Edward Jones-Pushing Advisory & Performance

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Sep 19, 2009 9:00 pm

It seems that Jones is trying to have it both ways.  They are spending tremendous amounts of money on the new "Advisory Solutions" investment platform.  As a Jones advisor I say it's about time that this platform was made available.

 
But at the same time they are coming out with a new performance program that would actually reduce the segment that an advisor was in if his performance fell.
 
Personally my branch is healthier that it has ever been.  I have seen a net increase in assets and clients through the down market.  Over the past few months I have busier than I have ever been.  The problem is that Jones is continuing to use the traditional measurement of my branch's health....the perfomance chart.  It appears to me that Jones is trying to have it both ways. 
 
No one else at Jones knows how to handle it either.  I have heard suggestions like, "do your first 20K in A-shares then use the fee based stuff"or "use A shares then convert them down the road" and many other variations of doing something to create a commission for the moment with the intent of using fee based for that same client later on.  Some of these suggestions have come from regional leadership or from individuals at the home office.
 
In my have never been at another firm but the way we have rolled this oput seems half thought out.  What happens elsewhere?
Sep 19, 2009 9:23 pm

The client always comes first...after the first 20K...




 
I am sure Spiff will spin it so that we can hear the other side. Clearly broker4hire must be disgruntled...
 
Sound familiar?
Sep 19, 2009 10:19 pm

Over 90% of the money going into AS is from existing accounts.  We got the lecture at Summer Regionals from some heavy-hitting super-vets on how they are converting existing accounts to it at a rate of 1-2 accounts a day.  I asked one of them at a break how much new money was going in, and his answer was ZERO.  Even my wholesalers are laughing at what we are doing.

Sep 20, 2009 12:21 am

that firm is a joke

Sep 20, 2009 12:31 am

Tell me why it's a bad idea to move a client that bought A-Share American Funds 5-7 years ago to switch to Advisory Solutions.  Also, Jones provides REFUNDS to clients that switch to Advisory Solutions when it impacts them fee wise.  Not just your horsesh*t answer JONES IS A JOKE.  Why is Advisory Solutions a bad idea for them??

If they came to you I'd bet everything I own that you'd stick that nice new shiny transfer in a WRAP account.  F U

I think your lying about the "first 20k" in A-shares.  If not, you have an obligation to report this person.

Sep 20, 2009 12:37 am

I probably would sell a wrap, but not after having sold an A share. And Jones is a joke for so many other reasons.

Sep 20, 2009 12:41 am

So, what you are saying is you never adjust your clients holdings? Never adjust your strategy? However, if you inherit a clients holdings it's open season? Interesting.


BTW:  you never answered my question, why is it a bad idea?  Especially considering the client will get a fee refund?


Sep 20, 2009 1:01 am

did the clients circumstance change or did yours? btw, Jones is a joke

Sep 20, 2009 1:13 am

You tell me, why would a wrap account benefit your NEW client and not my existing?

Please don't call Jones a joke, it'll ruin my night.

Sep 20, 2009 2:19 am

More Fee base! More $$ for the partners!!!! Yeah

Sep 20, 2009 3:38 am
voltmoie:

/// F UI think your lying about the "first 20k" in A-shares. If not, you have an obligation to report this person.



Actually I thought of you when I read this line. It's not about putting the first $20K of a client's money into AS; it's the first 20K GDC. Which in fact is what you've purported to do, and I think it's a good thing.



Other people talking about EDJ's AS haven't been exposed to it. Compared to what I see out there, this program is far, far better than the competition. I've looked at what others have to offer, at the due diligence involved, the rebalancing and the manner in which clients are handled.



Our plan is better, and even as myself being a potentially outbound Jones guy I find others calling this company a "joke" as being completely unprofessional, and unworthy of direct rebuttal.



By the end of September, I will have five clients on it. By October, 15. I have a list of clients with more than $50K, that have been clients for a reasonable time and who haven't paid any recent commissions on the account. If they are concentrated in mutual funds, this is a better deal for them. Period. End of discussion.



Sep 20, 2009 8:00 am

Automatic rebalancing is NOT good, especially for non-qualifiied money. Most of my clients have non-qualified money.



As for selling A-shares and then putting someone in advisory - it is better than switching someone out of American Funds and into Franklin a few years later, but still a little suspect.



If A-shares are "in your client's best interest", then why would you put them in Advisory after selling them A-shares. Has the Jones philosophy changed? No.



I hate to say it, but in this case Windy/Ronnie is acting the most ethical. He doesn't see it that Advisory is better than A-shares. He is still sticking with Jones philosophy (no matter how changed it is).



Lock - I agree with a lot of what you say, but I personally don't think that AS is such a good plan. You say it's cheap, but all-in it's still pretty expensive. Plus, the models are flawed (at least when I was there).



AS is set up the way it is for one reason - to limit liability of the home office. I don't think it's a BAD plan - but it could be better. And the whole philosophy of getting people in A-shares and then converting them - hogwash. These long-term brokers that are now wrapping their 100, 200, and 300 million dollar books. If they thought wrapping the money was in the clients' best interests, why did they not leave?

Sep 20, 2009 8:34 am
broker4hire:

"use A shares then convert them down the road" and many other variations of doing something to create a commission for the moment with the intent of using fee based for that same client later on. Some of these suggestions have come from regional leadership or from individuals at the home office.





wow.    

your a branch manager?

JD Powers awards?    

Sep 20, 2009 8:36 am
Moraen:

Automatic rebalancing is NOT good, especially for non-qualifiied money. Most of my clients have non-qualified money.



As for selling A-shares and then putting someone in advisory - it is better than switching someone out of American Funds and into Franklin a few years later, but still a little suspect.



If A-shares are "in your client's best interest", then why would you put them in Advisory after selling them A-shares. Has the Jones philosophy changed? No.



I hate to say it, but in this case Windy/Ronnie is acting the most ethical. He doesn't see it that Advisory is better than A-shares. He is still sticking with Jones philosophy (no matter how changed it is).



Lock - I agree with a lot of what you say, but I personally don't think that AS is such a good plan. You say it's cheap, but all-in it's still pretty expensive. Plus, the models are flawed (at least when I was there).



AS is set up the way it is for one reason - to limit liability of the home office. I don't think it's a BAD plan - but it could be better. And the whole philosophy of getting people in A-shares and then converting them - hogwash. These long-term brokers that are now wrapping their 100, 200, and 300 million dollar books. If they thought wrapping the money was in the clients' best interests, why did they not leave?





wtf

Im having a 1984 acid flashback

Sep 20, 2009 8:43 am
LockEDJ:

Compared to what I see out there, this program is far, far better than the competition. I've looked at what others have to offer, at the due diligence involved, the rebalancing and the manner in which clients are handled.



Our plan is better, and even as myself being a potentially outbound Jones guy I find others calling this company a "joke" as being completely unprofessional, and unworthy of direct rebuttal.







Your firm is like Waco or sceinctology or something

Wait till you get debriefed in the real world

you will understand

Sep 20, 2009 9:04 am
A b:
broker4hire:

"use A shares then convert them down the road" and many other variations of doing something to create a commission for the moment with the intent of using fee based for that same client later on.  Some of these suggestions have come from regional leadership or from individuals at the home office.



wow.    
your a branch manager?
JD Powers awards?    

 
This has caught a lot of people off guard.  They don't know what to do.  They want us to use Advisory and cheer us on for putting $1 billion in every eight days, but they ultimately want us to do it without our production dropping below $18k p/mo.  In normal circustances..no problem.  But I have to admit that I have been a little closer than I am comfortable with to that line throughout this market...and that is with A-shares.  Now that Advisory is a large part of my business that number has dropped to about $16K to $17k p/month.  And that is only because it has been VERY busy in the muni, VA and fixed annuity side.  No one is giving me any hassles yet...but I know that if I continue down this path they will. 
 
At this point I would like to get my production up some.  Do I lower myself?  Do I use A-shares for a client when I feel that Advisory is a better fit for them?  Do I just not tell some clients about the wrap model and only tell them about A-shares?
Sep 20, 2009 9:07 am

Here is the bottom line.  Either you are committed to the fee based model or you are committed to the A share model.  You really can't have it both ways.  I converted my book over 7 years ago to fee based and almost never do an "upfront" sales charge.  The only exception is that I did 2 trades where we hit the million dollar breakpoint, but even then I think by having diversified money managers is far better than one fund family.  When will

American funds be the next Putnam?
 
The comment that was made that Jones has the best fee based model is simply amazing.  You have never looked at one other program if you truly believe that.  The Jones fee based model is truly behind the times and there are far better available in the marketplace.  Go kick some tires at other firms and it will become apparent that you have been drinking the Kool-Aid far too long.
Sep 20, 2009 9:30 am

I have no moral dilemma.  If the client has over 50k in qualified money they are either going into AS or a B-share VA with an income rider.  I think AS for qualified is terrific but dangerous for NQ.

I'd also be able to sleep just fine at night if I were a vet were moving my existing clients into AS.  ML, MSSB, Wachovia did the same thing when their wrap programs hit.

The fee recovery system put into place by Jones safegaurds the clients from taking a hit. You can argue the merits of AS all you want but from the ethical end, get real.

Sep 20, 2009 2:33 pm

Well I certainly DO have a problem with the mass conversion of existing accounts to AS.  I've been with Jones over 10 years, and I've heard almost 10 years of lectures of how "evil" these accounts are.  Now that Weddle thinks of it, they're suddenly great?  We used to be trained how to sell AGAINST these things.

 
So did all the vets who are now converting existing accounts feel like they were selling inferior products back then?  Were they too stupid to understand other firms' wrap products at the time?  If they are so great, then why is almost every penny going in these things OLD MONEY?????
Sep 20, 2009 3:01 pm

Do you have any proof that ALMOST every penny going into AS is old money?  Other than the 100ft view from your office? If so, give us the FFAACCTTSS  not your BS opinion.

Why do you live in the past?  Microsoft used to think the internet had no commercial application outside of ISP.  Guess their employees should quit now because they continue to make a push into that industry.  Times change, adjust and move on.  Seems like Jones is doing that ... why are you not?