Edward Jones Payouts

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Aug 6, 2007 10:39 am

I am in what you might call "stage 3" of the interview process with Jones.  This is the only branch that is hiring in my area.  Morgan Stanley, Merrill, and AG Edwards are not currently looking for new FA so I guess I am stuck with EJ(but that might not be bad).


A couple of weeks ago I spoke with an EJ advisor and she stated she had $50mil AUM.  How much yearly income is usually generated from AUM with Jones? 


How much AUM would you need to bring in $100,000 a year?

Aug 6, 2007 10:52 am

Varies SIGNIFICANTLY. 


Probably of more importance is how many NEW AUM per year. 


However somewhere around 25 million is probably the avg that you are looking for to bring home 100k (before taxes).


Aug 6, 2007 11:36 am

Fish,


     As Gad said, it could vary greatly.  If that 50 million is in A-share Mutual Funds, that will generate a mere $50K annual income at Jones. I do know an ex-Jonsers who had just $40 million but it was a large stock book and he was doing $400 K gross which works out to be $152000 pre-bonus annually.  So each book composition will determine what the income level is.  Bottomline to you is that the payout works out to be 38% of new business generated plus any residual income you might have in your book, and since you are new, that would probably be $0.00!!

Aug 6, 2007 12:17 pm

38% of what???


38% of the incentive given to Jones for the fund?


What is a typical kickback?  2%?

Aug 6, 2007 12:41 pm

Kickbacks, incentives...


Fish, these are terms that teamsters are more used to working with. We professionals in the industry do not get "Kickbacks" and it is extremely insulting to hear our compensations referred to as such.


Ask yourself this question... If the big boys aren't hiring right now, why do you suupose that is?


What if it's because they see a very tough market ahead where the chances of staying in this business is slim and they don't want to risk their capital right now? Then what are you saying? That you know better than they do?


Now, it could be that the BOMs are keeping their offices open on the chance that they might recruit in somebody from the other offices, but Wachovia's "Blow off to the upside" in that arena seems to have quieted the markets there for now (We all hope that WS isn't making the mistake that Pru made before the last bear market!).


Might also be that they were put off by your manner in particular (asking about kickbacks and incentive programs etc) You might want to try to wait this period out and give it a better run (after you've smoothed off your own edges a bit) half way through the next recession. BOMs will be more willing and have more office space available to take a risk on timing your entrance right at the midway point. Plus, Don't Settle! If you truely think that Merrill is the best place to be then why would you put yourself through the wringer at Jones? (Or anyplace else for that matter.) It doesn't say much for you or your self respect that you see yourself as worth so little that you'd sell out to the first buyer that made an offer. 

Aug 6, 2007 12:41 pm

38% of GDC. I know the local rep really well.  She says she gets 40% of yearly GDC, and then Jones gives her support money for her office, corporate benefits, etc, so she figures it ends up being around 50% when all is said and done..........


She has a $40 million book and does $125,000 a year in GDC, so a lot of 12B-1s............

Aug 6, 2007 12:50 pm

I had roughly 28 million when I left Jones. I think my income my last full year in 2005 was just north of 100K, however, I brought in a lot of new business. One of the many ways Jones differs from the wires is that at the wires its all about AUM (managed money) vs. at Jones its all about NEW Aum that will drive your income (at least when I was there)


Best of luck to you!

Aug 6, 2007 1:07 pm

Thank you for addressing the question with regards to the AUM.


I am extremely nervous about the possible change in employment and from what I have gathered on this site it can be a stuggle.  I wish I had made this move years ago.  I have three kids all under the age of 7 and live in California which is not cheap.  Providing for my family is #1 so I do not really care which firm I work for as long as I can be productive.


My biggest hurdle will be doing the constant sales.  I tend to focus much on performance and research of investment vehicles.  I have done well for myself, but that has been limited to just two years of personal investing.


I do appreciate the forum and I do want to thank those that take the time to help those that need it.

Aug 6, 2007 1:32 pm

Fish,


Three kids and you're going to jump into a business with a 90% failure rate? Because providing for your family is number 1?


Why don't you just open a restaurant? Especially if you don't know how to cook.


have you ever watched the movie Glengarry Glenn Ross? Do you think that hard work is all it takes to be a "Closer"? Shelly worked HARD and knew every trick in the book and did NOT take no for an answer and yet he was on the balls of his ass because sometimes that's the way sales is. You cannot push a string!


Sometimes we do things in this life that close doors to us. We party instead of studying in college. We get mad at the coach and quit the football team. We have too many drinks at the Christmas party. We have three kids before we have a career. Lots of things are done today that alter who and what we can become as a result.


That's where you are. I don't want to be the wet blanket but I don't think this is a wise move for you. Not at this time anyway.


There are lots of other opportunities in this world, go be a reverse mortgage salesman (there is an industry that is going to grow, and what they are allowed to rape these people for is amazing!) for example. This industry has come through a bull market and is more likely to see a down turn now than a continued uptrend. We see it at every top, when people want to jump in and make some of that easy money that brokers make. It's like real estate speculators last year (we actually had a thread not long ago about how you can never lose in real estate). That's what you are, a late jumper, and Jones is willing to give you a shot because if you fail then they'll plug the next guy into your slot and then the next guy and the next guy, each adding to the dead AUM in the branch.


You want help, here's help, Do Something Else!

Aug 6, 2007 1:48 pm

Fish, it sort of sounds like you are doing this for the money.  If that is the case, your situation may not be ideal.  You can do it for the money if you are 23 and have no expenses.  With 3 young kids, living in CA, you might be in  for a rude awakening.  And you might spend your last nickel doing it.  If you can support your family on savings for 3 years, by all means jump in.  But if you have 3-6 months saved up, I would not risk my family on this bender.


You have to REALLY want to do this.  You have to REALLY want to sell, talk to people, and not spend time "analyzing" stocks, asset allocations, performance, etc.  You will educate yourself right out of business.

Aug 6, 2007 1:55 pm

I do not know how to respond to that post.


There are a couple of things I can not shake:


1.  I think I have the proper skill set to excel in this business.  I actually feel that coming in during a possible flat market would be great.  It would weed out the average and I think I will be better than that. 


2.  I do not know if it matters when I get in.  I am looking at this as a career.  If I struggle it will be now or later, I do not think the state of the market will make a huge difference.


I am trying to appreciate the above response.  I can not figure out if it is an effort to be helpful or just rude.  I will assume that you are trying to be helpful and I will ignore the attitude.

Aug 6, 2007 1:57 pm

The above was not a response to broker24.  It was to the previous post.

Aug 6, 2007 2:12 pm

Fish,


Do you have sales experience?  Can you handle rejection? Can you live off $40k for year 1 and 2, and then possibly less in y3 and 4?


Aug 6, 2007 2:31 pm

I know that I'm a broken record, but if one needs to make money in the 1st year, a good insurance agency is the way to go. 

Aug 6, 2007 2:32 pm

" I think I have the proper skill set to excel in this business.  I actually feel that coming in during a possible flat market would be great.  It would weed out the average and I think I will be better than that.  "


You ask about "Kickbacks" Then you say that you have the skill set to excel. A flat market? How about a down market? And you're sure that this would weed out the people who have been doiing this for years so that you can shine as someone better than that.


And you have the ballz to "Ignore the attitude"!?


"I do not know if it matters when I get in.  I am looking at this as a career.  If I struggle it will be now or later, I do not think the state of the market will make a huge difference."


Which proves that point number one is a fabrication of a deluded mind! How can it not matter when you get in? How can it not be easier during a market when things are going up than when they're going down? I've sold in up markets and I've sold in down markets, I'll tell you, it's easier in up markets!


An advisor's job is to advise, and I'm advising you that this is not the right time and Jones is not the right place (because it's not the right time). Go do something else for a while until we've gone through a bear, then you'll want to look at the career (my guess, however is that you won't because then you'll have seen your own portfolio go down and you'll figure that there is no way to make money in the stock market. How do I know this? Because I've been in this business for over 20 years and i know how investors feel at different points in the cycle.


It's a very common mistake of people to think, once they've made some good investments, that this job is a piece of cake.


Yes it's rude of me to lay a dump on top of your birthday cake right after you made a wish. Yes it's rude. I'm sorry, I'm being rude, but I still think you'll be better off not eating that cake! 

Aug 6, 2007 5:53 pm

As was said before, if you have 3 YEARS of living expenses saved up, then you may want to look into this. If you do NOT have that kind of money saved, then do NOT do this.  Also, do NOT listen to the "here's what I did in production my second year..." crap from any Jones people.  My interviewer told me he made $200,000 his fourth year in the business. I realize now that he must have meant gross, but he portrayed it as net.


Given your situation I would recommend NOT taking the Jones job. Take it from someone who has taken that job (with a newborn baby, and a spouse who did not work).

Aug 6, 2007 9:30 pm

Did the person you met with explain their incentives to sell you on joining? 


Fish:

I am in what you might call "stage 3" of the interview process with Jones.  This is the only branch that is hiring in my area.  Morgan Stanley, Merrill, and AG Edwards are not currently looking for new FA so I guess I am stuck with EJ(but that might not be bad).


A couple of weeks ago I spoke with an EJ advisor and she stated she had $50mil AUM.  How much yearly income is usually generated from AUM with Jones? 


How much AUM would you need to bring in $100,000 a year?

Aug 6, 2007 9:48 pm

Fish, this board is a microcosm of the rejection and ridicule you will face roughly 50 times per day (if you are good) in this business. 

Aug 6, 2007 11:59 pm

Fish,


1st to answer your question:  The payout varies slightly based on what you are selling, but I usually averaged 37-38%.  The 40% number they will give you is accurate for most things, but stock trades and a few other things are usually lower, which lowers the % a bit.  Also, they take 1% off of the top for national marketing, so even if you only sold products with a 40% payout you would get 39%.  And you have probably $1,000/month expenses on top of that, which you pay out of your own pocket.  And after the health insurance subsidy goes away and you start paying for 100% of your health insurance, you will understand why so many people are clamoring for socialized medicine.  So really you are netting quite a bit lower than the 40% figure they quote.


2nd, Whomit may not be the most tactful poster, and I may quibble with a few points, but for the most part he is correct and is giving you good advice.  I had a similar family situation when I started, but it was at the beginning of a bull market.  I also had substantial other money to fund my hobby for a few years until I started making money.  If I had to feed my family on my paycheck for the 1st 3 years I would have been forced to quit and take a job paying more $$.


I hate to be negative, because this can be a very emotionally and financially rewarding career.  However, unless you have either substantial savings you are willing to part with or a spouse with a good job, you should not even consider this with little kids at home relying on you to provide for them.  Even if you do, I would think twice.  Most people fail, and if you blow through $100,000 savings first, that will be very difficult to regain.  I know several people who have moved on to other careers who would have far better off financially had they never heard of Edward Jones.

Aug 7, 2007 12:07 am

I don't think I answered the right question above, sorry.  


When you are in a fast growing mode, maybe 10-25 million, you will probably gross 1% of your AUM, not from management fees, but primarily in new business generated from new clients and adding investments for existing clients.  Earlier on you should have a higher %, from what I saw the % is lower as your AUM rises.


15 million in AUM translates to about $150,000 gross.  38% of that is $47,000.  After expenses, you will be making about $30-40,000.  I'm going from memory here, but that's probably where most people 2-3 years out are.  You have to be at the top of the heap at EDJ to be making $100,000 in your first 5 years.  It happens, but rarely without assistance.