[quote=Philo Kvetch] [quote=Maxstud]

[quote=Philo Kvetch]Absent the sophomoric nonsense, wouldn’t it make sense for firms to use the funds to offset the losses?[/quote]Absent you lack of intelligence, see joes answer.  [/quote]



Absent your lack of understanding of how your own firm does things, Jones claims that they donate the monies to local St Louis charities.[/quote]

If you already knew the answer why did you asked the question?

It was intended to stimulate thought. It was directed at those who are capable of thinking Max, and as such has nothing to do with you.



Why don’t you just quit while you still not too far behind?

Far behind what?  Is this some sort of competition?  

Wow…do a little work for 1/2 day and look at all I missed.  Its wonderful to see Spiff and Max so happy and full of themselves.  Makes you feel good when for a day or so you thought your lovely firm was going to screw you again.  In retrospect, I would feel the same.  Enjoy!!

Max-

[quote=Philo Kvetch] [quote=joedabrkr]

[quote=Philo Kvetch]Who gets the money when an error results in a profit?[/quote]It is standard practice on Wall Street that the house gets the profits on errors.  You pretty much have to do it that way because otherwise you create an incentive for an FA to carry an error hoping for it to trade up to a profit.  That almost never happens, and creates the potential for all kinds of problems.[/quote]



Joe, your reasoning is flawed here.



If I had said, “Why not let the broker keep the money if an error leads to a profit?”, you would have been correct. What I had asked though, is why not let the profits under these circumstances go towards offsetting the losses? This does not incent the broker to do anything either way.



It happens more frequently than you might imagine, Joe.[/quote]

PK if you allow dollar for dollar offset of losses on a per-broker basis, it can still create a ‘moral hazard’.  Consider this example:  Joe Broker reports an error for a loss of 1000 on Jan 2.  On Jan 15 a client DK’s a trade for the purchase of ABC stock, and the security is flat at the moment but the market, in Joe’s view, is strong.  If he is staring at a $1000 loss against his next paycheck and he actually thinks ABC is going to go up, he has a pretty strong incentive to take his sweet time reporting the DK and busting the trade.

Perhaps if you allowed for offsets on an aggregate basis(say at the branch level for an organization with multi-advisor branches, allowing offsets could work without creating the potential for trouble.  Either way, you have to be careful that you don’t create an environment where a broker is tempted to “trade with someone else’s money”…effectively that is what they are doing by not promptly reporting an error.  They are either trading with the firm’s capital or the client’s capital in that situation.

[QUOTE]

Joe, your reasoning is flawed here.

If I had said, "Why not let the broker keep the money if an error leads to a profit?", you would have been correct. What I had asked though, is why not let the profits under these circumstances go towards offsetting the losses? This does not incent the broker to do anything either way.

It happens more frequently than you might imagine, Joe.[/quote]

Joe, I'd have to imagine that if PK's proposal were implemented, there would not be a situation where a person was about to lose $1000 from their paycheck.

[quote=footsoldier] Max-

[quote=Spaceman Spiff).  I told my BOA today that if they announce that they are going to reduce my income by 25% I’ll be either heading back to the home office or going indy.  We’ll have to see what happens.  Hey spears, want to share rent?[/quote]

Yes. 

Wow…do a little work for 1/2 day and look at all I missed.  Its wonderful to see Spiff and Max so happy and full of themselves.  Makes you feel good when for a day or so you thought your lovely firm was going to screw you again.  In retrospect, I would feel the same.  Enjoy!!

Amen...

I think California FAs really need to work the numbers on the new grid. It just doesn’t add up up unless you’re already Seg 5.

Jones should just sell the California business.  Cut the losses.  If they are having to rework the P&L to make California offices profitable now, how will it work when the IRFA’s start doing fee buisness.  Spiff and Max seem to think fees are the holy grail, cash cow, garden of eden etc, but there is substantial cost during start up when you aren’t getting those A share commissions you are used to.  Paying California rent and California BOA wages while transitioning to fees wont be fun.  Just sell the whole state to LPL.  Better yet sell it to Allstate or State Farm.

Jones should just sell the California business. Cut the losses. If they are having to rework the P&L to make California offices profitable now, how will it work when the IRFA’s start doing fee buisness. Spiff and Max seem to think fees are the holy grail, cash cow, garden of eden etc, but there is substantial cost during start up when you aren’t getting those A share commissions you are used to. Paying California rent and California BOA wages while transitioning to fees wont be fun. Just sell the whole state to LPL. Better yet sell it to Allstate or State Farm.

Life is funny… the reason California F.A.'s have to take a pay cut is due to the litigious state in which they live… so wouldn’t it be funny if the same group of Attorney’s got together for the Next Class Action suit-  Unfair pay scale to California F.A.'s compared to the rest of the Nation! I can hear it now, Why Should California F.A.'s pay for something the G.P.'s set up in the first place?

[quote=footsoldier]Max-

Brian I was there 15 years and believe me–the last four were more than the prior 11

I don’t see what difference it makes, it’s not as if Jones’ brokers get paid in cash.  They do it for the trips and the BOA don’t they?..Oh and those really cool P&L statements that make them feel like they are in charge of their own destiny!

Why do Jones people stay at Jones? Fear (or planned ingnorance), for many. That's why they really do it. They are too afraid to even look at other firms because it sets up the conundrum, and then the Jones lies become real. The newbies you can understand because it takes a while to figure out all the lies.  When faced with the "real", they have to make an ethical choice....stay with the lie, or face it and react. They are told they are the only ethical ones. Now what when they find out different? They have to be unethical to stay. Talk to ANY broker at Jones longer than 6 yrs can sell, and you will see the fear. It is prevalent. And I can't stand Eddie Jones, let me make that perfectly clear.... And I started looking because of BAD regional leaders. They probably will never figure that role out. I don't like EDJ because they lead good people down a path of lies. Only way to know if what I am saying is true is investigate for yourself. Go visit another firm. You'll see..... or are you scared???