EJ Changes Below Expectation Rules

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Feb 25, 2009 9:26 pm

Edward Jones announced today that they are suspending the "goals" program this month and lowering the % required in future months based on firm profitability.  This comes in response to so many FAs being below firm expectations.  I know in our region over 75% of the FA's selling 2-10 yrs are below and many were on the brink of going on goals.  This should save a lot of jobs and retain a lot of AUM that would have left with some of these FAs.  I think it was a good move. 

Feb 25, 2009 9:57 pm
breaking news:

Edward Jones announced today that they are suspending the "goals" program this month and lowering the % required in future months based on firm profitability.  This comes in response to so many FAs being below firm expectations.  I know in our region over 75% of the FA's selling 2-10 yrs are below and many were on the brink of going on goals.  This should save a lot of jobs and retain a lot of AUM that would have left with some of these FAs.  I think it was a good move. 



Why would you want to be employed at a company that would have to rush in at the 23rd hour to potentially save your job??

Feb 25, 2009 9:59 pm

are there really that many below expectations?



this might not be a bad idea

Feb 25, 2009 9:59 pm

What were the minimums ?

 
I know what they used to be years ago.
 
Red, Yellow, and Green was the names given, but the % numbers do not come to my mind.
Feb 25, 2009 10:07 pm

I think it is just delaying the inevitable(spelling?)... You are talking about advisors who can't do $216K/year...that is bad...some of these guy can't put together $8-10K/month..

 
Jones should cut them loose and scale back their growth(it's obviously not working real well) my old region had 26 out of 64 advisors on goals.. There were some guys who were looking at leaving to go to LPL, but now they might hang out for awhile..
Feb 25, 2009 10:17 pm

As I look at my region it's all the guys from 5 to 10 years out that are hurting.  Less than five and the expectations are lower.  More than 10 and this market hasn't hurt their production much at all.  5 to 10 = Lots of little blue dots hanging out below the red line.

Feb 25, 2009 10:24 pm

I think this is hilarious! Expensive business model, veteran advisors carrying the firm for years and being recruited like crazy, Regional meetings where the number one focus is growth, growth, growth, all these resources being dumped into training brand new advisors how to door knock. Is this really sustainable?

Feb 25, 2009 10:57 pm

My region appears to be healthier than a lot of the regions that I read about on this board. We certainly don't have anywhere near 75% of the

FA's below standard. I would guess based upon my last look at the

regional performance chart, maybe there are 40% below standard. I think

that as of last week we had 2 or 3 on goals. As for why Jones is relaxing the standards (which were already pretty low compared to the

major wirehouses), we all know it's strictly a business decision.

There are not enough new trainees in the system to replace all of those

who were going to fail.

Feb 25, 2009 11:07 pm

they are going to have reps making 50k a year , this is going to bring their average rep salary down alot

Feb 25, 2009 11:18 pm

I think it's a good move.



Now we can concentrate on our clients and growing our businesses and not on losing our seats. I can't compare myself to people at different firms in large population centers. I can only compare myself to people at my own firm in small rural towns like myself.



We just had our second best month in a year though so I have to admit being on goals actually helped us. I''m determined not to slack.



The events of the past year are unprecedented. We're all in uncharted territory.

Feb 26, 2009 10:19 am

Jones is doing a lot of things to keep us employed, if not happy. 

 
Changing the goals percentage is a short term fix.  They are making is a moving target.  When the firm is in a high bonus bracket and things are going well the goals numbers will be higher.  Times like this, they get lower.  Goals used to be the kiss of death.  You just simply didn't have time for the process to work.  If you didn't have the money in the pipeline coming in, you were screwed.  They're changing that process.  I think it's a wise move.  From a relationship standpoint it's much better to have someone that the clients know, even if it is a relatively new FA, sitting in that desk than some new guy.  Nothing like a bad market and an new guy in the office to start the ACATs coming in. 
 
They've also started an asset gathering contest.  First I've seen in over 12 years.  Between now and the end of April with every new relationship I start and bring money over, they'll pay me $1 per $1000.  So, the $1 mil in new money I have on the fence right now should mean an extra $1000 bonus here in the near future.  If I can do the work to get it over here. 
 
So, why do I want to work for a company that would rush in at the 23rd hour and save my job?  Because they did.  Because they could have just simply said screw you.  But, they didn't.  I have a few friends in my region who have just been handed a new lease on life.  Jones just handed them a do over slip.  They've now got about 6 months to transform their business.  They've been given the opportunity to do it, now they have to decide if they want it or not and work accordingly.  I think it will be good for the company in the long run.  
Feb 26, 2009 10:31 am
Swordoftruth:

I think it's a good move.

Now we can concentrate on our clients and growing our businesses and not on losing our seats. I can't compare myself to people at different firms in large population centers. I can only compare myself to people at my own firm in small rural towns like myself.

We just had our second best month in a year though so I have to admit being on goals actually helped us. I''m determined not to slack.

The events of the past year are unprecedented. We're all in uncharted territory.

 
I'm not saying you did Sword but when I was there and someone got put on goals very few made it and I always wondered "how in the hell did that guy pull it out?  Did he work his ass off and find that much new money or did he have to make a moral decisions?"  No one will know except that individual broker.  I truly believe some just had the money come through that they had been waiting on but I also trly believe some moved money around.  I've believe that's what getting put on goals does to you, you get backed into a corner and you fight to survive. 
Feb 26, 2009 11:48 am
noggin:
breaking news:

Edward Jones announced today that they are suspending the "goals" program this month and lowering the % required in future months based on firm profitability.  This comes in response to so many FAs being below firm expectations.  I know in our region over 75% of the FA's selling 2-10 yrs are below and many were on the brink of going on goals.  This should save a lot of jobs and retain a lot of AUM that would have left with some of these FAs.  I think it was a good move. 



Why would you want to be employed at a company that would have to rush in at the 23rd hour to potentially save your job??

 
LOL...LMFAO...Now my day is complete...I knew good ole Noggin wouldn't disappoint!  Find a way to put a negative spin on a company trying to save it's employees who are struggling due to this once in a lifetime (hopefully) huge economic/market decline.  Why would anyone want to work for that type of company...i'll tell you why....because they actually care about their employees unlike mother merrill & others who are axeing (sp) people left and right and couldn't care less if you walked out the door and drove off a cliff.  Now...personally, I am not on or near "goals"....but when I saw this memo, I thought ...wow...what a company I work for...and believe me ...I have worked for many large companies in the corporate world and seen my share of "F you" leadership.  And for the record, I too am in a region that is not near 75% below expectations, however, there are more than usual due to the environment..the brokers that were going to fail will still likely fail...but this move was just another reason why we are rated best place to work for in the brokerage business. 
Feb 26, 2009 11:54 am

They aren't looking out for you... They are looking out for themselves because they can't attract enough transfer brokers to fill the offices that would be empty in 4-6 months and they didn't want to see their revenue(read 12b-1 fees) dwindle any more than it already has due to market conditions... If you can't put together a 10-15K month and you have been out longer than 5 years... YOU SHOULD BE DOING SOMETHING ELSE...

Feb 26, 2009 11:56 am

P.S.

 
I think LPL now has more former EDJ guys doing over $150K than, EDJ does now.. Odd..
Feb 26, 2009 1:27 pm
Lou Mannheim:

I think this is hilarious! Expensive business model, veteran advisors carrying the firm for years and being recruited like crazy, Regional meetings where the number one focus is growth, growth, growth, all these resources being dumped into training brand new advisors how to door knock. Is this really sustainable?



No.

This is an old retail scam. Grow, grow, grow your locations so that it looks like you are a rapidly growing company. The bubble eventually pops. (See GAP, Talbots, Starbucks, etc.)

For a really great read and a look at how one of these "Grow, Grow, Grow" ponzi's ends up check out this article on Florida and it's basic economic driver....1,000 new residents a day. Til last year when they only added a total of 5,000 new residents. At least the weather's nice!
http://www.newyorker.com/reporting/2009/02/09/090209fa_fact_packer

Feb 26, 2009 2:07 pm

I also think Jones lacks the tools and products to keep up... I would be willing to be that the average Jones account is $125K...

Feb 26, 2009 2:35 pm

Do they still charge $1300 per month for communication fees?

Feb 26, 2009 2:56 pm
Squash1:

I also think Jones lacks the tools and products to keep up... I would be willing to be that the average Jones account is $125K...

 
It's not the tools or products.  I think it's their philosophy and strategy.  They focus on guys opening up as many accounts as humanly possible in the first 5-8 years.  Large producer in our region has about $180mm AUM, but like 1200 households (been out about 18 years).  So his average account is like $150K.  He is starting to get rid of accounts (Goodknighting them) and he said he could easily shed 500 housholds and barely dent his AUM.  He said his top 350 households account for 85% of his assets, so about a $450K average.  Problem is, guys at Jones traditionally don't like to get rid of accounts, so it drags the average account size down. 
Honestly, though, there are lots of wirehouse FA's just like this, especially in the suburban areas.
Feb 26, 2009 3:11 pm

The GP's should be circling the wagons to protect what they have vs go out and recruit new blood. The growth model at Jones will go the same way any other street corner business has. It will have to contract at some point just like Starbucks,  etc.


Jones is no different than any other enterprise and to have an office with staff on many street corners or shopping centers with all the costs involved can only make sense if the markets work. If there is no bonus (remember GP's still get their dough) the seasoned reps are scratching their heads wondering why the firm isn't take care of them. I know Spiff....its a great firm and they are so sincere that they are giving the starving FA 6 months grace period before the axe falls.


Maybe the approach that would make sense is to contract offices, reduce staff, and consolidate assets with those that can do the work. It's kind of like Obama's mortgage plan, it helps those who shouldn't receive help because they should have never received the loan in the first place. Rewarding those for bad behavior....God I sound like Rick Santelli now (by the way google his rant on CNBC, it is thought provoking if not hilarious...even the White House responded)!