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May 22, 2008 4:23 pm

Just saw the platform.  Starts at 135 bips, breakpoints and discounts available.  100K minimum.  160 funds/etf's.  26 pre-selected models.  Can build custom models.  Performance reporting and monitoring, auto-rebalancing, required annual review f-t-f, quarterly phone review (or f-t-f).

 
It looks very good.  I was surprised at the funds out included.  Very, very few Preferred funds.  Only 4 American Funds.  I also saw that the account will receive a credit for any Revenue Sharing income received by the Preferred Fund Families (if you choose funds that offer Revenue Sharing to Jones).  Can move previously sold A-shares, but client will receive fee credits if held less than 2 years.  All regions will be rolled out by August.
May 22, 2008 5:24 pm

What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?

May 22, 2008 10:31 pm

The market is demanding it, we are shifting our focus more towards "solutions" rather than "product", and it has been structured in an economical way (compared to market). Oh yeah, most of the "old school" team is out in STL. The new team "gets it".

May 22, 2008 10:37 pm

The GPs wont care if the old timers get upset because they wont be going anywhere. Anyone upset about fee based isnt going to switch and the GP's need to put new bodies in desks. B24 - I just posted to another forum. Get ahold of Morts office at MAP with the SMA product. I left Jones and built $40mil in managed by bringing $15 over and adding $25 in 18 months with SMA and fee mfunds etc. Alliance Bernstein has a hell of a good wholesale team that can teach this stuff.

Amazing, Jones with fee based. I know the weather has been weird but I didnt know hell froze over.

Congrats on the new product.

May 22, 2008 10:47 pm

Who thinks starting at 135bps is "structured in an economical way? 

 
The sliding price breaks are not particularly progressive...
135bps on first $500k
125bps on the next $500k between $500k & $1mm
100bps on (only) those dollars over $1mm
There's really not much break between, say, a $350k account and a $1.35mm account.
 
Of course this can be discounted but the FA's % payout gets discounted as well as the aggregate amount being lower, like EJ's policy on discounting equities. The more you cut your own throat, the more you bleed. 
 
Curious, how competitive is 135bps?
May 22, 2008 10:59 pm
SupermanFan:
...
Curious, how competitive is 135bps?

...



That depends, are the funds institutional share classes? Or, are they just load waived A shares?  I assume the 4 American Funds are load waived A shares.  I would say that 1.35% is a good rate.  It's fairly low, but it's sure not the lowest price out there.
May 22, 2008 11:08 pm

That is pretty standard in the market for wrap types of accounts using institutional share classes.  The fee is not as important as the advice that goes along with it.  I liked the previous comment about hell freezing over, that is very much what I thought would have to happen if they ever went fee based.  It certainly will be interesting to see how they integrate ETF's into the mix with those programs.  I guess us indy's will have to come up wiht something new to show how we are different.  Maybe I should have stayed at Jones? 

May 22, 2008 11:14 pm

I think the 1.35 is very competitive, especially since this is before the 12b-1's are credited/rebated back to the account---which amounts to 0.10-0.25, reducing the overall cost to the client...and from what I saw, I believe they're F shares.

May 22, 2008 11:21 pm
COBrien:

I think the 1.35 is very competitive, especially since this is before the 12b-1's are credited/rebated back to the account---which amounts to 0.10-0.25, reducing the overall cost to the client...and from what I saw, I believe they're F shares.

 
F shares are only from American Funds and they eliminate the 12-b-1 fee but the expense ratio does not drop by 25bps.  Slick way around rebating the 12-b-1 fee.  On its face 1.35% is competitive until your competition shows the difference in institutional shares vs. load waived A shares, then you are not so competitive.
May 22, 2008 11:24 pm

BTW, before you get too excited about the 12-b-1 rebates, I would be willing to bet they are for qualified money only as it is an ERISA rule.

May 23, 2008 12:41 am

I can see it now::::

$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
May 23, 2008 1:34 am
jwcopper:

What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?

 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...
May 23, 2008 1:57 am
WestH:
jwcopper:

What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?

 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...
 
Jeez....here we go...dis dis dis...hate hate hate...Jones has no fee based program they suck blah blah blah....all the sudden...as Jones usually does, recognizes our shortcomings and does what's necessary to fix it...and all of the haters/donkeys start chirping about how bad it is and how big bad evil Jones is "playing catchup"...not hey, a great firm researches and finds out what they can do to improve then makes it happen...wow...no wonder we rank  highest in investor satisfation as well as one of the best places to work for in the country, hmmmmm, but to think that some people on this thread would realize it....nah...this is more fun!!!
May 23, 2008 6:58 am
..and all of the haters/donkeys start chirping about how bad it is and how big bad evil Jones is "playing catchup"...

[/quote]



Gosh, there is no need to be so ugly and claim that Jones haters are all Democrats...that is a low blow.

May 23, 2008 7:19 am

Ok. Let's call this what it is. It's Jones attempting to make itself more retirement friendly. And finally "making sense of retirement".



I also think it's a way to stem the blood flow from reps leaving. But let's be honest, is this really going to help? What about stock accounts? People who just take dividends from stocks they inherited from the 20's?



My guess is the answer will be "we can't be all things to all people". Which is why we never had fee-based to begin with.



Kool-aid - I'm glad you like Jones - it's a great firm, but this is just another method of control, and some of us don't like being controlled. That's why we joined Jones in the first place, because we were told, "you get to do it your way". Not you get to do it your way "within these parameters".



Kudos for you to being loyal. Jones rewards loyalty quite well from what I've seen.



And by the way, of course it's more fun to bash Jones. Jones people get upset by it (sometimes even me). There's nothing more fun than getting a rise out of people. And if Merrill were ranked number 1 by RegRep; Fortune; and the other numerous periodicals Jones asks me to vote for my company for, then I'm sure people would be bashing Merrill.

May 23, 2008 9:01 am

Man, I started a twister. 

 
So on the fee%, in addition to breakpoints, you can discount up to 15% WITHOUT affecting your payout.  For accounts over $1mm, you can discount up to 30% WITHOUT affecting your payout.  So, on $1mm, the fee could be about 85 bips (with the breakpoints and discounts), and still get your 40% payout.
 
90+% of the funds are ETF's, no load, or load waived.  SO the average exp ratio (blended portfolio will be around 30-45bips (of course the higher are for small cap, int'l, etc.). 
 
It's not perfect, but it's certainly a very positive step.  Word is, they will eventually allow stocks and bonds in as well.  I think they are taking one step at a time.
 
Like we have seen the past year or tow, it's no surprise that that this morning, the infamous Fes Shuaghnessy announced his "retirement".  Out with the old, in with the new.
May 23, 2008 9:03 am
WestH:
 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...
 
 
Why would they do that?  In order to do that, they would have to stop paying for everything they pay for, start charging us for tickets, and turn into an indie firm.  Our payout structure is virtually identical to most other wirehouses/regionals.  That's just a comment that has absolutely no basis in reality.
May 23, 2008 9:05 am
spikedkoolaid:

I can see it now::::

$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
Spiked, Buddy.  C'mon.  That is a perfectly diversified portfolio .
May 23, 2008 9:21 am

KoolAid you quoted my comment as bashing?  Wow, asking the Jones folks to explain the philosophical message equates to bashing?  Thankfully a rationale jones person answered my question earlier and thank you for doing so.  Now I saw the post saying 90%+ of the funds are ETF's?  Talk about a shift in philosophy, is this true?  What kind of ETF's are they using, are they sticking to cap weighted or are they using the 'intelligent' indexes?  And, KoolOff, I double checked and as far as I can tell this is not bashing.  And saying they are fixing things as always to make things better, that sure is nice but fee based accounts, the desire by clients to have them has been around for a very, very long time, almost as far back as when EDJ bought that tiny bond trading house so they could claim 'founded in 1871' yes that is a stab.  So, if you are really new and you are getting this, you are probably pretty excited.  But waiting till your firm is strong armed and beaten down to the point of being run out of the business before adapting and changing...?  I hope nothing new comes along for the next 30 years for your sake.  My genuine inquiry above stands, sorry the reply bled into my response to being called a basher.  Now where did I leave that mallet?

May 23, 2008 9:47 am

jw- I think the answer to your question somebody already took a swipe at.



From what I understand, EJ is marketing this as part of their "solutions based" approach. As for strategy, Weddle admitted in the five-year plan that this is to retain and gather assets Jones would not normally have kept or gotten. And as I stated earlier, I think it's an additional method of control and a way of keeping people from jumping ship.



I'm breaking my own rule here. I better get on the road and get to work.