EDJ Startup/Ongoing Expenses
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Agreed. In big towns/cities you get lost in the herd. In some small and rural towns, you are the only game in town other than the local bank. Not a bad gig.
In my opinion, location is NOT a direct factor to success. Let’s say you are the only EDJ guy, the only finanical planner for that matter, in an entire county of 50,000 people. But you are the laziest guy out there and you sit on your butt and wait for the biz to come to you. After all, you are the only financial planner in the county. Surely some of those 50,000 people will come see you.
Wrong. You still have to do the work. Those people aren't going to come to you out of curiousity and then decide to invest with you just because you hung out your shinge. It might work for a furniture company, but not a financial company. I don't think it's any easier or more difficult in one location over another. It's just different. I'm in a metro market. My city has 3 zip codes, 52,000 households and $18.4 billion in investible assets according to the Jones info. I could get to anywhere in that area from my office in 15 minutes. On the other hand, the rural county I grew up in has 18 different little towns, 40,000 households, and $12.1 billion in investible assets. It took me 15 minutes just to get to school in the morning. And I sure didn't pass any HNW neighborhoods to get there. Put your office in a strip mall or put your office in a professional park. Who cares. Put your office in a small town or in a metro area. Who cares. Here's my advice. Put your office where you want to raise your family. Forever. If you've got a vested interest in the area, you'll make your business work.Spiff is correct that location is not the only factor, however, it is still an important factor. Do guys succeed in metro markets and fail in rural ones? Yes. Is the failure rate higher in metro areas than rural ones? I was in 2 different regions while at EDJ, both had a mix of metro and rural. The failure rate was probably at least triple in the metro area. That may not be representative, but I bet that the failure rate is at least double nationwide. I saw the same trend with reps I met from other parts of the country, the metro guys were turning over at an alarming rate, and the rural guys pretty much stayed around.
The flip side of that is that some of the metro guys who were successful took VERY nice checks from the competition to move. I don't know that the check is worth what you give up for it, but the fact is in a rural area that check is not an option. If you want to leave EDJ and stay in your community, you are looking at either the independent or bank channel, not a wirehouse. One thing that is not a factor is the overall income potential. I thought initially that the successful metro reps would make a lot more than successful rural reps. Maybe at the very top end, but I know several rural reps making $200-$500k a year, and many of them could make more if they wanted to. Call me lazy, but I plan on spending enough time on the golf course and with my family to ensure that my income never gets above $500,000. I'm not sure at what point I kick it into neutral and coast, as I'm not there yet. However, I know it's probably in the $250-500k range.LMFAO!!!!!I was fired from Jones producing in the high 13’s on a 4 month roll out between 5 and 6 years. But now I’m Indy and I’m making much more $$$ without the stress and have 2 reps on board under my office of supervisory jurisdition. How bout them apples. Now my 4 month average is who cares divided by eat shit.
I was fired from Jones producing in the high 13’s on a 4 month roll out between 5 and 6 years. But now I’m Indy and I’m making much more $$$ without the stress and have 2 reps on board under my office of supervisory jurisdition. How bout them apples. Now my 4 month average is who cares divided by eat shit.
That's something that I'm always a little bit baffled by. Now I realize that the message being sent is "more, more, more", but how exactly was Jones (or a wire, for that matter) losing money on a $150K producer? Arguably it's not exactly setting the world on fire, but c'mon now, who's the $150K producer hurting?
Now it is up to $216,000…I went to lunch today with a 7 year EJ broker just fired last week.
I dislike Jones as much as the next guy, but a 170k, producer is probably not profitable for the firm. Pull out FA cut, rent, BOA salary and beneits, and office expenses and there likely isn’t anything left. I can see them needing to increase this amount. Of course they figure they’ll keep half the assets, new blood and be ahead in a couple years.
I understand both points of view but in my case I was super-compliant, big on A share mutuals, tax-frees, rarely an annuity, and my previous few years of prod were between 105-110, then 134-137, then betw 156-160 which are not huge #'s but…the next year would’ve been around 175-180 based on previous year increases. 14k per month or 168K annually was meeting expectations. I think Jones is feeling pressure after the lawsuits to ramp up production per IR. Thats why they cast a huge net every month and try to find the next allstar producer. Only 1 person is left in my class back when I started. Thats not good news for the newbies reading this but its the truth.
Is this really anything different than at other firms? I don’t see Merrill or MS keeping guys around 7 or 8 years that are producing $180K. No firm can survive on producers at this level. And we as a firm don’t want someone ina “territory” that is satisfied doing $180K, which really prevents someone else from really bringing in clients. At the end of the day, this (or any firm) is really about business. Our job is to bring in more assets. If you don’t want to do that (at least to an acceptable level), you need to go strike out on your own with LPL or RayJay or whoever.
Though I am not yet a partner, if I were (or even a partner in my own indy firm), I would want advisors pulling their own weight.At the end of the day it is still a business. It is a for profit organization. They didn’t give you that office to have you grow up to be a Seg 2 producer for the rest of your life. They want to you make money for them. And for yourself. You can go almost anywhere and make $45K a year for a lot less stress than an EDJ office.
15 years ago Jones could see a profit from a $180K/yr office. Now they can't. Inflation has crept in. Sometimes production numbers need to be updated. I know I can't be profitable at $14k and I'm sure there aren't a lot of offices out there that can. I don't think it has anything to do with the lawsuits. I think it was just time to raise the bar. A business decision to focus on profitability. Have there been vets that were at the minimum level for years that suddenly find themselves having to produce more? Yep. They have a couple choices. Leave or produce. Simple. Me, I'd rather just find $4000 extra a month. You've got to be seriously below expectations for a long time to get fired from Jones. It's not like it's a suprise to anyone when they put you on goals. And it's not like they walk into your office on a Friday afternoon and say give me your keys. They will work with you to help you fix whatever your issues are. If you can't fix them, then it is seriously time to leave or Jones will make the decision for you. For a lot of guys indy is the route to choose. For the reason you mentioned above.You should ask someone from one of the wires how many people they started with and have left. Ask a 15 year veteran how many newbies they have seen come and go. I guarantee you the number is HUGE. As I said in another post, this is the case across the industry, not just Jones.Only 1 person is left in my class back when I started. Thats not good news for the newbies reading this but its the truth.
How come noone complains about the hurdles at ML or MS? If all you did was $18K per month at these firms, you’d been thrown right out the 41st floor window…
If you think about this in the context of the bean counters in St. Louis, it makes total sense.
You take someone who has busted their arse to get their office to roughly 20mil under mgmt in 4 or 5 years from scratch and is bouncing back and forth in the meeting/not meeting range and their is a potential transfer broker out their that has roughly the same assets and 12 month trailing average who is ready to make the switch. Now from a macro economics/pie in the ski view, Jones thinks they can fire the current rep. and move the new guy over. The new guy brings his 20mil to add to the current 20mil and over night you have a office that is in "theory" a 40 million dollar office with a 300k+ producing rep. Sounds pretty simple to me, and is what a big company that only cares about their bottom line should do, but ethically...... (In my 5+ years at jones, my region never had a transfer rep come to jones that was producing over 200k, except for a guy who came from a bank who was supposedly doing 700k gross, but could not even open a account at jones and left in pretty short order.) Just my 2 cents. P.S. This is for Spiff - you put your numbers up here not too long ago, and if I remember correctly, you are in that "danger zone" at jones where they might just can you out of the blue one of these days.... ya ya, Jones would never do that to you,..... until they do that to you! But I am sure you have been thinking of this and have a plan.... I sure hope you do anyway, because you seem like a nice guy.For what’s it worth:
Out of the 59 that started with me in early 2002, 18 are left. That’s roughly 1 out of 3, 6 years later. Of course a 5 year bull market started one year into the business…
[quote=Broker7]Hulk,
18 are left in the indusrty, or with Jones??[/quote] That has to be in the industry. I started not too much later than that, and when I left at the 3 year mark, there were 2 people left in my class of 16, one of whom was on the ropes. The other one was probably bound to leave for greener pastures, he has the personality to be very successful in this biz, and also the personality that would take a $300,000 check if you waved it in front of him. I'm not sure if either of them are still there, but either way only 3/16 hit the 3 year mark to avoid the training chargeback, and I left within a few weeks of when I hit it.On our Directory with an FA# next to them, meaning they are still selling with Jones. It seems that the class was larger than 59, but I’ve got a copy of a page when you are going through KYC telling everyone which classroom to go to. There are 5 classrooms listed. One class has 1, 2 have 3, mine has 5 and another has 6 left.
Interestingly enough, 2 of the 5 visiting vets (including mine) are no longer with Jones. I’m sure they either took a check or went Indy…And they were probably both compliance issues as well.
[quote=doneWjones]If you think about this in the context of the bean counters in St. Louis, it makes total sense.
You take someone who has busted their arse to get their office to roughly 20mil under mgmt in 4 or 5 years from scratch and is bouncing back and forth in the meeting/not meeting range and their is a potential transfer broker out their that has roughly the same assets and 12 month trailing average who is ready to make the switch. Now from a macro economics/pie in the ski view, Jones thinks they can fire the current rep. and move the new guy over. The new guy brings his 20mil to add to the current 20mil and over night you have a office that is in "theory" a 40 million dollar office with a 300k+ producing rep. Sounds pretty simple to me, and is what a big company that only cares about their bottom line should do, but ethically...... (In my 5+ years at jones, my region never had a transfer rep come to jones that was producing over 200k, except for a guy who came from a bank who was supposedly doing 700k gross, but could not even open a account at jones and left in pretty short order.) Just my 2 cents. P.S. This is for Spiff - you put your numbers up here not too long ago, and if I remember correctly, you are in that "danger zone" at jones where they might just can you out of the blue one of these days.... ya ya, Jones would never do that to you,..... until they do that to you! But I am sure you have been thinking of this and have a plan.... I sure hope you do anyway, because you seem like a nice guy.[/quote] I'm not concerned about my numbers. Numbers can change quickly in this biz and mine are fine. Although, I appreciate your concern for my well being. IF I had a plan, it would include the letters LPL. I'll say it again...Jones doesn't just walk into your office one day and say let me have your keys. First, you have to be producing at well below standards for a while. I'm sure they have some formula that they use, but I've never heard it. Once you hit the radar they'll contact you and find out what the story is. Then, they'll put you on goals. That means you have x amount of months to do y production or you're gone. I've seen guys go on goals half a dozen times, pulll out of the tailspin and make good FAs. I've also seen some get put on goals and leave ASAP cause they know they can't cut it any longer and someone finally told them so. I don't think the bean counters in STL have any misconceptions about giving $20 mil offices to transfer reps. We just don't get that many big producing ones. I'm sure it happens, but not in my region. 5 years and we've had one guy that was kind of a transfer broker. Everyone else has either been from the home office (nothing wrong with that) or new to the industry.I can attest to Jones being very patient with marginal brokers. I had a conversation with one last year who admitted to me that he struggled with the 18K monthly nut and he’s 10+ years out with Jones. As I’ve posted elsewhere, the evidence suggests that Jones would rather he leave, but to their credit, they’ve never asked him for the keys to my knowledge.
[quote=Spaceman Spiff][quote=doneWjones]If you think about this in the context of the bean counters in St. Louis, it makes total sense.
You take someone who has busted their arse to get their office to roughly 20mil under mgmt in 4 or 5 years from scratch and is bouncing back and forth in the meeting/not meeting range and their is a potential transfer broker out their that has roughly the same assets and 12 month trailing average who is ready to make the switch. Now from a macro economics/pie in the ski view, Jones thinks they can fire the current rep. and move the new guy over. The new guy brings his 20mil to add to the current 20mil and over night you have a office that is in "theory" a 40 million dollar office with a 300k+ producing rep. Sounds pretty simple to me, and is what a big company that only cares about their bottom line should do, but ethically...... (In my 5+ years at jones, my region never had a transfer rep come to jones that was producing over 200k, except for a guy who came from a bank who was supposedly doing 700k gross, but could not even open a account at jones and left in pretty short order.) Just my 2 cents. P.S. This is for Spiff - you put your numbers up here not too long ago, and if I remember correctly, you are in that "danger zone" at jones where they might just can you out of the blue one of these days.... ya ya, Jones would never do that to you,..... until they do that to you! But I am sure you have been thinking of this and have a plan.... I sure hope you do anyway, because you seem like a nice guy.[/quote] I'm not concerned about my numbers. Numbers can change quickly in this biz and mine are fine. Although, I appreciate your concern for my well being. IF I had a plan, it would include the letters LPL. I'll say it again...Jones doesn't just walk into your office one day and say let me have your keys. First, you have to be producing at well below standards for a while. I'm sure they have some formula that they use, but I've never heard it. Once you hit the radar they'll contact you and find out what the story is. Then, they'll put you on goals. That means you have x amount of months to do y production or you're gone. I've seen guys go on goals half a dozen times, pulll out of the tailspin and make good FAs. I've also seen some get put on goals and leave ASAP cause they know they can't cut it any longer and someone finally told them so. I don't think the bean counters in STL have any misconceptions about giving $20 mil offices to transfer reps. We just don't get that many big producing ones. I'm sure it happens, but not in my region. 5 years and we've had one guy that was kind of a transfer broker. Everyone else has either been from the home office (nothing wrong with that) or new to the industry. [/quote] I really don't think Jones looks at it like that. The exception may be in an urban area where there is a "wait list" of transfer brokers waiting for an office to open. But I know in my region, very few established FA's ever leave, so there are few opportunities for transfer brokers to take over an office. The only ones that seem to leave are the ones that either have not qualified for an office yet, or have just been struggling for several years. I have seen several newbies come and go, but only one established FA leave - and I heard he only had about $12mm in AUM after about 4 years. He ended up going, surprise surprise, independant. He did about $150K in production, so he went and rented a hole-in-the-wall office, and transferred some assets. He's probably netting $100K now or something like that. No assistant, one-room office, doubtful he prospects much (he obviously didn't before). It's a perfect example of a guy we wouldn't want to stay on. He was in a prime location with plenty of wealth. The person that replaced him doubled the assets in one year. The office is now up over $25mm in like 18 months.