Edwad Jones on Fee Based circa 2001
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This kind of reminds me of my sister, who’s married to an asshole. Everyone on the outside can clearly see he’s an asshole. She, on the other hand appears blissfully unaware…
You mean you don’t walk into the office every day fully believing that everyone you speak with that day SHOULD be doing business with you, because the way you do it is, in your opinion, the absolutely best way? Really? Cause that’s the mindset I have when I pick up the phone every morning to talk with clients and prospects.
But if you want to start your day thinking that there are a lot of other people who could do your job just as well as you can, more power to you.The business you do is sales...not advising. When I talk with people, I make a decision whether they're someone I can do business with forever. I don't do it so I can make my month or keep above the performing line or win a trip. I do it to build a business in which I talk with them and only them on an ongoing basis about their account, their kids, their hobbies, their latest vacation. I don't hound the so called prospect to beg them to do business or con them in purchasing a 25 year bond, paying 3 points. I do a great job for my clients and they refer people to me. What a concept.
[quote=skolbrother]I have not posted in quite some time. I have to chime in on the Jones fee based platform.
Let me say I am happy for my friends who are there that now have access to this way of doing business. That said it was the pure smugness displayed toward other firms and other advisors who did business this way by the GP's/ RL's down to the majority of the "inner circle" people. An example of this attitude is a GP gets up front of everyone and said "we don't do fee based because we don't screw our clients!" I will not say his name but it rhymes with Play Daily. That is why many of us may hold resentment toward EJ on this matter among other things it is the word I continue to use SMUGNESS. As a Seinfeld episode so eloquently points out "smugness is not a good quality."[/quote] I remember a conversation regarding ETFs with a GP back in St. Louis in 2001. He said they were nothing more than, "financial gimmicks, similar to the Nifty Fifty back in the 70's. Only a fool would ever invest in such a contraption," he went on to say. I pointed out that the dollar flow into ETFs had grown almost exponentially year over year since their introduction, and they seemed to be here to stay and carve out their piece of the financial services landscape. The guy went into a slobbering, ranting hissy-fit, complete with personal attacks such as "I've forgotten more about this business than you'll ever know." And, "If you think ETFs are where one nickel of your client's money belongs, then resign right now because I guarantee that they will never, ever be offered by Edward Jones." Once again, it's the hypocrisy, stupid!This is not a pissing match. I have done this a long time and I think those on this forum who know me will verify I'm doing a few things right. That said, I see alot of very good advisors at my firm and other firms so IMO it would be unprofessional to think I am the ONLY right fit for every client/institution.
[quote=Soothsayer][quote=skolbrother]I have not posted in quite some time. I have to chime in on the Jones fee based platform.
Let me say I am happy for my friends who are there that now have access to this way of doing business. That said it was the pure smugness displayed toward other firms and other advisors who did business this way by the GP's/ RL's down to the majority of the "inner circle" people. An example of this attitude is a GP gets up front of everyone and said "we don't do fee based because we don't screw our clients!" I will not say his name but it rhymes with Play Daily. That is why many of us may hold resentment toward EJ on this matter among other things it is the word I continue to use SMUGNESS. As a Seinfeld episode so eloquently points out "smugness is not a good quality."[/quote] I remember a conversation regarding ETFs with a GP back in St. Louis in 2001. He said they were nothing more than, "financial gimmicks, similar to the Nifty Fifty back in the 70's. Only a fool would ever invest in such a contraption," he went on to say. I pointed out that the dollar flow into ETFs had grown almost exponentially year over year since their introduction, and they seemed to be here to stay and carve out their piece of the financial services landscape. The guy went into a slobbering, ranting hissy-fit, complete with personal attacks such as "I've forgotten more about this business than you'll ever know." And, "If you think ETFs are where one nickel of your client's money belongs, then resign right now because I guarantee that they will never, ever be offered by Edward Jones." Once again, it's the hypocrisy, stupid![/quote] This reminds me of the annuity thread and offering a client a new improved annuity after the 7 year surrender is over. Why would someone do that? Seems like several folks believe that a lot has changed in 7 years and some of their clients would benefit from the changes that have happened. I wonder if an advisory account and ETFs would fall into a similar situation. NAW thats just silly, I know if I would have changed my mind about the way I view the world over the last 7 yrs that would be hypocisy so I vow never change my views about anything. swI am going to assume that you really don’t understand why someone would switch to another annuity after seven years. Please correct me if I’m wrong.
Annuities have gone through a monumental change over the past seven years. We now have living benefits that weren't even dreamed of in 2001. If I have a client who is in a plain "vanilla" annuity from 2001, it could make perfect sense to "upgrade" their contract. Especially if they have some income concerns. Even if they just have death benefit concerns, there are some incredible death benefit gaurantees that weren't around in 2001. Wondering why someone would switch annuities after seven years is kind of like wondering why someone would need to upgrade their computer after seven years. The changes in the products are enormous over that time frame.[quote=now_indy]I am going to assume that you really don’t understand why someone would switch to another annuity after seven years. Please correct me if I’m wrong.
Annuities have gone through a monumental change over the past seven years. We now have living benefits that weren't even dreamed of in 2001. If I have a client who is in a plain "vanilla" annuity from 2001, it could make perfect sense to "upgrade" their contract. Especially if they have some income concerns. Even if they just have death benefit concerns, there are some incredible death benefit gaurantees that weren't around in 2001. Wondering why someone would switch annuities after seven years is kind of like wondering why someone would need to upgrade their computer after seven years. The changes in the products are enormous over that time frame.[/quote] I guess my post wasn't very clear. I agree things change after 7 years why is it hypcrosy for a business to change along with the times?Because in the collective mind of this forum, EDJ is not allowed to change it’s mind. Ever. Under any circumstances.
Soothsayer is calling hypocrisy on a conversation he had with a single GP...SEVEN YEARS AGO. Seven years ago ETFs were so new that most of us didn't even know what they were. I'm honestly suprised that Jones has them in the Advisory Solutions platform because most of them don't even have a 5 year track record. You gotta admit, that's pretty outside the box thinking for EDJ. Oh yeah, on another note. I heard a small rumor yesterday that Jones is going to be moving away from the old EDJ green. They're going to be repainting all of our offices, getting rid of those green EDJ folders, and moving towards a different color scheme. I haven't had any way to confirm that yet, but the person who told it to me has a REALLY good source of info re: all things EDJ. So, maybe the color of the kool aid is going to change too.[quote=Spaceman Spiff]Because in the collective mind of this forum, EDJ is not allowed to change it’s mind. Ever. Under any circumstances.
Soothsayer is calling hypocrisy on a conversation he had with a single GP...SEVEN YEARS AGO. Seven years ago ETFs were so new that most of us didn't even know what they were. I'm honestly suprised that Jones has them in the Advisory Solutions platform because most of them don't even have a 5 year track record. You gotta admit, that's pretty outside the box thinking for EDJ. Oh yeah, on another note. I heard a small rumor yesterday that Jones is going to be moving away from the old EDJ green. They're going to be repainting all of our offices, getting rid of those green EDJ folders, and moving towards a different color scheme. I haven't had any way to confirm that yet, but the person who told it to me has a REALLY good source of info re: all things EDJ. So, maybe the color of the kool aid is going to change too. [/quote] Oh wow, I need to come back to Jones because they changed their color scheme......I wish I had known that because I would have just stayed with Jones. I am sure when they repaint the offices that they won't charge your P & L........My point all along has been just how wrong EDJ was on this issue for so long. Do you have any idea of the talent drain that the company experiecned beginning in 2003, much of which centered around this issue? How could the people at the highest level of your company have been so wrong? How come people who understood the changing nature of our business were treated with such contempt--effectively banished to the corporate closet. If you changed, great. But, how was EDJ so wrong for so long? What kind of a company culture fosters that kind of closed off thinking?
This latest episode where Weddle says, "We're gonna do fee based, but we're going to do it right," smacks of the same arrogance when you didn't have it all. Are the rest of the industry's fee based programs "wrong"? More cult-like control the message, control the spin. I'll stop bashing when Weddle says, "We are late to the game, and made a critical error by not coming to grips sooner with the fact that many of our clients and advisors preferred to work together under a fee based arrangement. We simply misjudged an important component of the business landscape in our industry. That being said, we have moved forward with a program developed by our company for our advisors and clients. It's a little bit different than anything else being used in the industry at this time, an we feel addresses some of the shortcomings of fee based platforms. We are anxious to see how it is received in the marketplace." Can a company change it's mind 7 years later? Sure. But in my mind, 7 years is way, way, way too long. The talent drain of the early 2000s will be the legacy of Bachmann and Hill.Sooth,
You are pretty dead-on. Here's the problem...Weddle has his own "internal" spin to deal with. You ever wonder how much dancing it ook for him to get this out there? Or e-mail, for that matter? Jones is a private company. They don't have to come out and announce to everyone that they did anything. Weddle has to be FAR more careful about how he is perceived internally (especially by Bachman, Hill, etc., as well as a pantheon of veteran advisors that may have more allegiance to Bachman) if he wants to get things done that go against the grain of the 80-year culture of the firm. Realistically, Weddle is not going to come out and essentially bash the history and the veteran leaders of the firm. Whether the veterans made mistakes or not, he needs to still be a company guy, and move the firm forward at the same time. He has made MASSIVE progress in 2 years. I give him credit for that. But I also accept that he has to spin it all carefully so that it doesn't come out as "look how I am fixing this company." But functionally, Sooth, you are right.Talent drain? What talent are you talking about that can’t be replicated ten times over with new people. I’ve been around for a while and I seriously don’t remember any devastating talent drain. Jones lost some big producers, like Van Pearcy who may be a bad example, but if you think that the legacy Bachmann and Hill will leave behind is that we lost some advisors in a down market, then you’re fooling yourself. My region lost some people to LPL, BAC, and ML, but we didn’t sit around and cry about it. We hired new people, who in my opinion, are better than the ones who left and moved on. Those offices are now humming just like they were before.
How was EDJ wrong for so long? Bachmann and Hill didn't believe in fee based business. Simple. I don't think they saw the impact of it on the horizon. Either through pig headedness or an over inflated ego, they both completely missed the impact it was having on other firms and the investment world in general. Weddle comes in and within months of his starting date there is a substantiated rumor that Jones is going to launch a fee based biz. Aug 4 for my area it actually happens. That's a pretty quick turnaround for a company who, just a few short years ago, didn't believe in fee based business. They're never going to say that they made a mistake and are late to the game. However, the second part of your statement I've heard him say. They know we came late to the game. They know we wanted fee based business. They took the time to create something that they believe is just a bit different than everyone else out there. They made sure they had the correct players in place to make sure the thing runs smoothly. They are confident that it will become an important part of our business and an important part of the revenue stream. I personally believe it will eventually become as important to Jones as revenue sharing is. Think what you will about Bachmann and Hill. They don't manage the company any more. I don't care for former president Clinton. But it doesn't matter. He doesn't run the country anymore. Same concept.[quote=Spaceman Spiff]Talent drain? What talent are you talking about that can’t be replicated ten times over with new people. I’ve been around for a while and I seriously don’t remember any devastating talent drain. Jones lost some big producers, like Van Pearcy who may be a bad example, but if you think that the legacy Bachmann and Hill will leave behind is that we lost some advisors in a down market, then you’re fooling yourself. My region lost some people to LPL, BAC, and ML, but we didn’t sit around and cry about it. We hired new people, who in my opinion, are better than the ones who left and moved on. Those offices are now humming just like they were before.
[/quote] Oh, Spiffy, you're a bigger Jones tool than I even thought. Maybe in your region it was like Steve Young following Joe Montana. But in my region it was like Jay Fiedler following Dan Marino, Cliff Stoudt following Terry Bradshaw, and Todd Marinovich following Jim Plunkett. In other words, guys who weren't fit to carry the previous guy's jock--on their best day. I'm talking about guys who started their careers at Jones, but left to go elsewhere and have since had huge success. I'll give you a few examples in my trade area: 1st guy left after about 2 years as a scratch strater at Jones. RL treated him like crap because he was a Mormon. Went to LPL. At present he has 3 full time assistants, a 401(k) specialist, and a LTC/Life specialist working in his office. His production last year was somewhere north of $1.25 million. 2nd guy left Jones after 3.5 years producing around $200K. Today he is the lead guy on a team at a wirehouse that does more than $2 million in production. Ironically, he is the majority shareholder in an LLC that owns both the buildings that Jones leases in the same town. One office is currently vacant, and the office he started in 1999 just turned over again (broker went to RJ), and is on the fourth broker since he left. 3rd guy left Jones producing just short of $300K after 4.5 years from scratch. Started his own RIA. Has a few guys working below him now, and just landed a huge institutional account a few weeks back. Production has more than doubled since leaving Jones just more than two years ago. There are more than 15 people in the trade area who left EDJ between 2002 and 2005 who are still in the business having considerable success. Jones has more than 25 offices in the area. The 15 guys outproduce the 25 Jones guys by a wide margin, and are now permanent competition (primarily as independents) for years and years to come. Who does Jones have? A bunch of failed Morgan Stanley, American Express, and various insurance hacks, a couple of big producers' wannabe kids, and some GP pets transplanted to the area to take over open offices--pathetic. That, Spiffy, is called "talent drain."[quote=Soothsayer][quote=Spaceman Spiff]Talent drain? What talent are you talking about that can’t be replicated ten times over with new people. I’ve been around for a while and I seriously don’t remember any devastating talent drain. Jones lost some big producers, like Van Pearcy who may be a bad example, but if you think that the legacy Bachmann and Hill will leave behind is that we lost some advisors in a down market, then you’re fooling yourself. My region lost some people to LPL, BAC, and ML, but we didn’t sit around and cry about it. We hired new people, who in my opinion, are better than the ones who left and moved on. Those offices are now humming just like they were before.
[/quote] Oh, Spiffy, you're a bigger Jones tool than I even thought. Maybe in your region it was like Steve Young following Joe Montana. But in my region it was like Jay Fiedler following Dan Marino, Cliff Stoudt following Terry Bradshaw, and Todd Marinovich following Jim Plunkett. In other words, guys who weren't fit to carry the previous guy's jock--on their best day. I'm talking about guys who started their careers at Jones, but left to go elsewhere and have since had huge success. I'll give you a few examples in my trade area: 1st guy left after about 2 years as a scratch strater at Jones. RL treated him like crap because he was a Mormon. Went to LPL. At present he has 3 full time assistants, a 401(k) specialist, and a LTC/Life specialist working in his office. His production last year was somewhere north of $1.25 million. 2nd guy left Jones after 3.5 years producing around $200K. Today he is the lead guy on a team at a wirehouse that does more than $2 million in production. Ironically, he is the majority shareholder in an LLC that owns both the buildings that Jones leases in the same town. One office is currently vacant, and the office he started in 1999 just turned over again (broker went to RJ), and is on the fourth broker since he left. 3rd guy left Jones producing just short of $300K after 4.5 years from scratch. Started his own RIA. Has a few guys working below him now, and just landed a huge institutional account a few weeks back. Production has more than doubled since leaving Jones just more than two years ago. There are more than 15 people in the trade area who left EDJ between 2002 and 2005 who are still in the business having considerable success. Jones has more than 25 offices in the area. The 15 guys outproduce the 25 Jones guys by a wide margin, and are now permanent competition (primarily as independents) for years and years to come. Who does Jones have? A bunch of failed Morgan Stanley, American Express, and various insurance hacks, a couple of big producers' wannabe kids, and some GP pets transplanted to the area to take over open offices--pathetic. That, Spiffy, is called "talent drain." [/quote] Come on Spiff, spin that......I think Sooth and Spiff are embellishing in both directions…
Spiff, the story isn’t that good…
Sooth, the story isn’t that bad…
I look around my old region and the ones that have left EDJ are most definitely outproducing those that either took over their assets or offices. I attribute that to the beating of the hiring drum. The quality of new hires has diminished greatly in the last 5 years in the 2 regions that I have witnessed. The bad news for Jones is that they spend the money to hire them, train them and then within the first 3-6 years they lose them to RJ or LPL. Repeat.Repeat. Repeat.I think Sooth and Spiff are embellishing in both directions…
Spiff, the story isn’t that good…
Sooth, the story isn’t that bad…
lets be real. Spiff is a company man, good for him. He buys the line that jones puts out. he is loyal to his firm and he should be or he needs to go elsewhere. I did catch something on a post of his i am surprised hasnt been brought up. Spiff use to be in IR training. So i am guessing he was a less then successful rep who was brought into the home office, given additional training, then given an office after paying his dues and some LP. Just a guess. But good for him for building on what he was given and making it in the business.