Quick Jones Question

Every Jones client has them and they pay a little revenue sharing as a thank you.

Jones gets paid about $3 per 10k invested annually. The same as the other 74 largest american fund distributors. And yes, an awful lot of Jones clients have American funds, the vast majority of mine included. And with 1 out of every 3 dollars going into funds finding their way into the american funds family, I don’t think Jones is alone.

Well said, Hulk. Most, if not all have revenue sharing. AMEX, ML, MS, SB among many other big ones have it. In my opinion mutual fund companies should just increase the 12-b1 fees 3 bps just to get rid of the scrutiny.

greenthingy and mr. peanut head,

As previously stated your firm doesn't seem to hire anyone with decent reading comprehension.  No-one has every denied that other firms have revenue sharing, nor that it's illegal.

All the regulators got after your firm for non-disclosure about how the "preferred" fundcos got pushed onto the unsuspecting public. 

[quote=Moneytree]What's the relationship between Jones and American Funds?[/quote]

When one firm pushes 70%+ of all their mutual fund purchases to one mutual fund family, I call that "synonymous".

[quote=Soothsayer]

[quote=Moneytree]What's the relationship between Jones and American Funds?[/quote]

When one firm pushes 70%+ of all their mutual fund purchases to one mutual fund family, I call that "synonymous".

[/quote]

Don't you mean incestuous?  

Hey Hulk,

ARE YOU SURE AFD's pays revenue sharing to all of it's top companies in the same way?  Jones is one of the few firms to get an ongoing stream of revenue based upon assets on the books.  Most firms receive their rev sharing dollars based upon current years sales. 

21bps (or thereabouts) from Hartford (the #2 Jones seller) versus 3 bps from AFD?  Hartford isn't even in the top 5  in sales at any other b/d except Jones.  Hmmmm.   Overpriced/underperforming funds kick in the most?  Don't you dare defend Jones's revenue sharing policies.  They are an embarrassment to the industry.

Zacko,

Hartford has changed the "agreement". See other thread. Don't know exactly what it means going forward.

Compliance Jerk - My reading comprehension is fine… His question was “what is the relationship between American Funds and Jones?” I answered the question. As for “pushing American funds on the unsuspecting public” - If you honestly belive I’d “push” american funds on a client so the firm makes 3 friggin bucks, you’re out of your damn mind. I sell American because I’m not going to have to apologize next year for them.



Zacko - No I’m not sure what the other firms get paid for selling american funds, and frankly I don’t care. In my prior post, what led you to believe I was “defending Jones rev sharing?” What’s an embarassment to the industry is that someone as juvenile as some of the ex-jones brokers are are actually responsible for other people’s money.



Anyone else - Please denegrate me as you wish if it makes you feel better. If you’re going to though, at least make me laugh.

[quote=Moneytree]What's the relationship between Jones and American Funds?[/quote]

With all the flows to American funds from discerning brokers like Mr Hulk, Growth Fund, CIB, Cap World, and I'm sure a few others will have as many holdings as there are IR's at Jones...roughly 10,000 or so.

I’m just glad to be indy.  Reading about Jones on this forum and talking to a broker or two still there (most of my friends have left{many for indy}) serves as a reminder of how much better I have it now.

More to the point on diversity. 

The danger not only to the client but to the broker of having 70% of his/her book in one mutual fund family can't be overstated.  Remember Putnam??? anyone?  When a mutual fund family "blows up" and you have everyone in it, you are going to have many unhappy clients all at once.  Just because American Funds hasn't blown up on us, and I agree it has been very good for my clients, doesn't mean it won't.

This is one of the major advantages of being able to offer wrap accounts or fee accounts.  You can offer the best funds from many different fund families without being handcuffed to one family for breakpoints (as mandated by our current rules).

Babs (as you are affectionately called by others) - I don’t have a problem with wrap accounts - 1% is more than fine as long as you are using the lowest fee fund class available for each fund. It’s just a different pricing structure.

But of course. However, it is more than just a pricing structure difference! 

The point being, by using advisor class shares or no-loads you can have clients with American Funds, T Rowe Price, American Century, AllianceBernstein and any other fund family you like and not be shackled to any one fund family by the restrictive A share rules we have now.

That means you could use an international fund from family A, mid cap value fund from family B, bond fund from family C and so on.  Since there is no load to buy the funds and the wrap fee takes care of your costs (hopefully), then you as the advisor can move assets in the best interest of the clients and not be hampered by artificial and arbitrary aggregation rules. 

It is always nice to have choices....don't you think.

It would also be nice to make 1% on your book…I do think.

B-shares will be the next wave of class action suits brought against brokers. 

Moneytree asked “what is the RELATIONSHIP between AF & EDJ”- Here’s a clue and CHALLENGE to all you Drone & Clones - What Mutual Fund Company was the number one fund held by Jones Clients BEFORE American Funds.  AND why were they replaced with American Funds? 

Fidelity?  Not enough juice...uh, I mean revenue sharing?

it wasn't revenue sharing, morons. It was Fidleity contacting clients and selling no-load funds, which I'm sure would be fine with you, right?

Hats off to you COWBOY- Sorry Focker- the real truth was Fidelity was approached by someone at Jones who had this really good idea that since Jones had this wonderful sales force selling their funds, maybe they would like to  pay a little somthin' somthin' on the side? Fidelity said screw you and split with clients... American Funds met with Ted Jones in person and they ate that famous sandwhich out his brown bag lunch that Mrs. Jones would pack every day and the deal was sealed... because up until then Jones wouldn't sell American. Now -NEXT CHALLENGE- Who was the 'Architect of Revenue Sharing' and what did it get him?

Oh Oh Oh Oh teacher! I know teacher! I know! I’m raising my hand the highest…oh oh oh pick me! Was it little “Dougie Hill” from down the lane?

No, I think it might have been that wolf in sheep’s clothing–the power-hungry despot himself–John Bachmann.

Sooth has done his homework… I still don’t get why you guys get all worked up over .03%. If we offered wrap accts at 1% for all of our fund clients, you tell me which would make us more money. Never mind the fact, that the other major brokerages do both…

.03% seems like a small price to pay for your product being peddled by the “Best Sales Force in the World”.  You can’t blame American Funds.

I know for a fact is was Doug Hill who made the rev sharing deals.  Sloop used to collect the checks, I once saw him bragging with one in his hand from one of the "lucky 7".

[quote=babbling looney]

More to the point on diversity. 

The danger not only to the client but to the broker of having 70% of his/her book in one mutual fund family can't be overstated.  Remember Putnam??? anyone?  When a mutual fund family "blows up" and you have everyone in it, you are going to have many unhappy clients all at once.  Just because American Funds hasn't blown up on us, and I agree it has been very good for my clients, doesn't mean it won't.

This is one of the major advantages of being able to offer wrap accounts or fee accounts.  You can offer the best funds from many different fund families without being handcuffed to one family for breakpoints (as mandated by our current rules).

Muny: Now you’re talkin’. Appears you have been around long enough to know of the “legends” of Ted. He useta sell Puritan fund as a “route” broker covering small towns up and down the Miss. river. According to “legend”, how many miles did he have on his Mercedes diesel?

[quote=joedabrkr] [quote=babbling looney]

More to the point on diversity. 

The danger not only to the client but to the broker of having 70% of his/her book in one mutual fund family can't be overstated.  Remember Putnam??? anyone?  When a mutual fund family "blows up" and you have everyone in it, you are going to have many unhappy clients all at once.  Just because American Funds hasn't blown up on us, and I agree it has been very good for my clients, doesn't mean it won't.

This is one of the major advantages of being able to offer wrap accounts or fee accounts.  You can offer the best funds from many different fund families without being handcuffed to one family for breakpoints (as mandated by our current rules).

[/quote]

It's not just a different pricing structure.  (I used to think that, and made the conversion because, as you said, I thought it would be nice to make 1% on my book.)  I've learned first hand that it is also a completely different way of thinking and building portfolios.

Maybe some day if you move to a real investment management platform you'll understand.
[/quote]

I think you are responding to the wrong person.  Perhaps you meant the Hulk? 

I agree it isn't just a different pricing structure when you are fee based or using wrap accounts.  It is the ability to better structure your client's portfolios if without all the restrictions of mutual fund A share rules and the perception that commissions are driving the activity. 

While I am not there yet, still studying for the 65 , I am eagerly anticipating the transition. Not just for the fee based income, but more because I can really get in there and restructure clients portfolios when needed. 

Am I wrong in thinking that this is the greater advantage not just to me but to my clients?  Serious question.

[/quote]

Am I wrong in thinking that this is the greater advantage not just to me but to my clients? Serious question.

AND THE WINNERS ARE: Tossthekoolaid and Devoted SA- BUT you each on answered HALF the question. It was DOUG HILL who thunk the whole thing up- what did it get him? Managing Partner crown for a year - then out on his can after the NASD looked under the hood. If Jones ‘didn’t do anything different than anyone else’ then why were they the only firm required to present a head on a platter? HHMMMM- kinda makes you wonder…

Hulk- you are way off base- John Bachmann was not the presenter of Revenue sharing… Sorry to you sooth- but jump over to Jones Secrets Revealed for a little tidbit on the great Mr. Bachmann… if you dare

Revealer- I guess I have been around. Now I don’t know the exact miles but I do know the TNT Brokers put on 150 miles a day 3-4 days a week… close enough? Here’s one for you- what was the name of Ted’s favorite horse?

Muny…I like your stories better than the boring old…“brown bag sandwich”…“Ed Jones Sr Cigar story”…“threadbare suits worn by bachmann” Yours are much more exciting.

BTW...was it Chester?

Muny: “Talk” to me about one of the original jones scandals, namely, perhaps a 20 yr. ago article in Forbes titled “Jonestown”. Article described how the GPs @ jones were allowed to bail on a Petro-Lewis (name from the past) partnership while jones left their customers holding the bag. (NOT the “most ethical” thing to do,ya’know). I’d really like to have a copy of that article. This jones s**t isn’t anything new. 

Munytalks: According to “legend” poor ole Ted had 800,000 miles on his MB diesel. Was soooooo frugal that he preached his frugality to the troops and customers.

Billy boy just totes the company line.  Beyond that he seems to have almost no original thought. 

Zacko just totoes the Indy company line. Beyond that he seems to have almost no original thought. Or humor. Or charm. But boy oh boy, he makes a lot of money, as he unfailingly reminds us. Oh, and he's much happier now and...lets see, Jones is going bankrupt...and...those damn GP's!! What was that about original thought?

"Zacko just totoes the Indy company line"

One of the funniest things I've read lately...I guess no one took the time to explain to focker that indy (notice lower case i) is short for independent.  Perhaps we also need to explain that independent means he doesn't have a Company line.  Also, perhaps a 3rd grade lesson on possessive vs. plural is in order ("...damn GP's" meaning to represent multiple general partners).

[quote=Revealer]Muny: "Talk" to me about one of the original jones scandals, namely, perhaps a 20 yr. ago article in Forbes titled "Jonestown". Article described how the GPs @ jones were allowed to bail on a Petro-Lewis (name from the past) partnership while jones left their customers holding the bag. (NOT the "most ethical" thing to do,ya'know). I'd really like to have a copy of that article. This jones s**t isn't anything new. [/quote]

AHHH, 1982 . Quoted as "One of the darkest periods of my watch" by John Bachmann. Edward Jones had been 'enthusiastic promoters' of the failed company's bonds. When Baldwin Company went bankrupt, taking along with them millions of Edward Jones Investor dollars with them, there were rumors of JOnes brokers being run out town and threats of tar and feathering. Slick Johnny consulted with Peter Drucker who reminded him that "You can't control the Universe- get over it". And from that experience and insight came the Investment Product Review Department. And guess what? Revenue from 'safer' investment products  went up up up from there....

I think there was another one called Energy Management from the ealy 80's...paid something like 14% interest and then went belly-up.  Jones paid two of my current clients (and a bunch of other folks) about five pennies on the dollar.  Class action attys got about the same.  Anyone else run into that one?

AHHH, 1982 . Quoted as "One of the darkest periods of my watch" by John Bachmann. Edward Jones had been 'enthusiastic promoters' of the failed company's bonds. When Baldwin Company went bankrupt, taking along with them millions of Edward Jones Investor dollars with them, there were rumors of JOnes brokers being run out town and threats of tar and feathering.

I have to ask someone who obviously knows alot...is this the scandal that brought Doug Hill working as an IR in the field to the safety of the home office to keep his bacon from burning? I heard tell that's what brought him to the home office.

Billy Bob,

While I may not be nearly as funny or as old & gray as you are, I am clearly more intelligent than you are.  I won't mentor you though...so don't ask.

If you will notice, I don't really bash Jones.  I merely point out facts since I spent ten years there and had the courage to open up my own office and go indy.  And I rarely tout RJ.  It is much more than the firm you are at.  It is the flexibility and freedom you have in running an office that you can truly call your own.

And yes old man, you are right--I do make more money than you.  Probably the last time you made more money than me is when I was in college waiting on tables and you managed the local used car lot in your town.

Devoted: You mean poor ole Dougie can’t go back to Wellington,KS to retire? You mean someone might kick his a** @ the coffee shop for selling them those “touchdown” bonds of Petro/Baldwin/Gambles??   fight