Edward Jones - how much does a Goodknight supplement?

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Dec 19, 2013 1:20 am

Trying to figure out exactly how much a Goodknight does for you at Edward Jones. If you are starting out at the typical $35,000 base in your first year with Jones, how much on average could you expect to make in year 1 if you are at the $5 mil Goodknight level? I know you obviously can't make a living off that, but how much income would that alone supplement your salary with?



Trust me, I know it's all about maxing out your contacts and opening tons of new accounts, etc., so no need to explain that. Thanks for any help provided.

Dec 19, 2013 11:30 am

Keep in mind, usually the goodknight are clients the advisor doesn't want, unless they're a very large producer...these clients won't be bringing much to the table, will be hard to get in touch with, etc.

Also, anything you generate off that goodknight is split with your housing advisor....so, you're already giving 80% of your gross to Jones, then your piece is split in half between yourself and the advisor.

Basically the picture I'm painting for you is that a 5 million dollar goodknight, while a decent foundation to get you hitting the ground semi running, isn't going to help much as far as your first year pay...where it should help is having someone to actually talk to so you don't lose momentum, bringing in outside assets, and generating referrals if you can get in front of these people.

They'll give you the average numbers, if you're making 35k base(I thought the typical was 30k?), I believe the average first year is somewhere around 50k.

Dec 19, 2013 2:29 pm
Paranoid Android:

Keep in mind, usually the goodknight are clients the advisor doesn't want, unless they're a very large producer...these clients won't be bringing much to the table, will be hard to get in touch with, etc.

Also, anything you generate off that goodknight is split with your housing advisor....so, you're already giving 80% of your gross to Jones, then your piece is split in half between yourself and the advisor.

Basically the picture I'm painting for you is that a 5 million dollar goodknight, while a decent foundation to get you hitting the ground semi running, isn't going to help much as far as your first year pay...where it should help is having someone to actually talk to so you don't lose momentum, bringing in outside assets, and generating referrals if you can get in front of these people.

They'll give you the average numbers, if you're making 35k base(I thought the typical was 30k?), I believe the average first year is somewhere around 50k.

I have heard the 50-60k figure for the first year. I guess what I'm confused on, is where does that extra 20-25k or so come from?

If part of 1st year compensation would likely come from goodknight (even 5-10k), I was wanting to know. And speaking of EDJ keeping 80% of everything you sell, do you mean 80% of the commission? I'm assuming so? For example, something as simple as an IRA rollover. If I opened an account for someone who set up say...a $15k IRA, what would I personally make off that?

Thanks, and sorry I'm a total newbie to all this.

Dec 20, 2013 10:28 am

Oh no no, don't apologize my friend, it's certainly very important to understand how you are paid.

15k IRA, assuming you put them in A share mutual funds at lets say 5.25%.

That'll gross 787.50. Jones keeps 80% of your gross commission the first year, so you'll take home $157.50 before taxes.

That extra 20-25k comes from commission, trimester bonus's, new asset bonus's(when you bring in over 100k in a single selling month), things along that nature.

The 2nd year is usually around the same, 50-60k due to your salary dropping off but your commission's rising/payout rising.

The 80% isn't for life, just starting out. It gradually decreases to 60% with you taking home 40%.

Dec 20, 2013 1:22 pm
Paranoid Android:

Oh no no, don't apologize my friend, it's certainly very important to understand how you are paid.

15k IRA, assuming you put them in A share mutual funds at lets say 5.25%.

That'll gross 787.50. Jones keeps 80% of your gross commission the first year, so you'll take home $157.50 before taxes.

That extra 20-25k comes from commission, trimester bonus's, new asset bonus's(when you bring in over 100k in a single selling month), things along that nature.

The 2nd year is usually around the same, 50-60k due to your salary dropping off but your commission's rising/payout rising.

The 80% isn't for life, just starting out. It gradually decreases to 60% with you taking home 40%.

Great to know - thanks for the help!

One more question, then I'll shutup lol. At some point, I believe I saw the different bonuses you could get in the first couple years. Where can I access this info?

Dec 20, 2013 2:24 pm

Are you working with the firm? If you are, it's on joneslink. If not, have the advisor giving you the 5m get it for you.

Dec 20, 2013 7:47 pm
Paranoid Android:

Are you working with the firm? If you are, it's on joneslink. If not, have the advisor giving you the 5m get it for you.

Yeah, I just started with the firm. Will look on Joneslink - thanks

Jan 1, 2014 5:48 pm

Congrats on getting on with jones. Our firm is not for everyone but for the right candidate, it is an exceptional opportunity. I can speak to your question about the GK - I have been the recipient of 2 GK plans, and the veteran advisor on one. Please understand the quality of a GK can vary significantly - sometimes it means the difference between establishing a solid foundation or washing out of jones, and sometimes the GK is more work and trouble than it benefits you. I have been given one of each. Generally speaking, they are the worst clients in the veterans branch - small accounts, people that need their hand held, are hard to get along with, people that don't return calls or listen to advice. However, with every GK plan, there are hidden gems - those clients who with a new face and little TLC can become your best relationships. The largest and most profitable client in my branch - a multi million dollar account - was a GK client that started out with a single muni bond.. If you do receive a GK, my advice is to give those clients world class service and see what rises to the top. But $5 million does not a successful office make - spend 20 percent of your time on the GK, and 80 percent building your own business. A $5 million plan might be expected to generate $15k gross ($3,000 net) in year one. ($30,000) comissionable gross split with the veteran FA), and $50,000 gross in year two, if you're doing your job.

Jan 1, 2014 10:18 pm

How about those new commercials talking about how big Edward Jones is? Certainly goes to show the change of pace Jones is trying to become. Putting offices in Boston, Chicago, LA, etc., commercials about how big they are.

The times are changing over there

Jan 1, 2014 10:29 pm

I've been with jones for 5 years. My observation is that our model is better suited for rural markets. I am just a lowly FA, and not privy to the hard data, but it seems our attempts to enter urban markets (LRM - location rich markets) has been disappointing so far. But our firm is continuing to grow, and our profitability increases every year, so I have to assume our general partners know what they're doing. My one dissatisfaction is that I do think it makes sense sometimes to have 2-3 advisors in one branch to share expenses. My city of 60,000 people has 8 jones FAs - all with different offices, some just 3-4 blocks from each other. It looks silly and Sharing rent and utilities with another adviser would increase our profitability. Since part of my compensation is tied to profitability, that would seem to make sense for jones and the FAs.

Jan 2, 2014 12:11 pm

i was with jones for nine years and participated on the giving side of three gk plans.. all were garbage. my recommendation is to build your own practice. ill detail my edj practice below. to be fair, i left last year and transitioned to an ria and only took the accounts that i wanted. now only taking clients i want with $1mil in assets or $15,000 per annum in revenue.. with a 93% payout.

31 households. 49,300 93 households. 52,300 181 households. 72,000 248 households. 91,200 302 households. 102,000 345 households. 107,000 268 households. 121,000 189 households. 131,500 128 households. 150,000 58 households. 217,000
Jan 2, 2014 10:27 pm
Glass Half Full:

I've been with jones for 5 years. My observation is that our model is better suited for rural markets. I am just a lowly FA, and not privy to the hard data, but it seems our attempts to enter urban markets (LRM - location rich markets) has been disappointing so far. But our firm is continuing to grow, and our profitability increases every year, so I have to assume our general partners know what they're doing. My one dissatisfaction is that I do think it makes sense sometimes to have 2-3 advisors in one branch to share expenses. My city of 60,000 people has 8 jones FAs - all with different offices, some just 3-4 blocks from each other. It looks silly and Sharing rent and utilities with another adviser would increase our profitability. Since part of my compensation is tied to profitability, that would seem to make sense for jones and the FAs.

Sounds like they are lost on what to do in the urban project. Not surprised when you have layers of people in STL that have A. Never been an advisor or B. Built their business knocking in farm towns.

Just weird to me that the would try and leave the Niche they've worked so hard at establishing. The benefit of a jones is they're in your town. You don't have to commute into a city or work over the phone because you've got an advisor in your town. That benefit is lost when Morgan Stanley, Merrill Lynch, Fidelity, UBS, etc. etc. are also in the clients backyard.

Jan 24, 2014 5:20 pm

Jhud, avoid the Goodknight plan if you can.

Jan 27, 2014 11:17 am

Depending on where he lives, I might avoid more than just the goodknight plan haha

Jan 28, 2014 12:27 am
Paranoid Android:

Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Jan 28, 2014 10:43 am
Jhud423:
Paranoid Android:

Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Huh? I'm here to help as much as possible, but also be realistic...not trying to be negative or discouraging to anyone. Just there are areas of the country where Jones isn't the best option to start a career, and certain where they are a fantastic place to start. They apply a one size fits all model regardless if you are in Kansas or California, Montana or Massachusetts. If you live in a rural area, they're great...there's probably no better company to get your career going with, you'll be on a salary that fits your area and receive training that is completely relevant to you. If you're in an urban area, it's much much tougher, and with no cost of living adjustment, it can be tough for people to get off the ground. I saw a ton of people come and go because they were trying to give financial advice, while figuring out which payment to make rent or car to make that month in months 2 and 3 of being out there, while also trying to figure out how to build the business because the "knock knock, how did I happen to catch you at home today?" that gets you invited in for Sweet Tea in Georgia, gets the cops called on you in New Jersey.

That's what I meant by that....it's all about location. That's why I probably don't see this putting Jones in Chicago, Boston, LA, San Fran thing working out well for them. I wish them nothing but the very best, and while I moved on from them, I still have plenty of friends there and enjoyed my time being there...

Jan 28, 2014 6:52 pm
Paranoid Android:
Jhud423:
Paranoid Android:

Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Huh? I'm here to help as much as possible, but also be realistic...not trying to be negative or discouraging to anyone. Just there are areas of the country where Jones isn't the best option to start a career, and certain where they are a fantastic place to start. They apply a one size fits all model regardless if you are in Kansas or California, Montana or Massachusetts. If you live in a rural area, they're great...there's probably no better company to get your career going with, you'll be on a salary that fits your area and receive training that is completely relevant to you. If you're in an urban area, it's much much tougher, and with no cost of living adjustment, it can be tough for people to get off the ground. I saw a ton of people come and go because they were trying to give financial advice, while figuring out which payment to make rent or car to make that month in months 2 and 3 of being out there, while also trying to figure out how to build the business because the "knock knock, how did I happen to catch you at home today?" that gets you invited in for Sweet Tea in Georgia, gets the cops called on you in New Jersey.

That's what I meant by that....it's all about location. That's why I probably don't see this putting Jones in Chicago, Boston, LA, San Fran thing working out well for them. I wish them nothing but the very best, and while I moved on from them, I still have plenty of friends there and enjoyed my time being there...

Ok then. Understood - sorry, I guess I read that wrong.

Jul 14, 2014 5:49 pm

I have been contacted about taking over a goodnight book, this is what I have been told:
the advisor is retiring and the book is being split into 2 parts, each just under 30mm
I am currently with WFA and have just finished my first full year with the firm. I did just over 80k in production and have gathered 9mm in AUM. Before joining WFA I was in the ML PMD program for 5 moths before moving to an area that ML did not cover. My current office has 7 advisors that range in age from 62-74, so the future for gathering assets from retiring FA's is good. Not sure which way to go, any advice? Before I entered this side of the business, I owned a commodity brokerage for just over 15 years.

Jul 16, 2014 8:45 pm

I'm a jones FA - and very happy with the firm. It is absolutely a great place to work. I have friends at WFA, and they seem to be a good place to work as well. $30 million is a good start but it's not a life changer. I've got $50 million AUC and I wouldn't even consider switching firms unless it was at least a $100 million opportunity. If you've got a shot at some assets from retiring advisors at WFA, it probably makes sense to stay put, but I don't know how they transition their books. At jones you don't pay for a GK, you split commissions for 18 months, unless it's a succession plan, then it is over 3 years. If quality of life and work/life balance are important to you, though, there is no better place to work than jones. I enjoy a ridiculous amount of freedom with my time and business, and it only gets better.

Jul 28, 2014 9:44 pm

Any FA at any firm enjoys a ridiculous amount of freedom with their time and business. It's not any different at MSSB, ML, JPM, UBS, etc. That's how life is as an FA. You own your own business, you can do whatever you want as long as you're posting the numbers.

I have no ill will for Jones at all, have many great friends there still to this day and wish them nothing but the best, but switching away from Jones made me realize how much bullshit they feed you about how much better it is there than anywhere else. Switching to a wire, I was actually a little nervous just due to how much Jones had told me about the evil wires, but come to find out...it's the exact same gig no matter where you go, the only difference is the resources and location.

I fear for new trainees now that American Funds is doing ETF's. With no incentive to go fee based(in fact, if you're not getting that 5.75% up front and decide you want to do fee based, you'll be put on PIP for not meeting your numbers).

GHF, I'm not trying to put you down or anything like that, but can I get an explanation of why your work/life balance is better than mine? Genuinely curious. I work at a "wirehouse" and have had no work/life balance issues...in fact, it improved significantly.