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Jul 31, 2009 1:08 am

the reality is that most fa's aren't interested in the clients that make up the jones biz model.  those clients feel privileged to get the service, and the jones fa likely appreciates the opportunity. it's a symbiotic relationship than jones figured out, and it works.

as most wirehouse fa's biz matures, the focal clients' net worth increases.  those at the lower end of the spectrum get frustrated as they're valued less by the fa's practice.  once those clients find jones, they must feel a sense of validation - hence the jd power response.   i may actually consider referring some clients from my c book to jones. it may be in everyone's interest.  that said, please stop with the gloating. few jones advisors could hold a candle to a majority of wirehouse fa's practices
Jul 31, 2009 2:18 am

I don’t think there was a lot of gloating.  If you read the first two posts, you might see what we are trying to say.

Jul 31, 2009 2:33 am

Edward Jones #1

Jul 31, 2009 2:49 pm

OK, I rescind my previous comments

Jul 31, 2009 2:55 pm
LockEDJ:

Regional Leader. Perhaps at your firm you’ll have Branch Managers; not an option at EDJ, insofar as none of us have their S24.

  Ahem...I do.  Not that it does me any good or is useful for anything other than an extra test from time to time.  But I do keep it up to date, just in case.    The awards are only really beneficial as a marketing tool.  It's the same reason hotels, car manufacturers, and many other businesses like to tout their JD Power ratings.  It's not the kind of thing that will bring a never ending stream of traffic in your door, but it's positive press and helps build the brand image.  It's nice when an independant third party says you're the best at something.  Gives consumers that extra little nudge when trying to make a big decision.    Other than the window stickers and blurbs in some of our corporate advertising, Jones FAs don't spend any time worrying about telling clients/prospects that we're ranked #1.  I'd rather promise them that I can give them better service, guarantee better returns, and get them into all the Rams football games for free.   
Jul 31, 2009 3:01 pm
Weddle Me:

Perhaps we won the award because we are #1!  Stop trying to throw darts at Edward Jones.

Customers voted us #1 … deal with it!

  I knew Jim Weddle.  Jim Weddle is a friend of mine.  You sir are no Jim Weddle.   IndyEDJ
Jul 31, 2009 3:12 pm
Spaceman Spiff:

[quote=LockEDJ]Regional Leader. Perhaps at your firm you’ll have Branch Managers; not an option at EDJ, insofar as none of us have their S24.

  Ahem...I do.  ...[/quote]   LOL. Sure enough, there had to be at least one online. I'm sure you'd agree it's pretty rare for an EDJ guy to have it; pretty shocking for one of us to go out and actually get one while we were working for the company.   Kinda like a red flag to the company saying, "uh, yeah, I'm about to leave because I'm getting this certification that's only useful if I leave you."
Aug 2, 2009 4:44 am

[quote=iceco1d]I thought EDJ eliminated the different payout on C shares?[/quote]

A Shares - 40%
B&C Shares - 35%

It’s complete crap since the higher payout pushes people to do the wrong thing.

Aug 2, 2009 5:00 am

I thought C was 30%…

Aug 3, 2009 2:34 pm
LockEDJ:

[quote=Spaceman Spiff][quote=LockEDJ]Regional Leader. Perhaps at your firm you’ll have Branch Managers; not an option at EDJ, insofar as none of us have their S24.

  Ahem...I do.  ...[/quote]   LOL. Sure enough, there had to be at least one online. I'm sure you'd agree it's pretty rare for an EDJ guy to have it; pretty shocking for one of us to go out and actually get one while we were working for the company.   Kinda like a red flag to the company saying, "uh, yeah, I'm about to leave because I'm getting this certification that's only useful if I leave you."[/quote]   I got my 24 when I was in the home office working with advisors from states that required the 24 along with the 7 & 63.  There were a couple of them if I recall.  I don't remember if they required it or not for all trainers, or if I was just looking for something to put on my annual review.    It is pretty useless for me right now.  Unless I ever decide that I don't want to be an FA any longer and go into the home office and work in Compliance.  I won't.  So, it will remain a useless registration that I have to go sit through a test every few years to keep up to date. 
Aug 3, 2009 2:48 pm
AGEMAN:

[quote=voltmoie] [quote=iceco1d]I thought EDJ eliminated the different payout on C shares?[/quote]

A Shares - 40%
B&C Shares - 35%

It’s complete crap since the higher payout pushes people to do the wrong thing.

I completely agree with you.  Tell someone who bought Putnam A shares in January 2000 that A shares are the way to go.  I just wish firms would be fair and pay a fair commission from dollar one and not play games.  Obviously for some reason Jones prefers A shares and they are trying to force that on their advisors.  [/quote]   You're seriously bringing up Putnam as the reason that A shares are the wrong way to go?  What about all the American or Lord Abbett or Goldman A shares that were sold during the same time period?  Were they bad too?  Or was it just the A shares of a company that decided to completely disregard sound investing and business practices?    Just FYI, the majority of the things you mentioned as the reason Jones can't recruit wirehouse advisors have changed.  Drastically.  Where have you been?  Under a rock?  Or maybe just trying to figure out what company you work for? You must have talked with someone in     We don't do options. - You got us there.  Then again, most advisors don't actually use options anyway.    We do pay transfer brokers to come over.  We have a fee based alternative.  A couple of them in fact. -  And if you spoke with anyone last year, they would have known when the most recent fee based addition was ready to launch.  You still have to fill out an application.  Mostly just for the fact that we have to get your personal info into our system.  How else would we know you're info?  Osmosis? Our payouts are much different than any other wirehouse or regional from what I've heard.  Certainly not as good as indy, but that's a whole different conversation.    "Ed J #1 among the uninformed" - pot, meet the kettle.     
Aug 3, 2009 7:26 pm

i didn’t think anyone did loaded mutual funds anymore…

  why would someone pay a sales load when they can get a similar strategy with a similar fee structure without the up front cost?   American Funds can't touch Wentworth Hausser or Neuberger for performance, and the later have no imbedded cap gains.   if you want the funds, use institutional shares in a wrap.  get 5 years service for the price of your up front load while paying the nearly the same mgmt fee.  have the option of swapping to other fund companies without a fee.  if your advisor doesn't cut it, walk without handcuffs.   tell me...do a-shares serve the client, or the broker?   a shares???...sounds like dinosaurs walking the earth to me...
Aug 3, 2009 8:52 pm

The lowered payouts are simply a way to guide behavior, plain and simple. Jones believes that A shares are the right way to go 100% of the time. I disagree and we each have the right to our interpretation. If you sign up for that cruise, you better look at the itinerary because there will be no unscheduled stops along the way......

Aug 3, 2009 9:05 pm

True, for the most part.  I use C shares for almost everything under 100-150K, and never have a problem.  What’s interesting is that FINRA’s direction on C shares is even more militant than Jones.  After reading it, I am surprised that many firms are as loose as they are about C shares.  For the record, I am not pro A-share, I am just basing that on what I have seen from FINRA regarding the use of C shares.  I think this is why (one of the reasons) Jones is pushing Advisory so hard.  They don’t want to worry about share class choices, conflicts of interest, etc.  It’s easier from a compliance standpoint to have someone in their advisory program.

Aug 3, 2009 9:20 pm

Lots of people still use loaded funds.  A shares, if done right, absolutely serve the client.  There are still a lot of folks out there that don’t want to pay a fee or who don’t want a lot of changes made in their portfolios.  For them A shares absolutely make sense. 

  Wentworth Hauser?  OK, who else besides me hadn't ever heard of these folks until just now?      So, in poking around a bit on their website (www.whv.com) and looking at their performance on Large Cap Core Equity, it's not much different than AGTHX.  I wouldn't say it was vastly superior and that American Funds can't touch them.  But then again, AGHTX isn't the best growth fund out there either.    Anyway, as far as who do A shares serve, I could ask the same thing about your wrap account.  I can sell against your wrap fees all day long.  Nothing like putting up a 10 year hypo that shows your client hasn't made any money, but you've made ten's of thousands of dollars in fees on a good account.  It's pretty easy to show the client that you've been milking them while they lose money.  Ouch.    Now, I don't do that, because I think that everyone has to pick the way they want to pay their advisor.  Some of them are going to pick A shares, some C shares, some B shares, and some fee based.  At the end of the day it's about choices and their money.  They just want to make some with what they've got.  They could care less that their money is with American, WHV, or Nürburgring.  They don't really care.  Anything beyond what's my bottom line is just noise to them.    Last thing, very few people actually pay 5.75% for their A shares.  Between the bond funds and breakpoints on the equity funds, most of my clients are probably closer to 3.5% than 5.75%. 
Aug 3, 2009 9:26 pm

[quote=noggin]

The lowered payouts are simply a way to guide behavior, plain and simple. Jones believes that A shares are the right way to go 100% of the time. I disagree and we each have the right to our interpretation. If you sign up for that cruise, you better look at the itinerary because there will be no unscheduled stops along the way......

[/quote]   You couldn't be more wrong.  Jones has never said that they believe A shares were right 100% of the time.  If they did, everytime one of us placed a B share or C share trade we'd catch all sorts of crap for it.  They do believe that breakpoints are good, thus the A shares bent.  And if you're able to hit a breakpoint, but choose not to, then they'll bust you for it.  But, for anyone who can't hit a substantial breakpoint, B shares and C shares exist for a reason.  If they really wanted to disincent FAs from selling B and C shares, they'd drop the payout down even further. 
Aug 3, 2009 9:46 pm

[quote=Spaceman Spiff][quote=noggin]

The lowered payouts are simply a way to guide behavior, plain and simple. Jones believes that A shares are the right way to go 100% of the time. I disagree and we each have the right to our interpretation. If you sign up for that cruise, you better look at the itinerary because there will be no unscheduled stops along the way.....[/quote]

  You couldn't be more wrong.  Jones has never said that they believe A shares were right 100% of the time.  If they did, everytime one of us placed a B share or C share trade we'd catch all sorts of crap for it.  They do believe that breakpoints are good, thus the A shares bent.  And if you're able to hit a breakpoint, but choose not to, then they'll bust you for it.  But, for anyone who can't hit a substantial breakpoint, B shares and C shares exist for a reason.  If they really wanted to disincent FAs from selling B and C shares, they'd drop the payout down even further.  [/quote]    Of course they're not going to come out and say it because its illegal.  If thats not the case why is there even a 5% premium for advisors to do A shares vs. anything else?  Its like going up to the host and slipping him a $10 to get you seated quicker.  The only difference is your company slips you a 5% to sell A shares.  My firm catches $h!t from every corner of the world for hawking VUL's to everyone and their mother.  Why?  Because they pay us 95% of the 1st year premium upfront.  How much do we get paid for Term insurance?  64%.  Tell me there's not an incentive to sell more VUL's than term insurance.  We get paid 20% less for selling non-proprietary insurance than our crappy Riversource insurance.  Every company has their own little conflicts of interest.  Its nothing to be ashamed of as long as you realize it and can sleep at night knowing that you sell the products (A shares, C shares, VUL's) knowing its in the clients best interest and not your own.  Thats all.
Aug 3, 2009 11:52 pm

My opinion is if Jones wanted you to make the VERY best decision for the clients payouts would be the same on A shares.  They want us to sell A shares and when we sell C they take a bigger cut.  Not sure what you are trying to defend here, Spiff.  You know as well as anyone that A shares are burned into our brains.

My simple opinion is A shares are good for anything under 25k and anything above 100k.

Aug 4, 2009 1:35 am

Good for anything under 25K?  Huh?  Why?  I haven’t done A shares for something under 100K since my first 6 months.  But I don’t get the under-25K thing.

  I will say, I think the attitude is changing about A shares.  That is probably the BIGGEST obstacle Weddle had to overcome in his new role.  He has tackled many other things, and now he is tackling the "A share American Funds and long bond" attitude at Jones. 
Aug 4, 2009 3:40 am

My logic might be off, correct me if it is.  As I build my client list I’ll have less time to service those with smaller accounts.  Why should I put them in C shares if I won’t monitor their accounts and earn my 1% per year?  Hopefully I’ll have the time… but will I really? Also, I’d prob. stick them into a Franklin asset allocation fund in most cases.  I know the exp. ratio is higher but it seems like I can achieve better diversification for them over the long haul with this model.

So, under 25k … A shares.  Above 25k C shares which I hope to meet more often with.

Again, my logic could be flawed.  (I also take into account time horizon.)