship one would normally be asked to disclose on a RFP?I still don’t know what Conestoga does.
foot has always been on the conspiracy theorist side of things when it comes to EDJ. He, and others like him, have this sick, twisted desire to see the company they used to work for diminished in some way. I think it burns them to no end that Jones keeps coming up as the best this or that, growing in the face of adversity, and getting stronger all the while. Should we tell him that Jones has been in the black every month this year? Should we tell him that we are bringing in scores of transfer brokers? Should we tell him that NY and NJ just named Jones as one of the top 5 places to work in the state? Nah, it'd just piss him off.
What no comments about litigation, competititon, or the uniform net capital rule? Those three factors could have a whole lot more negative impact on Jones and the 10-k than international expansion does. My guess with Canada and the UK is that while both of those operations have been in existence for a long time, neither of them have attained critical mass. They're both growing, but still relatively young. We have some big producers in those countries, but we have a lot more smaller ones. It takes a long time for those smaller ones to reach a point where their profitability outpaces the cash outlay for the new advisors. We don't see that at this point in the US because we've got thousands of offices that are profitable and we can withstand the onslaught of new advisors. I would venture to guess that it's going to take a long time to get Canada and the UK profitable like the US is. I hope to reap those rewards before I retire. I would be really concerned if Jones decided to scrap the whole international idea and just keep the US branches.
Isn't this the kind of business relationship one would normally be asked to disclose on a RFP?[/quote] You're going to have to help me out on RFP. That's a new acronym for me.[quote=Spaceman Spiff]I still don’t know what Conestoga does.
Sorry, I thought that was an industry wide thing.
Request for Proposal - typically non-profits have FA's fill them out when they are trying to get their business (fee-based/fee-only).Spiff earlier chided me because he felt I wasn’t reporting
Damn computer…
Anyway I agree with you fellas it doesn't make alot of sense to continue down this path. Suffice to say there are some who feel that all we do is spend our day coniving how we can screw with the FA's minds. For some unexplainable reason everytime I mention how much I appreciate EDJ and what I learned over 9 years, I get labled as twisted and wanting to have Jones diminished, because I report the truth...and sometimes that hurts. Jones Financial Companies has every right to make as much money from as many sources as it wants. They can tell you anything you want to believe. Nothing twisted. Just reporting as you requested Sir Spiffy...[quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[quote=now_indy][quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[/quote] - ExactlyFoot, I guess my only point is that many of the things you comment on are rather inconsequential in the grand scheme of things. And the fact is, many of the things you comment on are known, communicated, and not “hidden” from the FA’s. Just because Jim Weddle isn’t hanging from the rafters telling us about Conestoga whatever, LLC, it is somehow a conspiracy, or in some way less than legitimate. Even worse, the firm is trying to grow it’s presence overseas, albeit slowly, and somehow that makes them bad? It’s a long-term investment that will one day pay off. They are required, since they don’t yet see the light at the end of the tunnel, to disclose that they may NEVER be profitable. My guess is that they are trying to grow it organically without too much capital infusion, thus the slow growth. Alternatively, they could send up legions of recruiters, trainers, etc. and grow overnight at a cost. Or better yet, they could start buying firms (which we know won’t happen).
Bottom line, it seems like some people on this board are really grasping at straws sometimes to find criticism of the firm. Now, I have my own criticisms of the firm, which generally have nothing to do with most of the comical stuff I read on here. Most of what I read on here are the exact same issues you would encounter (to some degree) at a wirehouse.[quote=now_indy][quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[/quote] - Exactly Also the Edward Jones door sign isn't worth paying them 60% or more[quote=footsoldier]Damn computer…
Anyway I agree with you fellas it doesn't make alot of sense to continue down this path. Suffice to say there are some who feel that all we do is spend our day coniving how we can screw with the FA's minds. For some unexplainable reason everytime I mention how much I appreciate EDJ and what I learned over 9 years, I get labled as twisted and wanting to have Jones diminished, because I report the truth...and sometimes that hurts. Jones Financial Companies has every right to make as much money from as many sources as it wants. They can tell you anything you want to believe. Nothing twisted. Just reporting as you requested Sir Spiffy... [/quote] Yeeeeaaaaaaaah...... sure, they have the right, in America. Question is, if you were just starting now, and you really understood everything (12b1s, selling agreements, the importance of being fee based and cutting out the middle men, the natural burnout curve of chasing people, the inherent design to aggregate the labor of many for the few...) - would you see the opportunity cost and take a different path. (Like, cold calling established RIAs and small b/d shops, and trying to uncover an employee situation where you could really learn the business, by servicing small accounts, and doing SOME cold marketing, and not having "ownership" of you own business, at a time in your life when you didn't even understand how you get paid.) Just asking.[quote=Mishigun][quote=footsoldier]Damn computer…
Anyway I agree with you fellas it doesn't make alot of sense to continue down this path. Suffice to say there are some who feel that all we do is spend our day coniving how we can screw with the FA's minds. For some unexplainable reason everytime I mention how much I appreciate EDJ and what I learned over 9 years, I get labled as twisted and wanting to have Jones diminished, because I report the truth...and sometimes that hurts. Jones Financial Companies has every right to make as much money from as many sources as it wants. They can tell you anything you want to believe. Nothing twisted. Just reporting as you requested Sir Spiffy... [/quote] Yeeeeaaaaaaaah...... sure, they have the right, in America. Question is, if you were just starting now, and you really understood everything (12b1s, selling agreements, the importance of being fee based and cutting out the middle men, the natural burnout curve of chasing people, the inherent design to aggregate the labor of many for the few...) - would you see the opportunity cost and take a different path. (Like, cold calling established RIAs and small b/d shops, and trying to uncover an employee situation where you could really learn the business, by servicing small accounts, and doing SOME cold marketing, and not having "ownership" of you own business, at a time in your life when you didn't even understand how you get paid.) Just asking. [/quote] I don't think this is a Jones question. This is an industry question. Virtually nobody in the markets Jones serves could have started indy, or even at an indy shop. Of course you COULD, but it's not very likely. So it comes down to where is the best place to start your career in this industry. I am not going to argue Jones vs. Indy or wire vs. indy, since those are really comparing apples to oranges. It's like asking "should you have started your career in the restaurant business by managing a restuarant or owning one?" Yes, the occassional person decides one day "hey, I'm gonna open a restaurant", but the vast majority start as chefs or general managers, and eventually realize they can own their own deal. And then there are some that are perfectly content managing a restaurant and not having the headaches of owning AND managing it. But to make that long story short - yes, I see the value of being independant. No question about it. Just not ready right now.B24 , that also makes sense. I think what angers ex-Jonesers the most is 2 things. 1. EJ sells you on the opportunity to have your own business, when in fact it is far from it. 2. EJ also claims that the FA’s are the only profit center making an FA feel that the 60% going to Jones is going for expenses and/or partnership, when in fact it is far from it. I will be the first to admit that I was making a career change and jumped in without a full understanding of the business in general and the business of EJ and that is completely on me. A good portion of any discontent from someone who has left Jones is the FA’s own fault, not EJ’s, and that is certainly true in my case.
I agree. Jones is a training firm, and it costs a lot of money, and not many firms are training the next generation of reps. It is an industry wide problem.
Jones has the right to run the model. I guess, kind of like the price of gas being the driver of energy alternatives, competition will have to drive who trains the next generation, and how good, experienced advisors get paid fairly. I just can't believe that so many smart kids bother to get a college degree (to be a professional), and then go knocking on doors. That's not immoral, just unprofessional ( I spent four years and $100,000 going to college, and now I can afford to cold call). Kids, if you want to be an FA, get your CFP and internships in college, and when you graduate try to learn the business by working on a team with an experienced advisor. If you can get "ownership" from the start, great. We're in the planning business. Don't do this job because it's the only one you could get, you owe more to yourself and your clients.Interesting that FA's at Jones are growing (according to Spiff) and revenues are 300M down comparing 08 to 07. Inconsequential to B24? Short run probably...when he gets to the point of receiving bonuses...he'll be scratching his head in bewilderment funding growth in US, Canada, and UK. Just curious, wasn't Canada operations profitable in the last few years?
I may be wrong, but I think LPL's revenues were up. To be fair, because I only report, Jones revenues are at least double LPL. Isn't it great to be positive...and not twisted or wishing to diminish the good work that EDJ reps do. Scuse me while I go puke...The thing is most Jones FA's aren't "kids". They are career changers or people sick of the corporate culture who are looking for freedom and independence with the opportunity to receive increased compensation as time goes on.
Seriously, somebody could start a business just doing education for career changers on how to get into this business. My suggestion: learn enough (start CFP study) and go work for an RIA, and bypass the whole b/d thing. If you can get ANY job like that, the economics will likely look better in the longer term. Should be easier now days, there are more RIAs. Be a smart business person!
That would be the best way to start for sure. I had taken the CFP classes, met a guy at Jones who was a CFP, talked to him and jumped in. A friend who was in training with me at Jones jumped ship after 5 months to work on a team at UBS. I ripped him at the time for doing it, telling him he will be getting coffee for 5 yrs, but he is doing very well right now.
Jones is free to switch their model at any time. This might be a good time. They could easily grow their business taking their resources, and doing what most of us to do get now clients.
Guys, a terrible irony of this business is, real, long term success and enjoyment depend on using your instincts. Do not do what goes against your instincts. This career is serious business (helping folks with money is like helping them with their spirituality, think about it). Get the platform right and all will follow.
Mishigun-
I am of the belief that Jones doesn't care to be too profitable. They care more about growing so at some point they either get exponential revenue (when times are good 94-2000) or position the firm for sale (doubtful) or provide the engine to fund other businesses (conspiracy theory here I go). Others have modeled their business growth similarly, and look whats happening... contraction (Starbucks, etc). So I am running a company and its not growing revenue, but growing expenses (UK, Cananda, US unprofitable offices) at some point, I have to contract or I am going to be caught with experienced brokers looking for greener pastures (no bonuses) or asking fellow GP's to cough up more dough. This is why I suggest at some point, if the market doesn't provide the fuel for growth, that the GP's will have to make serious changes in their model. I doubt if the GP's would be willing to lose money.Interesting insight, soldier.
So, the market providing fuel for growth, that would be the opposite of fear (now), which is greed ( a bull market not unlikely, given ten years of sideways and the printing of 3 trillion). Yeah, so economics could get them. Probably will, because a lot of colleges are offering CFP programs (which is interesting, because, getting your CFP is easy compared with graduating college). Ripping assets from Jones or anybody is getting easier (what part about pay me 1%, pay as you go don't you understand?) What amazes me is, I'm in a position to hire someone now, (a solo office that is certainly findable within a large metro area), but not one job seeker has contacted me. That's why I say, if people who want to work in this industry ever get smart, watch out. ( Why should I recruit?).Here's the thing - Jones, from a total payout perspective over time is pretty much like a wirehouse. Our payouts and admin/office support are higher in the early years (everyone gets same payout regardless of production), and at real high production levels during good times (due to the uncapped profit sharing and bonus componants). It's in the middle to bottom for mid-level producers. We can squabble over the details, but by and large, the payouts are comparable to wirehouses.
Foot raises an interesting point about growth. I think the part about revenue growth is overblown. LPL is growing by leaps and bounds due acquisition and the industry exodus to independance. So you really can't compare the two. HOWEVER, the point about extreme growth, and what do you do when you get there - all interesting. I often wonder this. My guess is that Advisory Solutions plays a BIG part in all of this. We're all smart boys and girls, so we all get what I mean there. Grow it big then annuitize it. But I also think their long-term "vision" is to have around 17,000 FA's with well-established offices, that begin "sunsetting" and Goodknighting to newer FA's. At some point, gone will be the days of throwing 10 guys against the wall to see who sticks. I THINK there is some grander vision than business as usual. I do have to give the "current administration" for truly developing a long-term plan for something other than growth for growth's sake, and having a good roadmap for success. Whether I'm on that road long-term or not is irrelevant. I think Jones is going to be successful for a very long time. They have stuck to their guns the past few years, and made lots of positive changes, and I anticipate more of that to come.
[quote=B24]
Here's the thing - Jones, from a total payout perspective over time is pretty much like a wirehouse. Our payouts and admin/office support are higher in the early years (everyone gets same payout regardless of production), and at real high production levels during good times (due to the uncapped profit sharing and bonus componants). It's in the middle to bottom for mid-level producers. We can squabble over the details, but by and large, the payouts are comparable to wirehouses.
Foot raises an interesting point about growth. I think the part about revenue growth is overblown. LPL is growing by leaps and bounds due acquisition and the industry exodus to independance. So you really can't compare the two. HOWEVER, the point about extreme growth, and what do you do when you get there - all interesting. I often wonder this. My guess is that Advisory Solutions plays a BIG part in all of this. We're all smart boys and girls, so we all get what I mean there. Grow it big then annuitize it. But I also think their long-term "vision" is to have around 17,000 FA's with well-established offices, that begin "sunsetting" and Goodknighting to newer FA's. At some point, gone will be the days of throwing 10 guys against the wall to see who sticks. I THINK there is some grander vision than business as usual. I do have to give the "current administration" for truly developing a long-term plan for something other than growth for growth's sake, and having a good roadmap for success. Whether I'm on that road long-term or not is irrelevant. I think Jones is going to be successful for a very long time. They have stuck to their guns the past few years, and made lots of positive changes, and I anticipate more of that to come.
[/quote] I don't think this will ever leave. It's not practical. You would have to give away a lot of assets or build a lot of teams(wirehouse).. But you still risk defection(now with the assets you gave them.. I don't think Jones minds when FAs leave, but when the leave with a $15M goodknight they have some issues).. The ideal would be to have a senior advisor take on 3 smaller advisors and divide up the book when he retires(but the issue is if a firm would be willing to pay those advisors salary to wait and if the advisors would be willing to accept and if the senior advisor would actually do it or move and take another large payout..Well, it’s a successful business model. I just wonder if the public will see through all of the costs at some point.
It seems like the middle class is dying, so you have people who have money, and those who don't - the days of "selling", vs. giving people what they ask for, are numbered. On many fronts (like, liberal do gooders reforming 12b1, commissions - like, the expense cost of health benefits for all of the people at home office, -like, the cost/benfit of managed funds) the writing has been on the wall for a number of years now. If I was just starting out, I'd try to scrape down to the bottom line and work at a place where clients with money came to me, and they could see what they were paying, and most of the money was going directly to the advisor.Jones does have a sunset program for brokers who want to slow down. The FA has to stay during the period, I have only seen one when I was with Jones, it was a new program then and it showed.
One question that never seems to be addressed is WHY do the GP's feel the one broker office is so advantageous vs 3-4 broker offices?Again, they are building equity (branding) in the office, not the advisor. And they are building equity in the career assistant. It works. Like the Mutual Fund Store, there is x % of the market that will eventually conduct business in this manner.
They will point back to service. The only thing that truly separates Jones from anyone else is service. We excell at it. It is drilled into us from day one. So, if the choice is to save a few bucks on BOA salaries vs seeing customer service scores go down, they'll choose to keep the scores up and have the BOAs. From my own point of view, I'd love to share an office with a buddy or two. He can have his BOA and I can have mine, but we'd share office space, electric bills, etc. I can see that working especially well in an area like mine where the nearest FA is literally 300 yards away.
Mish - no. Not until they are disclosed in a more concise format than a prospectus. I agree with B24 that Advisory Solutions seems to be the direction that Jones would love us to go. If I can get just $50 million into AS, I'm grossing $675K a year. Add some insurance, LTC, bonds, and misc stock and fund trades and I'm easily at $750k. The big bogey at Jones used to be $100 million AUM. I think that number, because of AS, is shrinking. It will be good for revenue and good for the FAs once we get that program up to speed. It may take a while, but I expect to see revenues from that quickly rising over the next few years.Jones excells at service, no question. Surveys say something like six contacts per year.
I'm sure the firm can change with the times. Cutting out cold calling and charging more directly for managing money is good for everyone. The only losers may be some managed fund managers, and b/d's that are inefficient or gouge. I'm sure Jones will succeed, a long-timer must be sitting pretty.[quote=B24]
…But to make that long story short - yes, I see the value of being independant. No question about it. Just not ready right now.[/quote]
Oh, boy! It’s going to be hard to keep b24 and the other 5-10 year vets once they look around and see how easy and how profitable it will be go independant or hook up with someone like Morean or someone with a chain of RIA shops.
[quote=footsoldier] Jones does have a sunset program for brokers who want to slow down. The FA has to stay during the period, I have only seen one when I was with Jones, it was a new program then and it showed.
One question that never seems to be addressed is WHY do the GP’s feel the one broker office is so advantageous vs 3-4 broker offices?[/quote]
I still wonder that myself. The only thing I can gather is that it is easier for a group of 3 or 4 to go indy versus one guy. They can see the economies of scale, and 4 guys have more ba!!s than one. And would you rather have 4 guys leave taking 200mm AUM with them, or one guy taking 50mm?
I never bought the corporate line…" we hire people that are entrepreneurs, that want to be business owners"…like they are some sort of mavericks or something (sorry to bring up the “M” word so soon after the elections!).
The only other thing I think might contribute to this is how you manage it from a pure Human Resources standpoint. How do you decide who gets to partner? How do you decide on the size of the office? What if you lease 2500 sq ft and 2 of the 3 guys leave, and you can’t replace them? What if 1 guy leaves? What if all three go indy and you’re left with a huge office and no assets? What if the partnership doesn’t work out? Can you “unpartner”?
Realistically, I think the multi-FA office ship has sailed already. It’s now too complicated in our environment. They could make it work if they REALLY wanted to, but I don’t think the economics are there. Think about it…what do you save?..rent and 1/2 a BOA? Not a huge nut. That’s why they are asking Legacy and Goodknight offices to extend their terms right now. I am hosting another FA in my conference room, and he has been there for about 6 months, and will likely be there another 6-12 months. They have really scaled back on opening new offices until we get through this. Honestly, they have positioned the Goodknight/Legacy plan pretty well. It is allowing them to scale back on office openings until FA’s really prove themselves.
[quote=B24] [quote=footsoldier] Jones does have a sunset program for brokers who want to slow down. The FA has to stay during the period, I have only seen one when I was with Jones, it was a new program then and it showed.
One question that never seems to be addressed is WHY do the GP’s feel the one broker office is so advantageous vs 3-4 broker offices?[/quote]
I still wonder that myself. The only thing I can gather is that it is easier for a group of 3 or 4 to go indy versus one guy. They can see the economies of scale, and 4 guys have more ba!!s than one. And would you rather have 4 guys leave taking 200mm AUM with them, or one guy taking 50mm?
I never bought the corporate line…" we hire people that are entrepreneurs, that want to be business owners"…like they are some sort of mavericks or something (sorry to bring up the “M” word so soon after the elections!).
The only other thing I think might contribute to this is how you manage it from a pure Human Resources standpoint. How do you decide who gets to partner? How do you decide on the size of the office? What if you lease 2500 sq ft and 2 of the 3 guys leave, and you can’t replace them? What if 1 guy leaves? What if all three go indy and you’re left with a huge office and no assets? What if the partnership doesn’t work out? Can you “unpartner”?
Realistically, I think the multi-FA office ship has sailed already. It’s now too complicated in our environment. They could make it work if they REALLY wanted to, but I don’t think the economics are there. Think about it…what do you save?..rent and 1/2 a BOA? Not a huge nut. That’s why they are asking Legacy and Goodknight offices to extend their terms right now. I am hosting another FA in my conference room, and he has been there for about 6 months, and will likely be there another 6-12 months. They have really scaled back on opening new offices until we get through this. Honestly, they have positioned the Goodknight/Legacy plan pretty well. It is allowing them to scale back on office openings until FA’s really prove themselves.[/quote]
B24- I am in a practice with 3 of us total. We have one assistant and frankly that’s all that’s really needed. When you look at the cost savings compared to individual offices with 1 assistant per, it is quite large. It looks like we are going to add a ML guy who wants to go independent in the next couple of months or so. We are all partners in our referral book. If one of us were to leave they can move their book at anytime but when you net over 70% after costs why would you?
Now that is 70% of all real revenue, not any haircuts taking place. Just think of it, if you have 4 guys doing 250K each for 1 million dollar office take away 50K for a real good assistant and another 50K for a real nice space you have a tremendous amount of net income flowing back to the partners at 90% or even at 80%…250K minus 12,500 for assistant and another 12,500 for rent and 25,000 to broker dealer leaves 200K for the partner. How much business do you have to do to net 200K? This is of course a crude example but you understand the point.
The isolation of the 1-person office allows Jones to be much more controlling in many, many ways. Most importantly, they want to “control the message” at all times without the broker thinking much outside of the four walls of the office. Add in a paid company spy…errrr, I mean, uh, a, uh BOA, and they totally have you by the nads.
You get 2, 3, or 4 guys together, and guys talk. Talk shop, talk house, talk company politics, have a general bitch session, bust out the brewskis at 4 o'clock, whatever. Keeping the advisor isolated, and hopefully just yearning for the next nuggets of wisdom from OnionHead is part of the plan. When you do get together, make sure it is only Jones brokers, and that there is a full agenda plumb full of plenty of company propoganda to wear down any of those edges or rough spots that have cropped up in your little brain. Make you feel empowered, worthy, and most importantly, righteous, and then dispatch you back to your little office with the paid spy to sell, sell, sell. Not think, think, or God forbid think. Just sell, sell, sell. Like I said 8 pages ago, this was all devised by one very evil freaking genius.Funny. Ted Jones sat down in his office one day and told his dad Ed Jones that if they could just figure out a way to set up all these offices around the country, isolate the guys so that they can’t talk with each other, get them to give us money for the company and call it LP, then we can make millions. Well, that freaking evil genius didn’t sell the company to make himself rich. He didn’t go public to make himself rich. He wouldn’t let anyone who wasn’t a participating member of the firm participate in the profits. All that seems a little stupid for such an evil freaking genius.
Paid spy? Did I miss that in reviewing my BOA's coursework? Surely there must have been a "How to rat out your FA" module and I just overlooked it. I'll have to look again. Are these the same BOAs who help us build our businesses? The same ones who we share our bonuses with? The same ones who often times our clients love more than us? Those are the paid spies? They must have some special decoder ring that allows them to communicate with HQ when I'm not looking. Just FYI, there's this new thing that they just installed in all of our Jones offices. It's this black rectangular box. Has some wires coming out of the back that get plugged into the wall. Mine has these twelve little buttons on it that when I pick up the thing that is attached to the front of the box and punch a few of those numbers, I get to talk to whomever I want. I've even used it to call someone who lives a really long way away from me. You know what? They worked for a completely different company than me. They had some different ideas than me. I think they must be a freaking genius. SHHH...don't tell my BOA. She'll call Jim Weddle and tell him I'm getting some ideas that didn't come from Onionhead. This isolationism as a tool to control Jones FAs is one of the most moronic statements I've ever heard. If they truly wanted to isolate Jones FAs that much they wouldn't ever recommend Legacy plans or Goodknight plans. They'd never add a second advisor to a town. They'd never hire transfer brokers. Those people have ideas that we've never heard of before. They're evil and not to be trusted. Pathetic.the reason the offices are one person as opposed to multi rep is due to supervision.
The supervision issue is probably fairly accurate. Although what is the difference between our supervisors in STL overseeing 5 guys in 5 different offices, compared to 5 guys in one office?
You’re kidding, right? Its more like 1 supervisor per 125 brokers. But you’ll probably spin it into something incredible, greatest system in the industry, EDJ brokers don’t need supervision.
Spiff-
You are kidding aren't you? Have you ever been to a meeting that wasn't Jones only FA's? I have been to several events where wirehouse reps are at (in case you were thinking that this is an industry practice). While I may not go down the path of sooth (paid spys etc) I can't completely discount the isolation theory.
Your arguments are laughable. Ted Jones had a vision, but he wasn't a pauper by the time he took over. Did you ever meet him? I did and he was one of the reasons why I felt so comfortable going to Jones. Bachman on the other hand made me feel like I needed a shower afterward. Hill I never trusted (that greatest sales force in the world crap he used to give us) and Weddle was too new before I left.In my area there are at least 2 Jones offices that house 2 rep's. I went to the EJ web site & did a search for local offices & there are rep's on there with the same street address, I assume they are not new because they actually have a picture.
[quote=Broker Fee]
In my area there are at least 2 Jones offices that house 2 rep's. I went to the EJ web site & did a search for local offices & there are rep's on there with the same street address, I assume they are not new because they actually have a picture.
[/quote] Don't chime in if you don't know what the hell you are talking about. Those are Goodknight programs or Sunset programs, meaning the office sharing will only be temporary.You’re kidding, right? Its more like 1 supervisor per 125 brokers. But you’ll probably spin it into something incredible, greatest system in the industry, EDJ brokers don’t need supervision.
Huh? I think you missed my point. I meant, what is the difference between monitoring 5 guys in 5 different offices, versus 5 guys in 1 office. I was using simple math. To extrapolate that out (just for you Spears )...what's the difference between monitoring 125 guys in 125 different office, versus 125 guys in 25 different offices? You're still monitoring the same number of transactions for the same number of guys. Maybe there are FINRA/SEC rules about supervision under our arrangment that makes compliance for multiple-FA offices more difficult for some reason - I just don't know what it is.
Trust me, Spears, I'm not one to pull the "we're more ethical than the rest" bit. I'm just as unethical as you are .
[quote=Ron 14][quote=Broker Fee]
In my area there are at least 2 Jones offices that house 2 rep's. I went to the EJ web site & did a search for local offices & there are rep's on there with the same street address, I assume they are not new because they actually have a picture.
[/quote] Don't chime in if you don't know what the hell you are talking about. Those are Goodknight programs or Sunset programs, meaning the office sharing will only be temporary. [/quote] You're right I don't know much about Edward Jones & frankly I don't want to know much about Jones!!! Last time I checked this was a public forum & anyone can chime in on any subject regardless of how pathetic they believe the company is. Now I will leave you to talk more about a subject that you sound like you know about all to well...best wishes![quote=bspears] You’re kidding, right? Its more like 1 supervisor per 125 brokers. But you’ll probably spin it into something incredible, greatest system in the industry, EDJ brokers don’t need supervision.
Huh? I think you missed my point. I meant, what is the difference between monitoring 5 guys in 5 different offices, versus 5 guys in 1 office. I was using simple math. To extrapolate that out (just for you Spears )...what's the difference between monitoring 125 guys in 125 different office, versus 125 guys in 25 different offices? You're still monitoring the same number of transactions for the same number of guys. Maybe there are FINRA/SEC rules about supervision under our arrangment that makes compliance for multiple-FA offices more difficult for some reason - I just don't know what it is.
Trust me, Spears, I'm not one to pull the "we're more ethical than the rest" bit. I'm just as unethical as you are .[/quote]
I think you missed the obvious....if you make branch visits you have 125 yearly visits as opposed to 25. Multiply that out and it is a huge difference. Average yearly visit at 3-4 hours gives yo a difference in man hours of 400, that's 10 weeks for one person.
[quote=Spaceman Spiff]
Paid spy? Did I miss that in reviewing my BOA's coursework? Surely there must have been a "How to rat out your FA" module and I just overlooked it. I'll have to look again. Are these the same BOAs who help us build our businesses? The same ones who we share our bonuses with? The same ones who often times our clients love more than us? Those are the paid spies? They must have some special decoder ring that allows them to communicate with HQ when I'm not looking. [/quote] I want to reply to all of Spiff's retort, but I'll start with this one. BOA #1: Left to help her husband when he founded his own law practice. Her and her husband remain clients to this day. I take care of their firm's 401(k) to this day. BOA #2: Left to better take care of her elderly parents who lived cross-country. Her parents were quity wealthy. They have since passed away. She remains a client to this day along with her two daughters, as well as the many referrals she has sent me from the tennis club, bridge club, and various foundation boards that she serves on. She is very comfortably retired. BOA #3: 3 different kids from 3 different men. Married none of them. Married some other guy who is currently in the state prison for drug trafficking. Total nutball user, child-support collecting, systems working loser with her own criminal record. Found all of this out after I hired her. (Remember, you have to ask all of those PC questions in a BOA interview that might not unearth all of this. BTW, she was the "strongest recommendation" from the HR staff.) So, Spiffy, when things got a little nasty and tense around the office when #3 couldn't perform her job, any guess who the hammer came down on? Who was fighting for their career? The limited partner father of 3 with a distinguished military and business career who never had anything but the highest praise from his first two assistants? The guy who led men into battle, but was apparently uncapable of supervising an administrative assistant? The guy who got narked off by an absolute drug-addicted nut job who was looking for a courtroom payday? Yeah, that's right, Spiffy. I had to defend myself and fight for my career under those exact circumstances. Through that ordeal, I realized: 1) I do not "have my own business". In fact, I am an employee with an I.D. number. Nothing more. My LP can be overridden in a moment by any nut-job who makes any outlandish and unfounded claim at any time. 2) Your BOA is a paid spy.[quote=Soothsayer][quote=Spaceman Spiff]
Paid spy? Did I miss that in reviewing my BOA's coursework? Surely there must have been a "How to rat out your FA" module and I just overlooked it. I'll have to look again. Are these the same BOAs who help us build our businesses? The same ones who we share our bonuses with? The same ones who often times our clients love more than us? Those are the paid spies? They must have some special decoder ring that allows them to communicate with HQ when I'm not looking. [/quote] I want to reply to all of Spiff's retort, but I'll start with this one. BOA #1: Left to help her husband when he founded his own law practice. Her and her husband remain clients to this day. I take care of their firm's 401(k) to this day. BOA #2: Left to better take care of her elderly parents who lived cross-country. Her parents were quity wealthy. They have since passed away. She remains a client to this day along with her two daughters, as well as the many referrals she has sent me from the tennis club, bridge club, and various foundation boards that she serves on. She is very comfortably retired. BOA #3: 3 different kids from 3 different men. Married none of them. Married some other guy who is currently in the state prison for drug trafficking. Total nutball user, child-support collecting, systems working loser with her own criminal record. Found all of this out after I hired her. (Remember, you have to ask all of those PC questions in a BOA interview that might not unearth all of this. BTW, she was the "strongest recommendation" from the HR staff.) So, Spiffy, when things got a little nasty and tense around the office when #3 couldn't perform her job, any guess who the hammer came down on? Who was fighting for their career? The limited partner father of 3 with a distinguished military and business career who never had anything but the highest praise from his first two assistants? The guy who led men into battle, but was apparently uncapable of supervising an administrative assistant? The guy who got narked off by an absolute drug-addicted nut job who was looking for a courtroom payday? Yeah, that's right, Spiffy. I had to defend myself and fight for my career under those exact circumstances. Through that ordeal, I realized: 1) I do not "have my own business". In fact, I am an employee with an I.D. number. Nothing more. My LP can be overridden in a moment by any nut-job who makes any outlandish and unfounded claim at any time. 2) Your BOA is a paid spy.[/quote] That's jacked up. Before I was in the securities industry, I was in the Security industry. Before I left Jones, you can notice all of the things that the BOA does and the "click-click" on the phone line. You can say I'm paranoid all you want, but we used to investigate people by placing cameras in Microsoft Office boxes to spy on employees stealing - that was nearly ten years ago. However, my paranoia paid off for the most part. I did not have to deal with anything near on the scale that Sooth did, although you get enough bad-mouthing to your clients from your BOA once you leave. And Spiff - there's no telling what BOA's are told when you aren't around at the "BOA regionals" and their contacts with HQ when you aren't in the office. I will say my 3rd BOA was the worst as well (and the highest recommended from HR). Divorced, drug addicted, brought a dog to the office when I was supposed to be at a regional meeting. I wrote her up more times than I can count. HR was always on her side. BOA's are spies.I had a BOA with a serious drug problem and it was not easy to get rid of her. They put her on a strict plan to continue working and at one point she came into the office, handed me her keys, and then marched down to the unemployment line and filed. Only in California would she have a prayer to win and did. I was so glad to be rid of her that it didn’t matter. Thankfully her fromer employer took her back…
Spiff is such a staunch defender of his firm its admirable (or laugahable). They did provide good back room service, much better than LPL. Best in the industry? I wouldn't rely on a survey to make that statement. Certainly Jones will weather this better than most. Most other firms are cutting back reps, admin, overhead etc. It seems inevitable, we will see futher changes at Jones. The GP's when faced with coming out of pocket to support growth initiatives (assuming a slow market recovery) will force changes. As far as the transfer broker program recently implemented...Spiff or B24 is there tangible evidence that the program is working?... My friend who left Jones and went to SSB, is now looking again to move, and he said it wasn't worth it for him to consider.Foot, all I can tell you is that we haev more transfer brokers in the past 3 months than all 0f 2008. So I guess it’s working. But many of those may have come anyway, considering the turmoil the industry is in.
I wasn't referring to the cost issue. I realize there would be a cost savings to having fewer offices. My point was from a pure compliance perspective, why would Jones have to MAINTAIN the one-man office? Someone made the comment that it's for supervision reasons, and I am trying to figure out why having multile FA's in one office is more of a compliance issue than one guy.[quote=B24] [quote=bspears] You’re kidding, right? Its more like 1 supervisor per 125 brokers. But you’ll probably spin it into something incredible, greatest system in the industry, EDJ brokers don’t need supervision. [/quote]
Huh? I think you missed my point. I meant, what is the difference between monitoring 5 guys in 5 different offices, versus 5 guys in 1 office. I was using simple math. To extrapolate that out (just for you Spears )…what’s the difference between monitoring 125 guys in 125 different office, versus 125 guys in 25 different offices? You’re still monitoring the same number of transactions for the same number of guys. Maybe there are FINRA/SEC rules about supervision under our arrangment that makes compliance for multiple-FA offices more difficult for some reason - I just don’t know what it is.
Trust me, Spears, I’m not one to pull the “we’re more ethical than the rest” bit. I’m just as unethical as you are .[/quote]
I think you missed the obvious…if you make branch visits you have 125 yearly visits as opposed to 25. Multiply that out and it is a huge difference. Average yearly visit at 3-4 hours gives yo a difference in man hours of 400, that’s 10 weeks for one person.
No doubt, Jones preaches great service - and I believe it is followed.
I wouldn’t put anything past a large company that is trying to protect it’s assets. Scoff if you will, but I’ve been on the eavesdropping side. It isn’t hard to do and cost is minimal. As a matter of fact, part of my job was writing cost justifications for what we spent on investigations. Invariably, the savings generated from catching wrongdoing (either corporate espionage, stealing samples, etc.) FAR outweighed the costs of actually doing the investigation.
[quote=Ron 14][quote=Broker Fee]
In my area there are at least 2 Jones offices that house 2 rep's. I went to the EJ web site & did a search for local offices & there are rep's on there with the same street address, I assume they are not new because they actually have a picture.
[/quote] Don't chime in if you don't know what the hell you are talking about. Those are Goodknight programs or Sunset programs, meaning the office sharing will only be temporary. [/quote] Our region has a two-man office. One guy has been with Jones since the '70s, and the other guy for about 10+ years. Neither of them were new. And, when the 10+ year veteran retired, they let another Jones guy from a town over move into his spot. So, it's STILL a two-man office. It happens.Here’s another question for you Jones guys:
Does the BOA still keep a 3-ring binder on her desk that stores all of the new account documents? You know, the one page sheet per account that lists social, DOB, name, address, phone, account #, networth, income, etc. They did up until the time I left (mid-2006). I always thought that if a halfway decent set of identity thieves knew about that book. They could hit multiple offices in one night, and have personal data on thousands of people. jackpot for identity thieves. Just a thought.[quote=now_indy]Here’s another question for you Jones guys:
Does the BOA still keep a 3-ring binder on her desk that stores all of the new account documents? You know, the one page sheet per account that lists social, DOB, name, address, phone, account #, networth, income, etc. They did up until the time I left (mid-2006). I always thought that if a halfway decent set of identity thieves knew about that book. They could hit multiple offices in one night, and have personal data on thousands of people. jackpot for identity thieves. Just a thought.[/quote] Nope....all scanned and shredded immediately!I understand that is it possible to do the eavesdropping. But the thought of actually pulling it off is ridiculous. This is going to be an incredibly sexist statement, but I'm going to make it anyway: Can you imagine getting 10,000+ women to keep a secret like that? The gossip machines run pretty well at Jones anyway. Imagine getting all those BOAs to keep their mouths shut about something like that. Now, in an envirnment where there are corporate secrets (recipes, formulas, proprietary knowledge) I understand the need for something like that. But not at Jones. So, let's just do away with the BOAs are spies nonsense.No doubt, Jones preaches great service - and I believe it is followed.
I wouldn’t put anything past a large company that is trying to protect it’s assets. Scoff if you will, but I’ve been on the eavesdropping side. It isn’t hard to do and cost is minimal. As a matter of fact, part of my job was writing cost justifications for what we spent on investigations. Invariably, the savings generated from catching wrongdoing (either corporate espionage, stealing samples, etc.) FAR outweighed the costs of actually doing the investigation.
Spiff–
You take everything way too literally. What I meant was, when things got nasty, the tone and posture of the Home Office, HQ, HR, AL, RL and whoever else was very negatve. Very accusatory. Very guilty until proven innocent based on some very wild, irresponsible, and unfounded allegations. I did not receive the benefit of doubt when I was obviously due that position relative to the accuser. In other words, they took her word over mine (at first). They empowered a 5-month employee over a 5-year broker. In the blink of an eye, they had turned my BOA into their paid spy. Now, that's pathetic. P.S. I know your office is in Hoo-ville or something like that. But in real life, throughout all of these 50 states, drug abuse by employed adults is a fairly prevelant and persistent problem. Really. I swear to God. If you don't know better, or don't believe that, keep living in your own little Edward Jones/Truman Show world. I'm sure it's nice and safe in there. Just stay above that red line. P.P.S. When in the performance application, if you stare long enough and hard enough at the red line, sometimes you can see the camera inside of the computer screen. When you see it, just smile, wink, and say "CHEEEEEEEESE!"Hoo-ville! Ha Ha that’s funny!
[quote=Hey Kool-Aid][quote=now_indy]Here’s another question for you Jones guys:
Does the BOA still keep a 3-ring binder on her desk that stores all of the new account documents? You know, the one page sheet per account that lists social, DOB, name, address, phone, account #, networth, income, etc. They did up until the time I left (mid-2006). I always thought that if a halfway decent set of identity thieves knew about that book. They could hit multiple offices in one night, and have personal data on thousands of people. jackpot for identity thieves. Just a thought.[/quote] Nope....all scanned and shredded immediately![/quote] You should start keeping those after you scan them so it's easier when you go Indy.[quote=now_indy][quote=Ron 14][quote=Broker Fee]
In my area there are at least 2 Jones offices that house 2 rep's. I went to the EJ web site & did a search for local offices & there are rep's on there with the same street address, I assume they are not new because they actually have a picture.
[/quote] Don't chime in if you don't know what the hell you are talking about. Those are Goodknight programs or Sunset programs, meaning the office sharing will only be temporary. [/quote] Our region has a two-man office. One guy has been with Jones since the '70s, and the other guy for about 10+ years. Neither of them were new. And, when the 10+ year veteran retired, they let another Jones guy from a town over move into his spot. So, it's STILL a two-man office. It happens.[/quote] Here's the deal...one of those guys has something on someone, and you'll never get it out of him as long as they let them keep the 2 person office and share expenses.OK, fair enough. It was in Weddle’s corner this last week. He said that we have recruited 50 veteran transfer brokers YTD (through early April) vs 36 through all of last year. I was a little high on the almost double, but still a larger amount than last year. There you go.
I think you are underestimating the power of the kool-aid over the GPs. I would guess the vast majority of them aren't even thinking about broker expansion and how it affects their GP returns. I've never heard them try to explain it to a group of GPs whose income went drastically south last year. However, we are profitable in all of the months YTD. Which is a big 180 compared to the last quarter of 2008. So, if I'm a GP, I'm not happy, but I have the faith that those returns will come back. I also know that I have one of the best jobs in the industry. And if I can just keep the firm happy, I'll get to keep it. I only took enough accounting in college to be dangerous, so I'm not even going to pretend to understand how costs are offset by expenses. Both sound like money leaving my checkbook.[quote=footsoldier]
The 10K reads as follows (again I am reporting Spiffy); Operating expenses decreased due primarily to a decrease in financial advisor compensation (due to reduced trade revenue) and in variable compensation (due to reduced net income), partially offset by costs associated with the continued expansion and enhancement of the Partnership's branch office network. The Partnership added 953 financial advisors during the twelve months ended December 31, 2008, ending the year with 12,155 financial advisors, an increase of 9% from 11,202 as of December 31, 2007. My opinion...if the revenues don't recover, serious cuts have to occur if the growth objective is to continue. And that appears to be much more important to Jones GP's. Again I ask the obvious question WHY? Why grow at the expense of the successful broker (who is going without 20% of their compensation, i.e. bonuses) or at the expense of the GP? How do costs associated with expansion partially offset expenses? Depreciation? Scratching my head on that statement. Maybe some accountant types can shed some light. [/quote] It's written sort of backwards, but what they are saying is that (1) Overall, FA compensation went down (commish and variable), so expenses went down, (2) Expenses were UP due to opening of new offices. So the net effect was a slight decrease in overall expenses. One doesn't really have to do with the other, they just threw them in the same sentence. But you're right, it's written by some accounting knucklehead and doesn't make sense (I used to be one of those knuckleheads that wrote this stuff, so I'll go easy on them!). Foot, to be honest, I know you love to try and pile on, but Jones is really looking at continued growth right now as an investment. They know that the economy, the market, and the firm will climb out of this hole, and then they will be much stronger for it. I think you are over-analyzing the whole thing. Most of the successful brokers I have talked to completely understand, and agree with the current strategy, because they have been through this before. Doesn't make a zero bonus bracket much easier to swallow, and I'm sure some of them are ripped about their comp going down by so much. But by and large, most of them feel OK, because they know things could be worse if they were at another firm. If the profit shortfalls were only Jones-specific, then they would be irrate, but I can tell you, most of us feel OK with things right now (I said "OK", not "great". Don't get your panties in a wad).I suspect there is some kind of accounting mechanism that every time they open an office it makes the GP pie a little bigger. Sort of like when a bank makes a loan, it counts as an assett. When an EJ office opens it counts as an asset along with the anticipated future income stream.
[quote=footsoldier]
The 10K reads as follows (again I am reporting Spiffy); Operating expenses decreased due primarily to a decrease in financial advisor compensation (due to reduced trade revenue) and in variable compensation (due to reduced net income), partially offset by costs associated with the continued expansion and enhancement of the Partnership's branch office network. The Partnership added 953 financial advisors during the twelve months ended December 31, 2008, ending the year with 12,155 financial advisors, an increase of 9% from 11,202 as of December 31, 2007. [/quote]Kicking that around in my head: EJ expenses are DOWN because FA compensation is down. So the fact that FAs are struggling doesn't affect EJ as much as in a traditional fixed salary business because EJ doesn't have to pay the struggling broker. If a broker goes out and does zero next month, EJ's fixed costs are what, maybe 5 or 6k. 1k for the office, 3k for the BOA, maybe 1 or 2k for office support. But of course no broker does zero; even the struggling broker does 10k, of which 4k goes to the broker the other 6k means EJ breaks even.
Looking at it another way, they have to grow the total value of the partnership because for the GP, this is like another investment. If your Coca Cola stops growing, you sell it and find another investment. The GPs are in it for the returns; if they were truly 'owners' they would still be FAs. And if the GP pie shrinks, there will be enormous pressure from some GPs to sell the damn thing before the market figures out the true value. They say that right out loud: We need to grow because if we don't, we'll get bought out.
I understand that is it possible to do the eavesdropping. But the thought of actually pulling it off is ridiculous. This is going to be an incredibly sexist statement, but I'm going to make it anyway: Can you imagine getting 10,000+ women to keep a secret like that? The gossip machines run pretty well at Jones anyway. Imagine getting all those BOAs to keep their mouths shut about something like that. Now, in an envirnment where there are corporate secrets (recipes, formulas, proprietary knowledge) I understand the need for something like that. But not at Jones. So, let's just do away with the BOAs are spies nonsense. [/quote] The 10,000 women trying to keep a secret is awesome... I stand corrected sir. You have outwitted me. I will say this though - Advisor has a $30million dollar branch - that is an asset to Jones that they would like to protect. Smaller offices, maybe not. Just a thought.[quote=Moraen]No doubt, Jones preaches great service - and I believe it is followed.
I wouldn’t put anything past a large company that is trying to protect it’s assets. Scoff if you will, but I’ve been on the eavesdropping side. It isn’t hard to do and cost is minimal. As a matter of fact, part of my job was writing cost justifications for what we spent on investigations. Invariably, the savings generated from catching wrongdoing (either corporate espionage, stealing samples, etc.) FAR outweighed the costs of actually doing the investigation.
[quote=buyandhold] [quote=footsoldier]
The 10K reads as follows (again I am reporting Spiffy); Operating expenses decreased due primarily to a decrease in financial advisor compensation (due to reduced trade revenue) and in variable compensation (due to reduced net income), partially offset by costs associated with the continued expansion and enhancement of the Partnership's branch office network. The Partnership added 953 financial advisors during the twelve months ended December 31, 2008, ending the year with 12,155 financial advisors, an increase of 9% from 11,202 as of December 31, 2007. [/quote]Kicking that around in my head: EJ expenses are DOWN because FA compensation is down. So the fact that FAs are struggling doesn't affect EJ as much as in a traditional fixed salary business because EJ doesn't have to pay the struggling broker. If a broker goes out and does zero next month, EJ's fixed costs are what, maybe 5 or 6k. 1k for the office, 3k for the BOA, maybe 1 or 2k for office support. But of course no broker does zero; even the struggling broker does 10k, of which 4k goes to the broker the other 6k means EJ breaks even.
Looking at it another way, they have to grow the total value of the partnership because for the GP, this is like another investment. If your Coca Cola stops growing, you sell it and find another investment. The GPs are in it for the returns; if they were truly 'owners' they would still be FAs. And if the GP pie shrinks, there will be enormous pressure from some GPs to sell the damn thing before the market figures out the true value. They say that right out loud: We need to grow because if we don't, we'll get bought out.
[/quote] BH, you're sort of looking at it wrong. In the 10K quote we saw, they were strictly talking about expenses. So yes, maybe expenses were dwon, but revenues were down by more. In addition, the statement "if they were truly 'owners' they would still be FAs" is completely wrong. They are now pure owners. Their compensation, like any business owner, is directly and probably like 90%, tied to firm profits. Have you ever met the partners at a big law or CPA firm? I can tell you, they ain't practicing much law or doing tax returns. They are now reaping the benefits of their early hard work, and now the hard work of the newer attorneys adn CPA's. This is the backbone of how large professional partnerships work. Finally, the GP's are not going to sell out as long as they are still profitable. Most would much rather have a big, fat stream of income for the rest of their lives, rather than a lump sum. Because no other investment would ever consistently return what Jones GP (and LP for that matter) has returned the past 35 years (GP is somewhere around 40-50% per year, LP is around 20% - and that's for the past 35 years). When they die, the principle will get returned to their family.
BH, no offense man, but I don't think you quite understand accounting. And regardless of the "accounting" for the offices, assets and cash flow is king in this business. They could open a million offices, and it wouldn't matter if they weren't profitable. And the assets the FA brings in are the assets, not the office. So it's quite different than a bank lending out their own assets. They GP's have a formula - open X offices, they will be Y profitable, it has Z effect on MY profits. It's like any business. Proctor & Gamble could produce a trillion gallons of Tide, but it doesn't matter if nobody buys it.I suspect there is some kind of accounting mechanism that every time they open an office it makes the GP pie a little bigger. Sort of like when a bank makes a loan, it counts as an assett. When an EJ office opens it counts as an asset along with the anticipated future income stream.
B24
Do you have a Tide bottle sitting in your office? Next to a Coke or Pepsi beside a box of Cheerios directly behind some Charmin.B-
Help me on the accounting. I am losing money in two countries where I have expanded and never been profitable. I am losing money on 50% of the offices (I have no idea if that is accurate or not, total guess)in the US. My partnership income is down, and I am being told its good to go out and open more offices because when times are really good it will more than offset the leaner times. It's a house of cards. The foundation is cracked due to the market and its likely things will dramatically change for the FA to protect the viability of the partnership. Partnerhips require cash, and infusions (i.e., more new GP's) from time to time. It wouldn't suprise me in the least if the partners have to dig into their pockets to continue the expansion. The model in this environment doesn't make sense. The only rosy picture you can paint is with a market recovery. What if this is a 20 year cycle, and we are only 10 years into it?Foot
Are you going to stop investing in your retirement account? What if this is a 20 year cylce and we are only 10 years into it? Here's what I think: The Jones model works for them, it is all about growth, it is a great time as a firm to be growing. Regionals and independents are benefitting from the self-destruction of the wirehouses. Sometime in the future as Jones continues to add advisors, market share, as time goes by and they get further removed from the Ted Jones ideology, and greed eventually wins out they will be bought out. To all the Jonesers, never say never![quote=jkl1v1n6]
B24
Do you have a Tide bottle sitting in your office? Next to a Coke or Pepsi beside a box of Cheerios directly behind some Charmin. [/quote] It was just the first thing that came to mind. Funny story, back after 9/11 I was a finance director in the real estate/hotel industry. We were running some high-end luxury properties in NYC for a private equity firm out of Annapolis. The CEO came to talk to our executive committee, and he went through this whole speal about pricing in the luxury tier (mind-you, he wasn't even a hotel guy). He had a bottle of Coke and a bottle of Perrier. He did the ole' "which one costs more to produce, which one os priced higher" it's-all-perception routine. Needless to say, he was not happy at the moment.[quote=footsoldier]B-
Help me on the accounting. I am losing money in two countries where I have expanded and never been profitable. I am losing money on 50% of the offices (I have no idea if that is accurate or not, total guess)in the US. My partnership income is down, and I am being told its good to go out and open more offices because when times are really good it will more than offset the leaner times. It's a house of cards. The foundation is cracked due to the market and its likely things will dramatically change for the FA to protect the viability of the partnership. Partnerhips require cash, and infusions (i.e., more new GP's) from time to time. It wouldn't suprise me in the least if the partners have to dig into their pockets to continue the expansion. The model in this environment doesn't make sense. The only rosy picture you can paint is with a market recovery. What if this is a 20 year cycle, and we are only 10 years into it? [/quote] Foot, you're sort of right. But I think you're assumptions are a bit dramatic. First off, we were actually profitable last year - no need for a cash infusion (LP return was like 15%). Net Income 2007 - $4.1B, 2008 $4.6B, 2009 $5.2B (forecast). And 1/2 the offices are not losing money. Maybe at points in time - like last month or February or something - I have no idea. But on an ongoing basis, it's just not the case. On top of that, during the past past 15 years of growth, the dynamics have always been like that - lots of newer brokers losing money for the firm. But you have to look at the numbers. 10 years ago we had about 4,000 offices. So if half were profitable, that makes 2,000 profitable offices. Today we have, I don't know, 12,000 offices. If half are profitable, that makes 6,000 profitable offices. It's all about the profit dollars covering fixed costs. And with the rise of Goodknights and Legacy Plans, the overhead for unprofitable brokers is getting lower and lower, since many are not geting their own offices until they are already on their way to profitability (or the loss dollars and break-even point is much lower). SO in 5 years we'll have 18,000 offices and 10,000 or so will be profitable. At some point, we will slowly start to close un-profitable branches (like Starbucks did), and consolidate assets. Not a bad busienss plan. I predict over the next few years, profitability per-branch becomes a bigger focus, and that is how we will really grow profits (through growth & health). Also look at it this way - in the last 10 years, we have grown the # of advisors 180%, but Net Income has grown 250%. Good numbers if they perpetuate themselves. Why do you think they created the Advisory program? It's profit and cash flow. As they continue adding more accounts to it, continue bringing over assets (our ACAT ratio grew tremendously this past year), and continue to recruit transfer brokers with assets, the asset pie just gets bigger. And as we emerge from this bear, we will obviously be much stronger (like all firms). But I'm not sure that a sideways market for 10 years will really hurt us as much as you think. Bottom line, I'm not sounding any alarms until there's reason to. Here's what I DO see happening some day....we continue growing our UK/Canada presence, then sell off those assets and exit those countries. I have no idea what the end-game/exit strategy is, but you're right, if we have no hope of becoming profitable there, they might as well sell them and get some cash out (they are not profitable due to the overhead, not because the offices themselves are unprofitable. There would be value in the assets/advisors to another firm).Hey Foot, FYI, just heard April was our most profitable month since December. the last 4 months of 2008 and the first 4 months of 2009 were both profitble. We have yet to see a losing month, so you should feel better knowing that we have weathered the bulk of the storm! (I know you were worried for us )
I find it humorous that Jones is getting hammered for hiring during the downturn, but in another thread UBS is getting hammered by their folks for laying off before the upturn.
Well, Jones isn't getting hammered for it. Foot is just trying to come up with reason for why Jones will ultimately fail.
"Yeah, I know LP returns were 15% in the worst year in their 85 year history, but just wait! Things are going to be bad for another 10 years, and then Jones will REALLY be in trouble! 17,000 unprofitable offices, thousands of layoffs, fire and brimstone coming down from the skies!, human sacrifices!, dogs and cats sleeping together!,mass histeria!!"Guys-
I think you have missed my point...again. If Jones is so profitable where are the bonuses? The GP's will continue to make their dough at the expense of you. They won't tolerate 39% reduction in their comp. I don't think Jones will fail. I think the model might. They will adjust and you will be left in the cold...again.Well, I didn’t say SO profitable, just that they weren’t losing money as was suggested. I don’t think the model will ever be broken, for the exact reason you think it WILL BE. If it were a public company, I would agree with you. But as a private partnership, the GP’s will only be successful if the FA’s are successful. Now, the GP’s won’t exactly go broke, but without successful FA’s, their income will stay low. And the LP’s are protected by the 7.5% return floor. That’s when the GP’s have to start coughing up dough. I am sure they never want to get to that point. But they have never even come close to reaching that floor in 35 years.
The one-man office model would fail miserably in a public company domain. And Jones is smart enough to know that if they fuc! with our comp, everyone would just leave.When Jones needs more cash they just “announce” an LP offering and the drones line up with their checks…often times with borrowed money.
I know I know, pay 8%, get 20%, so it works.
Even if Jones can’t use all of the cash right away, they can just return it to the drones through the income…ponzi galore!
[quote=jkl1v1n6]
B24
Do you have a Tide bottle sitting in your office? Next to a Coke or Pepsi beside a box of Cheerios directly behind some Charmin. [/quote]I have a Caterpillar bulldozer in my conference room.
Jones actually believes that they are bullet proof. The LP's act as if their investment is just rock solid. The keep pushing and pushing and pushing this dream / culture on to the new guys hoping 3 of 10 hold on just long enough. The reality is most guys 5 years and under are F'in miserable, but they continue to be told "it will happen, it will happen, just follow the recipe." It is almost like Stockholm syndrome where they are so afraid of betraying their captor that they stick around and embrace the pain.
[quote=LuvIndy]
When Jones needs more cash they just “announce” an LP offering and the drones line up with their checks…often times with borrowed money.I know I know, pay 8%, get 20%, so it works.Even if Jones can’t use all of the cash right away, they can just return it to the drones through the income…ponzi galore![/quote]
Would you buy an investment that has returned 20% per year (fairly consistently) for 35 years, never returned less than 15%, and you can buy with borrowed money? So take $10K, buy 40K worth of partnership, pay 7% interest, and earn 20%. I’d sign up for that Ponzi scheme for some of my money. It’s known as partnership. Works the same way at every professional partnership.
Isn’t it obvious with LP returns at that level that those who are not yet partners are taking it in the rear in terms of their cut ?
[quote=B24] [quote=LuvIndy]
When Jones needs more cash they just “announce” an LP offering and the drones line up with their checks…often times with borrowed money.I know I know, pay 8%, get 20%, so it works.Even if Jones can’t use all of the cash right away, they can just return it to the drones through the income…ponzi galore![/quote]
Would you buy an investment that has returned 20% per year (fairly consistently) for 35 years, never returned less than 15%, and you can buy with borrowed money? So take $10K, buy 40K worth of partnership, pay 7% interest, and earn 20%. I’d sign up for that Ponzi scheme for some of my money. It’s known as partnership. Works the same way at every professional partnership.
[/quote]
Like I said, I know it works. The way I look at it they aren’t giving you anything until around 5 years after you’ve had it and you’ve gotten your original investment back. Then it is very lucrative. I’m not saying it’s a bad thing.
One of the unique characteristics of the employees is they do realize they can only control so much. Yeah the LP offerings are wonderful. But how much are you allowed to purchase? Typically in a career you would be lucky to own 10% of your net worth in LP. So while I can appreciate that it is a good investment, you have to look at it from all perspectives its limited.
By the way...nothing is given you have to pay for it. And if you finance it, the GP's make interest (another source of other income to Jones Financial Companies). As a pawn in the big picture, Jones reps can't see the forest from the trees. All they know is if they net 10K they are doing a good job in Jones eyes. So that's the bogey. What they can't know or control is what corporate is doing. Jones Financial Companies is struggling in a sideways or down market, you can't grow at the same pace if health is in question, and capital (no bonuses) is required to keep the growth engine going. If B24 or Spiff were in Segment 4 or 5 they would realize that they are getting hosed big time, because bonus money is at least 10% (if not 20% of comp). They are too new in the biz or not big producers (for the record I wouldn't be suprised someday they may be). I am not a doom and gloomer. I don't have any empathy for the GP, only the soldiers of the firm, the FA. I want Spif and B24 to succeed for themselves and their families. I hope that as they become more tenured in the industry and start to ask the questions that they see the light, and make the transition to ownership rather than employee. It doesn't have to be indy by the way.foot,
How do GP's make interest if we finance our LP?Unless things have changed since I left, if you financed through Jones they assessed interest (you would expect that from anyone lending you money to buy an asset or an asset that produced income).
foot,
Edward Jones has never (atleast not in my 20 years with them) provided the financing for the purchase of partnership. You can 1) pay for your partnership in full 2) arrange your own financing 3) go through a bank that Jones has a relationship with as far as financing partnership. I am not a CPA but I am pretty sure a firm cannot provide financing for investors to borrow to finance the firm that is providing the financing. How bout a tax or invesment banking expert clear this one up?Y-
Boone Savings & Loan. A wholly owned subsidiary of Jones Financial Companies...I would call that a relationship too. Like I said, things could have changed since I left, but they were always very accomodating to finance if we needed it. I paid cash. And before Spiff and B get all wigged out its a great bond.In fairness, my loan was from an outside bank. Maybe US Bank? Can’t recall exactly, as I only had it for a few months. It was not through Boone Savings & Loan. That I know. Otherwise, I would have just paid cash.
[quote=footsoldier]
One of the unique characteristics of the employees is they do realize they can only control so much. Yeah the LP offerings are wonderful. But how much are you allowed to purchase? Typically in a career you would be lucky to own 10% of your net worth in LP. So while I can appreciate that it is a good investment, you have to look at it from all perspectives its limited.
By the way...nothing is given you have to pay for it. And if you finance it, the GP's make interest (another source of other income to Jones Financial Companies). As a pawn in the big picture, Jones reps can't see the forest from the trees. All they know is if they net 10K they are doing a good job in Jones eyes. So that's the bogey. What they can't know or control is what corporate is doing. Jones Financial Companies is struggling in a sideways or down market, you can't grow at the same pace if health is in question, and capital (no bonuses) is required to keep the growth engine going. If B24 or Spiff were in Segment 4 or 5 they would realize that they are getting hosed big time, because bonus money is at least 10% (if not 20% of comp). They are too new in the biz or not big producers (for the record I wouldn't be suprised someday they may be). I am not a doom and gloomer. I don't have any empathy for the GP, only the soldiers of the firm, the FA. I want Spif and B24 to succeed for themselves and their families. I hope that as they become more tenured in the industry and start to ask the questions that they see the light, and make the transition to ownership rather than employee. It doesn't have to be indy by the way.[/quote] Foot, I agree with you. I know it's a challenge for most people to amass enough to make it meaningful. But that's not Jones' fault. If you join the firm at 25 and work for 30 years, you will be wealthy beyond belief. If you join at 55, not much chance. If you're a piddly producer, not much chance. But isn't that what they are rewarding you for? Contribution to the firm through years of service, profit contribution and service? Yeah, it doesn't seem like much compared to being indy and "owning" it all, but Jones is not an indy firm. So you can't compare to that. You have to compare the deal to Merrill or Morgan or Stifel, etc. Let's remember, most of the guys at Jones or any other firm are never going to go indy unless the rules really change. They have neither the ability nor the desire. So you have to evaluate the opportunity for what it is, not in comparison to something you will never do. And, I think the arrangement the firm has is fine. Overall compensation is on par with other wires/regionals. The "owners" (GP and LP) are being rewarded for the risk they take (more the GP's) and the opportunity cost of not going public. They SHOULD generate good returns for themselves. I'm not an LP, and I have evaluated the whole shootin' match versus being indy and going to other firms. I don't think I will EVER go to another firm (unless an offer I can't refuse comes up - but one did last year, and thank GOD I didn't take it). Now, would I go indy? Maybe. I really like the idea of branding and designing my own firm. I have plenty of experience running businesses in the past, so it is not at all intimidating for me. But right now, my assets aren't even close to being able to consider it (at least not in my mind - I know others have done it). But it wouldn't be because I have a problem with Jones. Sure, there's things I don't like. But nothing's perfect. Being indy is not perfect. And FYI, I know LP is a bond. And Jones knows it too. They called it a bond with some sort of enhancement ( I forget the term they used). They stated that in a Weddle Corner thing a while back when someone asked about LP and where it fell on the pyramid or something. So they are not trying to deceive anyone.B24 - Jones needs more LP’s and people in leadership like yourself. Guys that don’t BS and who actually have original thoughts. I wish I had you as a mentor/field trainer when I was there.
.
Wind - Aren't you like 2 months selling ?
[quote=footsoldier]Y-
Boone Savings & Loan. A wholly owned subsidiary of Jones Financial Companies...I would call that a relationship too. Like I said, things could have changed since I left, but they were always very accomodating to finance if we needed it. I paid cash. And before Spiff and B get all wigged out its a great bond.[/quote] Sooth is correct, it's not through Boone S&L. That entity existed ONLY to allow Jones to become a corporate Trustee. The S&L is now the Jones Trust Company. The lending for LP is done through US Bank as the lead bank. They make it very clear that it is a relationship outside of EDJ. Another conspiracy theory down the tubes.[quote=footsoldier]Guys-
I think you have missed my point...again. If Jones is so profitable where are the bonuses? The GP's will continue to make their dough at the expense of you. They won't tolerate 39% reduction in their comp. I don't think Jones will fail. I think the model might. They will adjust and you will be left in the cold...again.[/quote] I thought you might find this interesting. Someone sent a suggbox wire in stating that it doesn't make sense for us to be paying GPs millions of dollars when the company is barely keeping it's head above water. At the end of his comment, Weddle told us that the YTD returns on the LP & GP were 11% and 13% respectively. Where are the GP's making all the money? Now, 13% isn't anything to sneeze at, but the LPs are at 11%. That's not that much of a difference. No, we're not in a bonus bracket yet, but the owners of the firm are still making money. And that's the way it should be. I find this whole conversation interesting. Here's why. If I were an indy advisory going through this last year I probably saw a decrease in my production mostly from fees going down instead of up. Now, I don't know exactly what it costs to run an indy office, so I'm going to make up some numbers. Doesn't really matter if I'm close or not. Let's say in 2007 I had $500K in production, with an 80% payout, and $100K in fixed expenses. I cleared $300K. Pretty good year. However, in 2008, my production dropped 30% because I had a lot of fee based assets. So, I'm down to $350K in production, with an 80% payout, and $100K in fixed expenses. So in 2008, I only cleared $180K. I find it interesting that you keep saying where are the bonuses. Didn't I just lose $120K in income in 2008? Am I going to quit and go do something else because my income went down? No, I'm going to work harder to get that income back to where it was in 2007. I'm going to go after new assets so that when this thing does turn around, I can hit $750K in production instead of $500K. It's works the same way at Jones. If you got a bonus when things were going well, you expect that you'll get back there shortly. Just so you know, I've not heard a single vet talk negatively about the bonus situation. We all know why we aren't getting bonuses right now. We're smart people (well, most of us anyway) and we know that you have to take the good with the bad in this business.[quote=Ron 14]
Wind - Aren't you like 2 months selling ?
[/quote] Here we go!Spiff-
Again you are drinking. Who pays for the growth? Not you because your production doesn't warrant bonuses. Ask any producer who was receiving the extra checks and I will bet my last dollar they ain't happy. They will put up with it for awhile, but if in fact the GP's are making 13% and LP's 11% who does that leave out in the cold? Have you received a bonus ever that is equivalent to 10% of your annual pay? BTW. I admit my mistakes and I looked back at my paperwork for my LP years ago and you are 100% correct it was US Bank. Since I paid cash, I didn't recall. Have to look eleswhere for a conspiracy!Btw-
For years you have Mr. Spiff, maintained that Jones isn't comparable to indy. And as the doublespeak goes...you did exactly that. You will be a great GP someday.foot - Just for those of us who are following the banter and obviously you can choose not to answer, but what was your AUM when you left EJ and how long were you there?
I started from scratch in 1997. I ended with 44M under management when I left in 06. I was told I was a star…I earned LP…and now I am at 28M, half in fee base or recurring revenue, had a good year last year up 48% and this year tracking at 15% above same time last year.
Assets don't matter. Producing assets do..
Don't you have to be in each seg for a minimum of 4 months?
I don’t think he means he’s in Seg 2 yet, just that the has the production numbers to qualify. And yes, you have to be in each segment for at least 4 months.
I think Jones should change from production to AUM. When I was there a lot of people hit the production numbers only to flame out because they didn’t have enough assets to support it…For example… seg 2 when I was there was $8K gross… And some guys did one huge month followed by crap and qualified then a 6 months later they were gone because they couldn’t maintian there new seg without any assets…
[quote=footsoldier]Btw-
For years you have Mr. Spiff, maintained that Jones isn't comparable to indy. And as the doublespeak goes...you did exactly that. You will be a great GP someday.[/quote] I still don't think indy is comparable to Jones or any other non-indy equivalent. I simply used the higher payout in the indy world to demonstrate that this market has taken money out of many advisors pockets. Whether through a bonus system like at Jones or a payout system like yours, the net effect is still the same. I wonder which will come back first - bonuses at Jones or the AUM for the fees elsewhere? And as for the GP comment - thanks for the compliment.Thanks foot. You are absolutely right, 100 mil in AUM doesn’t really matter when they are 30yr Muni’s and A shares.
I was trying explain "dead assets" to a friend of mine who just went indy from Jones.. He was so happy he xfered $15Million to his new place, but he kept telling them "Nothing will change about your investments". They are all in A shares and 25 yr bonds...so assuming he had all of it in A shares.. that is only $37K in production vs if he was to annuitize half of his book that would be $75K in production(7.5Million at 1.0%), but he keeps missing the point of dead assets..
Spiff-
I would buy your argument if the firm was more interested in helping you succeed than finding the next FA to replace you if you fail. Your firm just started the advisory program to be competitive, because you were losing FA's and clients to fee based programs. We all have seen recurring revenues drop, how does that wash with the vets who are losing out. Let me illustrate it for you; You are a 360K producer netting 136,800. Typically your bonuses range from 13.6K to 27.2 depending on your expenses, etc. You continue to see the growth, now you have lost the bones. You see LP at 11% and GP at 13%. Do you feel left out? Or do you feel that for the good of the firm, you go without because your bonus was extra, and someday when you go from the 0% bracket back to 50% bracket it will be made up. I am making any sense to anyone out there besides Spiff? Are you out of seg 3? Your admission that we aren't comparable, and yet you compare is laughable. Spiff you can't have it both ways. Unless you drink the koolaid and learn how to speak in circles.I disagree...I have done plenty for clients that didn't make me a dime. If you treat your clients with respect and ALWAYS do whats best for them, then you will be repaid in the long run (referrals, client gets new money). Now that doesn't mean there aren't times that what is best for the client, isn't also good for the FA. But the statement as a whole, is very untrue. I always do what I beleive is best for the client. As far as the times. It's a struggle for sure for alot of people, but I think it's going to separate the good brokers from the great brokers. There's never a better time for a newbie, because we can come in and take accounts from a broker that hasn't took the time to spend with his client. But for someone with a book, I honestly don't beleive that its ALL the economy. I feel like alot of Vets are use to doing their business a certain way for the last 10 years or whatever and now when times are hard, they want to pick up the phone and do things the same way they were doing things when times were good. I think it's going to force alot of Vets to make some housecalls, and force them to do a whole lot more prospecting. Those Vets are the ones that will hang on to the gold, in my opinion atleast.[/quote] So Wind you are 4 months in and you have all of the answers ? You have done plenty for clients that didn't cost you a dime ? Cmon now. I know your RL is probably giving you the reach around at the new FA meetings, but please remember you don't yet know what the hell you are doing.[quote=buyandhold] Jones FAs like their firm, but they will do what’s in their best interests just like anybody else.
[quote=Squash1]
I was trying explain "dead assets" to a friend of mine who just went indy from Jones.. He was so happy he xfered $15Million to his new place, but he kept telling them "Nothing will change about your investments". They are all in A shares and 25 yr bonds...so assuming he had all of it in A shares.. that is only $37K in production vs if he was to annuitize half of his book that would be $75K in production(7.5Million at 1.0%), but he keeps missing the point of dead assets..
[/quote] Squash, Give him time. It takes a while to de-program. He will slowly come out of it.I will, but he hasn’t started prospecting for new (non-Jones people… Yes I believe there are Jones clients… and everyone else) clients… I think he will row himself in a circle start prospecting too late and be stuck… maybe not…
foot - I understand your reasoning. What’s your point? Why do you care?
Jones FAs have a choice to make. They either stay with Jones and get bonuses when their offices are profitable enough and the firm is profitable enough, or they can leave. Nobody is holding a gun to their heads telling them to stay. The GP/LP/Associate relationship isn't going to change. This is not the first time that Jones has been in a zero bonus bracket. This is actually the second time in my relatively short career. You might think the system is flawed, but it works. The people who have the most on the line get paid the most. Period. Jones doesn't ever promise an FA anything other than a roughly 40% payout. Bonuses are just that. LP is a goal, but not a guarantee. Trips can go away. Fortunately for thousands of guys like me around the country (and world) we have received bonuses, have LP, and go on trips. Most of the time. Others, like this one right now, we don't get one of those three. I can now choose to move as many of my clients as I can somewhere else and reestablish myself, or I can take the rare bad with the mostly good and stick where I'm at. I know which way I've chosen. Evidenlty I'm not alone. Vets are not leaving. So, again, what's your point?[quote=Squash1]I will, but he hasn’t started prospecting for new (non-Jones people… Yes I believe there are Jones clients… and everyone else) clients… I think he will row himself in a circle start prospecting too late and be stuck… maybe not… [/quote]
Curious to what that means? What’s the difference between a Jones client and a non-Jones client? Can I, as a Jones guy, bring in non-Jones clients?
I prospect a lot, and I’d like to be able to identify and classify these creatures.
[quote=Squash1]
I was trying explain "dead assets" to a friend of mine who just went indy from Jones.. He was so happy he xfered $15Million to his new place, but he kept telling them "Nothing will change about your investments". They are all in A shares and 25 yr bonds...so assuming he had all of it in A shares.. that is only $37K in production vs if he was to annuitize half of his book that would be $75K in production(7.5Million at 1.0%), but he keeps missing the point of dead assets..
[/quote] Not to derail this extremely intriguing thread, but this brings up a good point. B24 and others have stated that they refuse to go indy with too few assets; however, a person coming from Jones will likely have a book that consists mostly of dead assets, and therefore the amount they take with them shouldn't be THAT big a factor into whether a move to independence will be successful. After all, most Jonesies spend most of each month chasing new money anyway, which is what they'll do as an indy with twice the payout. On the other hand, a guy at a wirehouse with a highly annuitized book is a TOTALLY different situation..
[quote=Borker Boy][quote=Squash1]
I was trying explain "dead assets" to a friend of mine who just went indy from Jones.. He was so happy he xfered $15Million to his new place, but he kept telling them "Nothing will change about your investments". They are all in A shares and 25 yr bonds...so assuming he had all of it in A shares.. that is only $37K in production vs if he was to annuitize half of his book that would be $75K in production(7.5Million at 1.0%), but he keeps missing the point of dead assets..
[/quote] Not to derail this extremely intriguing thread, but this brings up a good point. B24 and others have stated that they refuse to go indy with too few assets; however, a person coming from Jones will likely have a book that consists mostly of dead assets, and therefore the amount they take with them shouldn't be THAT big a factor into whether a move to independence will be successful. After all, most Jonesies spend most of each month chasing new money anyway, which is what they'll do as an indy with twice the payout. On the other hand, a guy at a wirehouse with a highly annuitized book is a TOTALLY different situation. [/quote]Isn't the idea that you take your dead assets, go indy and move them into fee-based accounts?
I would not do what the guy in this example did, tell them that nothing would change with their investments. If price is an issue then you probably do not want them as clients going forward anyway.
Once again, I guess we should agree to disagree. It would be interesting to read what others think about our "banter."
You might think the system is flawed, but it works...Fortunately for thousands of guys like me around the country (and world) we have received bonuses, have LP, and go on trips. Thousands of guys like you have received bonuses. A small percentage of FA's have actually had bonuses that equal 10-20% of comp. Because they would be in Seg 5. How many in your region? In a seasoned region like my old region, there were 6-8 out of 50. Vets are not leaving. So, again, what's your point? The only reason I care to continue this with you is to illustrate the hypocrisy. A seg 3 broker (which I think you are) can be profitable and receive a bonus, but its peanuts. It might be a couple of hundred bucks to maybe a 1K paid three times a year. So if you net 80K before out of pocket expenses , and you receive 3K in bonus you are lucky if its 3-5% of comp. Again, technically you are correct, you are bonusable, and you are part of "thousands of brokers", as you say. And as far as Vets leaving...I would surmise that some might consider other opportunities if the GP's continue to make their dough and the really profitable FA's are left out. Those are the ones who are paying your bond interest (LP)and funding growth for the owners. What's your point? Why do you care? My intent was to illustrate the doublespeak that you continuously bring to the forum.[quote=footsoldier]I started from scratch in 1997. I ended with 44M under management when I left in 06. I was told I was a star…I earned LP…and now I am at 28M
[/quote] If you were a star, then I was a rock star. Looks I started just after you, left just before you with over 60MM. Today I am at 85MM--give or take. Y/Y asset level is almost identical. I took a few hits, but raised a lot of cash and bought a lot of puts in late '07 and early '08. I have added a lot of clients fleeing wirehouses in the last year--especially the last 5-6 months. Over $3 million new in April alone. Some of you will call BS, and that's fine. But, it's true.Spiff–
Can you buy puts yet? Or, is that "risky"? Is it any more risky than say, uh, standing still while your portfolio shrinks by 30-40%? I think that's a fair quesiton. Maybe you should pose it to Mr. Weddle for the next weekly column.Sooth-
Udaman. I don't feel like a star,and didnt' then. How much in recurring revenue? Growing assets in this marketplace. Tell us what you are doing, finally someone who is growing their business!!!Im not trying to start an argument, but you are on a forum with guys (I am not one of them) who have been in this business 10 years and you, 100 days in, are spouting off irrelevant commentary. Ever hear the quote, "Shut the f**k up for once and you might learn something" ?I just meant I have the numbers for Seg 2 almost Seg 3. I haven’t even reached Seg 1 “Officially” yet.
Ron-
Stop trying to start an argument. I never once said I had all the answers, and until I make that comment stop trying to use “un said words” in the form of a punch-line to try and be little me because I am new. Just because I am new, does not mean I don’t know ANYTHING. I obviously know SOMETHING, according to my performance. I am just giving you what I see. I see vets doing the same thing they have done in good times, and it’s not working. Thats why so many are below the line and I’m finding it easy to find accounts. It’s because I’m prospecting and spending quality time with my clients/prospects and most vet’s don’t want to. And for the argument that “we don’t have time to see them all”. I limit my clients/prospects to a certain number and each are qualified in certain ways based on amount invested or potential investment. That way there is never an excuse that there isn’t time to spend with these people.
.
Do you think a major leaguer asks a single A player how his swing looks? No. So these guys, 50mil AUM and 5+ years in the business don't give a flying crap about how you "do plenty of things for your clients that don't pay you anything." Get a clue.
Give him a few more months. Failure rate in this business has never been higher. Maybe he’ll be “Gone With the ‘wind3574’”. Go back to the mall and explain to me the benefits of going one level up on my cell phone plan.
[quote=Soothsayer]Spiff–
Can you buy puts yet? Or, is that "risky"? Is it any more risky than say, uh, standing still while your portfolio shrinks by 30-40%? I think that's a fair quesiton. Maybe you should pose it to Mr. Weddle for the next weekly column.[/quote]It's a fair question and the answer is and will probably always be no.
I think there are a lot of people at Jones who would think and act the same way you do. Selling puts or doing covered calls can be a great strategy if you find someone willing to do it. No doubt you get some clients that see the value in what you do. Great. There are lots of people out there.
However, for each of the people out there doing options to hedge a portfolio, there are dozens doing it to try to game the system and make a quick buck. As far as I know you can't get a license that just allows you to sell puts and nothing else. There might not even be an options trading system out there that will put those kind of limitations on a system. So, how do you monitor all of it? More manpower, more licensing, more money in the litigation war chest? From what I know of Jones' history, it was a decision that was made a long time ago and they aren't changing it.
[quote=footsoldier]
Once again, I guess we should agree to disagree. It would be interesting to read what others think about our “banter.”
You might think the system is flawed, but it works...Fortunately for thousands of guys like me around the country (and world) we have received bonuses, have LP, and go on trips. Thousands of guys like you have received bonuses. A small percentage of FA's have actually had bonuses that equal 10-20% of comp. Because they would be in Seg 5. How many in your region? In a seasoned region like my old region, there were 6-8 out of 50. - We've got half a dozen guys at Seg 5. We've got a ton doing high Seg 4 numbers. And that category is growing rapidly.Vets are not leaving. So, again, what's your point? The only reason I care to continue this with you is to illustrate the hypocrisy. A seg 3 broker (which I think you are) can be profitable and receive a bonus, but its peanuts. It might be a couple of hundred bucks to maybe a 1K paid three times a year. So if you net 80K before out of pocket expenses , and you receive 3K in bonus you are lucky if its 3-5% of comp. Again, technically you are correct, you are bonusable, and you are part of "thousands of brokers", as you say. - And...Where's the hypocrisy? It is what it is. There's no hypocrisy. The OWNERS are getting paid. The EMPLOYEES aren't getting a bonus. Again, where's the hypocrisy? Maybe I'm just dense, but when I signed on to be an FA I got told that I would get a bonus if my office was profitable enough and if the firm was profitable enough. I knew there would be times when the firm wouldn't be profitable. I also knew it would take years for my bonuses to be substantial enough to do anything other than to take my wife out for a nice dinner on a trip. I see the GPs making money from the firm. Again, OWNERS vs EMPLOYEES. Fortunately for me I happen to be an owner also.
And as far as Vets leaving...I would surmise that some might consider other opportunities if the GP's continue to make their dough and the really profitable FA's are left out. Those are the ones who are paying your bond interest (LP)and funding growth for the owners. - In reality it's all the little FAs out there who are just beyond location gain, but not yet profitable that pay for all that growth.
What's your point? Why do you care? My intent was to illustrate the doublespeak that you continuously bring to the forum. - You just keep believing what you want and I'll believe what I want.
[/quote]
Amen Ron. Look, I’ll apologize right now at wasting space here with what may seem to be unproductive flamethrowing but Windy and Spiffy puhleeeeeeeese S.T.F.U.!!!
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Here we have Windy, a Spiffy wanabee wasting space here giving advice while not quite yet “officially” segment one??? Spiff (1750+ posts and not even a Joneser LP!) could so easily be a top producer on GP track if he merely dialed the phone and worked his business and helped clients they way he helps to dilute and detract from possible good information on this board.
Your eyes are rolled to the back of your head as you pleasure nobody but yourself yourself creating investment industry amateur porn. Zip up guys. Open your eyes. Open your ears. But SHUUUUUUUUUTTTTT TFU!!!
I agree completely with your comments on Windy, but Spiff is fine and I believe he is an LP.
.
whata douche.
[quote=Ron 14]
Do you think a major leaguer asks a single A player how his swing looks? No. So these guys, 50mil AUM and 5+ years in the business don’t give a flying crap about how you “do plenty of things for your clients that don’t pay you anything.” Get a clue.
You totally just proved my point. If I don't know sh*t, why are vets in my region asking me for advice on my process and how to get the numbers I am? Why am I getting wires from Weddle praising my performance? Look I am not going to go into one of these "Windy's lying arguments", but just because I am only 4 months out, does in no way mean I don't have a few good things to tell to even a Vet. Everyone can use advice from EVERYONE at certain times.
No a Major Leaguer doesn't ask a Single A Player about his swing, thats why the single A player takes his spot once he gets his process down, regardless of how long the Major Leaguer has been around.
[/quote]
Wind - I'm trying to show some support here. But please quit beating your own chest. We know you are doing well. And you will get the praise you deserve - from your peers (not just at Jones, but in other aspects of the industry) if you keep getting things done for the next few years.
A newbie is a newbie now matter what. You have earned my respect (and I believe some others - although some people will still think you are full of crap) as a fast starter, but please don't think that translates into sustainable growth.
I wish you all the luck in the world, but man, ease up a little.
Everybody likes hearing success stories, just not "I'm so much better than everyone in my region's stories". And people come to me because I'm the greatest.
Sorry to hijack everyones thread, but I think we've gone a little off topic.
[quote=Moraen] [quote=wind3574] [quote=Ron 14]
Do you think a major leaguer asks a single A player how his swing looks? No. So these guys, 50mil AUM and 5+ years in the business don't give a flying crap about how you "do plenty of things for your clients that don't pay you anything." Get a clue.
[/quote]You totally just proved my point. If I don't know sh*t, why are vets in my region asking me for advice on my process and how to get the numbers I am? Why am I getting wires from Weddle praising my performance? Look I am not going to go into one of these "Windy's lying arguments", but just because I am only 4 months out, does in no way mean I don't have a few good things to tell to even a Vet. Everyone can use advice from EVERYONE at certain times.
No a Major Leaguer doesn't ask a Single A Player about his swing, thats why the single A player takes his spot once he gets his process down, regardless of how long the Major Leaguer has been around.
[/quote]
Wind - I'm trying to show some support here. But please quit beating your own chest. We know you are doing well. And you will get the praise you deserve - from your peers (not just at Jones, but in other aspects of the industry) if you keep getting things done for the next few years.
A newbie is a newbie now matter what. You have earned my respect (and I believe some others - although some people will still think you are full of crap) as a fast starter, but please don't think that translates into sustainable growth.
I wish you all the luck in the world, but man, ease up a little.
Everybody likes hearing success stories, just not "I'm so much better than everyone in my region's stories". And people come to me because I'm the greatest.
Sorry to hijack everyones thread, but I think we've gone a little off topic.
[/quote] +1
[quote=Juck Phones]
Amen Ron. Look, I’ll apologize right now at wasting space here with what may seem to be unproductive flamethrowing but Windy and Spiffy puhleeeeeeeese S.T.F.U.!!!
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Here we have Windy, a Spiffy wanabee wasting space here giving advice while not quite yet “officially” segment one??? Spiff (1750+ posts and not even a Joneser LP!) could so easily be a top producer on GP track if he merely dialed the phone and worked his business and helped clients they way he helps to dilute and detract from possible good information on this board.
Your eyes are rolled to the back of your head as you pleasure nobody but yourself yourself creating investment industry amateur porn. Zip up guys. Open your eyes. Open your ears. But SHUUUUUUUUUTTTTT TFU!!!
[/quote] First, welcome to the forum. Second, go away. To set the record straight I am a LP. Have been for about 10 years now. As to your dial the phone instead of post here...there's a bit of wisdom in that statement. Are you my RL?First, welcome to the forum. Second, go away
For the record, a fresh perspective is what this forum needs. Spiff, you got your LP(because of your dedication to the firm) not your production as an FA. If I were a GP, and knew of your massive communication skills (3X my forum experience) I would get you in front of groups of FA's or videos so you could spread the word of how awesome EDJ is to the troops. You are wasting your talents helping clients when you could be helping the firm. Imagine what would happen to your production if you spent the time marketing rather than defending the firm. I only respond on these forums at home prior to coming to the office or after I have hit my daily goal, which I define as identifying at least 500K of new assets that I had no idea existed. I imagine your goal is to respond at least 3 times a day. Are you moving anywhere close to seg 4 like others in your region?I don’t have a goal for responding. I am moving my business in the direction I want. And I choose to spend my time at home with my family rather than with anonymous people on a message board.
If you could pass along to whatever GPs you think would listen, I'd love to have a job where the only thing I do is tell everyone what a great company I work for. However, I think they'd pay me exactly what they pay me now to do the same thing.[quote=iceco1d]I’m curious about something here - not being a d***, just genuinely curious…
The wires have 40% payouts - maybe a tade higher for big producers. Heck, now wires have payouts in the 25% range for people in the "penalty box" don't they? Wires offer benefits. EDJ offers benefits. Both have 401Ks. EDJ has no penalty box, similar benefits package...why are they "ripping off" their FAs, and the wires aren't/weren't? Heck, at least at EDJ you have some type of change to become an LP or GP...at least you HAVE a profitability bonus. I guess being an outsider, I'm having trouble seeing how EDJ is that much different than any of the other EMPLOYEE MODEL firms.Yeah, wires had higher salary for a longer period of time. Maybe slightly better benefits? Better technology and broader product offering. Whoopy. What's the big difference? [/quote] ICE, very insightful. And I would argue that the technology is now on par. I am sure Foot will respond with something about the LP's and GP's taking all our money. How all the profits should go to the lowly producers, not the owners and higher producers. And how Jones lied and deceived everyone when they hired them, since if not EVERYONE can be a successful top producer and LP, that they have been conned into joing the firm, thinking that profit bonuses and LP were somehow guaranteed. Run Foot, Run.
Thanks for the encouragement. Where would I run? Certainly not back to your firm. Edward Jones is a great place to learn how to prospect, learn about a p/l and then move. Everybody's reasons for leaving are different. Mine was I wanted to choose how and when I wanted to slow down. And for some crazy reason I wanted my hard work to somehow work its way down to my kids. And at Jones it just seemd really difficult to accomplish that.
Then there is the many options for clients that Jones chose to stay away from. I felt I knew what was best for my clients and I wanted all options available. At the time Bachman and then Hill were against fee based programs.
I know I am not allowed to compare indy to Jones (unless it furthers B24 or Spiffs soapbox), I realized I could reap the benefits I was paying for. Now things apparently are different. You go boys. See you at the finish line.
[quote=iceco1d]I’m curious about something here - not being a d***, just genuinely curious…
The wires have 40% payouts - maybe a tade higher for big producers. Heck, now wires have payouts in the 25% range for people in the "penalty box" don't they? Wires offer benefits. EDJ offers benefits. Both have 401Ks. EDJ has no penalty box, similar benefits package...why are they "ripping off" their FAs, and the wires aren't/weren't? Heck, at least at EDJ you have some type of change to become an LP or GP...at least you HAVE a profitability bonus. I guess being an outsider, I'm having trouble seeing how EDJ is that much different than any of the other EMPLOYEE MODEL firms.Yeah, wires had higher salary for a longer period of time. Maybe slightly better benefits? Better technology and broader product offering. Whoopy. What's the big difference? [/quote] I think the scorn comes from the fact that when you are at Jones, you are told it is BETTER than being at a wirehouse, and BETTER than being Indy. Expectations are set so high that once people realize it is not vastly superior, and in many ways about the same as a wire, and definitely no better than being Indy, with lots of kool-aid culture (whether you participate or not), you feel a little schmucked.
[quote=LuvIndy][quote=iceco1d]I’m curious about something here - not being a d***, just genuinely curious…
The wires have 40% payouts - maybe a tade higher for big producers. Heck, now wires have payouts in the 25% range for people in the "penalty box" don't they? Wires offer benefits. EDJ offers benefits. Both have 401Ks. EDJ has no penalty box, similar benefits package...why are they "ripping off" their FAs, and the wires aren't/weren't? Heck, at least at EDJ you have some type of change to become an LP or GP...at least you HAVE a profitability bonus. I guess being an outsider, I'm having trouble seeing how EDJ is that much different than any of the other EMPLOYEE MODEL firms.Yeah, wires had higher salary for a longer period of time. Maybe slightly better benefits? Better technology and broader product offering. Whoopy. What's the big difference? [/quote] I think the scorn comes from the fact that when you are at Jones, you are told it is BETTER than being at a wirehouse, and BETTER than being Indy. Expectations are set so high that once people realize it is not vastly superior, and in many ways about the same as a wire, and definitely no better than being Indy, with lots of kool-aid culture (whether you participate or not), you feel a little schmucked. [/quote] I have to say...I've heard this a bunch of times...but at no time was i EVER told that EDJ is Better than being at a wirehouse or Better than being indy. I WAS told that no one model is right for everyone, and the visiting vets and ATLs WOULD say that the Jones model was best FOR THEM. If anyone says they were ever told in training that Jones was the best and only model that worked, I would call BS...or I would say that individual teaching them should be sh*tcanned because that is not the way it has been taught to me. I've heard Weddle himself say that the Jones Model/Culture is not for everyone! Everytime someone (usally one of the haters) say that it makes me ill...because it is a downright lie! I guess the gist of it is...that no place is perfect, not Jones, not Indy...it's a matter of finding the right fit at the right time!
[quote=footsoldier]
Thanks for the encouragement. Where would I run? Certainly not back to your firm. Edward Jones is a great place to learn how to prospect, learn about a p/l and then move. Everybody's reasons for leaving are different. Mine was I wanted to choose how and when I wanted to slow down. And for some crazy reason I wanted my hard work to somehow work its way down to my kids. And at Jones it just seemd really difficult to accomplish that.
Then there is the many options for clients that Jones chose to stay away from. I felt I knew what was best for my clients and I wanted all options available. At the time Bachman and then Hill were against fee based programs.
I know I am not allowed to compare indy to Jones (unless it furthers B24 or Spiffs soapbox), I realized I could reap the benefits I was paying for. Now things apparently are different. You go boys. See you at the finish line.
[/quote] I could not agree with you more. I was not as fast a starter as you were at Jones but that is for another discussion. I like the idea that rather than waiting for someone in leadership to smile down on me and invite me to take my money and place it with them and let them return to me interest on my money in a illliquid investment, I can actually enjoy all of the profits that I have earned. I am thankful that I was able to think for myself and actually listen to people like Indyone,soothsayer and footsoldier. I also appreciate the fact that I have several friends outside and inside Jones. The recurring theme is that everything at Jones is better and more ethical than everything outside which is simply not the case. If I have a grudge it is this, I was promised that I would make at least 40% of the revenue that I brought in. It is quite obvious to me that that is not nor has ever been the case. Case in point varaible annuities and fixed income trades. I am thankful that they gave me my start in the business and they like me have lived up to our agreement. I like having technology and actually being able to use it.....[quote=Hey Kool-Aid] [quote=LuvIndy][quote=iceco1d]I’m curious about something here - not being a d***, just genuinely curious…
The wires have 40% payouts - maybe a tade higher for big producers. Heck, now wires have payouts in the 25% range for people in the “penalty box” don’t they?
Wires offer benefits. EDJ offers benefits. Both have 401Ks.
EDJ has no penalty box, similar benefits package…why are they “ripping off” their FAs, and the wires aren’t/weren’t?
Heck, at least at EDJ you have some type of change to become an LP or GP…at least you HAVE a profitability bonus.
I guess being an outsider, I’m having trouble seeing how EDJ is that much different than any of the other EMPLOYEE MODEL firms.
Yeah, wires had higher salary for a longer period of time. Maybe slightly better benefits? Better technology and broader product offering. Whoopy. What’s the big difference?
[/quote]
I think the scorn comes from the fact that when you are at Jones, you are told it is BETTER than being at a wirehouse, and BETTER than being Indy. Expectations are set so high that once people realize it is not vastly superior, and in many ways about the same as a wire, and definitely no better than being Indy, with lots of kool-aid culture (whether you participate or not), you feel a little schmucked.
[/quote]
I have to say…I’ve heard this a bunch of times…but at no time was i EVER told that EDJ is Better than being at a wirehouse or Better than being indy. I WAS told that no one model is right for everyone, and the visiting vets and ATLs WOULD say that the Jones model was best FOR THEM. If anyone says they were ever told in training that Jones was the best and only model that worked, I would call BS…or I would say that individual teaching them should be sh*tcanned because that is not the way it has been taught to me. I’ve heard Weddle himself say that the Jones Model/Culture is not for everyone! Everytime someone (usally one of the haters) say that it makes me ill…because it is a downright lie! I guess the gist of it is…that no place is perfect, not Jones, not Indy…it’s a matter of finding the right fit at the right time!
[/quote]
Hey Kool-Aid - I think you are one of the few that were told this. My last regional meeting went something like this, “There is no better time to be in this business, and the best place to be in this business is at Edward Jones”. That is verbatim what Weddle put out to the Area Partners and RL’s.
How about the omission from the troops that the GP's owned a piece of Hartford Mutual Funds for almost 10 years...
We were highly encouraged from 1998-2002 to transfer all "non-preferreds" to Hartford when they had the NAV program. All along they were receiving an income interest as a beneficial owner (in addition to the higher 12b-1) that they split 60/40. We douldn't figure out why Jones made Hartford a preferred when they had little if any track record. Spiff and B24 weren't FA's at that time. That was another example of the integrity of Jones. Here I go again, with reality not a conspiracy theory. Silly me...Where does the 35 bps trail at Franklin Templeton go on A shares at Mutual series…25bps on your commission statement and where I wonder does the 10bps go???
Alright Kool-Aid, how do you 'splain the fact that EVERY year at our regional meetings they have former ML guys stand up and talk about how awful things were on the "dark side" and how unethical EVERYONE is at the wirehouses?
One of the reasons used to be because they use C shares and wrap accounts, but I noticed that after Advisory Solutions rolled out, that reason mysteriously disappeared from their Top 10 Reasons Why Wirehouse Brokers Are Satan's Spawn list. After they're finished, the regional leader stands up and tells us that independence isn't all it's cracked up to be due to the outrageous expense and headache of running a business, paying all the associated fees, rent, health insurance, E&O insurance, etc. We get this crap three times a year, every year.We get the “rah, rah” Jones, but none of the “top 10 reasons why wirehouse brokers are satan’s spawn list” in my region. But I guess foot, et al. would rather we sit around and complain about the minor details rather than be proud of where we work. Do the other brokerage firms really not talk about their positive attirubtes to help keep morale up?
I’ll always default to what Bachmann said, “Is our way the only right way? No, but it is one right way.”
That Hartford thing, if true, makes me sick to my stomach
[quote=Moraen] [quote=Hey Kool-Aid] [quote=LuvIndy][quote=iceco1d]I’m curious about something here - not being a d***, just genuinely curious…
The wires have 40% payouts - maybe a tade higher for big producers. Heck, now wires have payouts in the 25% range for people in the "penalty box" don't they?
Wires offer benefits. EDJ offers benefits. Both have 401Ks.
EDJ has no penalty box, similar benefits package...why are they "ripping off" their FAs, and the wires aren't/weren't?
Heck, at least at EDJ you have some type of change to become an LP or GP...at least you HAVE a profitability bonus.
I guess being an outsider, I'm having trouble seeing how EDJ is that much different than any of the other EMPLOYEE MODEL firms.
Yeah, wires had higher salary for a longer period of time. Maybe slightly better benefits? Better technology and broader product offering. Whoopy. What's the big difference?
[/quote]
I think the scorn comes from the fact that when you are at Jones, you are told it is BETTER than being at a wirehouse, and BETTER than being Indy. Expectations are set so high that once people realize it is not vastly superior, and in many ways about the same as a wire, and definitely no better than being Indy, with lots of kool-aid culture (whether you participate or not), you feel a little schmucked.
[/quote]
I have to say...I've heard this a bunch of times...but at no time was i EVER told that EDJ is Better than being at a wirehouse or Better than being indy. I WAS told that no one model is right for everyone, and the visiting vets and ATLs WOULD say that the Jones model was best FOR THEM. If anyone says they were ever told in training that Jones was the best and only model that worked, I would call BS...or I would say that individual teaching them should be sh*tcanned because that is not the way it has been taught to me. I've heard Weddle himself say that the Jones Model/Culture is not for everyone! Everytime someone (usally one of the haters) say that it makes me ill...because it is a downright lie! I guess the gist of it is...that no place is perfect, not Jones, not Indy...it's a matter of finding the right fit at the right time!
[/quote]
Hey Kool-Aid - I think you are one of the few that were told this. My last regional meeting went something like this, "There is no better time to be in this business, and the best place to be in this business is at Edward Jones". That is verbatim what Weddle put out to the Area Partners and RL's.
[/quote] I honestly haven't heard that....but....would you expect them to say the best place to be is Indy??? I'm sure Weddle as well as most GPs and RLs do believe that Jones is the Best firm to be with...I don't blame them. And at this time I feel it is the Best place to be FOR ME...I will listen close at Summer Regional and if they say it...it won't surprise me because every company I ever worked for did say they were the best. I'm sure LPL doesn't tell people at their trips/meetings/whatever, that RayJay is the best?!?
[quote=Borker Boy]
Alright Kool-Aid, how do you 'splain the fact that EVERY year at our regional meetings they have former ML guys stand up and talk about how awful things were on the "dark side" and how unethical EVERYONE is at the wirehouses?
One of the reasons used to be because they use C shares and wrap accounts, but I noticed that after Advisory Solutions rolled out, that reason mysteriously disappeared from their Top 10 Reasons Why Wirehouse Brokers Are Satan's Spawn list. After they're finished, the regional leader stands up and tells us that independence isn't all it's cracked up to be due to the outrageous expense and headache of running a business, paying all the associated fees, rent, health insurance, E&O insurance, etc. We get this crap three times a year, every year. [/quote] We never have had anyone stand up and tell how horrible it is elsewhere. The advisory thing I will give you...when I started, in training they talked of how "A" shares were cheapest for "our" niche of client..i.e. long term serious investor blah blah blah...and then Advisory Solutions was introduced the following summer...I actually give Weddle et al credit for realizing it was giving our clients a choice how they want to pay us. And it isn't a bad product to boot...I will be happier when they allow us to use equities in there as well...but as it is ....it's not bad. Like I have said in just about every post I've made...Jones is far from perfect, but seeing what my buddies at UBS, BAI/Merrill and others are going through, i'm glad i'm here. Someday when I have a bigger book, Indy may be the way to go...but until then...no place I'd rather be![quote=Hey Kool-Aid][quote=Borker Boy]
Alright Kool-Aid, how do you 'splain the fact that EVERY year at our regional meetings they have former ML guys stand up and talk about how awful things were on the "dark side" and how unethical EVERYONE is at the wirehouses?
One of the reasons used to be because they use C shares and wrap accounts, but I noticed that after Advisory Solutions rolled out, that reason mysteriously disappeared from their Top 10 Reasons Why Wirehouse Brokers Are Satan's Spawn list. After they're finished, the regional leader stands up and tells us that independence isn't all it's cracked up to be due to the outrageous expense and headache of running a business, paying all the associated fees, rent, health insurance, E&O insurance, etc. We get this crap three times a year, every year. [/quote] We never have had anyone stand up and tell how horrible it is elsewhere. The advisory thing I will give you...when I started, in training they talked of how "A" shares were cheapest for "our" niche of client..i.e. long term serious investor blah blah blah...and then Advisory Solutions was introduced the following summer...I actually give Weddle et al credit for realizing it was giving our clients a choice how they want to pay us. And it isn't a bad product to boot...I will be happier when they allow us to use equities in there as well...but as it is ....it's not bad. Like I have said in just about every post I've made...Jones is far from perfect, but seeing what my buddies at UBS, BAI/Merrill and others are going through, i'm glad i'm here. Someday when I have a bigger book, Indy may be the way to go...but until then...no place I'd rather be![/quote] Better late than never![quote=noggin] I like the idea that rather than waiting for someone in leadership to smile down on me and invite me to take my money and place it with them and let them return to me interest on my money in a illliquid investment, I can actually enjoy all of the profits that I have earned. [QUOTE]
First, LP is not illiquid. You can sell it back at any time. Second, you are offered LP and then have to accept it. Just like when we call our clients and tell them we have an investment idea for them. They can choose to buy or pass. I find it humorous when people who never had LP talk about how bad an investment LP is. You get to enjoy all of the profits you earn? You have a 100% payout? That's a sweet deal. I thought that you you had to pay LPL or RayJay to be your custodian. Guess I learned something today.noggin “conveniently” discusses the interest on LP but happens to forget the profit distributions yet mentions his own “profits” of 100%. For someone who rails against Jones for what he sees as ethical lapses, he seems to have a few of his own. noggin don’t be a Tim Geithner and lecture us on taxs cheats.
[quote=Spaceman Spiff][quote=noggin] I like the idea that rather than waiting for someone in leadership to smile down on me and invite me to take my money and place it with them and let them return to me interest on my money in a illliquid investment, I can actually enjoy all of the profits that I have earned. [QUOTE]
First, LP is not illiquid. You can sell it back at any time. Second, you are offered LP and then have to accept it. Just like when we call our clients and tell them we have an investment idea for them. They can choose to buy or pass. I find it humorous when people who never had LP talk about how bad an investment LP is. You get to enjoy all of the profits you earn? You have a 100% payout? That's a sweet deal. I thought that you you had to pay LPL or RayJay to be your custodian. Guess I learned something today. [/quote]I would readily admit that I didn't ever have the opportunity to be offered LP. You miss what I was saying so let me try again. I consider an investment illiquid that is not publicly traded in other words that I could not sell and settle within 3 days. With that as a consideration, LP is illiquid.
I said that I could enjoy all of the profits that I have earned not profits on all my revenue. There is a significant difference there. I would rather have a 100% interest in the profits of my enterprise rather than the hope of sharing in profits of an overall enterprise. Let's not even begin to talk about being a W-2 employee at Jones or an actual business owner as I am today. I hope that you stretched before you jumped to all those conclusions, you probable pulled a muscle.....
That Hartford thing, if true, makes me sick to my stomach
Ask Spiff. He was probably at the home office when this came down. We found out because Jones like all firms is required to disclose their back door arrangements. It seemed odd that Hartford paid 70M to the partnership and American was around 10M in revenue sharing. If you read the fine print, Hartford bought out the partnerships interest at a premium. The interesting thing is its is similar to LP in that Jones owned an income interest for all those years. Do you think they got back just their principle as an LP would when cashed out? I am waiting for the spin...[quote=noggin] [quote=Spaceman Spiff][quote=noggin] I like the idea that rather than waiting for someone in leadership to smile down on me and invite me to take my money and place it with them and let them return to me interest on my money in a illliquid investment, I can actually enjoy all of the profits that I have earned. [QUOTE]
First, LP is not illiquid. You can sell it back at any time. Second, you are offered LP and then have to accept it. Just like when we call our clients and tell them we have an investment idea for them. They can choose to buy or pass. I find it humorous when people who never had LP talk about how bad an investment LP is. You get to enjoy all of the profits you earn? You have a 100% payout? That's a sweet deal. I thought that you you had to pay LPL or RayJay to be your custodian. Guess I learned something today. [/quote]I would readily admit that I didn't ever have the opportunity to be offered LP. You miss what I was saying so let me try again. I consider an investment illiquid that is not publicly traded in other words that I could not sell and settle within 3 days. With that as a consideration, LP is illiquid.
I said that I could enjoy all of the profits that I have earned not profits on all my revenue. There is a significant difference there. I would rather have a 100% interest in the profits of my enterprise rather than the hope of sharing in profits of an overall enterprise. Let's not even begin to talk about being a W-2 employee at Jones or an actual business owner as I am today. I hope that you stretched before you jumped to all those conclusions, you probable pulled a muscle.....
[/quote] Strange, but I call things illiquid when you can't sell them quickly. T+3 hasn't ever been the deciding factor in my mind. No big deal, you didn't have any anyway. It's a semantics discussion. Congrats on owning your own business. I hope it works out for you.
[quote=footsoldier]
That Hartford thing, if true, makes me sick to my stomach
Ask Spiff. He was probably at the home office when this came down. We found out because Jones like all firms is required to disclose their back door arrangements. It seemed odd that Hartford paid 70M to the partnership and American was around 10M in revenue sharing. If you read the fine print, Hartford bought out the partnerships interest at a premium. The interesting thing is its is similar to LP in that Jones owned an income interest for all those years. Do you think they got back just their principle as an LP would when cashed out? I am waiting for the spin...[/quote] I was at the home office when this all came out. I don't remember much about the details. I know that Jones had an interest in Hartford that when they sold got $70MM out of the deal that hit the books. That much you've already put out there. I remember Hartford had an NAV transfer program that nobody used all that much. The big talk was about the revenue sharing. I remember it being kind of a sleazy, used car salesman, type of vibe that I was never comfortable with. I know of one person down in Texas, who is no longer with the firm, who tried to make a wholesale change from American to Hartford simply because of the revenue sharing dollars. At his level it would have substantially increased his bonuses. About the time that was getting figured out by some other guys like that one Jones changed the way our P&L gets credited in regards to revenue sharing. From then on, it really didn't matter what company you sold. There was a clear conflict of interest and it got fixed. I hope that Jones made a ton of money on that deal. I hope that Hartford bought out Jones' interest at a premium. If they did it was a good business decision. If they didn't then maybe not so much.In all fairness, it wasn’t just Hartford that had the NAV transfer program. It was every family excluding American. So it wasn’t EDJ pushing the switch to Hartford anymore than it was to LA, VK or any of the others.
This was more than just your run of the mill conflict of interest Mr. Spiff. And it got fixed coincidentally at the time when revenue sharing disclosures were required.
My recollection was that the partnerhip didn't pay for the "income interest" (as you would LP) but it was in consideration of "consultant work". That was doublespeak for access to thousands of FA who relied on Uncle Milty (now retired ) to provide objective due diligence when recommending fund families into the preferred status. Oh the FA you are referring to currently is one of the highest producing brokers in the nation at at another indy house. I recall, again in the field, several conference calls, videos and meetings about the NAV transfer programs and why it made sense to move clients out of non-preferreds to Hartford. The rep you are referring to was actively involved in communicating that message to the troops.Just the fact that they were encouraging transfers from non-preferreds to preferreds at NAV is disturbing. Especially when the non-preferreds were probably better than the crap offered by Putnam, Federated, Hartford etc.
Ron…Ron…Ron…stop it. They never said move all your money from the 3000 other mutual funds to our preferred seven. They just said it was good for the company and good for LP returns and of course GP returns. They would never tell the best sales force in the world to move money directly…but maybe, just maybe…with you know, a wink and a smile. Secret code…
[quote=footsoldier]This was more than just your run of the mill conflict of interest Mr. Spiff. And it got fixed coincidentally at the time when revenue sharing disclosures were required.
My recollection was that the partnerhip didn't pay for the "income interest" (as you would LP) but it was in consideration of "consultant work". That was doublespeak for access to thousands of FA who relied on Uncle Milty (now retired ) to provide objective due diligence when recommending fund families into the preferred status. Oh the FA you are referring to currently is one of the highest producing brokers in the nation at at another indy house. I recall, again in the field, several conference calls, videos and meetings about the NAV transfer programs and why it made sense to move clients out of non-preferreds to Hartford. The rep you are referring to was actively involved in communicating that message to the troops.[/quote] I'm well aware of where that FA now works and the real reason he left Jones. He may be the biggest producer in the country, but he can still act like a slick used car saleman. I wasn't in the field then, so I wasn't a part of those messages you referred to. I would assume that there would have been some discussion about if the non-preferreds that were being transferred were good funds, then don't NAV them, but rather move them in-kind. Of course your memory banks probably didn't store that info. I do recall the NAV transfer programs, but like was mentioned before, I also recall every other preferred fund having the same thing. Just FYI, Hartford has a 529 NAV program right now. So, was it only bad back then, or is it still bad now? The question is, why does that matter now? Today?I would assume that there would have been some discussion about if the non-preferreds that were being transferred were good funds, then don’t NAV them, but rather move them in-kind. Of course your memory banks probably didn’t store that info.
Spiff- Getting a little testy aren't you? My memory isn't clouded...just jaded according to you. I speak the truth from experience, from being there. Clearly your glasses have fogged over. They encouraged us to consider consolidating to preferreds for some very plausible reasons, not the least of which is we got paid better. They never told us about the conflict with Hartford. We only found out years later as I said earlier.OK. Fair enough. There was a conflict of interest there. I thought we cleared that up a few posts back. I also told you I wasn’t in the field at that time, so I don’ t know what was actually said on any conference calls. However, from my experience in the field, there hasn’t ever been something from the home office that has been a blanket statement you should be using product XYZ. There has always been some sort of verbage about if it makes sense for your clients.
So, I think your memory is as good as our clients. You remember what you want to remember or whatever helps you right now. You are only talking about the relationship with Hartford and about the NAV program with them, but completely ignoring the comment from Hulk about their being NAV programs with the other preferred families also. I'm sure Hartford was the recipient of some of those assets, but more than likely back then it would have been Van Kampen or Lord Abbett, not Hartford. It's only been in the last few years that Hartford has really caught any traction. At least that's the way it is in my region. I'm sure mine isn't much different than any other. So, today - 7- 8 years later- why does that matter? Those conflicts have been vetted and done away with. Why do you continually insist on dredging up things that happened many years ago and pretending like they have any relevance at all today?So, today - 7- 8 years later- why does that matter? Those conflicts have been vetted and done away with. Why do you continually insist on dredging up things that happened many years ago and pretending like they have any relevance at all today?
Are you suggesting that the history of your company doesn't matter? Weddle was there during the Bachman, Hill tenure. And so were many others. You can't have your head in the sand forever. And as much as you chide me for bringing up the dark side, you constantly make feeble arguments that deserve our scrutiny. If you were remotely balanced in your messages...I am at the point now I am astonished at the level of your participation on these forums. Your production must have suffered. For a moment imagine a day without posting...This whole thread smells like sour grapes to me. People whose companies went bankrupt or are kept on life support with tens of billions in taxpayer welfare are questioning Jones’ business model and practices? Please.
You guys single handedly destroyed the *global* economy 4 months ago but you're dredging up 8 year old Jones' issues that have been dealt with? Pot. Kettle. Black.[quote=footsoldier]So, today - 7- 8 years later- why does that matter? Those conflicts have been vetted and done away with. Why do you continually insist on dredging up things that happened many years ago and pretending like they have any relevance at all today?
Are you suggesting that the history of your company doesn't matter? Weddle was there during the Bachman, Hill tenure. And so were many others. You can't have your head in the sand forever. And as much as you chide me for bringing up the dark side, you constantly make feeble arguments that deserve our scrutiny. If you were remotely balanced in your messages...I am at the point now I am astonished at the level of your participation on these forums. Your production must have suffered. For a moment imagine a day without posting...[/quote] I love the assumptions about my production based on the frequency of my postings. As if there is any correlation. I'm not suggesting that the history doesn't matter. I'm suggesting that when an issue has been fixed, it is no longer an issue. History is what it is. It is what got us to where we are, but has no bearing on the future. The regulators said we had an issue with revenue sharing. So now we have to disclose it. There was a possible conflict of interest with Hartford, so we liquidated our partnership stake and resolved it. We didn't have a fee based platform (because of the views of Bachmann and Hill), but when Weddle took over we fixed that. We didn't have a good financial planning set of tools, so we got some of those too. I'm sure there are other things you remember from your history with Jones. And I'm sure you'll bring them up again in the future. Or you'll keep bringing these same ones up again and again and again.... But, I would submit to you that for all of the bad things that you believe Jones did, there are a multitude of good things that Jones does. You, however, choose to ignore those. As for being balanced, like the other gentleman said - Pot. Kettle. Black.[quote=Potential]This whole thread smells like sour grapes to me. People whose companies went bankrupt or are kept on life support with tens of billions in taxpayer welfare are questioning Jones’ business model and practices? Please.
You guys single handedly destroyed the *global* economy 4 months ago but you're dredging up 8 year old Jones' issues that have been dealt with? Pot. Kettle. Black.[/quote] What the hell are you talking about ? Why don't you put Unrealized in front of your member name.Ron, yes, it’s a bit harsh. But his point is well put. Jones has done OK thru this mess, yet we continue to be the target of constant criticism. Yes, some of us defend the firm, to an almost feverish level sometimes (cough, cough, spiff). But it’s hard to blame us considering what has gone on, the fact that we have done OK, the fact that we WORK there, and that we LIKE the firm.
However, I would argue that the *advisors* and the *wealth management units* of all these major banks should not be a reflection of what their corporate parents have done. Seriously. I think Merrill, SB, MS, AGE, WACH, etc. all have fine wealth management divisions/firms whatever you want to call them. And I personally know individuals at most of these firms, that do very good work for their clients. Unfortunately, they have been dragged under by the undertow of their parent firms. I see many of them regularly because of our involvement in local organizations. We talk about what's going on, and frankly, I feel terrible for these guys. Most have been in the industry for years (20-30 in many cases), have a loyal clientele, and now are being dragged through the mud due to no fault of their own. But if you think I am going to sit there and bad-mouth their firms and point out the weaknesses in their firms, you're wrong. So I guess that is where I have a problem sometimes with the constant Jones bashing and the 8-year old news. You never hear me say "Jones is the best, and XYZ firm sucks", or whatever.I have to disagree B24. XYZ does suck.
B24 -You are absolutely correct. Many guys at many firms are just plugging away managing their book of business and had absolutely nothing to do with any of this crap. For Potential to label every guy not at Jones as "single handedly destroying the global economy" is not only wrong it is completely stupid. That is a quote he grabbed right from the media because he can't produce an original thought.
We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients.[quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote] So your 529 class A shares that you paid 5.75% to buy, we're now able to put them in a much better fund family at no cost to you. Oh and by the way for my trouble of moving you out of American Funds/Putnam Funds/etc. I will be getting a 1% commission to put you into this much better fund family.Are you guys joking ?
Wow, I worked for EDJ for 16 years and it was never as bad firm as you make it out to be. I left when Doug Hill took the reigns and you have to admit it that EDJ under Weddle is in much better shape than when Hill left it. I left for family reasons and the ability to offer my clients managed money. Every firm has its good points and bad points. No one is Satan except maybe for Prudential Securities!!
I’ll speak for Spiff here…
"Borker you SOB, quit bringing up the past. Why bring up this bogus stuff from yesterday...its today already. The past is the past....what bad stuff has come out today...huh borker. You got nothin'..."[quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote] Yes, it's so horrible for EDJ to tell us we can move to a better product at NAV AND get paid to make the move. If we just had a firm wide promo on that it was the worst advertised one of my entire career. I didn't even know John Hanc*** had an NAV program like Hartford. And the only reason I knew Hartford had one was because my wholesaler told me. I may have to look at that JH 529 plan a little more. Thanks for the heads up.[quote=bspears]I’ll speak for Spiff here…
"Borker you SOB, quit bringing up the past. Why bring up this bogus stuff from yesterday...its today already. The past is the past....what bad stuff has come out today...huh borker. You got nothin'..."[/quote] That was pretty close. You missed "Borker, why don't you just go ahead and leave. Save my LP some $$."[quote=Borker Boy] We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote]
I didn’t even know that… Where was the promo? That sounds like a good product to sell. I like John Hand-c*** and there annuities. What’s your so called ‘beef’ with them… You should sell some annuities. There good products.
[quote=Spaceman Spiff][quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote] Yes, it's so horrible for EDJ to tell us we can move to a better product at NAV AND get paid to make the move. [/quote] Just wait until one of your analytical clients reads this on their prospectus and gives you a phone call. Then you'll see where the issue lies.[quote=Spaceman Spiff][quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote] Yes, it's so horrible for EDJ to tell us we can move to a better product at NAV AND get paid to make the move. If we just had a firm wide promo on that it was the worst advertised one of my entire career. I didn't even know John Hanc*** had an NAV program like Hartford. And the only reason I knew Hartford had one was because my wholesaler told me. I may have to look at that JH 529 plan a little more. Thanks for the heads up. [/quote] Spiff I know you have been getting pounded and sorry to pile on, but come on, you actually think John Hanc*** offers a better 529 product then what is currently offered? Just say it for what it is, a churning opportunity for FA's.[quote=3rdyrp2] [quote=Spaceman Spiff][quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote]
Yes, it’s so horrible for EDJ to tell us we can move to a better product at NAV AND get paid to make the move. [/quote]
Just wait until one of your analytical clients reads this on their prospectus and gives you a phone call. Then you’ll see where the issue lies.[/quote]
Or better yet, you can do like I do and disclose it at time of sale… Always better to be upfront with your clients… That was it doens’t come back around to bite you. Also it makes them happier clients and so you get more referrals and more of their serious money.
God I love my job!
Miss J
You will actually tell your clients that it will cost them nothing and you will make 1% on the transaction.
How will this be justified? "Look at this hypothetical of the funds that I cherrypicked from the new company to show better results than what you had in the old fund company." This is why we should change.Don’t you have Missouri 529’s?? Or, maybe, they don’t offer revenue sharing or you might get kicked to the side if you try to use the one with a tax benefit for your clients.
Ok Miss Jones…John hand-c*** and beef in the same post. Hmmm…do you do any freelance mentoring?
[quote=Ron 14][quote=Spaceman Spiff][quote=Borker Boy]We just had a firm-wide promo to “inform” FAs they could move their 529s to John Hanc*** at NAV and receive a 1% upfront pop.
I rest assured every night that it was done purely for the benefit of our clients. [/quote] Yes, it's so horrible for EDJ to tell us we can move to a better product at NAV AND get paid to make the move. If we just had a firm wide promo on that it was the worst advertised one of my entire career. I didn't even know John Hanc*** had an NAV program like Hartford. And the only reason I knew Hartford had one was because my wholesaler told me. I may have to look at that JH 529 plan a little more. Thanks for the heads up. [/quote] Spiff I know you have been getting pounded and sorry to pile on, but come on, you actually think John Hanc*** offers a better 529 product then what is currently offered? Just say it for what it is, a churning opportunity for FA's.[/quote] I honestly don't know if they do or not. That's why I said "I may have to look at that JH 529 plan a little more." I know they have a multi-manager fund of funds that I've transferred in, and if they had that in their 529 plan, it might be worth looking into. As far as cost or anything else, I'm clueless as to that particular plan. MO does have the MOST plan. Vanguard runs the no load version and Upromise runs the advisor version, which I've used a few times. It too is a multi manager platform. I've used both American and Hartford's plans too. If I think it warrants a discussion with my clients from a performance standpoint, then I'll certainly have the discussion with them. I would assume they would WANT me to have that talk with them if there was a better product out there. Especially if they can move at NAV.That is crap and as usual, Jones looks at things from a performance standpoint. Performance that cannot be repeated.
Sure they can Ron…chase last years performance…all my do it yourself buddies do it all the time. Spiff, your postings are getting more and more slime ballish and possibly uneducated, just the way GP’s like it. You’re the best spinmaster I’ve come across and believe me, I’ve listened to many. Good job…
Ron - Jones didn't say anything about performance. I did. I actually think there may be some value and better performance in a multi manager product if the company putting together the product knows what they're doing. Hanc*** might. I actually hope that the performance I'd find if I look at it WON'T be repeated. Cause that would suck.
BS - what spin? Is it spin that I said I didn't know anything about the Hanc*** product? I don't mind getting called on something when I'm wrong or when I might need to look at something a little differently (see the thread on Advisory Solutions as an example) but when the only thing I've said is I don't know anything about a product, I don't see how you can call it slimb ballish or uneducated.Don’t you have Missouri 529’s?? Or, maybe, they don’t offer revenue sharing or you might get kicked to the side if you try to use the one with a tax benefit for your clients.
I'm not a CPA and I don't give tax advice, but all 529 plans get the state tax deduction in Missouri.
[quote=Ron 14]
Spiff I know you have been getting pounded and sorry to pile on, but come on, you actually think John Hanc*** offers a better 529 product then what is currently offered? Just say it for what it is, a churning opportunity for FA’s.[/quote]
Okay guys, let step back and have some perspective. How many brokers have substantial assets in 529 plans? We’re going to “churn” what are for the most part less than $10,000 accounts? I don’t have any clients exploiting the estate benefits of 529 plans. They are all putting $100 or so a month into equity funds that are down 25 percent. So for the $40 in net commissions, I hardly see how it makes sense to take an hour for an appt and fill out reams of application/transfer paperwork, unless it makes sense for the client (coughcoughputnam).
Putnam Rocks!
Ok Hulk, I’ll bite…don’t you have a disclosure the client needs to sign if they invest in a 529plan not from their home state?
Hulk, there of plenty of HNW clients who are putting in a 60k deposit to max out the 5 yr gift for grandkids, kids, etc.
bspears - as of last year the answer is no in Missouri.
ron - remember, we’re at EDJ, our clients don’t have a $60k net worth, let alone for a grandchilds 529. Even in your example that in all reality is few and far between, you’re talking about $240 assuming it’s still worth $60k. Trust me, there are better “churning” opportunities out there. Just ask rankstocks.
This thread is going nowhere. I cannot believe we are debating 529's. It's like debating CD's.
Spears, in my state they must sign disclosure for any non-state 529. But I always explain why I don't use the in-state 529 (the plan is HORRIBLE). But I always explain the state tax deduction and let them decide if it's of more value to them. Even if someone was going to do the front-loaded 60K contribution in one year, their state deduction would only be capped at 10K, which gives them a whopping tax reduction of $500.
I know B24..you disclose everything...I can hear the conversation now...
I know putting in the state sponsored 529plan allows for some state tax savings, but very little, not worth how terrible their plan is. EDJ's has reviewed the plan and said it was just the most terrible, horid, mis managed, corrupt in the country, maybe the world. I think B Madoff had some of the money. Anyway, if you would like to get the tax deduction, which again is only like 20 cents, I can try to get them to send me paperwork, may take a month or so..if not we can open the 529 right now and send funds to the best in the world...yes thats right its West Virginia's plan. EDJ has done years of due dilligence on the plan and its the best in the world. Ok great...sign here and here and I think you've done your kid right. Just a thought, because of ALL the hours the guys in research do, if something happens to the best plan in the world, I may be calling you to make a move to the next best plan in the country..whomever that may be...because, I'm a fianancial advisor here and thats what I do, always looking out for you. You are my hero B24More often than not the trustee of the "horrible" plans will fire the manager themselves (Bright Start in Illinois did it a few years back). Why is it so difficult to admit that Jones put this out there as a churning opportunity ? My name is Ron 14 and I have churned an account before, BFD.
This is what folks at Jones call "nickle and diming." A few accounts won't add up to much, but you move all of those suckers over and you can add to that gross pretty nicely. (So they say, but I ain't doing it.)
Okay guys, let step back and have some perspective. How many brokers have substantial assets in 529 plans? We’re going to “churn” what are for the most part less than $10,000 accounts? I don’t have any clients exploiting the estate benefits of 529 plans. They are all putting $100 or so a month into equity funds that are down 25 percent. So for the $40 in net commissions, I hardly see how it makes sense to take an hour for an appt and fill out reams of application/transfer paperwork, unless it makes sense for the client (coughcoughputnam).
[quote=bspears]
I know B24..you disclose everything...I can hear the conversation now...
I know putting in the state sponsored 529plan allows for some state tax savings, but very little, not worth how terrible their plan is. EDJ's has reviewed the plan and said it was just the most terrible, horid, mis managed, corrupt in the country, maybe the world. I think B Madoff had some of the money. Anyway, if you would like to get the tax deduction, which again is only like 20 cents, I can try to get them to send me paperwork, may take a month or so..if not we can open the 529 right now and send funds to the best in the world...yes thats right its West Virginia's plan. EDJ has done years of due dilligence on the plan and its the best in the world. Ok great...sign here and here and I think you've done your kid right. Just a thought, because of ALL the hours the guys in research do, if something happens to the best plan in the world, I may be calling you to make a move to the next best plan in the country..whomever that may be...because, I'm a fianancial advisor here and thats what I do, always looking out for you. You are my hero B24[/quote] Spears, I am no saint. But I give them the straight up facts on the 529's, and they have to sign a detailed disclosure. If you knew the providor of my state's plan, you'd know why I hate it so much. I'll give you a hint, they love teachers, and they love annuities, and their MFD's suck bags. Not to mention they are horrendous to work with. And for the record, I do my own vetting of investments. And frankly, I don't even know if Jones researches 529 plans or not. I have looked at the providors and the plans, and made my recommendations. I actually have not used Hanc*** yet, but I would consider them for 529's I use in the future. I like the plan. WAY too much paperwork to switch people. I honestly can't stand 529 business. I do it when people ask for it. And I currently use the Virginia Plan, not the WV plan. I don't even bother looking at others anymore, since the dollars are so small. My largest 529 is only 85K.It’s only 5. AZ, KS, ME, MO, PA.
For the longest time TIAA-CREF managed the MO plan. And they did suck. It wasn't worth the tax savings for the underperformance. MO fired them and hired the Vanguard/Upromise folks. Spears - for every bit of spin that you say I put out there, you put as many or more words in other people's mouths. I don't recall B24 telling anyone what 529 plan he actually uses. He may use the one from his state. So, before anyone takes any of what spears says as even remotely true, please go back and check his fact finding abilities. You'll find that he tends to jump to a lot of his own conclusions.I guess I would really think he was a dumbass if he said all this negativity about his 529plan and then actually used it. I'm probably right on the nose with my thought process, because I know who trained the little booger.
Everyone, spiff is trying to suck up as much as he can to St Louis, so take what he says with a grain of salt, its all tainted and a real spinmaster at work. Nothing Jones does is wrong in his eyes..the industry does it, its all history, I DIDN'T SEE THE PROMO. I've noticed you've ramped up your defense of the fraud, so I'm betting the production is sucking wind and you're trying to convince yourself you still work for a great place or something else is at play here. Hmmmmm....Those 8 letters make me cringe. No wonder MO fired them. If my state used Vanguard/UPromise, I'd use them in a heartbeat. In fact, I have had a Upromise 529 for my kids long before I started at Jones, and I still have it. In fact I would use almost any other in-state plan other than my own state's plan.
Those 8 letters make me cringe. No wonder MO fired them. If my state used Vanguard/UPromise, I’d use them in a heartbeat. In fact, I have had a Upromise 529 for my kids long before I started at Jones, and I still have it. In fact I would use almost any other in-state plan other than my own state’s plan.
I do U-promise when I grocery shop. They give my 529 credit for the grocery's I purchase.. Kinda nice! I love to throw parties, cook and all in all spend money.. So my credits have been growing. I think that is a nice way to pick up market share for Upromise.
Miss J
I have had the credit card for years. Made me quite a bit over time.
[quote=bspears]
I guess I would really think he was a dumbass if he said all this negativity about his 529plan and then actually used it. I'm probably right on the nose with my thought process, because I know who trained the little booger.
Everyone, spiff is trying to suck up as much as he can to St Louis, so take what he says with a grain of salt, its all tainted and a real spinmaster at work. Nothing Jones does is wrong in his eyes..the industry does it, its all history, I DIDN'T SEE THE PROMO. I've noticed you've ramped up your defense of the fraud, so I'm betting the production is sucking wind and you're trying to convince yourself you still work for a great place or something else is at play here. Hmmmmm....[/quote] I haven't been called a little booger in years. Spears, I agree, Spiff seems to be over-shooting a bit on this. But in reality, nobody else has given it much of a thought (that I know of). And as far as I know, there was no "promo". I never saw anything about it, other than the JH internal calling me. Seriously, you're putting too much weight into this thing.I see bspears has graduated to kindergarten. Instead of attacking an inanimate company he has moved on to individual people. He moves on to the two people (spiff and B24) that are the most patient with the Anti Jones ranters. There is enough “bad” truth out there about any company that you don’t have to make up lies. Make a pile flippin 529s? Gimme a break you losers.
Ron, the only reason you "know" there are plenty of people doing $60k 529s is because you read it somewhere. We are all going to have 4 clients with $50 million each. Service them til they puke. They will name kids after us and we will all be rich. The "Serve the UHNW Market" is old news. They lost all of their money just like us. Check your statement fool. If I was admin here I would first of all require an IQ test before I allowed people to post. I am off to drink beer and throw the bottles at the alligator in the duck pond.[quote=ytrewq]I see bspears has graduated to kindergarten. Instead of attacking an inanimate company he has moved on to individual people. He moves on to the two people (spiff and B24) that are the most patient with the Anti Jones ranters. There is enough “bad” truth out there about any company that you don’t have to make up lies. Make a pile flippin 529s? Gimme a break you losers.
Ron, the only reason you "know" there are plenty of people doing $60k 529s is because you read it somewhere. We are all going to have 4 clients with $50 million each. Service them til they puke. They will name kids after us and we will all be rich. The "Serve the UHNW Market" is old news. They lost all of their money just like us. Check your statement fool. If I was admin here I would first of all require an IQ test before I allowed people to post. I am off to drink beer and throw the bottles at the alligator in the duck pond.[/quote] The reason I know there are plenty of people who max out the 5 yr gift of 60k into 529's is because it is an obvious financial planning tool / tax shelter for those who make a lot of money. I have no clue what the rest of your statement means. If you are assuming I only take UHNW clients that is as far from the truth as possible. I wasted some time today doing a $1400 rollover! And next week I am sure I will open a 529 for a $50 DCA.[quote=Spaceman Spiff] foot - I understand your reasoning. What’s your point? Why do you care?
Jones FAs have a choice to make. They either stay with Jones and get bonuses when their offices are profitable enough and the firm is profitable enough, or they can leave. Nobody is holding a gun to their heads telling them to stay. The GP/LP/Associate relationship isn’t going to change. This is not the first time that Jones has been in a zero bonus bracket. This is actually the second time in my relatively short career. You might think the system is flawed, but it works. The people who have the most on the line get paid the most. Period. Jones doesn’t ever promise an FA anything other than a roughly 40% payout. Bonuses are just that. LP is a goal, but not a guarantee. Trips can go away. Fortunately for thousands of guys like me around the country (and world) we have received bonuses, have LP, and go on trips. Most of the time. Others, like this one right now, we don’t get one of those three. I can now choose to move as many of my clients as I can somewhere else and reestablish myself, or I can take the rare bad with the mostly good and stick where I’m at. I know which way I’ve chosen. Evidenlty I’m not alone. Vets are not leaving. So, again, what’s your point? [/quote]
Curious … I’ve followed quite a bit of this thread, a lot of Spiff’s comments and those from the indy side. From what I’ve read the above doesn’t seem to apply - the company makes life particularly hard for those that choose to leave. There seems to be much empirical evidence to support this.
I’m not talking about the Company fighting to retain assets. That’s just life. I’m talking about the underlying spirit of EDJ not supporting the Protocol, and mean-spirited efforts to undermine an exiting FA.
Holy crap, a post on a different thread.
I’m talking about the underlying spirit of EDJ not supporting the Protocol, and mean-spirited efforts to undermine an exiting FA.
Last I checked, Jones never signed up for Protocol.
You see Jones is a Family company and when you leave the family, it becomes a divorce. Think about how you treat someone who divorces your sister and that is how it feels. I have been gone from Edward Jones for 9 years now from and I got dissed during the eulogy at my father's funeral by an Edward Jones Partner speaking for the firm!! At some point this has got to stop. IndyEDJI’m not talking about the Company fighting to retain assets. That’s just life. I’m talking about the underlying spirit of EDJ not supporting the Protocol, and mean-spirited efforts to undermine an exiting FA.
[quote=IndyEDJ]I have been gone from Edward Jones for 9 years now from and I got dissed during the eulogy at my father’s funeral by an Edward Jones Partner speaking for the firm!! At some point this has got to stop.
IndyEDJ[/quote] What did he say?[quote=LockEDJ] I’m not talking about the Company fighting to retain assets. That’s just life. I’m talking about the underlying spirit of EDJ not supporting the Protocol, and mean-spirited efforts to undermine an exiting FA.
You see Jones is a Family company and when you leave the family, it becomes a divorce. Think about how you treat someone who divorces your sister and that is how it feels. I have been gone from Edward Jones for 9 years now from and I got dissed during the eulogy at my father’s funeral by an Edward Jones Partner speaking for the firm!! At some point this has got to stop.
IndyEDJ[/quote]
So your Dad still worked for the firm when he died? And some partner dissed you!? Tell me it ain’t so!
[quote=LockEDJ] I’m talking about the underlying spirit of EDJ not supporting the Protocol, and mean-spirited efforts to undermine an exiting FA.
Last I checked, Jones never signed up for Protocol.[/quote]
Oh, they've gone far beyond not signing up. They've been active and vehemently against it; in fact. other b/d have gone to great lengths to point out that EDJ really has no concern for the client at all in their stance. EDJ's only position really is to retain clients.
If EDJ isn’t a protocol firm, then why complain about our not supporting it? FWIW, the brokerage firms that have signed up for protocol have not signed up “for concern for the client” but rather to prevent the suits/countersuits that were doing nothing but lining their attorney’s pockets.
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