Specific "leaving Jones" scenerio

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Apr 3, 2007 3:04 pm

I left Jones two years ago (after six years with them).  The FA that went independent with me from Jones left after 35 months with the mothership.  He was sent a bill for approximately $10,000.  He settled with them for around $2,000.

Apr 3, 2007 3:32 pm

[quote=Gone Indy]I left Jones two years ago (after six years with them).  The FA that went independent with me from Jones left after 35 months with the mothership.  He was sent a bill for approximately $10,000.  He settled with them for around $2,000.[/quote]

That’s obviously bad news. I wonder if it has anything to do with the fact that he went indy and not a backwards move. I just find it amazingly hard to believe that a company with a 14% turnover rate last year over the whole company (so who only knows how high amongst just the advisors) enforces such a ridiculous policy and I can’t find a single thing about it (outside of the Jones web page) on google. And so far one person on this forum, which is composed primarily of ex Jones people, knows of somebody personally that got a bill.

Apr 3, 2007 3:35 pm

I know of 2 in the last 8 months, both were no in 'right to work states".

Apr 3, 2007 3:42 pm

I have no empirical data to support this, but I would suppose that the majority of ex-Jones brokers who are still in the business were verteran brokers when they made the jump.  (This was true in my case, and Gone Indy’s as well.)  Which is probably why you’re not getting the responses that you’re looking for.

Apr 3, 2007 3:52 pm

SP: veteran

Apr 3, 2007 5:47 pm

Actually, now that you mention it... I had a friend who went to Jones from Barney (he thought that an office with 30MM in AUM sounded like a pretty good deal) and soon found out that they frowned on such staples of his business as "B" Shares and stock trading. He also found out that 30MM in AUM that couldn't be converted into "C" shares was no bargain whatsoever.

So my friend wound up working at a Wachovia Brank branch... where he waited for several MONTHS for Jones to release his license. By which time his old Barney clients were gone and the Jones clients were no less useless than they were when he was there.

He went into teaching college after that (wasn't much happier working in a bank branch than at Jones).

I'm not pointing any fingers, and I'm sorry, I can't tell you if Jones wanted money too (I think they did) but I do recall that Jones (at least my friend blamed it on Jones) put a real hurting on this guy's life by sitting on his ticket as long as they could.

Apr 4, 2007 11:52 am

I left Jones after 24 months to go with Morgan Stanley well aware of the “training” Clawback clause as they call it.  Yes you will be liable. However you can negotiate with them for far less than they are asking.  Being upfront with them and honest will go alot farther than trying to squirm out out a legally binding contract.  Yes it sucks but they will get their money.  My $37500 ending up being $3000.  Good luck negotiating.

Apr 5, 2007 5:28 pm

[quote=Nole32303]Out of all of the ex-Jones people on this site, not a single one in a single thread still on this forum has ever said they actually physically got a bill for training costs. There's plenty of people out there that insist they will get one for $75,000, but not a single one who says they have gotten a bill. I am not saying they won't send one, but I think that may be indicative of something. [/quote]

I did.  So did a friend of mine.

Apr 5, 2007 5:31 pm

[quote=vagabond]

[quote=Nole32303]Out of all of the ex-Jones people on this site, not a single one in a single thread still on this forum has ever said they actually physically got a bill for training costs. There's plenty of people out there that insist they will get one for $75,000, but not a single one who says they have gotten a bill. I am not saying they won't send one, but I think that may be indicative of something. [/quote]

I did.  So did a friend of mine.

[/quote]

And how did you handle it? And what was the result?

Apr 5, 2007 6:03 pm

Really the first thing you should do is call HR and ask to get a copy of your employment contract.  They will fax it to you.  Some will say that this raises a red flag that you are leaving.  I don't think they are that coordinated, and who cares anyway.

In my case, first they sent out 2 letters within two weeks of me transferring my license.  One saying what I owe for training and another reminding me of the non-compete and confidentiality clauses.  Most everyone gets these letters and ingnores them.   A while later I got notice from the NASD that they filed for arbitration to recoup the training costs.  I believe this is the standard SOP now.   I got a lawyer and negotiated a settlement for a much lower amount, similar to dukenduke above.  They don't want to go to arbitration (only one case has, because the rep never replied to the arbitration notice.  The rep also never showed up at the arbitration hearing and Jones still didn't get awarded the entire amount), but they do want to show that they are "enforcing" the contract by going after everyone.  Not to mention if they average $5000 per settlement on 1000 reps per year, thats $5mil to split between Jones and their lawyers.  That pays one low ranking GPs salary.  Another way the IRs are their only profit center.