Jones to RJFS --THANKYOU!
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[quote=LockEDJ]
As a sub-36 month/Seg 2 guy I'm generating around a 10% profit. At $20K, my location margin exceeds 45% so I don't think I'm in too much trouble there. Should the time exist where I needed to make more, my Jones business plan certainly allows me enough space to achieve it.
[/quote] 20,000 Gross @ 45% location margin = $9,000 Location margin Gross: 20,000 Deductions Payout (8,000) Tech Fee (1,250) Rent (500) at least BOA (1,500) at least ($9.00/hr) Benefits (1,000) at least (profit sharing, health ins, ER FICA) Other Exp xxxxxx Total Exp (12,250) Margin $7,750 So I am estimating low on everything, and not including any "other" expenses (phone, supplies, licenses, CAM, utilities, etc.). Based on that, you are already short of your 45% margin. How's that work again?The magazine says average production at Jones is $213K, and $41M AUM… I bet that is high considering all the new people they have… My guess would be more around $150-180K and $20-30M AUM
[quote=B24][quote=LockEDJ]
As a sub-36 month/Seg 2 guy I'm generating around a 10% profit. At $20K, my location margin exceeds 45% so I don't think I'm in too much trouble there. Should the time exist where I needed to make more, my Jones business plan certainly allows me enough space to achieve it.
[/quote] 20,000 Gross @ 45% location margin = $9,000 Location margin Gross: 20,000 Deductions Payout (8,000) Tech Fee (1,250) Rent (500) at least BOA (1,500) at least ($9.00/hr) Benefits (1,000) at least (profit sharing, health ins, ER FICA) Other Exp xxxxxx Total Exp (12,250) Margin $7,750 So I am estimating low on everything, and not including any "other" expenses (phone, supplies, licenses, CAM, utilities, etc.). Based on that, you are already short of your 45% margin. How's that work again? [/quote]Maybe he doesn't have a BOA.
Love the hours worked conversation..... I probably work less than any million dollar producer I know. Have two great assistants and like the business, so I enjoy my 30 hours. And NO CLIENTS have my cell phone and I never call the office when I am on vacation. When I turn the key and leave--I am done until I return....period. I enjoy my personal time that much more because I seperate work and play. Also enjoy work more as a result. I could work less and some weeks I actually do. My view is I don't think anyones goal in their first couple of years of business should be to eventually work ten hours per week. The focus should be on building a succesful practice and gathering assets.
It's funny to hear all of you discuss how many hours you would "like" to work. Yes, Lock could achieve that goal as easily as anyone else. I don't know his work ethic or how seriously he takes building a successful investment practice. If you work hard and you work smart--this business is full of wonderful rewards--financial and otherwise. In the first two to three years, it's tough. But, like I have heard a time or two before--if it were easy...everyone would do it.[quote=Squash1]The magazine says average production at Jones is $213K, and $41M AUM… I bet that is high considering all the new people they have… My guess would be more around $150-180K and $20-30M AUM
[/quote] I would estimate around 170-190K. Jones' average production is misleading though. If you exclude all the newbies (well, like half the firm), the average production is probably more like $400K. And the average AUM at the END of 2008 was $37mm (off their financial Statements). Average velocity is probably around 0.5%, which would equate to about $185K production. And since velocity of newbies is usually higher than vets (becuse of so much new money coming in, in relation to total AUM), the average would likely be slightly higher than this. Bottom line is that Jone is a firm of about 6,500 "real" producers. The other 5-6,000 are new or underperformers.Actually, I was just looking at our Financial Statements again. If you include fee-based revenue (AUM fees and 12b-1 revenue), the number is actually about $250K per FA in revenue (actually it was $266K, but that was 2007). Maybe $213K was 2008 numbers. AUM per FA dropped from 48mm in 2007 to 35mm in 2008.
The $185K only includes trade revenue (commissions).I’ve redefined what I call “work” time because I do enjoy my time in the office more now than I used to. I am nearing the point where things are running the way I want them to, and about to hit the breakout point where all additional revenue is just hitting my bottom line (beyond the typical 40% payout level). Like Zacko clients RARELY hear from me out of the office, and definitely do not have my cell phone. Staff is trained to deal with the majority of issues without me. It’s rare that they need to call me for an “emergency”.
Whoever is paying $9 an hour for a BOA should be embarrassed. Are you running a sweatshop or a financial services business?
[quote=Spaceman Spiff]
If you're still Seg 2, your office isn't profitable. [/quote] [quote=B24] How's that work again? [/quote] I could go into a long harangue about my location margin, but either you believe me or not. My location margin, YTD, is nearly 10% of GDC but with what I expect to be a pretty good December, it wouldn't surprise me to hit 12% for the year. I know when I compare myself using the FA Rankings report I'm doing well against my peers, my region and considering service time, nationally. I've run cost-effective businesses before, so I know my way around a bit. Anyway, that's my story and I'm sticking to it.I think Jones has done it's FAs a great disservice by reworking the P&L to make it "friendlier". It more than likely appears on paper that your office is operating at a profit to Jones. A couple of years ago, you'd still be in the red and would be that way until you got to averaging above $15,000 a month or so.
If it were me, I wouldn't be focusing on my location margin YTD. I'd be looking at the Bonus Period To Date and trying to figure out how to get it above $23,000. That in addition to the meeting/exceeding/below standard line on your Performance Chart are really all that you need to be looking at. Do you not care about the bonuses? LP? Profit sharing? All of those things mean I get to retire sooner and not work any hours a week. The higher I can make them, the quicker I get there. I'd rather spend time with a rich happy wife in retirement than with a penny pinching one now.[quote=Spaceman Spiff]
I think Jones has done it’s FAs a great disservice by reworking the P&L to make it “friendlier”. It more than likely appears on paper that your office is operating at a profit to Jones. A couple of years ago, you’d still be in the red and would be that way until you got to averaging above $15,000 a month or so.
If it were me, I wouldn’t be focusing on my location margin YTD. I’d be looking at the Bonus Period To Date and trying to figure out how to get it above $23,000. That in addition to the meeting/exceeding/below standard line on your Performance Chart are really all that you need to be looking at.
Do you not care about the bonuses? LP? Profit sharing? All of those things mean I get to retire sooner and not work any hours a week. The higher I can make them, the quicker I get there. I’d rather spend time with a rich happy wife in retirement than with a penny pinching one now. [/quote]
I’d rather spend my retirement with a rich younger version of my wife. Shut up Spaceman Queef
Spiff-
Regarding the great disservice to FA's, could you highlight for us old ex-Jonesers the new bonus grid. My understanding is that there are more levels (as many as 10 tiers). What is the current bonus %? Is the 23K you are referencing the first tier? Sounds as if they are keeping more of the bonus pool for themselves...It's not really that much different than before. There are now 10 bonus brackets instead of 5. Your bonus is based on location margin instead of profitability. They're generally the same thing, just the terminology is a little different.
How do you figure that the firm is keeping more of the bonus pool for themselves? My comment about the disservice to the firm is that I have heard what Locked says about being profitable from other new FAs. With the P&L the way it was when you were here, you basically had to hit Seg 3 before you showed a positive number on the location gain line. And until you were in the low to mid 20's that number wasn't big enough to even worry about. From what I've heard from newer FAs in our region, they can start seeing positive numbers on their P&L in Seg 2, like Locked is. Jones may be trying to send a more positive message by way of the P&L, but if a lot of folks start to think like Lock is, that he can make it at Jones at $20K a month, we're in trouble.Few things:
Locked, so your margin is 10%, not 45%? OK, pretty close. It has nothing to do with believing you. I think you just don't know what you're talking about. 2nd: I pay my BOA $18.50, not $9.00. But since I have no idea where Locked works, I didn't want to assume when I was doing that little analysis. 3rd: Cheese, the big difference between Location margin and the old "profit" formula, is that you no longer get a corporate overhead allocation on your P&L. So the expenses on your P&L are strictly office expenses. That's why the first bracket you have to hit $23K for the trimester to get a bonus. I assume this sort of represents the corporate overhead amount that has to be overcome to actually have some profit contribution to the firm. And incidentally, it was an accounting requirement that forced them to take the corporate allocation off the P&L and call it "Location margin".[quote=B24]Mo, I am just saying that I know many people that have no idea what the transition would be like. All they hear is how high the ticket charges are, how none of your clients come with you, and how expensive it is to pay for employer FICA (yes, much of this is spewed by Jones). So most of them don’t bother looking any further, as they KNOW what they make NOW, and they are comfortable not changing. Not that it’s RIGHT, it’s just how it is.
And as you might have gathered, I am speaking for others on this...[/quote]Maybe they actually enjoy being at Jones. Just a thought. Seems simple enough. Not everyone strives to be independent.
[quote=grimlog]
[quote=B24]Mo, I am just saying that I know many people that have no idea what the transition would be like. All they hear is how high the ticket charges are, how none of your clients come with you, and how expensive it is to pay for employer FICA (yes, much of this is spewed by Jones). So most of them don’t bother looking any further, as they KNOW what they make NOW, and they are comfortable not changing. Not that it’s RIGHT, it’s just how it is.
And as you might have gathered, I am speaking for others on this...[/quote]Maybe they actually enjoy being at Jones. Just a thought. Seems simple enough. Not everyone strives to be independent.
[/quote]
I agree completely. And "better" is subjective. But only if you know what the options are.
I am a complete greenhorn, interviewing with Jones currently. What would you be paid if you were to bring in 1 mill/year in gross, all accounts you set up? Would that be good? Mind you I am an architect making this transition, and I have no financial experience whatsoever.
[quote=grimlog]I am a complete greenhorn, interviewing with Jones currently. What would you be paid if you were to bring in 1 mill/year in gross, all accounts you set up? Would that be good? Mind you I am an architect making this transition, and I have no financial experience whatsoever.
[/quote]
Do you mean, $1million in production (what clients pay in commission or fees) or $1 million in assets?
You will starve if you only bring in $1 million in assets.
$1 million in production - it will vary. Spiff, B24 or rankstocks can tell you better what a $1 million producer will make (all things combined).
Keep in mind that it is extremely unlikely that you will make this much early in your career.
Personally, I would have stayed an architect.
[quote=B24]Few things:
Locked, so your margin is 10%, not 45%? OK, pretty close. It has nothing to do with believing you. I think you just don't know what you're talking about....[/quote] Is there some confusion regarding YTD and monthly numbers? I thought that was pretty clear for those that actually read what I wrote. But hey, whatever. It only shows that the person that didn't know what they were talking about in this situation was you.