Edward Jones' Incentive Trips

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May 19, 2008 10:05 pm

I've heard Edward Jones FA's have the opportunity to go to some pretty cool places on their incentive trips.  I'm just curiouse about where some of the coming up places are and what the trips have been like in the past.  Is it realistic for a first year FA to qualify for the trips?


Thanks!
May 19, 2008 11:06 pm

Europe, Bahamas, Germany, Rome, just to name a few.....and yes your first year is the easiest to qualify.

May 19, 2008 11:31 pm

It gets easier to qualify as your production grows....

May 20, 2008 12:22 am

It was always great when the newbies made the trip because of bonus points and all of the 10 year drones were asking him what he was doing to be so uber-successful in his first year!


May 20, 2008 12:28 am

I remember my first trip, i was the only one that had less than 5 yrs experience who won a trip starting from scratch, everyone else walked into a 30-50 million dollar office. Those pikers actually acted like they earned something......Oh well, good memories........

May 20, 2008 8:56 am

Are you free to do what you want on those trips, or does the company have events everyday that you're expected to attend?

May 20, 2008 9:44 am

You are never free unless you are independent.


Sorry Spiff. I couldn't resist...
 

 
At Jones, especially your first trip, you are expected to make the meetings. To be fair, there aren't many meetings, almost always in the morning. And if you get a smart GP, they make it as short as possible (as long as they satisfy all the rules). I will say that the trips are one of the few things I do miss. I am happy to report though, that with the help of a travel professional. I am taking 9 people to Hawaii to celebrate our first indy diversifcation trip. It costs a bit more, and because I am seeing a client over there, much of the trip will be deductible according to my CPA.
 
A big difference there, because the trips are taxed at 50%!!!!
 
May 20, 2008 9:46 am

Make sure you save enough money for the taxes they charge you with. My hit on the paycheck was $800 per month for the next 3 months. There after I referred to them as disincentive trips. You take a week off, lose the production, you pipeline is down, and they charge you for the trip on your pay check for the next 3 months. What a rip off.

May 20, 2008 10:09 am

In your first two years, you receive some bonus points to help you win the trip.  I wouldn't call it easy, but the first two years may be easier than the two following.  Other trips have included the indy 500, NCAA final four, Mercedes golf tournament and the US Open tennis tournament.  There are always trips to Europe, the beach and Disney.  There is only one meeting to attend and it is done before lunch.

May 20, 2008 10:40 am

The trips are great.  Yes, the taxes hit your paycheck and you take a week out of production, but so would a regular vacation.  I think the second contest is the easiest one to hit.  You still have some bonus points, but a few months of ramping up your pipeline to get things going. 


The trips for this period are:
New York, NY - Christmas shopping trip w/$700 shopping allowance. 
Daytona 500
St. Thomas, USVI Cruise
Barbados Cruise
Maui
Sorrento, Italy
Orlando, FL - Disney trip where you stay at Disney and they give you Park Hopper Passes
Kauai
Beijing, China
Borneo, Malaysia
Deauville/Normandy & Paris, France - Think D-Day invasion trip for a history buff
Nuevo Vallarta, Mexico
Breckenridge, CO - Ski Trip
Chile & Argentina
Malta
St. Kitts, USVI
Berlin, Germany
 
In addition to just getting to go on the trip they also have breakfast and dinner allowances (cash they hand you), two planned dinners with the group, and typically some other things they throw in.  You can choose to participate with the group or not.  Nobody takes roll, except for the morning meeting the first full day you are there.  Credit Onion calls them a rip off.  He's evidently not priced a fancy vacation like the Jones trips.  My first trip was to Lake Como, Italy.  I checked into extending it a day on the front and back.  It would have cost me $500 a night to stay over at the .  So, 6 nights of that would have cost me $3000, plus airfare, plus meals, plus stuff I bought, plus the time and trouble of planning it all and worrying about it.  I think they are a great deal, even if they do hit your paycheck for taxes.  But the Onion probably thought the profitability bonuses were a rip off too because they taxed them at the same rate.  
 
noggin - ALL of them took over $30-50 million?  Really?  You had conversations with them in depth enough to find out all of their backgrounds and how much of a book they took over?  Congrats on winning yourself, but c'mon. 
 
 
  
May 20, 2008 10:55 am
Spaceman Spiff:

The trips are great.  Yes, the taxes hit your paycheck and you take a week out of production, but so would a regular vacation. 


 
 
 
This is one of those issues that Jones calls a point of compensation, but eventually you realize that it is not really compensation because as Spff says, they are really just a vacation that you pay for. I too admit they were nice, and you are getting a great discount bottom line compared to taking your own trip, but they are hardly "free" as you think they are early on.
 
If calculating the net net to bottom line, two $4000 trips= $8000-2600 taxes = 5400. Equal to about 2% of a 250k producer, 1% of a 540k producer.
 
They are what they are.
 
May 20, 2008 12:18 pm

They're still better than anything I've heard of in the rest of the industry.  Most firms have something similar for top producers, but you are talking about the top 5% of that saleforce.  The little guy like Noggin (again, good job) wouldn't have a chance to go.  And it's not really a contest.  So if you work for ML and there's a production contest for the top 50 producers and you're #51, you're out of luck.  Not at Jones. 

 
Jones breaks down the trip taxes for anyone who wants to read the book.  Their math is as follows:
$5500 trip value - $1375 Fed taxes - $420 FICA - $165 State = $3540
 
So here's where the glass is either half empty or half full.  If you are the half empty guy, Jones just screwed you out of $1960, but you got to go to Lake Como, Italy.  If your glass is half full, Jones just gave you a $3540 bonus which you traded for a trip to Lake Como, Italy.  Either way, you still went to Lake Como, Italy. 
 
I would say that this falls in line with some of the other discussions we've been having about Jones and perceptions.  They never advertise the trips as free trips.  If you get the book and choose not to read the rules, you might get suprised when your paycheck is $653 lighter than you expected that first month.  But then shame on you for not reading the rules.  Jones isn't trying to hide anything.  People are just lazy. 
May 20, 2008 1:49 pm

Spiff I'll agree with everything you said. It's mis-perceptions.

May 20, 2008 3:03 pm
CreditOnion:

Make sure you save enough money for the taxes they charge you with. My hit on the paycheck was $800 per month for the next 3 months. There after I referred to them as disincentive trips. You take a week off, lose the production, you pipeline is down, and they charge you for the trip on your pay check for the next 3 months. What a rip off.







God forbid they "rip" you off for deducting federally mandated taxes.



I could be wrong, because I have yet to go on one, but from my limited accounting knowledge, a self paid vacation would be funded with after tax dollars. With diversification trips, you are being taxed for a trip you never paid for yet is still considered revenue by the IRS. The additional benefit of having to only pay the taxed portion of the trip, is that you use future PRE-tax dollars to pay your federal obligation for the trip.



Does this sound about right?

May 20, 2008 5:26 pm

Back to the original question about how hard is it to qualify as a first yr rep.

Well, I started my office from scratch in the big city in the early 90's, I finally qualified in my 3rd yr.  So we took 2 trips a yr for the rest of the 90's.
But since Jones called them "Diversification" trips, besides the Mutual Funds & Annuities sales, which was 90+ percentage of my business, I had to sell my clients Margin, fixed income, insurance, etc... stuff which I wasn't too sure were appropriate for some of my clients, to hit 6 or so goals in order to qualify.
The trips were very nice.  Great locations, great hotels, great networking w/ other Jones IR's.  Everything's wonderful, until the tax hit over the next 3 months.  In the 90's, it varied from $500 - $600 per month for next 3 months.   Guess it's up to $800 a month now. 
Jones valued the trips anywhere from $5000 - $7000 for 2 travelers.
Not about you guys, but I'm in the Chairman's Club at LPL now, & when we have to pay for the trips ourselves, we still don't ever spend even half that much for a family of 4.  We've just booked for an All-Inclusive resort in Cancun, airfare included, for us 4 this summer for under $2000.  And another trip to Hawaii for less than $3000.  All tax-deductible, & no taxes due to the firm afterwards.
LPL also have the Master's trips (to Hawaii, Puerto Rico, Phoenix, & Hawaii for next yr) for 2 people, no taxes due afterwards.
We love the Jones trips, but for a young IR to pony up the taxes for 3 months afterwards sorta hurts. 
One yr, we just took the money, around $1600, instead of the Jones trip for 2, & booked a cruise for our family of 4 instead.  With money left over, & no taxes due afterwards....
 
May 20, 2008 5:32 pm

If you just take the money though, how's it taxed?  I think I've heard now the money option is $2,000.  How much of that would be take home?

May 20, 2008 5:38 pm
IsOldSpiceRightForMe:

If you just take the money though, how's it taxed? I think I've heard now the money option is $2,000. How much of that would be take home?





That depends on your personal (or household) federal and state tax brackets.



After doing some research, you also have the option of reporting the trip yourself on your personal tax return but must notify EDJ that you are doing this.

May 20, 2008 6:22 pm

My first trip was a SuperTrip to Greek Isles Cruise.  I was a new to the industry and new to my territory(nothing given to me).  I made every trip and my wife and I loved the trips. 


Brazil, Germany, Paris, Maui, Tahiti, New Zealand, Monaco, Japan, etc.


The one thing I didn't like is the organized stuff...My wife and I decided after our trip to Paris, that if it entailed any group activity we would not go...That's when we really started to enjoy ourselves.  I also started to pre-extend our trips and get our own flight reservations.  That's when it became really fun.  I could find better flight times on my frequent flyer airline and cheaper.  I was always amazed by that.


All in all, it was a great experience, but at LPL they pay all my expenses and I don't get taxed.  Much more of a meeting but I don't have to go to anything if I don't want.  No GP's taking notes in the back of the room.

May 20, 2008 9:12 pm

Back in the good old days you actually got more points for selling some fund families over others.  That was great.  And I am sure all of the new disclosure requirements are being followed to the letter.  I remember when they sent us the memo saying we had to read this lengthy disclosure to clients.  Something along the lines of 'I may be recommending these investments so I can win a trip, I may get a bonus just because you open an account, everything I am telling you is hinging upon a conflict of interest.'  Does anyone have  copy of that fun full page disclosure the EDJ folks are supposed to be reading to the client before opening an account, I wish I kept that one for the hallway of shame.

May 20, 2008 9:36 pm
Spaceman Spiff:

The trips are great.  Yes, the taxes hit your paycheck and you take a week out of production, but so would a regular vacation.  I think the second contest is the easiest one to hit.  You still have some bonus points, but a few months of ramping up your pipeline to get things going. 


The trips for this period are:
New York, NY - Christmas shopping trip w/$700 shopping allowance. 
Daytona 500
St. Thomas, USVI Cruise
Barbados Cruise
Maui
Sorrento, Italy
Orlando, FL - Disney trip where you stay at Disney and they give you Park Hopper Passes
Kauai
Beijing, China
Borneo, Malaysia
Deauville/Normandy & Paris, France - Think D-Day invasion trip for a history buff
Nuevo Vallarta, Mexico
Breckenridge, CO - Ski Trip
Chile & Argentina
Malta
St. Kitts, USVI
Berlin, Germany
 
In addition to just getting to go on the trip they also have breakfast and dinner allowances (cash they hand you), two planned dinners with the group, and typically some other things they throw in.  You can choose to participate with the group or not.  Nobody takes roll, except for the morning meeting the first full day you are there.  Credit Onion calls them a rip off.  He's evidently not priced a fancy vacation like the Jones trips.  My first trip was to Lake Como, Italy.  I checked into extending it a day on the front and back.  It would have cost me $500 a night to stay over at the .  So, 6 nights of that would have cost me $3000, plus airfare, plus meals, plus stuff I bought, plus the time and trouble of planning it all and worrying about it.  I think they are a great deal, even if they do hit your paycheck for taxes.  But the Onion probably thought the profitability bonuses were a rip off too because they taxed them at the same rate.  
 
noggin - ALL of them took over $30-50 million?  Really?  You had conversations with them in depth enough to find out all of their backgrounds and how much of a book they took over?  Congrats on winning yourself, but c'mon. 
 
 
  
Actually that is the truth. We went to Bejing for our first trip and there was not anyone out lee than 5 years with the exception of my self that didn't take over at least 30M. How do I know, well I talked to everyone on the trip. My week may have been the exception but it is the truth. My wife said the thing she would miss most are the trips and in all seriousness the trips are topnotch. The taxation hurts but the trips are compensation plain and simple. We stayed at the St Regis in Bejing and by far the nicest hotel I have ever stayed at.....