EDJ...30 months out and wanting out
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Spiff I think you misunderstand. I think Jones is a great firm. … But if you look at the original post – five brokers in seven years – you can see where the growth model has its flaws. I’m sure someone will eventually take over this particular office and make it work. When that day comes, I hope he’ll light a candle for the five carcasses in his storage room.
I know they are trying to change -- fewer trunk of the car starts, more Goodknights, but they still don't develop their human capital the way other businesses do. (I know this is an industry-wide situation.)BH,
I think the turnover has nothing to do with commission vs. fees. I doubt that if each of those brokers used fees , they would have survived.[quote=Spaceman Spiff]
So, if transactional brokerage is done, why are my clients buying all these great muni bonds this week? Oh yeah, because I'm calling them to tell them to buy them.[/quote]
Do you ask them if they believe interest rates will be going up from here, as part of the sure to come inflation?
No, I ask them when in history the spread between munis and treasuries has been so high. They scratch their heads. I tell them never. We buy the bonds.
You're comfortable PREDICTING inflation rates? You're more of a man than I am. I can't even predict what I'm going to wear tomorrow, much less where inflation is going.Heh. Might as well plan tomorrow’s wardrobe, the country is so frozen and mortified right now.
Well the world population is going from six billion to nine billion in under fourty years, so inflation looks inevitable. Some real men are throwing money into KOL right now, you've got enough munis, dude.[quote=Spaceman Spiff]No, I ask them when in history the spread between
munis and treasuries has been so high. They scratch their
heads. I tell them never. We buy the bonds.
The current government has promised billions of new dollars coming into the economy. The current leader in the presidential polls has promised to add anohter trillion.
When government does that it's going to be inflationary. What happened to interest rates from 1977 to 1981?
What happened to the value of bond portfolios during those years?
Why not stay in cash for two to three years while you wait to see what happens.............oh wait, I know. Investors would object to paying you 200 basis points for your advice when that advice was to stay in cash.
A cynic would conclude that financial "advisors" would rather offer bad advice than good advice as long as they get their fee.
Do you guys ever think that the right thing to do is go to cash and wait for two or three years?
Putz, I cannot believe that even you would be such a wuss as to wait in cash for two or three years. Dude, keep your spending in cash but for **** follow your own advice about inflation. Cut the crap, options other than for specific protection and anything other than core bonds is wussy BS. Stay invested in blue chips.
Mark my words, if you are bored and tired of smelling your own *****, start paying attention to ETFs like KOL. Be a man, old man.I had a client ask me today about my fee. Seems he is down 8.5% ytd and wanted to know why he is paying me 1.25%. I reminded him that his Vangaurd fund is down 32% ytd, he wasn’t paying me for the 8.5% he lost, he was paying me for the 23.5% he didn’t lose. ACAT signed, now I have all of his money. The fees are for advice, which transactional brokers have a hard time understanding. If that advice is to go to cash or bonds, so be it. Of course, he didn’t have to pay commissions on any changes when we went to bonds back in January, as he would have in a brokerage account.
[quote=Getthere]
Putz, I cannot believe that even you would be such a wuss as to wait in
cash for two or three years. Dude, keep your spending in cash but for
**** follow your own advice about inflation. Cut the crap, options
other than for specific protection and anything other than
core bonds is wussy BS. Stay invested in blue chips.
[/quote]
KIds, the deal in being a financial advisor is to make money for the client--not 100 to 200 bps for you.
It is probable that the market will trade within a narrow range for the next ten years as the mortgage crisis unwinds, we deal with a deep recession coupled with the inflationary pressures that build when the Treasury prints money or borrows money.
It appears that the Treasury is going to be borrowing huge--as in HUGE--sums of money in the coming years. All that borrowing is going to force corporations and municipalities to pay higher and higher rates in order to attract investors.
Corporations paying higher rates does no favors for bond prices, nor for stock prices.
In light of my belief that the market will go nowhere for ten years or so I see no reason to run the risk of the stock market which will almost certainly be flat for a decade when a flat return can also be generated by putting your money in an insured bank account.
I understand that this drives financial "advisors" crazy because you have to offer advice, even if it's terrible advice, in order to justify your pound of flesh.
I have argued against the AUM concept since it first raised its ugly head and I see the coming year to two years as a chance to bury the idea on the trash heap of history.
Considering how little most "financial advisors" actually do getting a base salary and a chance to earn a bonus is more than fair.
KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[quote=Primo]KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[/quote]
I am not suggesting that you work for free.
What I am suggesting is that you work for a reasonable base salary and a shot at a bonus pool based on the profitability of your cost center.
Oh, where a little statment can lead. I think the reason so many edj brokers leave is they are not making it financially...I came in with a years worth of extra money to help me get through...I say it is way more then the money. The new broker is out on his own.. at the beginning.he does know the difference between a roth and a trad, a fixed or a variable annuity let alone how to use a portfolio system that does not even know which mutual fund is which. (have you tried to rebalance a por folio lately?...it takes 2 years to know to use another system like instant xray...to understand what you should be doing...then you ad a crazy market. There is very little help because the guy who recruited you is out of the country on the diversification trip you won for them by blindly following them.. thinking this was an easy job,,just go and and knock a few doors till you find some one who knows less then you do!!" I quess I am saying I am over my head!!! I do not know what to do!!! I owe them for the training that I never got, or how to really make it in this business, how to really be a financial advisor....
Maybe I can go back out and knock a few doors and NOT talk about financials......(now I feel a little better!!)I MUST be going crazy I have read all your post for the last 3 years…It is kinda fun to jump in a get you all engage in my life at jones!!! gotta love it!! This is more fun then watching uptick live!!!
[quote=Provocative Put] [quote=Primo]KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[/quote]
I am not suggesting that you work for free.
What I am suggesting is that you work for a reasonable base salary and a shot at a bonus pool based on the profitability of your cost center.
[/quote] So this is how you are paid?
[quote=Provocative Put]What I am suggesting is that you work for a reasonable base salary and
a shot at a bonus pool based on the profitability of your cost center.
[/quote]
Cost centers by definition are not intended to make a profit. Otherwise they would be called "Profit Centers."
Regardless, if you were to base an FA’s bonus on the profitability of his profit center, how would that significantly reduce his incentive to charge what you deem to be a high fee, if that helped lead to higher profits for his profit center?
This seems to be a solution in search of a problem.
[quote=Morphius]
Regardless, if you were to base an FA’s bonus
on the profitability of his profit center, how would that significantly
reduce his incentive to charge what you deem to be a high fee, if that
helped lead to higher profits for his profit center?
[/quote]
How about this idea. The only fees the client pays are to the mutual funds and other packaged products that they buy.
Your profit center gets credit for a sales charge when a product is bought and also gets credit for any trails that follow.
Surely you’re not going to say that the quality of your advice depends on how much you’re going to be paid. Are you?
[quote=Provocative Put]
How about this idea. The only fees the client pays are to the mutual funds and other packaged products that they buy.
Your profit center gets credit for a sales charge when a product is bought and also gets credit for any trails that follow.
[/quote]
So your plan is for the mutual fund house to be paid, but not the advisor, since 12b-1 fees are simply for marketing expenses.
And who, exactly, do you expect to do this work for free? The brokerage firm or the advisor?
I would also like an answer to my question. How are you paid Put? Although I doubt you would be so brave as to answer a direct question with a direct answer. My form of compensation may be disliked by some, but at least I do not make holier than thou comments without the ability to back them up and offer an alternative.
monopolybet,
How did you win a trip for someone? A hire is one tick on a checklist of requirements. The reality is that you “probably” cost other FA’s time and production. Try a bit of personal responsibility. Blaming a lack of success on someone else for helping you, just not as much as you wanted, is lame at best. Pffft. This gets old.