Coming: EJ's New Production Standards

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Sep 19, 2009 8:53 am

Some of this has been addressed on another forum, but it looks like some changes are coming to production requirements:

 
First, they are considering the possibility of allowing FA's to fall back into a lower segment (Seg 4 to Seg 3, etc.).  This seems reasonable as we all know someone who hit Seg 4 or 5 because of a major ticket, only to fall back to $12K gross a month for the next several years.
 
Have also heard that there will be no more "meeting expectations" when you are at 70% of the standard.  If you are below 100% (which is $27,000 for anyone out 6 or 7 years), you will be considered BELOW standard.  I think the main effect this will have is eliminating a LOT of Seg 3's from going on the Div Trips, as now anyone out over 6 or 7 years will have to be Seg 4 to qualify, since they made the change that you have to be "meeting expectations" to register for a trip.
 
A friend in St. Louis said these changes were being tossed about over a year ago (before the market blew up) but put on hold becuase of market conditions.  If things continue to improve, look for these changes by year end.  If the markets crash again, well......
 
Weddle said on the most recent Sugg Box that the "legal, ethical, and profitable" standard still stands, and JonesNet still says Seg 4 & 5 is not mandatory.  However, it looks like they are trying to find a way to make it less "enjoyable" for people content to earn less than $100K a year to hang around.  Probably not a bad idea.
Sep 19, 2009 9:02 am

Personally, I never understood the Meeting/Exceeding/Below thing. I think the segments are stupid. I understand for training and development purposes, but segment numbers give advisors a false sense of accomplishment. I am a perfect example. I hit segment 3 very early in my career (maybe 18 months or so?) because I had a string of 20K+ months early on. Yes, I earned it, but I also then fell back to the 10-12K range for a while.



I think they need to get away from the segment things and just focus on LOS and production, coupled with amount of annuitized AUM (like the wires). Adjust for those getting GK and existing offices, and the process is much better.



Personally, I think it is WAY too easy to hit a trip. There is no way 6000 FA's should be going on trips.



Yes, Jones takes 60%, but if we pushed the envelope more on profitability, then more people would be profitable and sharing more of the profits. More people that are profitable means higher profit brackets means higher payout. The 750K+ producers should be getting at least 50% payouts consistently (including profit sharing, bonuses, etc.). $1mm+ producers should be in the 55%+ range. $1.5mm+ should be in the 60% range.

Sep 19, 2009 11:04 am

Every well devised compensation plan answers one very important question "What's in it for me?"



The compensation plan for Jones breeds contentment at some point. If there were payout increases with certain production levels you might see a small increase. Truth is though these old guys are fat and lazy at this point. They've been sold the idea its their business and working 35hrs a week is okay.



I like what Weddle is doing though, maybe pride will push them because money sure has not.

Sep 19, 2009 3:33 pm

You guys are young and hungry, there are guys in their 50s that were young and hungry 20 years ago and just aren't interested in building anymore and want to enjoy the fruits of their labor.  Guess what, 95% of them earned that right.  If you worry about keeping your nose to the grindstone you'll have the right to make that decision as well someday.

Jones has tried to made it easy for older brokers to off-load their overlooked accounts to someone who will really work them hard, but why can't they take it a step farther and make it easier for these guys to hire a junior broker or hire a junior member of their team where the older broker still owns the clients but a junior broker who is paid by the older broker takes over the relationships?  Why doesn't Jones use the team model for some of these guys like the Wirehouses use instead of 1 office 1 broker?

Sep 19, 2009 4:19 pm
voltmoie:

Every well devised compensation plan answers one very important question "What's in it for me?"



The compensation plan for Jones breeds contentment at some point. If there were payout increases with certain production levels you might see a small increase. Truth is though these old guys are fat and lazy at this point. They've been sold the idea its their business and working 35hrs a week is okay.



I like what Weddle is doing though, maybe pride will push them because money sure has not.





They will do it through profitability bonuses and profit sharing

Sep 20, 2009 2:38 am
More Changes =(equals)= Less $$ =(equals) LESS HAPPINESS =(Equals) More STESS= More Exodus = More New Guys = more nuckle heads = Less Experience = More problems for EDJ and More Brokers leaving (Experienced/Successful) for LPL, Raymond James, Commonweatlh, and other indy firms!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Sep 21, 2009 9:13 am

Volt-

 
I couldn't disagree with you more. I am young and hungry still but I long for the days when I can work 30 hours a week and make 300K. That is why people annutize their business. This is why I am not an econ professor or something. I want to make a lot of money and start enjoying time off before I am 60.
 
I don't like the idea of Jones being able to change the rules. I gotta say the production side of things is fine, too many 20 yr vets gross 200K which is pathetic. However sometimes this stuff makes me question why I build a book Jones can take from me.
Sep 21, 2009 11:45 am

The more that Jones changes standards and payouts(if they do) the more they look like the old wirehouse that they were an alternative to.

Sep 21, 2009 11:57 am
RealWorld:

Volt-

 
I couldn't disagree with you more. I am young and hungry still but I long for the days when I can work 30 hours a week and make 300K. That is why people annutize their business. This is why I am not an econ professor or something. I want to make a lot of money and start enjoying time off before I am 60.
 
I don't like the idea of Jones being able to change the rules. I gotta say the production side of things is fine, too many 20 yr vets gross 200K which is pathetic. However sometimes this stuff makes me question why I build a book Jones can take from me.
 
What do you disagree with me about?  Guys at Jones have never been able to truly annuitze their business, you agree? 
Sep 21, 2009 2:29 pm
B24:

Personally, I never understood the Meeting/Exceeding/Below thing. I think the segments are stupid. I understand for training and development purposes, but segment numbers give advisors a false sense of accomplishment. I am a perfect example. I hit segment 3 very early in my career (maybe 18 months or so?) because I had a string of 20K+ months early on. Yes, I earned it, but I also then fell back to the 10-12K range for a while.

I think they need to get away from the segment things and just focus on LOS and production, coupled with amount of annuitized AUM (like the wires). Adjust for those getting GK and existing offices, and the process is much better.

Personally, I think it is WAY too easy to hit a trip. There is no way 6000 FA's should be going on trips.

Yes, Jones takes 60%, but if we pushed the envelope more on profitability, then more people would be profitable and sharing more of the profits. More people that are profitable means higher profit brackets means higher payout. The 750K+ producers should be getting at least 50% payouts consistently (including profit sharing, bonuses, etc.). $1mm+ producers should be in the 55%+ range. $1.5mm+ should be in the 60% range.

 
The trips certainly help increase satisfaction with the firm through the spouses. If you take those away or make them more difficult, ouch!  That was my wife's biggest concern when I left Jones. When you take the trips out, now you are left defending payout....That could get ugly real fast....
Sep 21, 2009 2:53 pm

That might be very true for some, Noggin, but my wife and I decided after our last Div Trip that from now on we were just going to cash them out.  Sure, they were nice places, but with the nametags, the Maritz table, the big dinners, the GPs you had to make conversation with, etc., it began to feel more like a regional meeting.  I didn't really feel like I was getting away from work.

 
My last trip I was asked by two different people "What's working for you now?!"  and that sealed it for me.
Sep 30, 2009 8:24 pm

Agreed on the trips. They may have value to a bumpkin who has never been anywhere or enjoyed any of the great things this world has to offer, but you really have to be mentally ill to think that hanging out with 60 brokers is a great vacation. My wife was able to barely stand the first one then we quit. Eventually went indy, should have done it earlier. 

Oct 1, 2009 10:39 am

I hope that this production change would take into account the problems with expectations right now.

I truly hate how someone can take over a branch at 50 million and have the same expectations as someone who took over 4 million.
Oct 1, 2009 7:14 pm

The things that my wife and I did not enjoy about the trips were the fact that there were really two major groups, the vets who made and booked the trips together every time, and the newbies who made it because of lower standards. The vets did their own thing, and the newbies were on top of the world thinking they had made it, when they did not have a clue. We had traveled alot earlier and even though the trips were nice, it just isn't very enjoyable with those two groups and the daily dose of koolaid and wholesalers. The freeloaders from the home office were a major drag. They were even assigned to spend time with various people. The same with diversification trips, I went to learn about the the company that was hosting, but every time I was FORCED to hear at least an hour's worth of koolaid from the home office. Was not my idea of fun. Corporate culture must be grown not force fed, and they seem to have lost that somewhere along the line. 

Oct 1, 2009 7:28 pm

My most entertaining event happened on my first trip on the first day. Midway through our first meeting I stepped out to take a leak. As I am washing my hands I see behind me, through the angle of the mirror, the RL and a newbie who got a 40mil goodknight walk into the same stall with the newbie carrying a brown paper bag. I thought they were going in to clean something up, but as I walked towards the door I only saw the paper bag and the newbie's feet positioned like he was taking a deuce. I then realized why "servicing" clients was the theme of the meeting or should I say meating.

Oct 1, 2009 7:30 pm
RealWorld:

I hope that this production change would take into account the problems with expectations right now.

I truly hate how someone can take over a branch at 50 million and have the same expectations as someone who took over 4 million.

This is what would make Ted Jones sick today to watch happen.  Although, back when I started (1996), even 4 million was considered a good leg up.  Waaaayyyy back then, there was no such thing as taking over an office of any size.
Oct 1, 2009 7:42 pm
Ron 14:

My most entertaining event happened on my first trip on the first day. Midway through our first meeting I stepped out to take a leak. As I am washing my hands I see behind me, through the angle of the mirror, the RL and a newbie who got a 40mil goodknight walk into the same stall with the newbie carrying a brown paper bag. I thought they were going in to clean something up, but as I walked towards the door I only saw the paper bag and the newbie's feet positioned like he was taking a deuce. I then realized why "servicing" clients was the theme of the meeting or should I say meating.





I really doubt the accuracy of your story.

Oct 1, 2009 8:08 pm

My regional leader took over a 100Mil office, must be tough to grow that..

Oct 1, 2009 9:29 pm
Advisor238:
Ron 14:

My most entertaining event happened on my first trip on the first day. Midway through our first meeting I stepped out to take a leak. As I am washing my hands I see behind me, through the angle of the mirror, the RL and a newbie who got a 40mil goodknight walk into the same stall with the newbie carrying a brown paper bag. I thought they were going in to clean something up, but as I walked towards the door I only saw the paper bag and the newbie's feet positioned like he was taking a deuce. I then realized why "servicing" clients was the theme of the meeting or should I say meating.



I really doubt the accuracy of your story.

 
You shouldn't. You were doing the servicing.
Oct 2, 2009 10:37 am
Squash1:

My regional leader took over a 100Mil office, must be tough to grow that..

 
There is NOTHING wrong with taking over a 100 mil office.