Arbitration and The Green Machine
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I missed the part about us discussing building a balanced portfolio. You didn't say what else your client owned, so I went with what info I was given. I realize my mistake was simply stating the most recent history and performance numbers. But evidently they're irrelevant. Nobody needs to know how well a fund manager or team does in a bear market. I should have said that CAIBX has outperformed LAFFX on the YTD, 1 year, 3 year, 5 year, 10 year,and 15 year returns. Is that chasing returns? No. It's a pattern. If you are using the reversion to the mean arguement, then the mean is better on CAIBX than LAFFX and any reversion would work in the favor of CAIBX over the long term.
Question: If you have a client tranfer assets into your office do you always continue to hold them? If that client owns XYZ investment that is more expensive and has a lower return than the investments you normally use and trust, don't you sell XYZ investment in favor of your own? What's the difference in this case? Is it simply because it was sold through an EDJ office? Or, does it just piss you off that you didn't have the opportunity to transfer the client into your new office and tell him that you are sorry that EDJ made you sell him those mediocre funds. You know they have this list we had to sell from. I really wasn't allowed to sell you a better product. It's all they had. NOW that I'm independant I can sell you anything I want. I was so stupid back then, you know, 18 months ago. I've learned soooo much since I left. Let me show you this fund from...If Lord Abbott is such a bad fund company, why are they still a preffered or Putnam or hell even Hartford? I could transfer ANY fund from ANYWHERE and with enough jockeying of numbers and hypos, I could justify a commission trade. That is all it is to you Spiffy, a way to justify your commission trade. As I was taught, you can move funds every 3 years at Jones…just put in the fspend…we reviewed acct and found xyz fund to have a better performance in the last 1-3-5 year time frame and client advised to move. zip zap…wally pak…NEXT…“Look Dorothy, its not a wizard afterall”…Your always chasing returns. Are the analyst at LA dumbasses?? IF I remember all the funds at LA aren’t on your preferred list…did you look at everything they have to offer as a possible choice to NAV…well of course you wouldn’t do that…hell you don’t get paid to do whats right for the client…Would you call your LA wholesaler and have a conversation about the underperformance compared to CIB…what are they recommending as a possible replacement for Affiliated…etc…hell no…why would you …you don’t get a trip category doing that…but “WE"RE THE ONLY COMPANY THAT DOES THE RIGHT THING FOR OUR CLIENTS”…what a crock of shit…
Seriously I use to compare everything to CIB-hence CIBforeveryone! I now have realized on the outside that not all funds have exposure to international stocks and they aren’t all supposed to move the same direction at the same time.
My RL used to talk about putting money in the funds that were up on the statement because then the client didn't really see the sales charge. Buy high, sell higher was the mantra. This is another example of how A share business influences advisor recommendations.I’ve got all your f’'ing tricks down pat…it’s nothing but a facade in St Louis…a big joke…the whole thing …from training to marketing…you guys are a bunch of frauds…Why has the s&p returned something like 11.6% the last 15-20 years and the ave clients return is less than 4…because of jokers like you…moving their money every 3-4 years, chasing returns…and generating those great GP/LP returns…damn you guys are wizards…
I love CIB, but CIB and LAFFX are two completely different funds. According to the latest AF mailer CIB has only 20% in US-based Equities (I stress the “based” cause with the mega caps AF owns most of the companies are global but you can say MMM is American cause its Prez sits in a bldg in Minneapolis!) And I’m not a huge Lord Abbett fan, but I doubt they will be sucky forever (same with VK).
Well heck…why should we care if they are “sucky” for any length of time. Just find something, anything, that shows better performance and move them. Again, its not “making sense of investing”…its…“money in motion”…And this whole rant has nothing to do with LA…as I probably have very little % compared to my total holdings and a lot more in American Funds…which they suck this first quarter…I guess I need to find another fund company thats done better this past quarter and move my AF clients…but the issue has to do with not thoroughly looking at what any fund company has to offer before jumping to something else. But then why would we…why would we try to build trust with any of our clients…because the Jones thought process is they are customers…not clients.
Hartford's returns have been very good. You really should take a look at them if you haven't already. At a minimum you should get to know Cap App.
CIB is right. Not all funds are created equal. But we aren't talking about all funds here. We're talking about those two funds that the EDJ FA sold and moved to CIB. First of all, he couldn't have done it without your client's approval. So somewhere in the process YOUR CLIENT!!! decided to take the direction of another advisor. I don't agree with the buy and forget strategy that Jones is so famous for. I believe that if there is a valid reason to move from one fund family to another, performance being the major one, then you do it. I'd rather my client pay me another commission to make the move and understand that I'm trying to make money for him over the long term than to stay in a fund that isn't keeping up with everything else. If I don't do it, some punk like you is going to do it for me. This new FA, when reviewing YOUR CLIENT'S!!! portfolio, found an area that could use some improvement. He made a change. My personal feeling is that he made a good change. Did it cost YOUR CLIENT some tax dollars. Absolutely. But you go ahead and sit there and tell that you know that CAIBX would have put/kept more money in his pocket over the last 1, 3, 5, 10, or 15 years, but it was a bad move because he now owes some taxes. It's always better to save money on taxes than to move to different fund that has historically made more money. Jones has never "taught" me that I can switch funds every three years. In fact, my RL says that in his office the minimum is 5 years. Compliance sends fspends for ANY fund to fund switch I make. Don't give me any crap about Jones teaching us to switch funds all the time. They'd just as soon us leave them alone forever. If you think people don't do EXACTLY what you're telling me I shouldn't be doing (chasing returns) then you are naive at best. They're going to see some magazine article somewhere and wonder if their fund that bspears sold them is that good. Next thing you know, they're on Smartmoney.com typing LAFFX into the search field and within 30 seconds comparing it the fund they saw in the magazine. Before long they're doubting your intelligence. Again, you didn't answer my question. You went on another rant about preferred funds, compliance, etc. I stopped reading. So, I'll ask again. Let's say you transfer a new client into your office from say, UBS. In his portfolio he has fund XYZ that in your opinion is not as good as fund ABC that you use, know, and trust. What do you do with it?You know, at LA if you don’t want to use LAFFX you only have one other LC value choice. And it’s really not true LC value. It’s All Value. And in our system it’s a growth fund. So, if he was strictly looking at the preferred funds (which I would guess he would be inclined to do as the new FA) he’s not going to find another LA fund to switch to and not add additional risk to the client’s well balanced portfolio. So, he can leave it alone or have a discussion with the client about options. Evidently your client made the incorrect choice.
[quote=CIBforeveryone]Seriously I use to compare everything to CIB-hence CIBforeveryone! I now have realized on the outside that not all funds have exposure to international stocks and they aren’t all supposed to move the same direction at the same time.
[/quote] WOW.I just found out that the person who took over my office churned and burned a few accounts lately too (an understatement). This individual has been in five (count them) 5 different positions with three different companies in 6 years, and with Jones twice in that amount of time. This individual was allowed to take over two (count them) 2 different Jones offices and had two outside positions and is the least admired person in the two regions “it” has been a part of. “It” tells a lot of lies, does a ton of Hartford, and is probably sucking it up big time by now as far as returns, but “it” doesn’t care. “It” will be Seg 3 forever. “It” sucked up to the right people in St. Louis and is their pride and joy, I imagine. I have seen a HUGE breakdown in compliance in Jones as of late. They are letting the brokers do whatever they want to do to people.
I would investigate the fund family dumbass...I would do DUE DILLIGENCE...If I could justify nothing met satisfactorily, then yes I would explain to the client what I've done. But on the first meeting, to make a suggestion like this without explaining the fees (straight from my client) and or tax situation..is...well...worth a complaint in my book. You didn't answer my question...Would you call LA and talk with them about the clients acct? Hell, would you call your internal mf research and talk with them about it...well HELL NO you wouldn't...none of this crosses your mind...alll your doing is calculating YIELD TO BROKER....another famous phrase I learned at the green maching. So are you exhausting every avenue in making a change for the client that is in its best interest? Are you evaluating every angle that would have the most benefit to the client and the least benefit to you...are you..everyday.
This is the dumbest argument I have ever heard. You two realize you are comparing two very different funds, right?
its fits you, you’ve been one of the biggest dumbasses I have ever had the misfortune to read.
[quote=Maxstud][quote=CIBforeveryone]Seriously I use to compare everything to CIB-hence CIBforeveryone! I now have realized on the outside that not all funds have exposure to international stocks and they aren’t all supposed to move the same direction at the same time.
[/quote] WOW.[/quote] Max you must be in a better mood today. CIB, how long did it take you to figure out that mutual funds may invest differently, have different objectives, have different allocations than other mutual funds? What makes this amazing, you didn't even pick the best AF. I second the WOW.Maybe I was premature on the good mood.its fits you, you’ve been one of the biggest dumbasses I have ever had the misfortune to read.
How many investments have you swithched today Max…was it bond to funds or funds to bonds or hell even the scarry funds to funds…
This thread has reminded me why I do fee based business. Never will a client (or another broker for that matter) question when I make a change because there is no commission. They know the advise is based on what I feel is best for them, not a commission. Also, my clients know that sometimes doing nothing is the right thing to do, and fee based accounts eliminate any suspicions.