Ej # 1?
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[quote=Spaceman Spiff]
I read the appeal. The GP estimation is low, IMHO. I don’t have any accounting basis for that, so it is simply my educated guess.Lawyers, absent a forensic accountant, don’t have a clue as to what stuff is worth. My LP is worth exactly what I put into it. If I have $50,000 in LP and I decided to cash out or leave Jones, they’d cut me a check for $50,000. I would assume that GP would work the same way. Since there aren’t any supporting documents in the PDF to see how they got to the $270K figure, I would have to assume that there is more to the story than some attorney randomly assigning the value of his GP to such a low figure.
With that said, I agree with B24. The comment about GP not being worth much and LP being almost worthless is one of the more ludicrous statements I’ve ever seen here. It’s not even a logical statement to make. GP’s have to sell out of their partnership at a certain age or when they leave the firm. Why would any of them invest in something that could be worth substantially less than what you’ve put it at any given time? It’s not a stock, so the value doesn’t fluctuate like stock. It’s not even a bond whose value fluctuates with the change of interest rates. There is no supply and demand curve. It is what it is. Jones says you want $X in partnership, you’re going to pay $X to get it. Like I said, there’s more to the story than what you read in that opinion. [/quote]
Here’s how these things work. Plaintiff and Defendant hire experts. They present their opinion to the court. The court decides which opinion is more valid.
The expert that is believed to be more credible by the court wins. My guess is, David Lane hired a VERY credible witness to tear apart how GP works and valued it considerably lower than it was worth. The fact that he only had to pay $60k in attorneys fees leads me to believe that she didn’t have a very good attorney or expert.
[quote=BigCheese]Spiff-
I am an idiot for continuing to converse with you, that's for sure. You can't produce, only talk about it. I grossed 308K and netted 210K. I am not a huge producer but I didn't have to gross 500K to net it so maybe I might be a notch above an idiot. You can articulate well and often, if I were your manager I would recommend a few more outbound calls so you don't go in the red, again. You can have your 20K LP netting you 20% (4 f___ grand) and I'll take my 25% higher payout (last year I kept 75K I would have given the almighty GP that you would have paid if you grossed the same)and keep it for me and my family. And if I choose I will grow my company, not put huge dollars in GP's pockets. Oh and I can and frequently do offer clients the ability to hedge their losses. And I see absolutely nothing wrong with them taking a portion of their profits if they so choose. My compliance officer seems to agree that it's important to be able to offer clients choice. Can you do this Spiff? You can only offer what Jones feels is appropriate? Doesn't it challenge you not to be able to determine what is right/suitable for your clients? The reason I left Jones was because of management. I didn't trust them to look out for my clients interest first. I found they were most concerned about themselves and they cared little about the client and even less about the advisor. [/quote] Do I find it challenging not to be able to determine what is right/suitable for my clients? I wasn't aware that I wasn't doing that. See, all of the clients that I've talked to said they wanted to retire, spend money, put kids through college, etc. NONE, let me say that again, NONE of them have said anything about puts, calls, spreads, straddles, hedge funds, etc. I have one guy that asks me about gold. That's it. I'm sure that there are some people out there that I won't ever work with because they think they need someone like you because fancy strategies are an absolute minimum that they'll accept in their portfolios. Um...OK. That's maybe, what, 1 out of 100 families? I'll take those odds. I'm not so sure if I went indy that I'd change my money managment style all that much. I like it the way it is. Who ever told you that we can't take profits? Maybe your fingers got ahead of your brain waves with that one. I'll give you the benefit of the doubt. And as for hedging your losses, I never said that I didn't believe it was important. It's just not important for me to do it the same way you do. As for my production, my LP, and your assumptions, you can keep banging that drum if you want. I'm not dancing along. Not because I can't keep up, but because I choose not to. Congrats on a $308K year. I'm happy for you. BTW, I'm not the one talking about production. You are.I'd agree with that assessment. Another way to look at it is if he really didn't have that much GP at the time. He hadn't yet come into the home office yet and was still working in KY. The $1 mil would have probably been close to what he was getting in commission, bonuses, and GP combined. From what I understand the GPs in the field don't get as much GP as those in HQ do, because they're also still producing. Just a guess.
Here’s how these things work. Plaintiff and Defendant hire experts. They present their opinion to the court. The court decides which opinion is more valid.
The expert that is believed to be more credible by the court wins. My guess is, David Lane hired a VERY credible witness to tear apart how GP works and valued it considerably lower than it was worth. The fact that he only had to pay $60k in attorneys fees leads me to believe that she didn’t have a very good attorney or expert.
Do I find it challenging not to be able to determine what is right/suitable for my clients? I wasn't aware that I wasn't doing that. See, all of the clients that I've talked to said they wanted to retire, spend money, put kids through college, etc. NONE, let me say that again, NONE of them have said anything about puts, calls, spreads, straddles, hedge funds, etc.
Your clients (typically less sophisticated) only know what you tell them. And because you can't offer them you either steer the conversation away or tell them to go elsewhere. You can't offer non-correlated assets. While I was at Jones from 1998-2006 it was A share mutual funds and a little MAP if the clients really wanted to step out... Now you do have advisory and if one could look back at our threads years ago, you were advocating that it wasn't really necessary. Now, the montra is recurring revenue. Lp is the greatest thing since sliced bread, yet someone of your tenure, wouldn't have enough to make a difference, but its a point to remind us of. My reason for asking your gross was to get a reference. Do you really walk the talk? I am guessing not, but then again, I am an idiot who has been in the biz longer and apparently been more successful.I'd agree with that assessment. Another way to look at it is if he really didn't have that much GP at the time. He hadn't yet come into the home office yet and was still working in KY. The $1 mil would have probably been close to what he was getting in commission, bonuses, and GP combined. From what I understand the GPs in the field don't get as much GP as those in HQ do, because they're also still producing. Just a guess. [/quote] I am willing to bet there was an "agreement" that David would get additional GP at some point in the future (IOW they deferred his GP award), thus lowering his current assets. It was a win/win for him and the firm. The firm gets to split up a 300mm office into who know how many parts, and David gets to retain much of his assets until some point in the future.[quote=Moraen]
Here’s how these things work. Plaintiff and Defendant hire experts. They present their opinion to the court. The court decides which opinion is more valid.
The expert that is believed to be more credible by the court wins. My guess is, David Lane hired a VERY credible witness to tear apart how GP works and valued it considerably lower than it was worth. The fact that he only had to pay $60k in attorneys fees leads me to believe that she didn’t have a very good attorney or expert.
[quote=BigCheese]
Do I find it challenging not to be able to determine what is right/suitable for my clients? I wasn't aware that I wasn't doing that. See, all of the clients that I've talked to said they wanted to retire, spend money, put kids through college, etc. NONE, let me say that again, NONE of them have said anything about puts, calls, spreads, straddles, hedge funds, etc.
Your clients (typically less sophisticated) only know what you tell them. And because you can't offer them you either steer the conversation away or tell them to go elsewhere. You can't offer non-correlated assets. While I was at Jones from 1998-2006 it was A share mutual funds and a little MAP if the clients really wanted to step out... Now you do have advisory and if one could look back at our threads years ago, you were advocating that it wasn't really necessary. Now, the montra is recurring revenue. Lp is the greatest thing since sliced bread, yet someone of your tenure, wouldn't have enough to make a difference, but its a point to remind us of. My reason for asking your gross was to get a reference. Do you really walk the talk? I am guessing not, but then again, I am an idiot who has been in the biz longer and apparently been more successful. [/quote] Yes, my clients are typically less sophisticated. News flash - most people in this country haven't got a clue how to handle their money. Of course they're unsophisticated. I, and most of my Jones counterparts, work with simple people. They have simple needs, simple goals, and simple minds. For most of them if I mentioned the phrase hedge fund, they'd think I was talking about a bank account for their landscaping needs. I understand that I work at EDJ, there are limitations, and therefore I won't be able to offer my clients the same kind of fancy scenarios that you do. I'm OK with that. I can make a good living keeping my life, and my client's portfolios, very simple. You'll probably forever have to wonder if I'm a bigger producer than you. I don't plan on caving in on posting my production numbers. Never have never will. You say it's a point of reference. For whom and for what? Why don't you ask B24 what his numbers are? Or rankstocks? Or Moraen? Or ice's? I respect all of those guys, but I haven't got a clue what their production numbers are. It doesn't matter to me. Those guys post some good stuff. I don't always agree with them, but not because they don't make as much jack as I do. I don't agree with them because they have different opinions than I do. For everyone out there following this thread between foot and myself, if you would do him a favor and before you post your comments, make sure you put your 12 month trailing GDC for him to see. That way he knows whether or not to pay attention to you or not. Just FYI, if you're under $250K, don't even waste your time. You're not worthy of his time or attention.Spiff-
This is only directed to you because of the enormous amount of posts and opinions that you have. Ice is close, but he at least admits he is new. You continuously pontificate either to refrain from doing the work (my guess...waiting for them to walk in the door) or to at least have someone listen to you since you must not have enough clients (given the time you have on this forum) or prospects to talk to.
If you showed a little balance in your posts once in a while I wouldn't be challenging you. It's not about your production as much as your naive position regarding Jones. You simply have no clue and attempt to puff your chest every time you can, acting as if you actually have experience. You just know how to bend over for GP's with the hope one day that you can be just like them.
What a pitiful existence.[quote=BigCheese]Spiff-
I am an idiot for continuing to converse with you, that's for sure. You can't produce, only talk about it. I grossed 308K and netted 210K. I am not a huge producer but I didn't have to gross 500K to net it so maybe I might be a notch above an idiot. You can articulate well and often, if I were your manager I would recommend a few more outbound calls so you don't go in the red, again. You can have your 20K LP netting you 20% (4 f___ grand) and I'll take my 25% higher payout (last year I kept 75K I would have given the almighty GP that you would have paid if you grossed the same)and keep it for me and my family. And if I choose I will grow my company, not put huge dollars in GP's pockets. Oh and I can and frequently do offer clients the ability to hedge their losses. And I see absolutely nothing wrong with them taking a portion of their profits if they so choose. My compliance officer seems to agree that it's important to be able to offer clients choice. Can you do this Spiff? You can only offer what Jones feels is appropriate? Doesn't it challenge you not to be able to determine what is right/suitable for your clients? The reason I left Jones was because of management. I didn't trust them to look out for my clients interest first. I found they were most concerned about themselves and they cared little about the client and even less about the advisor. [/quote] That is glorious. Congrats to you on getting to that point of freedom and efficiency.[quote=BigCheese]
Spiff-
This is only directed to you because of the enormous amount of posts and opinions that you have. Ice is close, but he at least admits he is new. You continuously pontificate either to refrain from doing the work (my guess...waiting for them to walk in the door) or to at least have someone listen to you since you must not have enough clients (given the time you have on this forum) or prospects to talk to.
If you showed a little balance in your posts once in a while I wouldn't be challenging you. It's not about your production as much as your naive position regarding Jones. You simply have no clue and attempt to puff your chest every time you can, acting as if you actually have experience. You just know how to bend over for GP's with the hope one day that you can be just like them.
What a pitiful existence. [/quote] WTF? Spiff is awfully balanced on his viewpoints of Jones.My point was simply this: If GP is not worth a lot then LP which derives it’s value from the GP must be worth a lot less than I have been led to believe or David Lane really shafted his ex-wife with the cooperation of the home office by giving him less GP with an understanding to increase it significantly in the future…
Which is it?anon - thanks
BC - I have plenty of clients and prospects to talk to. Enough to do what I want to do in your all important gross commission column. Again, my numbers, my goals, my business. But thanks for worrying about me anyway. So, how do I know you're telling me the truth about your production numbers? And what do you think you've gained by telling us what it is? The guys out there grossing $500K now think you're just a punk kid. The noobs might think you're the bomb because you hit $300K and that they want to be like you someday. Others, like me, might think, man, only $300K? I would have thought the way he talks that he would have been a lot further along right now. That's not even Seg 4 territory. 9 years with Jones, indy experience before, 3 years after, That's not all that impressive. So why is it better for ice to be at the level of posts that he is, but not me? Especially as a new guy, why isn't it exponentially worse for him to be at my level (actually 50% past it) after not even two years of being here? That just doesn't make sense. But, does that make ice any more credible than me? Speaking of credibility, where are those articles you referenced before? You know the Forbes, WSJ, STL Biz Journal articles that documented the flaws in the EDJ business model? We can continue to have this stupid little back and forth, but if your goal is to prove me wrong, then by all means, get to it.To be fair I think he was attempting to make the case that it wasn’t worth as much to her as it was to him. Either way I found the talk about RL burnout to be interesting. I haven’t see that much RL turnover but I am very disconnected from Jones these days.
Spiff I just liked the percentage he was getting. I wasn’t raving about the overall production.
[quote=noggin] My point was simply this: If GP is not worth a lot then LP which derives it’s value from the GP must be worth a lot less than I have been led to believe or David Lane really shafted his ex-wife with the cooperation of the home office by giving him less GP with an understanding to increase it significantly in the future…
Which is it?[/quote]
The latter. As well as having a good expert witness to drop the value of that GP. My guess is it’s a combination of the two. But really, do you expect anything less?
My guess is GP is worth a LOT more than the case let on. It’s far more likely that the home office was complicit in shafting Paula Lane.
That doesn’t so ethical now does it Spiff. Reducing the value of GP so a less-educated divorcee would receive less support. It sounds like the firm is protecting their nest egg and ultimately David Lane.
What a great firm. I am sure all firms would do the same (thought I would beat you to it the classic response).Let me qualify. I would do the same thing for a valuable employee. Withhold a bonus. Delay the granting of an equity interest. Reduce payout, etc.
We don’t know the whole story. Perhaps she was giving the pool boy a good polishing. Or let one of her dirty hotel bellhops hit it right nasty-like. And he should have to pay for that?
The less-educated divorcee is not producing for the firm. Divorce isn’t about fairness. Come to think of it, neither is marriage.
Spiff-
I am not afraid or embarassed by numbers. They are what they are. Gross is difficult these days, but not impossible, I actually got a committment to place 200K in a couple of REITS today (14K gross) so I am feeling pretty darn good. I expect my revenue to jump to 500K by next year. I am doing marketing in a big way and referrals are starting to pick back up. My average household is now over 400K, without having any stated minimums. My numbers aren't outstanding, but they are definitely clients for life that generate it. 25% is recurring (Reits are not recurring revenue). So while I am no superstar, I am building my business and will look forward to the day that you and I can go toe-to-toe. Until then I have to assume you are struggling like alot of my friends at Jones grossing 18K per month. Putting on a good face, but in reality, you are struggling to survive ( I know I don't know you...but I know others like you in Segment 3 and they are struggling to make it). When you net 200K, let's talk. I think today that would be 600K gross in your lonely world. So far, all I can find are articles that talk about how dirty Jones was during the revenue sharing debacle. Since LPL also participates in revenue sharing I will refrain from posting those wonderful reminders of how great Jones is. Maybe I should post your 10K showing all the ways Jones Financial makes money on your revenue and doesn't trickle a dime down to you or should I remind you of the haircut you get on annuities or C shares. Oh lets talk about the bonus system...you aren't receiving any yet because your revenue isn't high enough to matter. You are smarter than most Jones brokers, maybe that's why I keep trying to get you to see that there is another viewpoint.[quote=Moraen] [quote=noggin] My point was simply this: If GP is not worth a lot then LP which derives it’s value from the GP must be worth a lot less than I have been led to believe or David Lane really shafted his ex-wife with the cooperation of the home office by giving him less GP with an understanding to increase it significantly in the future…
Which is it?[/quote]
The latter. As well as having a good expert witness to drop the value of that GP. My guess is it's a combination of the two. But really, do you expect anything less?
My guess is GP is worth a LOT more than the case let on. It's far more likely that the home office was complicit in shafting Paula Lane.[/quote] Moraen, It would make no difference to the ex wife if he got GP or not. Think about this.... She cannot own GP. It is converted to cash. However, if he had the cash available to buy the GP to begin with, she would have gotten 1/2 of the cash anyway. If he had to borrow the money to buy the GP she should have said "no thanks". She would have assumed 1/2 of the loan but then gotten her share in cash which she would have paid on her 1/2 of the loan she assumed. Splitting currently owned GP is a different matter. Current value is face value. I don't think you need an expert witness for that. Of course you could always argue the present value of the GP earnings (or whatever the cash is invested in for that matter). I bet an ex wife would just take the cash. Mine sure as hell did. Am I missing anything here? I did not Google David Lane's divorce so I do not know any of the specifics.
I'd agree with that assessment. Another way to look at it is if he really didn't have that much GP at the time. He hadn't yet come into the home office yet and was still working in KY. The $1 mil would have probably been close to what he was getting in commission, bonuses, and GP combined. From what I understand the GPs in the field don't get as much GP as those in HQ do, because they're also still producing. Just a guess. [/quote] I am willing to bet there was an "agreement" that David would get additional GP at some point in the future (IOW they deferred his GP award), thus lowering his current assets. It was a win/win for him and the firm. The firm gets to split up a 300mm office into who know how many parts, and David gets to retain much of his assets until some point in the future.[/quote] B24, Isn't GP both an asset and a liablility? Unless of course you have the cash to pay for it already? If that is the case wouldn't you already have the asset? I can understand the arguement of delaying income (the IRS has rules against this). I don't understand how delaying the use of a current asset to purchase another current asset changes a balance sheet? If I am correct (been wrong before) then how (or why) in the world would Jones be participating in this if it had ZERO effect on Lane's actual current networth?[quote=Spaceman Spiff][quote=Moraen]
Here’s how these things work. Plaintiff and Defendant hire experts. They present their opinion to the court. The court decides which opinion is more valid.
The expert that is believed to be more credible by the court wins. My guess is, David Lane hired a VERY credible witness to tear apart how GP works and valued it considerably lower than it was worth. The fact that he only had to pay $60k in attorneys fees leads me to believe that she didn’t have a very good attorney or expert.
qwerty (ok, ok, ytrewq). Aren’t you a GP? I was hoping you would chime in. It seems you know more about the GP than the rest of us (I have very little knowledge of it). How is it given? How much is given when it is offered?
I’ve never had to deal with something as complicated as Edward Jones GP/LP. I’ve testified in three divorce cases and in one case, there was a partnership for an engineering business. The value of the partnership in this case was equal to projected cash flows (based on past ten years revenue).
I have no idea why Jones would participate in it if it were as you state. I’m just saying I would if I had a valuable employee, I’d try to help that guy out. I also don’t know anything about how much GP is ever offered. It always seemed very complicated when it should really be simple.
Ice - Spiff was talking about how he respects you no matter what your production numbers are.