I really won’t ever sell my book…why would you?  Bring in a partner, and share in the revenues for the rest of your life…why would you ever “retire?”  What’s the point of building a fee based practice (which would otherwise provide you with lifetime income) and selling it?

[quote=success] it is sto imply to point out that there are many things that can neg. impact all of our businesses.  revenue sharing for us and wrap fees for you.  those are just 2 examples.  [/quote]

Wow, they really do drive that "wrap fee = evil" message in hard, don't they?

Mike,

i didnt say i am against wrap fees.  I think it can be appropriate as long as the fees are not too high.  Wrap accounts give the client more flexibilty.  However, most folks i know do it for the recurring revenue.  There are pros and cons to ever platform out there.  They can all be "evil" if taken advantge of. 

I agree with Zacko.  the arguement about selling your book is non sense.  I think  a better arguement is saving more in a 410k, more deductions, and better product selection. 

success-

Maybe what you ought to do is become a GP. You have double speak in your blood. "I did not say wrap fee was bad." Go back a few pages and look. Babs was right. The only way to defend is attack.

Have you looked at fees associated with mutual funds (personalfund.com dude, check out transaction costs)? And you are worried about wrap fees. Did you know that your/my firm participated in directed brokerage (a fee was paid to Jones to transact for the funds) until it was banned? Did you know that the GP's had an ownership interest in Hartford mutual funds since 1995, and terminated the relationship with a 70M payment to the GP's along with other income durng the last 10 years? Did you get any of that? I didn't. Are you still paying 1300/ month for the most ridiculous technology on the street. Do you have financial planning software (do you even know how to calculate IRR). Can you communicate with the rest of the known world in an effecient manner. By the way, I have company email but am unable to send attachements.

Oh yeah, the final question. How do you feel about giving the GP's 60% and they only made 60M of the 300M as a result of yours and my efforts? The rest (get your calculator out) came from back door arrangements? So when Weddle is asked the question should we be worried ( and bozos like you say its only 4% of revenues but 60% of net profits) the rest of us just shake our heads and say its not a matter of if but when we choose to change b/d's.

So congrats on your production and enjoy the trips. You'll figure it out someday, maybe.

[quote=footsoldier]

success-

Have you looked at fees associated with mutual funds (personalfund.com dude, check out transaction costs)?

[/quote]

Footsoldier! THANK YOU! I had stumbled upon personalfund.com a while back and couldn't remember what it was called....(duh).

< I'm jumping out of my desk and throwing both arms in the air a'la Mary Catherine Gallagher...You're a SUPAH STAH!>

Last year they took 70%. Factor revenue sharing against net income. That

paints a clearer picture. The GPs will never take a lower payout.

success-

Appears that others have a different calculation than you. (Remember your comments on this thread that rev sharing is only 4%)

Could mean that you'll be taking over for Weddle in a few years. Truth comments in his last sentence above is probably the most powerful words of the day.

"I really won't ever sell my book...why would you?  Bring in a partner, and share in the revenues for the rest of your life...why would you ever "retire?"  What's the point of building a fee based practice (which would otherwise provide you with lifetime income) and selling it?"

There are so many reasons to sell a book of business.  In many ways, it should be no different than selling any business.  However the main reason that someone would sell is that sale price is worth more to the seller than the continued stream of income + any potential headaches.   (Clients don't like new person, continuing ed becomes pain in the ass, etc..... and there are LOTS of etc.)

Great accounting work going on in here.  By the logic displayed here you could easily say that Income was 1000% of revenues. 

Read the books more carefully and you will see that RS makes up about 4% of total revenues.  Even if you used power logic...that means that about 4% of income was from revenue sharing.  

I don't think any company wants to lose 4% of income but it is not like revenue sharing makes or breaks Edward Jones as a company.

footsoldier,

relax dumb ass.  In an earlier post, I had my cash payout last year at 48%.  Include commission, bonus and profit sharing.  I am fully that bonus is based on my PL statement.  If we assume the avg. bonus bracket is around 30% (sometimes its 0 and somtimes its 50), then 48% is a good number. I am cool with that number.  i dont care how much weddle makes. Maybe someday something will happen at Jones and many more will go indy.  But for right now, if i maintain about 48% payout, great!  And yes I enjoyed Italy at the hotel carusso. 

success-

You had zero out of pocket expenses (that would be described as money out of your pocket or money deducted from your paycheck)? I average about 16K last year with out of pocket expenses, how do you explain that. And you tell me to relax. I won't bother with your other comment.

Get a grip dude. Just look at real net numbers. That's the point with revenue sharing. Rev Sharing at Jones represents (here comes the calculator again) 73% of net profit.  I concede that 4% of revenues is not that much, but 73% of net profit (to the owners, i.e. general partners) does present a different and potentially changing scenario.

In the context of my earlier responses, when our managing partner was asked what are the potential issues to EDJ if rev sharing was banned, he responded with sarcasm. Actually similar to you.

I'm raising my hand with a question here....

Success...When has bonus bracket @ Jones EVER been 50%? I can't recall a time in the last few years?

foorsoldier,

ok, if i had 10k out of pocket, im still at 46.87.  still fine with me.

devoted,

the year was 2000.  for numbers sake, i assumed an average bonus bracket of 30% over that past 10 or 20 years.  maybe its 25%.  whatever.  the point is its cash to me.  i may be leaving 13% on thr table.  i'm cool with that.

Success-

I calc (I know you can't) your difference close to 20%. So that means 100K a frickin year difference at your production.

You are so smart. Let's just take a look at what that means to your bottom line, 100K invested at 10% annually over your lifetime (assume 20 years). Gee that is 2.16M. If you are as young as you sound, assume 30 years, and your (in your words cool with that) decision cost you 3.39M. Just a drop in the bucket.

Welcome to the world of finance. It's no wonder Jones reps ripped on these forums.

footsoldier,

I know what my income is and i know what cash is.  I know what my annual out of pocket expenses are and most comes out pretax.  Everything else I write off.  Very simple math.  Its funny how you can spat numbers off like you can see my tax return.  I know exactly what I make, NET of everything.  If i buy something for the office, I write it off, just like you do.  My printer broke yesterday, I made 1 phone call and it was fixed in 2 hours.  I didnt even have to write a check.  Hears a question.  Why would anyone buy a franchise like Mcdonalds, Chick-fi-la, etc and pay royalties.  why not just open a mom and pop diner and call it footsoldier cafe.  You could easily make more b/c there are no royalties, right?  Well, i would prefer a chick-fi-la sandwhich over your any day.   I guess you could say that the 55% or so that jones keeps is a royalty.  If you dont think chick-fi-la has a huge royalty, call em!!!!!!!!!!

Success, I'll grant you that the franchises makes tons of money, but the product is terrible.  If you want a good burger you have to go to the Rocky's, the Big Kahuna burger, or the "mom and pop diner".  Sure, the consumer may spend a bit more at the independently owned restaurant, but they get SIGNIFICANTLY better quality and service than at the franchise.

success-

Now we are getting to the heart of the matter. Basically your inferring that you NEED EDJ to run your biz because you can't or won't. You are problably right on that issue (and its a big one I agree). But please spare us the numbers. You lose hands down the argument.

Zacko, and others I am sure would be happy to comment on their experience after they left the mother ship as to their true SUCCESS with client retention.

That sealed it Success. Been watching your posts for a few days and seeing you call people names and be hostile. Was trying to be tolerant of your perspective but when you compare our business to fast food your kool-aid spilled on my suit and it pissed me off. I get your royalty analogy. I understand the Jones “tradeoffs”. What you and other IR’s with only Edward Jones as your experience can not seem to grasp is that indeed you are serving chicken sandwiches while many of us are striving to be gourmets. I have 4 relationships that if you totaled them would represent an office that alot of seg 3 IR’s would fight to takeover. They just don’t want “chicken sandwiches”. You can think “just sell’em a good growth and income fund and it’s all the same.” and you would be very wrong. I certainly get leveraging the brand name and there is value to that but do not think being the low cost provider is what sophisticated investors are looking for or you will always be pushing hard till the last Tuesday of the month rather than trying to truly mange money.

Ok to be fair…not everyone is an entrepreneur and feels comfortable on their own.   If Success thinks that the trade offs he is making by having less income, less control and having a “brand name” to lean on is worth it… then that is his decision.  I’m Ok with that. It wasn’t good for me and I am much much happier where I am now.

But here is the rub and the annoyance with the EDJ clones who post here is that they always insert some sort of snide "we are better than you" comment.  They refuse to acknowledge that they have a more limited business model. They also seem to think that if you abandoned the Mother Ship you have somehow turned into Snively Whiplash and are fleecing the widows and orphans and they are Dudley Doo-Right defending the innocent.    I've seen some very good people at Edward Jones and I have seen some people I wouldn't trust with a toilet bowl plunger.  That's true of pretty much all companies.

What I don't miss about Jones?  The interminable, boring and pointless meetings.  The limited product line to offer my clients.  The hypocritical "inclusion" crapola. Listening to some clueless noob, who just had 30 million dollars dropped in her lap through a goodnight program, being held up as some sort of super sales person.  Gee wiz..give me 30 million on a platter and I bet I could rush through the segments too.  I also don't miss the camaraderie or socializing with the other IRs since I never did it anyway.  Being NOT one of the guys by default (I'm a woman), I was also not one of the guys by choice as well.

What makes me happy?  I get to keep more of the money I am making. I don't have some artificial deadline, quota, number of dials I have to make.  It is up to me what I do, when I do it and how I do it. Of course this doesn't mean there is no compliance...in fact there is more.  I can determine how much of my income I want to devote to advertising, overhead, computers....you name it. 

I am in control of my life.....hallelujah!

To speak to Success' analogy about the chain food vs mom & pop shop.

After we left Jones and began meeting with clients to "pop the big question" one client pretty much summed it up by saying...

"Well who is Edward Jones anyway? Isn't that guy dead? What do we want our money with a dead guy for? We want to come with you, where do we sign!"

Maybe some people are not good with recipes and choose to use the "company secret sauce"..while others can create a kick a$$ chicken sandwich from scratch. (myself I'd take the kick a$$ sandwich)