Thank's to all the Jones Haters

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Dec 2, 2005 2:56 am

I wanted to thank everyone for all their posts.  I'm now studying to take the series 7 with EDJ, and I stumbled across this forum while doing research to prepare for the next step in my training.  I want to tell you I was pretty sure I made the right decision to join Jones before I found this forum, but now I am 100% certain I made the right choice.  Look at all the hate. Jones gets slammed 10 times more than any other firm.  Why, because they treat their people bad?  Because they treat their clients bad?  The best analogy I can make is the New York Yankees.  I’m not from New York, and I certainly do hate the Yankees, but I hate them because they are soooo good.  Year in and year out they are always in contention for the championship.  I’m pretty certain that you all are pretty much the same way.  Just look at some of the comments that have been written:<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


 


“I hate Jones, but man do they know how to train brokers”


 


“All those kool-aid drinkers are just working for the MP’s” – Lets see 9000 IR’s and 300 MP’s on shear numbers that means I have a 1 in 300 shot of making MP.  So if I work hard build a strong book, and work hard to improve the firm I could probably improve those odds to 1 in 30.  I figure I have a great chance to be a major owner of a brokerage firm just by doing my job.  Where else are you going to get that opportunity?


 


“Their product offering is so minimal” – I’d rather be excellent at a few things than mediocre at everything.


 


“How many single broker strip mall offices can one firm need.” – Jones uses the most expensive business model in the industry and thrives at it.  Could it be that clients prefer to talk to their brokers face to face.


 


“I was an 5 year vet and went indy” – What could be a more ringing endorsement for a firm than that it trains it’s people well enough to go into business for themselves.


 


I have yet to met a Jones rep who isn’t a nice person, every one of the half dozen reps that I’ve talked to in my region have taken time out of their busy schedules to answer all my questions, offer advice, and encourage me to talk with them again.  I’m not so sure most of you would express the same courtesy, after reading newbie after newbie get slammed in this forum. So, I’m drinking as much of the kool-aid as I can get my hands on.


 

Dec 2, 2005 7:27 am

I just left Jones.  Was there good and bad, of course.  Are their serious problems, you bet.  Not everyone at Jones is bad or unfriendly, but keep in mind they are on a big growth push.  You will be surprised how those "nice people" change once you are hired and working.


Good luck.  Your eyes will be opened soon so keep that in mind.


p.s.  It's LP not MP.  Makes me wonder just how much you know about Jones.

Dec 2, 2005 8:04 am

Enjoy your office being next to a subway and nail salon. That really impresses HNW clients.

Dec 2, 2005 9:21 am

I was actually in an old friend's office yesterday. He works for an unnamed regional. Here I was in foyer waiting for him to come out. His office (and 10 others)---marble floor in foyer, oriental rugs throughout, 2 conference rooms with A/V equip. mahogany furn, etc,etc,etc. And across the street in the standard run down strip mall was guess who? jones with the cheesey signs promoting I don't know what hanging in the windows. Well, I have a 7 figure portfolio and IF I wasn't in the biz, guess which office would convey the proper message to me if I was a potential client? Huh, which one??   

Dec 2, 2005 9:43 am

Kool Aid,


Jones does a good job in the training arena. You sound like I did back in '01. I am sure you will see the light. I left and went Indy and have never looked back.


Sure, drink the kool-aid but dont get drunk off of it.



Good Luck,


Reg

Dec 2, 2005 9:57 am
Revealer:

I was actually in an old friend's office yesterday. He works for an unnamed regional. Here I was in foyer waiting for him to come out. His office (and 10 others)---marble floor in foyer, oriental rugs throughout, 2 conference rooms with A/V equip. mahogany furn, etc,etc,etc. And across the street in the standard run down strip mall was guess who? jones with the cheesey signs promoting I don't know what hanging in the windows. Well, I have a 7 figure portfolio and IF I wasn't in the biz, guess which office would convey the proper message to me if I was a potential client? Huh, which one??   


Correct me if I'm wrong but isn't that the business model that Jones has chosen to pursue? To go after those who are mid/mass market clients and grow them to become high net worth? To try to blend into a community like a small business? Most of that market would probably be intimidated by an office that is not as modest as your average Jones branch.

Dec 2, 2005 10:04 am

Kool-Aid-I agree with you 100% - Jones had a very good training model.  If it's the right choice for you, then that's fantastic.  I would urge, though, that after you are a few years in and other firms come knocking to speak with you, listen to what they have to say.


As a recruiter, I urge reps to do this all the time.  It's not so that I help someone transition.  In fact, I would say that 9 times out of 10, the reps that speak with other firms, learn that they are happier where they are.  What this will do, however, is enlighten you to other organizations and how they work.  There is good, bad and ugly everywhere you go. 


Just my thoughts.  I interviewed with many other competitors in my previous career and I stayed put 90% of the time.  The best thing to do is have an open mind and KNOW for sure that the business model you are in is the best for you. 


Jones is a great place for some reps.  If that's the right model for you and you're happy, more power to ya and congratulations - so many people walk into work everyday hating their boss, their company, their pay, whatever.


Best of luck

Dec 2, 2005 10:05 am

jones chooses that by force due to the lack of choice in platforms, vendors, and everything else to do w/ financial planning.  The bottomline on your comment is THEY choose v having the products and platforms to choose yourself.  Doesn't that really tell the story?

Dec 2, 2005 10:38 am

You keep sipping that Kool-Aid, and maybe someday, you too can be part of the Military Police ...


Maybe when you grow up, you can migrate over to REAL independence...but you'll have to unlearn a lot of bad habits...

Dec 2, 2005 1:32 pm

Ilovedogs,


LP would be great, but I'm going to work my tail off for a chance at MP in years 5 through 10.



Dec 2, 2005 3:21 pm

Kool-Aid Lover,


There are three levels of partnership at Jones: LP (Limited partner); GP (General partner) and MP (Managing partner).


Since you are new to Jones I wouldn't count on becoming Managing Partner in 5-10 years (since there is only one MP)


You may want to become a little more educated before you head off to KYC and embarrass yourself!


Good luck





Dec 3, 2005 1:18 am

Indy,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


Thanks for taking time to point out my mistake.  I did mean GP and not MP.  I don't know were my head was when I wrote the original post, probably too wrapped up into trying to figure the difference between bearish and bullish butterfly spread options. 


Setting a goal to become MP would be way too “pie in the sky” as it would take as much fate as hard work to make MP.


As far as making mistakes, what better time to make them than in training.  I have no doubt that I’ll be making more mistakes in the weeks to come, as well I have no doubt that I will not be embarrassed for making them.

Dec 3, 2005 1:28 am

KAL,



You've got a great attitude!



Keep studying for the 7. That's the easy part.



BPD

Dec 3, 2005 7:08 am

I have nothing against E Jones, but your comment "– I’d rather be excellent at a few things than mediocre at everything"  does not cut it.



It
is too limiting.  You carreer may last 25 years, why go with a
firm that  apparently is not equiped to handle the most profitable
of client when so many others can do both?



Good lcuk either way!

Dec 6, 2005 5:35 pm

I hate to spill your Kool-Aid but here are some facts:


1.  Jones still has the California AG office coming at them for over $300 million on this revenue sharing deal. Where AG is asserting that Jones crossed the proverbial conflict of interest line.  There is also at least one other major class action suit pending in State of MO. 


2.  Because of this pending litigation Jones can not raise any more capital through their BS limited partenship scheme.  How you going to be GP when you can even be a LP?


3.  I know of one hell of a law suit being contemplated on some very credible and new legal theories that could easily hit them for another $100 million.


As I said several times on this post; it is not the performance, or what some survey says about financial service companies.....it comes down to one thing THE CAPITAL!  Take it away and adios EDJ!






Dec 8, 2005 3:28 am

Mr. Legstrong,


 <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


After finishing “the NASD” rules section of my Series 7 training, I read your post, and since it dovetailed nicely into my training.  I decided to analyze the Statement of Financial Condition that every firm has to provide their clients and prospective clients.  Here’s what I found:



As of June 24, 2005 the firm has Net Capital just shy of $600 million to meet minimum requirements it would only need $50 million.  So if the $400 million of pending and contemplated litigation you wrote about went against the firm then “the Capital” would still be there, to the tune of 3 times the requirement.   Not to mention that since Jones is a Partnership the general partners are on the “hook” for loses, and I seem to recall the general partners paid the bill the last time.  With Doug Hill paying the largest share, and where I come from that is what the leader should do.  


So I’m pretty sure the firm will be around in 3 years when I’m first eligible for LP, and I’m confident we can weather Bill Lockyer and his quest to become Governor of California.  

Dec 8, 2005 11:25 am

aahh Grass Hopper


Unfortunately you do not know how to compute minimum net capital.  When capital goes down the required capital goes up.  Some fancy stuff called customer reserve calculation.  Look it up!  


Anyway EDJ is in the plaintiff class action attorney and AG cross hairs; these attorney fellas want that capital.   Do yourself a favor and research the fall of Drexal Burnham - it was a lot bigger than EDJ both in capital and profits...Then BOOM - Gone! after the nice people from the AG office got to them.  Research the fall of Drysdale Securities, did some bad stuff BOOM! gone in a week!  Research General American Life Insurance in St. Louis...BOOM! gone in three weeks! Look at Executive Life it was rated AAA then BOOM gone -the California AG took it away.   Reseach Stock Walk (aka Miller Johnson) up in MN a few years ago - 200 million hit to capital - gone in three days. 


You see Grass Hopper financial services companies game plan is to make as much as they can without getting caught.  When they get caught - it can create a meltdown of capital so quick that it can be fatal.


Mark my words if and when EDJ gets hit for $100 - $300 million and all of the LPs are trying to get their money out and the GPs are trying to move all the cash they made to Uraguay or something - it will be MELT DOWN time.  I would say that there is about a 40% chance of this happening.  Do the research on the financial services companies that have melted down the last 25 years....I am not making this stuff up.  Ken Lay at Enron was convince that it was a PR problem right into bankruptcy..a judgement comes down the pipe on EDJ and that is a direct hit to capital.  Also compare the capital base to other BDs -


EDJ is CON game.  The reps drink the Kool Aid and then believe that they are going to help people.  The Reality is most of them are steering their customers into things like ICA where it is statistically impossible to beat the market over the long run...Why?  Because ICA has over 90% correlation to the S&P.  The customer would be much better in low cost index funds...but now that would not be in the best interest of EDJ Geeps and Reps now would it.  Does that sound just little like a CONflict of interest?


So here is the EDJ (and others) game plan:  Lets try every concieveable line of BS to CONvince the clients that we are not skimming money from them.


Also ask the guys pooring the Kool-Aid for you why EDJ has not issued any LP units lately.....The answer is simple- Because they can't.  Their attorneys will NOT sign off on the nescessary legal opinion that their is NO material liabilities.


The GPs are just a bunch of racketeers, the built an organized system of skimming money from hard working Americans and they are making a lot more money than they deserve!  And they use the rep base as a tool to do this. Nature has a way of weeding out these models and the unsatiable greed that the GPs have demonstrate over these revenue sharing (kick back) schemes could be the end of EDJ.


Of coure I could be wrong...but I bet it is just a matter of time!


Good Luck CONvincing your clients that you can actually help them!


Regardless I get a good laugh reading about the Kool-Aid kids on this board.




Dec 8, 2005 12:01 pm

All right Mr. Legstrong,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


I've got some time now that I'm on the review portion of my training.  I'll take on your challenge, and do a deeper dive into that fancy customer reserve calculations thing.  Lets see if I can move that boiling pot of hot oil from one pedestal to the other and open the door to the temple.

Dec 8, 2005 1:25 pm

Don't forget to research the other "melt downs" I noted....that is more important than the customer reserve rules! It will illustrate just how fast well capitilized profitable firms can fall apart.  Just throw in a judgement or two...BOOM - Gone!

Dec 8, 2005 11:39 pm

The problem with these forums is that people can speak with an air of authority when in reality they haven’t got a clue.  Lance after looking into the issues you presented I’ve concluded that you really don’t know what you are talking about. Lets start with your statements about how minimum capital requirements are calculated.


 <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


SEC rule 15C3-1 allows for different types of firms to meet minimum capital requirements in different ways.  At Jones we must maintain minimum net capital equal to $250,000 or 2% of aggregated debit items arising from customer transactions.  So your statement that as net capital decreases, the minimum capital requirement increases is false.



Further your assumption that litigation and settlements effect the firms capital position is false s well.  As with the settlement with the SEC and the AG of Missouri the GP’s paid the fine from their own pockets.  Keeping the firms capital intact.



In the cases you mentioned in your post.  All of them involved serious financial catastrophes that resulted in litigation, and not litigation that lowered capital. 



1990’s Drexal Burnahm – the inventor of the Junk bond portfolio, and over-funding schemes.



1982 Drysdale Securities – Firm under funding that directly led to the 1986 Government Securities Act creating rules for Capital Requirements for all broker/dealers.



Late 90’s General American Life Insurance (now owned by Met Life) – Submitting false claims to Medicare.



Early 90’s Executive Life – Multi billion dollar portfolio of junk bonds.



Late 90’s Stockwalk parent of “MLK” – Out of compliance with federal rules regarding minimum capital requirements.



In a nutshell they committed serious financial errors or fraud that resulted in their loss of capital and their downfall.   This isn’t even close to being the case with EJ. 



The litigation brought by AG of California is regarding failure to ensure that our clients were informed that EJ received profit sharing from the “preferred funds”, and that profit sharing payments were distributed to IR’s in direct proportion to the funds sold.  This in no way reflects as bad investment of our net capital, nor were we skimming from our clients as our customers did not pay more for their funds than someone who bought the funds through a broker not receiving profit sharing. 



Maybe you should get off the Jack Daniels and start drinking the Kool-Aid.