Cost Basis

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Sep 24, 2008 10:47 pm

I am celebrating this week. I ACATed an account in and lo and behold the cost basis was in the account. Guess where the account didn't come from??? That's right Edward Jones, home of the Anti Cost Basis Network........



 
I was talking to one of my buddies still at the Green Machine, he is having fun. He has GMAC, Bear Stearns and Lehman Bros bonds in his portfolios not to mention the Fannie mae preferreds that he loaded up on. Joy, joy, joy!!!!
 
He said they changed the investment objective on Lehman debt to Aggressive Income on friday after 3 pm...... I guess it took them awhile to figure out who Lehman is???
Sep 25, 2008 10:49 am

Hint, when transferring a Jones account--ask the client to pull up account link--if it hasn't been set up even better--do that and cost basis is in there!  Of course you will have to manually place it into your own cost basis system like LPL--but do this before you transfer the account.  Also don't forget--Jones now requires the client to pay upfront the transfer fee before they will transfer the account out--they will not transfer the account with a debit balance!

 
If the client asks Jones for the cost basis after they transfer they will sent you a copy of all the 1099's.  Jones account link is the best way to gather this info!
 
If you are thinking about going indy from Jones--then plan out a year in advance and slowly place all your clients on an indepth account statement on all accounts--that way you will have account cost basis on the statements. 
 
By the Jones does have a good PDF on Lehman Bonds recommendations!  They had a lot of them on the books! 
 
Have a good day!
Sep 25, 2008 10:51 am

Sorry folks can't spell, it is send not sent! Also it is By the way Jones does have a good PDF on Lehman Bond recommendations! 

Sep 25, 2008 9:21 pm

It amazes me that cost basis isn't maintained easily by some clearing firms or if it is to be maintained, either the Advisor or his/her client has to incur some kind of "cost-basis" fee for the information to be maintained.  I was not aware Edward Jones had such a mechanism either.  Reminds me of the clearing firm Pershing, LLC. 

 
At a prior employ, the Advisor had to pay $2/month PER ACCOUNT to maintain cost basis for his/her client.  Other clearing firms such as National Financial did include cost basis electronically but if you wanted the details printed on the client statement, again, the Advisor would have a small fee to pay for each account.
 
I think its about time all the clearing firms recognize the benefit to not only the Advisor but also to their clients to freely provide cost basis info.  Other clearing firms have already recognized this long ago such as LPL, Sterne Agee, Raymond James, etc.,etc., -- lets hope the remaining ones follow suit so we can all win.
Sep 26, 2008 8:56 pm

strange to read this.  I just met a lady that is inheriting 400k from her mother's EDJ account. $400k is 50% American funds, 10% individual growth stocks, 38% bonds that are all considered junk status but are as follows:  Countrywide, GM, GE,  LEH, BAC 5 more etc..all financials.  Seems that mom died 360 days ago and the broker has dragged his feet waiting on maturity dates.  Per the statement the first bond doesn't mature until 2037...go figure and also no cost basis, and the EDJ rep has no clue what the value was on the date of death, and he opened the account.

 
This whole portfolio looks like a happy meal to me.  What exactly is the time standard at jones to split a probated 400k account when the rep had knowlege of the death 4 days after.  The whole thing sounds fishy to me, taking almost a year to get this done is crazy!  Think of all the potential money lost by the benny to get out of this cookie cutter portfolio since it took almost a year.
 
Thanks, I just hate incompetance.
Sep 27, 2008 10:00 am

I'm the last one to take up for Edward Jones in general--but before you blame the FA at Edward Jones--It is up to the Personal Rep and the attorney to set that action into motion.

All the FA does is wait for direction from the estate!  Yes, they can make recommendations to the Personal Rep but it is hard to get anything done while the estate is probated.
 
Now as far a junk--the LEH bond is dead!!!!  The Countrywide is really Bank of America now and it is not junk--GE is AAA rated, BAC is not junk--GM is junk and should be removed as soon as possible.
 
You hate incompetance!  But you really must be new at this--or you have not done too many estates--don't blame the FA.  I had an estate that took 7 years! 
 
When you do get the amount for your client from the estate, contact the attorney - not Edward Jones - to get the cost basis--they have to provide it--it is part of the probate!