Jones Advisory/American Funds
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Yes, yes, yes. One stock forever is bad.
Also, Spiff my point was about people who became WEALTHY in the market.
The majority of wealthy people do in fact have most of their wealth either in real estate, business equity or both.
Also, to Ron’s point. How much of that millionaires money is principal? Isn’t most of it the stuff you got him to add all of the time?
Also Ron, I wonder if you live near me - a lot of CAT people around here. My best friend’s wife in fact. But they know better than to put everything in CAT stock. But they have made a good amount buying it when it is cheap and selling it for a decent profit.
It all boils down to discipline. With discipline (and a little hard work) you can accomplish anything. You can build a Jones business. You can become an astronaut. You can get a Ph.D. These UFC guys - Discipline. Karate - Discipline. Undisciplined people become successful through luck.
Less than 40% of that persons money would be principal.
It absolutely boils down to discipline, but I really do feel that the average 30 year CAT employee who retires with 500k in his 401k and a few other scattered investments will be best served by an FA who can allocate his assets in a way that matches his needs and tolerance for risk. Will keep him from blowing himself up (My house has gone up more than my equity and income fund, I want to take money out and by some land-2006 or my neighbors nephews third cousin made 50k last week trading tech stocks-1999) and get him to stay the course, stay in front of inflation, and leave a bit behind. Now I will be the first to admit, if some dude sold his start up and has 10mil to invest maybe what I do isn't perfect for him and that is fine. I think it will still work, but it probably won't impress him.[quote=Wet_Blanket]
Its funny because I normally, in my personal life, convince coworkers not to buy company stock (despite what HR and Leadership says). If it weren't for FINRA, I'd advocate shorting it sometimes.
My reasoning is: My whole income is contingent on this company (if I get fired or the company goes under), do I want to make my savings / retirement that way too? Answer is always no.[/quote] I don't know how many of you live ina n area like mine, but if one of two major employers were to go belly-up, the following would happen to many people: 1. Lose your job 2. Lose your pension (OK, it's insured, but still) 3. Lose most of what's in your 401K, since you allocate most, if not all, to your company stock 4. Lose tremendous value in your house, since that employer is one of the lynch-pins of our economy, and that many thousands of people losing jobs (that are not replaceable anywhere in our region) would cause a glut of houses. 5. Lose your stock options 6. Lose your deferred stock 7. LOSE YOUR MIND. But people don't want to listen.[quote=Ron 14]
Less than 40% of that persons money would be principal.
It absolutely boils down to discipline, but I really do feel that the average 30 year CAT employee who retires with 500k in his 401k and a few other scattered investments will be best served by an FA who can allocate his assets in a way that matches his needs and tolerance for risk. Will keep him from blowing himself up (My house has gone up more than my equity and income fund, I want to take money out and by some land-2006 or my neighbors nephews third cousin made 50k last week trading tech stocks-1999) and get him to stay the course, stay in front of inflation, and leave a bit behind.
Now I will be the first to admit, if some dude sold his start up and has 10mil to invest maybe what I do isn’t perfect for him and that is fine. I think it will still work, but it probably won’t impress him. [/quote]
Even 35% is considerable. Especially over 30 years.
[quote=Spaceman Spiff] No, people who became wealthy started a business, grew it, and sold it. People become wealthy in their investments not because they have a superior strategy (granted there are some out there that do), but because they have a superior discipline. They make their IRA contributions EVERY year. They do those things that most people just simply don’t. Some of my “wealthiest” clients don’t do anything but buy American Funds and do their IRA contributions. Period. No individual equities, no individual bonds, no covered calls or collars, or hedge funds. It’s discipline. Pure and simple.
To think that the average person gets wealthy in the market BECAUSE of the market is just retarded.
The problem with stating that there aren’t a lot of millionaires that used mutual funds to get there is that mutual funds are a, relatively speaking, new phenomenon. I don’t know of very many people that actually put $10K into AIVSX in 1929. Actually I don’t know any. It wasn’t until probably the 1980’s that mutual funds became the primary investment vehicle people used to invest.
I think your last paragraph states it best: “I know more people who have made overall better returns getting LUCKY buying a few individual stocks”. Luck isn’t the way I want to run my practice. I don’t want to be lucky with one or two and unlucky with one or two and call it a day. Because for every one person who got lucky, 5 got unlucky. Those aren’t good enough odds for me. Not everyone has a Captain Dan buying them stock in that fruit company back in the 70’s. [/quote]
We’re not talking about the “average” person. I don’t want to work with “average” people.
Agree completely about the business people. But I was speaking about people who became wealthy by investing, not by doing the other things that get you wealthy. Also agree about the discipline - we can agree on that. The upside of an individual equity disciplined investor IMHO is more than the upside of a mutual fund disciplined investor.
Also, the whole, “for every one person who got lucky, five got unlucky” I think is bullsh!t (pardon my Eyetalian). That’s what brokerage firms tell their employees to make them think there are a ton of people out there that NEED them.
I want to work with the average person. They are the ones who need the help the most and will respect a professionals viewpoint. In my short experience, those with multiple millions always think they can do it on their own or find a better way. That attitude has prevailed for them over time and made them successful, but it makes for a shi**y client.
[quote=Ron 14]
I want to work with the average person. They are the ones who need the help the most and will respect a professionals viewpoint. In my short experience, those with multiple millions always think they can do it on their own or find a better way. That attitude has prevailed for them over time and made them successful, but it makes for a shi**y client.
[/quote] I disagree. That's an excuse for not having clients with money. I actually find that busy, successful professionals (of a certain age) have the maturity and sophistication to see that they can't be their own financial advisor (or CPA, or attorney), and can't imagine having them time or inclination to do it themselves. As for younger, successful people, well, that's up in the air. Many still think they can do it all. They can design nuclear reactors or develop new chemical compounds, so they MUST be able to manage money.[quote=B24] [quote=Ron 14]
I want to work with the average person. They are the ones who need the help the most and will respect a professionals viewpoint. In my short experience, those with multiple millions always think they can do it on their own or find a better way. That attitude has prevailed for them over time and made them successful, but it makes for a shi**y client.
[/quote]I disagree. That’s an excuse for not having clients with money. I actually find that busy, successful professionals (of a certain age) have the maturity and sophistication to see that they can’t be their own financial advisor (or CPA, or attorney), and can’t imagine having them time or inclination to do it themselves. As for younger, successful people, well, that’s up in the air. Many still think they can do it all. They can design nuclear reactors or develop new chemical compounds, so they MUST be able to manage money.
[/quote]
I agree with B24 (of course). I lost count of how many clients I had with less than $20k at Jones who thought they knew better than everybody. Another good reason to leave - leave those guys behind.
Also, I don’t want to surround myself with average people. Average people = average advisor.
Well I am just going by what has worked for me in my short 3 years. I have many more clients in the 100-500k range than I do 1mil and above. 90% of my clients in that range are 35-45 because the area I am in is fairly young. When I run into a 38 yr old who got a 1mil bonus from the hedge fund he works at or because he is a MBS trader they aren’t interested in help because they have all of the answers.
Ron, there are certainly going to be regional variations to everything we do. In my area, the only people that aer in the 35-45 range that have over $1m either inherited it, inherited a business, or have been very, very lucky. I live in sort of an “old world” New England shoreline town. Lots of old money.
That makes sense. I am in a young suburb where very few homes are older than 15 years. The two closest high schools are 5 and 10 years old. The people with more than a million are hedge fund / trading floor guys who rather swing for the fence than put a plan in place.
With things like fishing boats parked at the marina, a lighthouse, fog horns, and big old houses? Stuff straight out of a Steven King novel. Funny, but you don't sound like you have an accent.Ron, there are certainly going to be regional variations to everything we do. In my area, the only people that aer in the 35-45 range that have over $1m either inherited it, inherited a business, or have been very, very lucky. I live in sort of an “old world” New England shoreline town. Lots of old money.
With things like fishing boats parked at the marina, a lighthouse, fog horns, and big old houses? Stuff straight out of a Steven King novel. Funny, but you don't sound like you have an accent. [/quote] You got it. Except the fishing boats have slowly been replaced by yachts over the years. Although I still have a few friends that are lobstermen. Makes for a nice backyard BBQ! "Hey, will someone PLEASE eat the last few lobsters!" So wea' gonna go get some wicked cold beehz and get wicked f***!n drunk. How 'bout them apples? It's sort of Good Will Hunting meets The Perfect Storm meets Dynasty. All rolled into one.[quote=B24]Ron, there are certainly going to be regional variations to everything we do. In my area, the only people that aer in the 35-45 range that have over $1m either inherited it, inherited a business, or have been very, very lucky. I live in sort of an “old world” New England shoreline town. Lots of old money.
Nice. I’ve not been any farther north than DC, but would love to spend some time up there. I had an invite from a former trainee who lived in Cape Elizabeth, ME to come spend some time with him and his family, but he quit before I got the chance. One of these days we’ll make the trip up to that area.
The ME shoreline is beautiful country. It’s really like a different world if you have not spent much time along the east coast (north of NYC). It’s just like they portray it in movies - you know, those goofy stories that always seem to have some goober like Kevin Costner get tangled up with some beautiful recent divorcee, and he wears gay sweaters and she wears long flowing dresses, and it’s always windy? NOT that my wife has ever made me watch one of those with her. Seriously. Guys. I just saw the commercials. Oh Christ, you’ve all had to watch them with your wives TOO! And NO, I didn’t like them. Well, not really. Well, it was just so touching when she found that message in the bottle.
I digress. If you want to do that kind of trip, you should think about a tour of the Canadian island provinces (NB, NS, Newfoundland, PEI). You'll never want to leave.Hate to revive this but, Jones friend of mine in S.C. said they are increasing the fees on the advisory program by 10%(current and future partcipants) because the preffered funds refuse to pay for revenue sharing on assets in the advisory program… Talk about conflict on interest, I knew there was a reason Goldmansachs Growth and Income was in there…
From day 1 we were refunding revenue sharing back to the client anyway, so it's a moot point.
No but the advisory fees are increasing from 1.15(discounted) to 1.25 because the revenue sharing is not in place to deduct from the fees
Revenue sharing was a very minimal amount of revenue in the program (about .01%, actually about $0.83 on every $100,000). I think the idea is that most clients were getting a net credit on their account, now they will essentially break-even. The largest pieces were shareholder accounting credits and 12b-1’s, which will both continue to be credited back to the client (those added up to about 12 basis points) .
ON a net basis, most clients will still receive net credits on their accounts (outside the program fee of 1.35%), but just much less than before. We now also waive IRA fees and TOD fees for Advisory clients.I love how people seem to be able to twist things around. First, according to the release from Weddle, Jones has made the decision to not accept revenue sharing dollars from Advisory Funds. Wasn’t a huge deal anyway because there wasn’t a large percentage of preferred funds being utilized. Who said that it was the fund companies that are refusing to pay revenue sharing?
Second, this is where you might want to check you're buddy's math skills, there will be a 9 basis point admin fee starting in October. Which isn't anywhere near 10% of the full charge. Even if you are discounting, you have to discount down to 90 bps to get to 10%. As far as I can tell it's a 6.6% charge. At the end of the day they'll still not be paying the whole 1.35%. It comes out to be a net increase of $103 a year on a $100K account. That's 1 basis point. Didn't you folks say that revenue sharing was a bad thing? Wouldn't this be a good turn of events for Jones? How do you spin this for a negative? Oh, I forgot. Everything that Jones does is bad. Never mind.