The Mutual Fund Store

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Dec 9, 2008 7:56 pm

I've been running into this place a lot recently.  I'm amazed that people will listen to some guy they've never met in person and let him decide what they're going to invest in. 

 
Does anyone know how their system works?  What I envision is Adam Bold sitting down at his computer looking at funds, then telling his advisors what their portfolios are going to be.  The schmucks at the local Mutual Fund Store answers the phone during the call in show, sets appts, then signs people up.  He probably doesn't have a clue why or how the portfolios are set up, he just knows how to push the right buttons on the keyboard.  From what I've gathered, service is awful.  Fees are average.  Performance is blah. 
 
Does anyone out there know any more about this place than I've been able to gather?  Any skeletons in the closet?  It's never small money that I see there.  Usually $250K+ portfolios.   
Dec 9, 2008 8:11 pm

Don't know any skeletons.  Bold pushes the whole angle over and over that his folks aren't paid a commission, just "a small fee", and talks constantly about their asset allocation process.  Maybe that's why they draw bigger accounts.

Dec 9, 2008 11:18 pm

Adam Holt is a joke.  I was listening to him a couple months ago when he said Edward Jones advisors had used Lehman Brother bonds to leverage client portfolios and then use the proceeds to fund risky mortgage backed paper (what?).  In the very next call he took,  he thought stable value funds were made up of 2-week treasury bills.  Idiot.

 
Here's his pitch....stocks bad, bonds bad, CD's bad, load mutual funds bad, UIT's bad, everything except his advisory platform bad.  What's even funnier?  The mutual fund store closest to my office was taken over by an Edward Jones broker that failed within 6 months.  What a joke.
Dec 10, 2008 6:07 am

I've never heard his show.  His advice may be a joke, but as a business person, he's probably first rate.  If I'm not mistaken, he's Schwab's #1 RIA.

Dec 10, 2008 9:08 am

I know absolutely zero about the MF Store.  I don't think they have offices near me, and they definitely don't advertise.  But I looked at their fund list.  I have to say they have some damn good funds in their arsenal (they also have some dogs like Magellan).  I don't know how they operate in terms of fees, advice, etc.  But if they are coming up with well-balanced portfolios from the list that I saw (link attached), it's not the worst thing someone could do.  And it would be tough to talk down a portfolio consisting of these funds.  I'll be honest - it's far better than the crap I see coming in from some wirehouses and indies around here, and better than what a lot of Jones advisors do (I'm not poo-pooing us or the wires or indies - I'm just saying that their fund list is pretty impressive).  JMHO.

 
http://www.mutualfundshow.com/funds/index.asp
 
Oh, and he uses both load and no-load families, so I don't think he claims that load funds per se are bad, just PAYING a load is bad (of course, I've never even heard him speak).
Dec 10, 2008 9:38 am

Can we get his name right, Adam Bold(not defending) got this from his website



Fee-based: Because we receive a quarterly fee based upon the assets we manage for a client, our advisors are motivated to monitor the portfolio on an ongoing basis. Furthermore, our advisors are bound by their fiduciary responsibility to keep their clients’ interest first.
 
Serve the everyday American: Our clients open investment accounts with as little as $50,000 and have access to thousands of no-load and load-waived mutual funds. This allows us to manage money for the typical mutual fund investor.
 
He is just a RIA, probably charges 1% or higher, and now he is talking about franchise opportunities(nice jargon, wrong industry) where you can go work for him in one of the stores.
 
I have never run into anyone who uses these people
Dec 10, 2008 10:18 am

It may be tempting to write him off as a joke or "just an RIA," but he has more than $4 billion in AUM.  Whether or not you agree with his fund picks or his take on the underlying securities in a given fund, he's certainly running a successful business. 

Do the math: if he averaged only 1% on AUM he is generating more than $40 million gross.  And that doesn't even include the franchise fee revenues.  

If there's a joke involved here, I think he's the one that's doing the laughing ... all the way to the proverbial bank.

Dec 10, 2008 11:27 am

B24 - Thanks for the quick link.  I would have eventually found it, but you saved me some time. 

 
I've spent some time on his website and figured out that rank is exactly right.  He doesn't like annuities, individual stocks, UITs, ETFs, strategic allocation funds, SMAs, and pretty much everything else except his particular way of investing.  He actually told some caller that unless you have $5,000,000 to $10,000,000 that you shouldn't own ANY individual stocks. If you click on the link that B24 put up, look for the investment topics link and then find the one that says market bottom.  This idiot actually put out there on the public airwaves that the market had reached the bottom.  IN MARCH!!!    
 
The guy is a marketing genius.  Tell everyone that all advisors, except him, are money hungry, commission driven beasts that only sell you what they can make the most on.  Say it over and over again on the radio and eventually people will believe it.  They will then call your local branch and move money to you because you are the genius on the radio. 
 
OK, so how would you guys go after prospects that currently work with this bozo?  You're certainly not going to win them over by telling them how big an idiot this guy is.  They'll just figure you're a money hungry broker who's looking out for #1.  I've got three prospects that have money with this guy right now.  Total is about $1.3MM.  Those would be nice assets to get in here in January. 
Dec 10, 2008 11:37 am

I think you could do three things. And all of these depend on the portfolio and how you want to look..

 
A. Worst case scenario(IMO) compete with him on the fee(ie they charge 1.5 you go 1.00). But then i think that might get you into a bigger problem(on an ongoing basis)
 
B. Show a client a portfolio of the investments they own, and if they started investing in 98 2001,2002 and show them how much money they would have today(I am guessing equal to or less than what they put in) and then explain the idea of a VA and the income guarantees/death benefit.
 
C. Warren Buffet owns stocks, why can't they.  After all mutual funds are just stocks.
 
D. I would go with alternative assets here, but since you are with EDJ, kind of out of the question.
 
E. Somehow relate that your EDJ office is more personable and client focused, then the big bad Mutual Fund Store(too many clients, turnover of key personel, hold times etc..)
 
 
Dec 10, 2008 11:40 am

Well, I am assuming based on seeing their funds, that the investments are pretty good.  So I don't think you can use that angle.  But I am not sure how "tailored" their approach is to clients.  In other words, I don't think they do a lot of "planning".  So maybe their investments are OK, but they just need more planning, and possibly more investment solutions to address their specific needs (i.e. annuities, insurance, whatever).



The one other thing is to possibly get them on board by avoiding the advisory fee.  Maybe they are bothered by the fees they are paying.  You don't have to bash the fees, but maybe paying 2.5% once would be better than paying 1% every year (in their mind).  You just have to find their pain.
Dec 10, 2008 11:40 am
Spaceman Spiff:

B24 - Thanks for the quick link.  I would have eventually found it, but you saved me some time. 

 
I've spent some time on his website and figured out that rank is exactly right.  He doesn't like annuities, individual stocks, UITs, ETFs, strategic allocation funds, SMAs, and pretty much everything else except his particular way of investing.  He actually told some caller that unless you have $5,000,000 to $10,000,000 that you shouldn't own ANY individual stocks. If you click on the link that B24 put up, look for the investment topics link and then find the one that says market bottom.  This idiot actually put out there on the public airwaves that the market had reached the bottom.  IN MARCH!!!    
 
The guy is a marketing genius.  Tell everyone that all advisors, except him, are money hungry, commission driven beasts that only sell you what they can make the most on.  Say it over and over again on the radio and eventually people will believe it.  They will then call your local branch and move money to you because you are the genius on the radio. 
 
OK, so how would you guys go after prospects that currently work with this bozo?  You're certainly not going to win them over by telling them how big an idiot this guy is.  They'll just figure you're a money hungry broker who's looking out for #1.  I've got three prospects that have money with this guy right now.  Total is about $1.3MM.  Those would be nice assets to get in here in January. 
 
Are his clients in his mutual fund plan only successful when the market goes up?  If so, I'd hate to be in that position with these markets.
 
Why don't you ask your prospects that?
Dec 10, 2008 11:43 am

I would also focus on distribution phase(ie retirement if applicable) show them what happens when you start taking 3,4,5% a year and when the market crashes what that income turns into.

 
B24 is right, probably not a lot of focus on the planning over there. Asset allocation probably but not actual planning
Dec 10, 2008 2:40 pm

i guess i would try to find out WHY they are talking to you in the first place, if they love this other "advisor" and agree with his philosophy.  there has to be something they don't like or they would not be listening to you in the first place, and use that info to your advantage.

Dec 10, 2008 3:07 pm
rankstocks:

Adam Holt is a joke.  I was listening to him a couple months ago when he said Edward Jones advisors had used Lehman Brother bonds to leverage client portfolios and then use the proceeds to fund risky mortgage backed paper (what?).  In the very next call he took,  he thought stable value funds were made up of 2-week treasury bills.  Idiot.

 
Here's his pitch....stocks bad, bonds bad, CD's bad, load mutual funds bad, UIT's bad, everything except his advisory platform bad.  What's even funnier?  The mutual fund store closest to my office was taken over by an Edward Jones broker that failed within 6 months.  What a joke.
 
Did he fail at Jones or the Mutual Fund Store?
Dec 10, 2008 3:31 pm

I think this guy has a great niche.  We can find bad in anything out there, but this guy is a true entreprenuer.  Same as Fisher Investments and Ron Carson.  They develop a business model and push it, kinda like doorknocking all day.  Leave it up to a joneser (rankstocks) to bash the store, makes them feel better.  Its bread into the culture. 


So...Spiffy, what makes you think you can do these clients any good in this environment?  Is this to better their portfolio (they offer some great funds) or to better your gross for January?
Dec 10, 2008 4:51 pm
Spaceman Spiff:

I've been running into this place a lot recently.  I'm amazed that people will listen to some guy they've never met in person and let him decide what they're going to invest in. 

 
Does anyone know how their system works?  What I envision is Adam Bold sitting down at his computer looking at funds, then telling his advisors what their portfolios are going to be.  The schmucks at the local Mutual Fund Store answers the phone during the call in show, sets appts, then signs people up.  He probably doesn't have a clue why or how the portfolios are set up, he just knows how to push the right buttons on the keyboard.  From what I've gathered, service is awful.  Fees are average.  Performance is blah. 
 
Does anyone out there know any more about this place than I've been able to gather?  Any skeletons in the closet?  It's never small money that I see there.  Usually $250K+ portfolios.   
 
Have you listened to podcasts of the Mutual Fund Show? The guy's the Cramer of mutual funds.
 
I'd imagine he knows a tad bit more about how and why to construct a portfolio than you're giving him credit for. He puts his expertise on display every week on the radio, and apparently folks with a lot of money are buying what he's selling.
 
 
Dec 10, 2008 4:56 pm

So we should not prospect anyone until this market ends because we cannot help them?  I think that is a terrible statement. I think you can help people, by repositioning assets(reallocation) finding if they were in the right allocation to begin with.

 
Client xfering in $84K today(yeah kinda small), but they had $175K in dec 31, 2007. They are 62, and only 10% bonds/fixed income in the portfolio(and that was high yield funds), the rest equities(some bad stuff too, funds that closed, got renamed, some Jones preffered(just kidding... but not really)).
 
Had they been allocated properly or had the advisor kept a better eye on the investments they held, I would like to think, that their portfolio wouldn't been in shambles.
 
So we find out what their risk tolerance is combine that with age,assets and goals, and build a plan for the future..
Dec 10, 2008 5:11 pm

Well dipshit..if you would have read SPiffs question..he was looking for an ANGLE to discredit Money Store. If it was all about basic allocation models, I think Spiff would have tried that already. 

WE all have accts (unless you've been prospecting for less than a year) where the portfolios are in terrible shape, especially from the last 2 months.  What you say in your thread is so f ing "duh" I can't control myself.  Your repositioning is a commission comment.  Like I said before, we can find bad in ANY portfolio.  I bet I could, within a very short time, find fault in several of YOUR portfolios Squash, but doesn't necessarily make you a bad advisor.  How long you been helpin people with their allocations...3 weeks?
Dec 10, 2008 6:00 pm

So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 

Dec 10, 2008 7:32 pm

I got it Spiff.

 
I cancelled all of my appointments today and didn't take any phone calls so that I could think about this for you.
 
Send your Mutual Fund Store prospects this book:  http://www.amazon.com/Great-Mutual-Fund-Trap-Investment/dp/0767910729/ref=sr1_1?ie=UTF8&s=books&qid=1228955304&sr=1-1