Jones Secrets Revealed, Part 6

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Feb 13, 2007 6:19 pm

SPIKED-

It's not just LTC Trails- don't expect to ever see Life Insurance trails either.  I did several nice large ILIT's - EDJ Trust Company of course- and EDJ does not have to release these fees.

The Edward Jones Insurance Company funnels the money through first and dispenses it back out to GP's.

Pretty good racket, actually.

Feb 14, 2007 10:42 am

[quote=babbling looney]

Why don't you explain to me, no teach me, foot, why you need "cost basis" for an IRA account

Because inquiring minds want to know?  Seriously the client probably would like to know the breakdown between invested amount, reinvested cap gains and dividends and the actual underlying growth in the account to determine exactly where the growth is coming from.  I would want to know.  Why shouldn't the client have that information available to them?  It isn't just qualified accounts from Jones that lack this information.

[/quote]

I have to admit something.  This forum actually taught me something.  I was reviewing a client's SEP this morning looking at her Franklin Global Smaller Co's seeing some decent growth.  Then I looked at her Cost Basis/Unrealized G/L and saw a red number denoting a loss.  We invested $8777 10/05 took out $396 last year for her RMD and today its worth $10,777. 

Bab's comment rung in my head like my third grade teacher telling me to stop slouching.  I realized that she is right.  I don't have any way to tell (without digging out old statements) what was growth, dividends, or Cap Gains. 

With that said, the client doesn't care.  She's up 27.5% in 16 months.  That's what she cares about.  But this inquiring mind would like to know and understand.  Guess I'll wire a GP and see if I can get a straight answer.   

Time to move her to AGTHX.  

Feb 14, 2007 11:24 am

Bab's comment rung in my head like my third grade teacher telling me to stop slouching

My work here is done....

Feb 14, 2007 2:01 pm

[quote=munytalks]

SPIKED-

It's not just LTC Trails- don't expect to ever see Life Insurance trails either.  I did several nice large ILIT's - EDJ Trust Company of course- and EDJ does not have to release these fees.

The Edward Jones Insurance Company funnels the money through first and dispenses it back out to GP's.

Pretty good racket, actually.

[/quote]

My staff handled the specifics, so I don't know them, but we were able to do a block transfer of residual commissions on my Hartford policies after the agent change was done. We needed an EJ sign-off, but if it is bigger dollars, go to the trouble. I am fairly sure it can be done.

Feb 14, 2007 3:38 pm

Even on my own term policy with Protective I was able to transfer to myself as broker of record. But Jones still gets paid on the trails and the new agent at Jones is listed as broker of interest.

Feb 14, 2007 4:49 pm

[quote=babbling looney]

Why don't you ask the client to bring in their EDJ statements and you can have your assistant figure it out.

Yeah...that'll be fun.  Let's take 4  to 6 years of statements (if the client still has them) and hand calculate the reinvested dividends and capital gains AND get the purchase price of every systematic investment into the fund or stock.  Very effective use of time.

[/quote]

Do you really have other pressing things to do?

You somehow find the time to spend the majority of every day on this forum.  

Feb 17, 2007 9:32 pm
Hey, just wanted to let you all know that what was said about not being able to transfer LTC or Life Insurance policies sold at EDJ to your new B/D is incorrect.  When I first left Jones in '04, I was told the same thing, but I still tried.  I was told that I was allowed to become a servicing agent but commisions could not follow me.  I was very aggravated and gave up.  Two years later (last year) I decided to try again and it worked. 

This is what I found out.  First of course, be appointed with the company.  What you need to do then is find out if the ins co. has their own LOA to do this or is one put together by the client (you) OK.  Genworth does not, but Hancock and Hartford do as I recall.  Have the client sign the LOA and then you sign it as well.  The client's part should basically say that they want you to become the agent of record and to receive all future commissions on the policy (yes the client will have to know this).  Your part says that you accept the policy.

Next, believe it or not, you have to forward this LOA to the Insurance Department at EDJ and have a GP sign off on it!  I thought for sure that this where I would hit the brick wall, but to my huge surprise the GP did sign them - and it was about 30 policies!  That part of the LOA will basically say that EDJ releases this policy including all future commissions to the new agency.  Just so you know, all the ins. companies accepted faxes, so I faxed all these up to EDJ and they faxed it back to me within a few days with a couple of follow up calls. 

After you get them back, then forward them to the ins. company.  I will tell you, Genworth will not make this process easy.  They consistently said that they would not do this.  I had to have someone in my back office deal with a contact they had at Genworth to get it done.  Hartford and Hancock were easy.

All in all it was a bit of work, but I think well worth it.  It's nice to see those trails hitting once again!  I do have to give EDJ alot of credit with this.  They were not going to handcuff the client if they didn't want to stay there. 

Good Luck and I hope it works for you like it did for me.
Feb 17, 2007 11:43 pm

Thanks EXED-

All of my LTC policies were written with GENWORTH.  All of my Life Policies with Hartford.  I appreciate the heads up.  I will have my assistant get right on it.

Feb 18, 2007 7:45 am

You aren’t continuing to place everything with one company, are you?

Feb 18, 2007 1:27 pm

Mr. Anonymous,

When it comes to LTC in California I don't see anything better than Genworth.  I know the product inside and out.  I feel very comfortable selling just one product when it comes to LTC.  I do have access to other providers but I choose to give my clients the best.

Feb 18, 2007 1:54 pm

Then you don't sell much LTCi.  Genworth is the best sometimes.  Sometimes, it isn't.  LTCi is very much dependent on the circumstances of the individual client.  

It's great that you know the product inside and out.  If you are going to sell the product, it's important that you also understand their competition's product inside and out.

I'll give you an example of when Genworth doesn't do the trick.   Client owns a business set up as a sole proprietor.  His wife works for him.  The business can buy a policy on the employee (his wife) and she can put him (the business owner) on the policy as a joint insured.  The premium is 100% deductable and it doesn't have to be included as income.   Genworth can't do this because their joint policies are two separate contracts.

Here are some other reasons why Genworth might not be the best for a client.

1)Different companies have different sweet spots based upon age of the insured.  Different combinations of benefits cause different companies to be better values.  For example: John Hancock won't give Ultra Preferred Rates with life time benefits.

2)Different companies underwrite differently.  A specific condition may cause someone to be standard with Genworth and ultra preferred with someone else.

3)Since LTC carriers don't guarantee rates, this needs to be a concern.  Genworth's long history of not raising rates is used as a selling point.  It actually scares the heck out of me.  All the carriers that have lots of old business on the books can expect to have major claims.  The policies in the past were way underpriced.  Most of the big mutual companies stayed out of the business because they knew that it could not be priced at a profitable level.  I would also argue that their long history of not raising prices does not have meaning know that they are no longer owned by GE.  From a price increase standpoint, one should feel much safer with a big Mutual company like Northwestern Mutual, New York Life, or MassMutual.

My only point with this is that if you are going to do the best for your client with LTCi, your cases need to be shopped.  Sometimes Genworth will be the best.

Feb 18, 2007 8:43 pm

I just came across this table and thought it interesting.



Legal Actions Against Retail Brokerage Firms Between 2001 and 2002



Complaints per Million Retail Accounts*

------------------------------------------------

1.5        Fidelity Brokerage Services

2.6        Credit Suisse First Boston

4.8        Edward D. Jones & Co.

6.1        Charles Schwab

6.5        American Express Financial Advisors

7.2        TD Waterhouse Investor Services

7.3        E*Trade Securities

8.4        Salomon Smith Barney

8.9        Quick & Reilly

9.8        UBS PaineWebber

10.6        Raymond James & Associates

11.5        A.G. Edwards

11.9        Ameritrade

12.1        Merrill Lynch

14.9        Wachovia Securities

20.2        Morgan Stanley

27.5        Prudential Securities

63.3        U.S. Bancorp Piper Jaffray



*Source data: http://www.financial-planning.com/pubs/fpi/

20030701102.html





Deduce from it what you will…

Feb 18, 2007 9:23 pm

That is very interesting… I’d bet that the average has dropped substantially in the last couple of years.

Feb 18, 2007 9:58 pm

This chart as many statistics are skewed.  Jones has way more accounts than any of the other's mentioned.  When you are investing $100/month it's hard to sue somebody!

Feb 18, 2007 10:02 pm

Mr. Anon,

I'm glad you mentioned those other providers.  I do believe that the CARE Coordinator is the most valuable part of the Genworth policy.

Feb 18, 2007 11:17 pm

[quote=Incredible Hulk] [COLOR=GREEN]That is very interesting… I’d bet

that the average has dropped substantially in the last couple of years. [/

COLOR][/quote]



You could be right. People don’t complain when they’re making money.



Still, I wonder what Fidelity does so right, and Piper Jaffrey does so wrong!

Feb 19, 2007 1:00 am

I wonder where all the bank and independent broker dealers are…if anything, you’d think that bank brokers would have higher complaint rates because of all the “confusion” caused by bank-sold non-FDIC investments…at least that’s what the regulators thought when banks got into the biz…

Feb 19, 2007 4:24 pm

[quote=Philo Kvetch]I just came across this table and thought it interesting.



Legal Actions Against Retail Brokerage Firms Between 2001 and 2002



Complaints per Million Retail Accounts*

------------------------------------------------

1.5        Fidelity Brokerage Services

2.6        Credit Suisse First Boston

4.8        Edward D. Jones & Co.

6.1        Charles Schwab

6.5        American Express Financial Advisors

7.2        TD Waterhouse Investor Services

7.3        E*Trade Securities

8.4        Salomon Smith Barney

8.9        Quick & Reilly

9.8        UBS PaineWebber

10.6        Raymond James & Associates

11.5        A.G. Edwards

11.9        Ameritrade

12.1        Merrill Lynch

14.9        Wachovia Securities

20.2        Morgan Stanley

27.5        Prudential Securities

63.3        U.S. Bancorp Piper Jaffray



*Source data: http://www.financial-planning.com/pubs/fpi/

20030701102.html





Deduce from it what you will…[/quote]

LPL is not on the list at all…wonder why?

Feb 19, 2007 4:32 pm

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//–>Hey, just wanted to let you all know that what was said about not being able to transfer LTC or Life Insurance policies sold at EDJ to your new B/D is incorrect.  When I first left Jones in '04, I was told the same thing, but I still tried.  I was told that I was allowed to become a servicing agent but commisions could not follow me.  I was very aggravated and gave up.  Two years later (last year) I decided to try again and it worked. 

This is what I found out.  First of course, be appointed with the company.  What you need to do then is find out if the ins co. has their own LOA to do this or is one put together by the client (you) OK.  Genworth does not, but Hancock and Hartford do as I recall.  Have the client sign the LOA and then you sign it as well.  The client’s part should basically say that they want you to become the agent of record and to receive all future commissions on the policy (yes the client will have to know this).  Your part says that you accept the policy.

Next, believe it or not, you have to forward this LOA to the Insurance Department at EDJ and have a GP sign off on it!  I thought for sure that this where I would hit the brick wall, but to my huge surprise the GP did sign them - and it was about 30 policies!  That part of the LOA will basically say that EDJ releases this policy including all future commissions to the new agency.  Just so you know, all the ins. companies accepted faxes, so I faxed all these up to EDJ and they faxed it back to me within a few days with a couple of follow up calls. 

After you get them back, then forward them to the ins. company.  I will tell you, Genworth will not make this process easy.  They consistently said that they would not do this.  I had to have someone in my back office deal with a contact they had at Genworth to get it done.  Hartford and Hancock were easy.

All in all it was a bit of work, but I think well worth it.  It’s nice to see those trails hitting once again!  I do have to give EDJ alot of credit with this.  They were not going to handcuff the client if they didn’t want to stay there. 

Good Luck and I hope it works for you like it did for me.
[/quote]

This sounds like the process we went through I was trying to describe earlier in the thread and it was successful. I too was surprised EJ signed off on it.

Feb 20, 2007 9:51 am

[quote=joedabrkr] [quote=Philo Kvetch]I just came across this table and thought it interesting.

Legal Actions Against Retail Brokerage Firms Between 2001 and 2002

Complaints per Million Retail Accounts*
------------------------------------------------
1.5        Fidelity Brokerage Services
2.6        Credit Suisse First Boston
4.8        Edward D. Jones & Co.
6.1        Charles Schwab
6.5        ***American Express Financial Advisors***
7.2        TD Waterhouse Investor Services
7.3        E*Trade Securities
8.4        Salomon Smith Barney
8.9        Quick & Reilly
9.8        UBS PaineWebber
10.6        Raymond James & Associates
11.5        A.G. Edwards
11.9        Ameritrade
12.1        Merrill Lynch
14.9        Wachovia Securities
20.2        Morgan Stanley
27.5        Prudential Securities
63.3        U.S. Bancorp Piper Jaffray

*Source data: http://www.financial-planning.com/pubs/fpi/
20030701102.html


Deduce from it what you will........[/quote]

LPL is not on the list at all....wonder why?
[/quote]

Maybe they couldn't find enough clients to satisfy their polling minimums.