What happen to all of the jones defenders

I have never worked for Jones, don't really know any Jones folks other than by names on account statements I've moved, and for that matter don't care to know any...

But, my question is, how hard must you all ex-Jonesers been bent over to elicite SUCH great distaste for an organization.  I mean, didn't you all do your homework before taking the job???

I did an internship at Northwestern Mutual in college as a college agent.  Those guys get NOTHING.  Pay a desk fee, phone fee, pay all their own expenses, basically everything.  I think it's like that at a lot of places.

So why do you all complain SO MUCH about paying for some expenses...it seems to me it's part of the deal, and if you didn't like it WHY DID YOU SIGN ON???

If you were lied to, that's one thing...but ignorance of the industry employment structures is a poor excuse for such complaining.

An observation.

[quote=BankFC]

I have never worked for Jones, don't really know any Jones folks other than by names on account statements I've moved, and for that matter don't care to know any...

But, my question is, how hard must you all ex-Jonesers been bent over to elicite SUCH great distaste for an organization.  I mean, didn't you all do your homework before taking the job???

I did an internship at Northwestern Mutual in college as a college agent.  Those guys get NOTHING.  Pay a desk fee, phone fee, pay all their own expenses, basically everything.  I think it's like that at a lot of places.

So why do you all complain SO MUCH about paying for some expenses...it seems to me it's part of the deal, and if you didn't like it WHY DID YOU SIGN ON???

If you were lied to, that's one thing...but ignorance of the industry employment structures is a poor excuse for such complaining.

An observation.

[/quote]

Most of the ex-EJers had nothing to compare with, started off in "small town USA" some of the ones that were there longer never had access to such a site as this one.... and alot of us heard only what we wanted to hear.... just like a Moonie won't listen to family once converted all you can do is believe what is being passed down from the mountain (St. Louis).

You are correct we signed on board, but there was a big difference to what we heard and what we lived through.  And talk about (lack of) disclosure. If you don't have anything to compare EJ to, some of us believed that if the firm takes cares of it's clients (like they claim) how could they possibly screw the brokers??????

I can appreciate that.  It just seems to me that one would do as much due diligence as one could before entering a completely new industry. 

Some firms cover more expenses than others, some have better payouts, etc...I guess I just don't get the (or what seems to be) consistently negative feelings towards one particular firm, especially considering that the amount of support above other firms I have seen (see above post).

But, by all means, continue with the EDJ bashing!  I could care less, just so long as, if you could, confine it to your "dedicated EDJ sucks threads." 

BankFC,

Jones mostly hires people new to the industry.  They truly have a great training program, out of necessity.  It takes a lot of training to convert a truck driver to a broker.  I have said numerous times, if you were making 40k as a teacher, truck driver, Walmart manager etc. making 100-200k/year as a Jones IR seems like the greatest thing ever, and that is exactly how the GP's want IR's to think.

Reality is that those who go through the work of build a practice in this business, only to find out how much they are getting screwed and even more, how much their clients are getting screwed by Jones get a little worked up when the light comes on.

If you only knew the lies spread by the Jones  "culture"  about reps from every other firm you too would be a little disgusted.  Especially given the glass house they live in at Jones.  To a true Jones kool-aid drinker, the worst thing for a person to do ever is invest money with a bank rep in a fee based acct.  They are on a religious crusade to save investors from you.  I know because I was there, and for 5 years I bought it.

BTW, did you know that you only sell B share MF's and annuities because you work at a bank?

Not trying to convert you to a Jones-hater just hoping to put some things in perspective.

Happy Holidays

Actually I bought it for about 4 years and spent a year working on an exit strategy. 

The moonie analogy from compliancejerk is perfect.  If you doubt it, try talking to a kool-aid drinker some time.  You shouldn't have any questions after that.

[quote=BankFC]

I can appreciate that.  It just seems to me that one would do as much due diligence as one could before entering a completely new industry. 

Some firms cover more expenses than others, some have better payouts, etc...I guess I just don't get the (or what seems to be) consistently negative feelings to wards one particular firm, especially considering that the amount of support above other firms I have seen (see above post).

But, by all means, continue with the EDJ bashing!  I could care less, just so long as, if you could, confine it to your "dedicated EDJ sucks threads." 

[/quote]

BankFC,

You haven't been reading these very long have you ?  By the way look at the title of this posting, this is all about telling the TRUTH about Edward Jones, it's not bashing if it's the "TRUTH" 

The whole point about us x-jonsers, is the FIRM changed we didn't, the Leadership did.   The best example for you would be imagine your Bank merged with another Bank, only the other Bank was in charge and they changed the culture you were hired under?  You could do all of the due diligence in the world, but when management changes the culture of a Firm changes and not always for the best, and can not be predicted with due dilligence.

I don't hate Edward Jones the Firm, I distrust the Leadership that was not in place when I hired on.  Imagine being married and one day your spouse changes their personality 180 degrees, what would you do, walk out the door, or try to get them to change back to the way it was..........sounds like a movie.

The fact is the Leadership (GP's) Greedy Pricks lied to IR's and to the clients, and some there still believe the GP's, but it is getting less all the time, reality does bite. 

This might just give you a different perspective, from my point of view....hopefully with all of the Bank mergers this won't happen to you.

What happen to you Jones Defenders?

Are you all out there worKing CHURNING and BURNING THOSE OLD LADIES OUT OF THEIR RETIREMENT MONIES..........Bill F-upped, the Great one according to you Drones and Clones condones that activity..............just read about it?

Thanks for sharing. What a COMPLETE breach of confidentiality. I would take the little old lady by the hand, guide her to a computer, and show her how her "new" advisor just vomited the prospective clients personal financial information over the world-wide web. Maybe I would show her son or daughter this post as well. If you don't like the portfolio, which sounds like it was designed to provide maximum income for her, then deal with is in a professional, confidential manner.

Bill F-upped

Is that what you would really do, you sound like  a disciple of Doug "3 Mil" Hill and you would do another cover up?

I would take her by the hand and call her children and have a meeting with a very good Securities Attorney, and have her and them file a complaint with the following:

1) NASD   

2) SEC  

3) State Securities Department

Have the Attorney file a suit against another fraudulent act by Edward Jones,  and take your answer that you put over the world wide web to tell what a sleaze bag you and how Edward Jones IR's really are..............

Anyone that condones that kinda of treatment to a client should not be in our business, and you call your self and Edward Jones ETHICAL?

Bill F-upped you are a DISGRACE...to our INDUSTRY

I have a question.  If I gross $525,000 at Jones and have about a 38% payout. ($199,500 net), $46,000 in bonuses and 8600 in total profit sharing, that comes to a 48% payout.  If I add the trips in then it comes to 50%.  I havent even mentioned the LP return.   So, if my payout is 50%, why would I go indy to get 55-60 % (after exp) payout?  Assume I dont care about selling my book.  I will prob. transition to my kids into to it anyway.  INdy may have more products, but I am willing to bet that most are not that good for our clients, like a $1m B share annuity ticket.

Here's your answer...if I were grossing $525K (which I'm not yet having just gone indy this past summer), I'd be netting at least 75%, maybe more since I don't get a haircut to the lowest common denominator on product.  That's over $130,000 difference per year and I get to choose my own trips.

Also, you'll transition the book to your kids IF they are interested and IF Jones sees fit to allow that.  If both of those conditions are not met, you're probably throwing away a minimum of half a million dollars.

As far as product goes, I do a lot of fee-based business and my understanding is that Jones fee-based platform leaves a lot to be desired...that's just one example, but it's the one that happens to be most important to me.  As far as products that are not good for clients, see my previous thread "another reason to detest Edward Jones" or something to that effect.  There are plenty of examples of product that is not good for clients in the Jones arsenal.

It should be obvious that I'm happy as an indy and that you're happy as a Jonser...as long as that holds true, we should both stay put.

I could go on, but all you really have to do is search backwards in this forum and you'll find plenty of other opinions that pretty much already answered your questions.

exdrone wrote:

BankFC,

…Reality is that those who go through the work of build a practice in this business, only to find out how much they are getting screwed and even more, how much their clients are getting screwed by Jones get a little worked up when the light comes on…

[quote=success]

I have a question.  If I gross $525,000 at Jones and have about a 38% payout. ($199,500 net), $46,000 in bonuses and 8600 in total profit sharing, that comes to a 48% payout.  If I add the trips in then it comes to 50%.  I havent even mentioned the LP return.   So, if my payout is 50%, why would I go indy to get 55-60 % (after exp) payout?  Assume I dont care about selling my book.  I will prob. transition to my kids into to it anyway.  INdy may have more products, but I am willing to bet that most are not that good for our clients, like a $1m B share annuity ticket.

[/quote]

Why do Jones people continue to include their bonus to calculate their payout %?  Bonus is kept intentionally low by the firm by continuing to open new offices that are not profitable.  This helps the GP's keep more and pay the IR's less.  You are paying for the much heralded 25,000 offices they want.  Ultimately, you have no control over the bonus bracket you are in so how can you reliably call it part of your payout compensation. 

Profit sharing was more reliable while I was at Jones so I have less beef with that, but it too is determined by the GP's for you.....how can you compare that to total control over your margins as an independant?

As for your 1mil b-share annuity....is that any more appropriate that a million in gmac bonds?  My point is there are inapropriate products avail at Jones and everywhere else if sold to the wrong client in the wrong amount. It shows serious ignorance to assume that a product not offered at Jones is probably inapropriate for the client.  Have you heard of Protective's new B2A annuity?  At 250k it has an M&E of 65pbs and no front end load......If sold appropriately, to  a client with a long time horizon, you could argue that it is more appropriate than your A share product. 

I thought it was very interesting today, an adult son of a client of mine was brought into my office to say hello and give thanks for the solid advice that his parents are getting from yours truly. I asked about his experience in brokerage accounts and he launched into what can be best described as a tirade against a wirehouse that I won’t mention. His words as to why he left there were “when they tried to slam me into their managed account which they would have made more money on”.  I thought that was a very interesting comment from a lay person…

Ex,



You didn’t answer the question. Specifically how is Jones “screwing” their clients?



BPD

Good job, nog.  Although my take is that this is just one more plus of being indy...I don't have to "slam" anyone into anything.  They have the option of going either fee-based or commission.  I've had people tell me they like fee-based because when I call with a suggestion, they know that I'm not motivated by a desire to turn another commission.

To each his own, eh?

[quote=BigPayDay]Ex,

You didn't answer the question. Specifically how is Jones "screwing" their clients?

BPD[/quote]

I did not see your question while I was typing my last response.  Here's one way comes to mind immediately.  Preferred fund families.  I'll believe Jones does due diligence on fund families when the remove one from the list for imploding.  I believe they are in the business of extracting kickbacks, and as long as the payment is made, they stay on the list.  I see that as screwing clients.

Hey playa…the Jones defenders are back!

BBD,

Funny you did not ask me how the IR's are getting screwed, which I also stated in the quote above.  Are you giving me that one?

[quote=exdrone]

[quote=BigPayDay]Ex, You didn’t answer the question. Specifically how is Jones “screwing” their clients? BPD[/quote]

I did not see your question while I was typing my last response. Here’s one way comes to mind immediately. Preferred fund families. I’ll believe Jones does due diligence on fund families when the remove one from the list for imploding. I believe they are in the business of extracting kickbacks, and as long as the payment is made, they stay on the list. I see that as screwing clients.

[quote=BigPayDay] [quote=exdrone]

[quote=BigPayDay]Ex, You didn't answer the question. Specifically how is Jones "screwing" their clients? BPD[/quote]

I did not see your question while I was typing my last response.  Here's one way comes to mind immediately.  Preferred fund families.  I'll believe Jones does due diligence on fund families when the remove one from the list for imploding.  I believe they are in the business of extracting kickbacks, and as long as the payment is made, they stay on the list.  I see that as screwing clients.

[/quote]

Ex,

If this is truly the case then why is it that the fund family that Jones gets the least revenue sharing on is the one that is the most widely used?

BPD [/quote]

First, I did not say that the IR's were screwing their clients, my comments applied to the firm and its management. 

You help me make my point by indicating that one fund family gets most of the business.   If Jones got rid of the pref family system and did a better job of informing IR's on other avail funds they would not be stuck recommending American so excessively.

[quote=success]

I have a question.  If I gross $525,000 at Jones and have about a 38% payout. ($199,500 net), $46,000 in bonuses and 8600 in total profit sharing, that comes to a 48% payout.  If I add the trips in then it comes to 50%.  I havent even mentioned the LP return.   So, if my payout is 50%, why would I go indy to get 55-60 % (after exp) payout?  Assume I dont care about selling my book.  I will prob. transition to my kids into to it anyway.  INdy may have more products, but I am willing to bet that most are not that good for our clients, like a $1m B share annuity ticket.

[/quote]

OK I'll use small words to make sure all you jones boys understand....

Let's see....you're right as far as "forget the LP return" since that is a return on an equity investment in the firm.  If you're gonna count yoru payout like that the boys at Merrill should be able to count performance of the stock in their ESPP as part of their payout.

The money in the profit sharing is technically yours, but not available for your use right now.  If you did withdraw that 8600, at your hypothetical income level it would be more like 5000 or less after taxes and penalties.

Regardless of the value that Jones may put on your w-2 for the trips, they are not liquid or saleable.  You can't even take your boyfriend or girlfriend if you are not married.  So, clearly that deserves some sort of valuation discount compared to your hypothetical indy payout of 55-60 percent.

So you're really nowhere near that 50 percent you talk about, although I must admit the payout at Jones is perhaps better than I realized.

Real indy net payouts are all over the place depending upon your product mix and your business structure and expenses.  Mine will likely be somewhere closer to 60-65 percent next year, but my expenses are pretty low.

While your at it, you also forgot to account for all of the other expenses you bear as a Jones IR, such as technology charges, custodial expenses(or you clean yourself), postage(50% right?), and office supplies.  Where does that leave us?

And then there's the fact that I'm free of a cult-like atmosphere described by many at jones.  And, if my b/d changes in ways I don't like, or if I end up having an 'issue' with anyone in management, I can just leave because the book is MINE by contract.  That, by the way, tends to keep the b/d honest in the services they offer and their pricing, because they know they have competition.  I don't have to worry about lawyers from DesPeres sending me dunning letters, or hired guns being handed my book and given an incentive to chase after it.  None of that b.s.

Hey look, Jones is fine for some of you, and from what I've seen from posts by some of you IR's, you've built some great businesses, learned a lot about the markets, and treat your clients well.  But I sorta get the sense that's the exception that proves the rule.

I'm not saying that Jones is a bad firm, or that ALL of the advisors are stuffing their widow clients into today's version of "touchdown bonds", but really stop justify your payout versus indy....your trying to pee up a rope.  And grow up and spare us the snide commenst about "1m b-share annuity tickets", and I'll forgo mentioning the California suit yet to be settled, long GMAC bonds, and storefronts in strip malls.

Great post joe,

We're about due for an, "It's not all about money" comment from one of the Jones boys.  That's their way of conceding defeat. 

Of course they usually start the payout talk repeating the propoganda they hear from St Louis.

Ex,



So when you say “screwing” do you mean that our clients are overpaying or being sold inferior products or both?



BPD

BBD,

I concede.  American funds for everyone.  You're nuts, I'm an ass.  Lets do this again next year.

Ex,



Are you afraid to back up and/or clarify your “Jones is screwing their clients” comment. Are you afraid to answer my question? Let me ask it again. When you say “Jones is screwing their clients…” do you means Jones’ clients are being over charged or being sold inferior products or both?



BPD

Dude,

My biggest issue with Jones with respect to clients is the preferred funds family system.  The supposed due diligence that Jones does on these fund families is a total sham.  They are not the most diversified fund families or the best from a performance standpoint across asset classes.  If your firm truly has no conflicts of interest why dont you have the best fund managers on your preferred funds list.  Answer: It is a scam based on kickbacks and that is not in the best interest of clients.  The limited choices maximize flows to the chosen companies...that maximizes kickbacks, it is not about who pays the most.

Ex,



You still didn’t clarify how Jones is screwing their clients. Do you feel our clients could have gotten better net returns and lower fees at your firm or if they were a client of yours over the past 10 years?



BPD

I have made it clear where Jones fails in providing IR's with the info and tools they need, as well as their motivation for it.  The clients are being screwed by promising objectivity and due diligence and delivering neither.  How many different ways do I need to say it?

Promising better returns is a game I never played and I'm not going to start now.  As for fees, I am not nor do I strive to be the low cost provider of financial advice.

Is your method of pitching product showing hypos and promising the lowest cost?

BTW, this seems to be a very personal issue for you.  Are you a GP?

Ex,



So because I build a diversified American Funds Mutual Fund portfolio of say: 20% American High Yield Tax Free, 20% Capital Income Builder, 20% American Mutual, 20% Capital World Growth and Income and 20% Growth fund of America I haved screwed my clients? Who’s brainwashed? At least I can sleep at night. You say that Jones’ preferred fund families aren’t very good across different asset classes. Show me different funds for the asset classes I mentioned above that have had better net returns (Isn’t that what we are trying to provide to our clients?), lower turn over (Lower tax liability), lower cost with less risk than the over all market. Come on put your "I have more / better product / and my firm does better / more due dilligence rhetorec where your mouth is!!!    



BPD

BPD: That list is about 92-94% “correlated”. Yep, that gets you to a “diversification trip”. BTW, did you see that Wal-Mart is paying 117 Million in a Cal judgement for ? Wait til one of those Cal juries gets their hands on the rev.sharing issue. (As an aside, you only mentioned Am. Funds. Don’t your good jones clients own any putnam?)

I mis-spoke. The jury award was 172 mill. OF COURSE they (WMT) are appealing. Cal will tie the jones boys up in court for YEARS.

[quote=BigPayDay]Ex,

So because I build a diversified American Funds Mutual Fund portfolio of say: 20% American High Yield Tax Free, 20% Capital Income Builder, 20% American Mutual, 20% Capital World Growth and Income and 20% Growth fund of America I haved screwed my clients? Who's brainwashed? At least I can sleep at night. You say that Jones' preferred fund families aren't very good across different asset classes. Show me different funds for the asset classes I mentioned above that have had better net returns (Isn't that what we are trying to provide to our clients?), lower turn over (Lower tax liability), lower cost with less risk than the over all market. Come on put your "I have more / better product / and my firm does better / more due dilligence rhetorec where your mouth is!!!!    

BPD [/quote]

Like I said 7 or 8 posts ago.  American Funds for everyone.  That's what you call diversification?  What's the overlap in that portfolio?  Were you running Putnam hypos in 98 and 99 with using your rear view mirror fund selection methodology?  Why don't you answer my questions before you applaud yourself(another habit you probably picked up at Jones).  And, are you a GP?

BigPayDay.........you call 38% Big Pay?  And you still pay out of pocket expenses, like Phone, Postage, Advertising..etc...?  And this is a good deal how? 

The amazing thing is many Firms are downsizing and they are aware of the fact there are just too many Advisor's out there. They are all drinking the same Kool Aid, Weddle is just a clone of Doug "3 Mil" Hill although he does have a lot more class thats for sure.  

However, Jones keep stating they want market share, 25,000 IR's, what they really want is a Jones Office every 2 miles, young hard working door knocking IR's doing about 200 to 300K Gross commissions, causing no problems, drinking the Kool Aid sounding the company montra........................... 

They really don't care if an IR leaves, they will just send in several newbie Ir's to keep the scraps and start over..........only with two offices instead of one..........it's called multiplication the Jones way

When was the last time Jones went after an experienced IR that leaves..........they don't and can't afford too...........they only go after the training expenses in the first 3 years......so if you have over 3 years and can produce over 250K you need to think about leaving...........sooner than later....... 

BigPayDay, What say you?

Well, because I'm bored and am offically on vacation today I ran a morningstar report of the American Funds that BPD proposed as a diversfied portfolio, using 10K invested into each fund.

12.9% is concentrated in the top 25 stocks

Microsoft, Citigroup, Fannie Mae, Freddie Mac are all in 4 of the funds.  Growth fund, Cap inc bldr, Cap world growth, American Mutual

The rest of the top 25 are all in three funds  generally Growth fund, Cap inc blr and Cap G&I or American fund.

Appoximate allocations  Cash 10.4% -Us Stocks 41.2 - Non US Stocks 24.7% - Bonds 22%     My program only allows me to create Morningstar hypos on an existing account.  I'm too cheap to pay for the full Morningstar Advisor platform   so I used an account that also had minimal (less than $100) stock position and a very small Franklin Natural Resources fund, which has a 33.28 % ytd total return.    There may be some skewing because of this but not much since the existing account is so small

3 year Alpha 5.15  Beta .65

Standard deviation is 6.94 compared to the benchmark (S&P) at 10.01    Sharpe Ratio 1.68 compared to 1.01

pre tax return   3 mo 1.84  1 yr 10.20  3 yr 14.14   5 yr 7.97   10 yr 10.92

Benchmark       3 mo 2.87  1 yr 8.44  3 yr 12.09  5 yr .64  10 yr 9.28

Not too bad. Most clients wouldn't kick you in the shins if this was their portfolio.  One point I may make is that I AM able to run a Morningstar hypo at all.... something I couldn't do at Jones.  Plus I can print it out in a full color format, place it into a folder with other information and analysis of their stock holdings using S&P reports and Morningstar with my recommendations in writing.  The clients are impressed

Babbling- I use instant x ray with all my clients. I think it is a wonderful tool. I hope you have a great holiday season. I think the point about overlap at American Funds is a valid one. I tend to diversify my book just as I advocate my clients to do. No one fund family has all the best answers or all the best performance…

I hardly think 12.9% in the top 25 stocks(roughly 0.5% per stock) is a concentrated portfolio.

In fact, there are some in this forum who would likely argue that performance on a portfolio is often dliuted because of overdiversification...

I hardly think 12.9% in the top 25 stocks(roughly 0.5% per stock) is a concentrated portfolio.

Me either.  I just posted the Morningstar results and let the chips fall where they may.  I use American funds among others.  Each fund family and fund manager has different styles.   Unfortunately for the commission brokers, we are all under the gun about breakpoints and B shares are being phased out.  So if you have a particular client in American funds or any other loaded fund family and you want to diversify them you don't have many choices other than to try to do it within the fund family or face the wrath of the compliance department.

This is why fee advisory businesss and wrap accounts have become (at least to me) more attractive.  You can do the right thing for the client and not have to worry about the breakpoint rules that are handcuffing us to fund families that may not provide ALL the best choices.

In fact, there are some in this forum who would likely argue that performance on a portfolio is often dliuted because of overdiversification

I agree with this too.  Pigeonholing portfolios on a "magic" allocation formula is the easy way out.  Each person's goals and risk tolerance are different.....so should be their portfolios.  

Sonny,

Excluding BPD, most Jones brokers probably have more than one fund family employed in their own 401k acct, and with their other money.  We all see the value of diff managment styles as seen by our own choices in our own accts.  Of course we buy funds at NAV, but certainly a client would be willing to pay for the benefit of that kind of diversification if given the choice.

As for your 73 year old client, I think your right.  Unless the client is going to hit a large breakpoint he may never break even on cost given his age.  Personally I would use the C share.  I just dont trust that a fund company wouldn't change the rules on waiving the cdsc at death.  I've noticed that some of them won't do it in a trust acct anymore.  Do they consider an IRA a trust? 

Questions for the Jonesers:

Assuming your income and support(home office and local) are the same(ceteris paribus):

Are you a better advisor at Jones than you would be elsewhere?

If you really think A shares and breakpoints are the only answer when it comes to buying mutual funds, is there any reason you couldn't do that at another firm?

Is it the firm or the broker that delivers what is right for each client?

Do you feel that the Jones "moral authority" protects your clients from you in a way they wouldn't be protected at another firm.

It seem like when the heat gets turned up on this forum, most of the Jones folks crawl into a hole until it cools off.  Any of you got the guts to look at yourselves and answer these questions honestly?

After all isn't Jones just another brokerage firm or is it really "special" as so many there claim?  Make your case......if you can.