Jones Secrets Revealed, Part II

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Apr 23, 2006 10:20 am

Since Part 1 was so good I thought I would start another one.  Remember all you people reading this,  I was a $540,000 Gross/$54,000,000 AUM/8 year New/New. 


So at Jones when you had a prospective client come in from another firm to transfer the account, you always made them liquidate at the other firm, that way the money coming in was in cash and you could get paid.  I remember giving a toast at a regional meeting at a bar to the "Liquidate and Transfer Form." 


One specific example I remember was early in my career at Jones.  I was reviewing a portfolio and I asked my mentor for help.  Without even listening to my questions he replied, "Liquidate and Transfer."


I remember selling my prospective client on selling the Franklin CA Tax Free fund that she owned for 10 years.  We bought individual 3 pt bonds.  This was back when there was no aggregation rule.  It's funny how that Franklin is one of the preferred families paying Jones revenue sharing now.  More to come...

Apr 23, 2006 5:02 pm

spiked now tell us all why you left jones. can you be honest with this ?. doubt it.

Apr 23, 2006 6:11 pm

Spiked-



Give us more. You know too much to keep this bottled up.

Apr 23, 2006 7:16 pm

I've gotta say, that's one of that absolute worst things I've seen from the

EJ guys in my area.



I had a client with the same situation - She had a state-specific tax

exempt fund through Franklin. The EJ guy had prepared that infamous

'transfer and liquidate' form - I liquidated, and the check was mailed off.



I got a call from the client, and I just so happened to ask 'what did you do

with that cash?' - Her reply was that it went into some American Funds

tax free bond fund. I just about wanted to submit a complaint to EJ about

this type of sales practice - It's completely wrong and totally unethical.



'Transfer and Liquidate' - at least then, EJ doesn't see it as a mutual fund

'switch'... right?



Nice..... Nice.....



Upsetting - we are all judged by the actions of another. That stuff makes

me ill.



C

Apr 23, 2006 10:32 pm
spikedkoolaid:

Since Part 1 was so good I thought I would start another one.  Remember all you people reading this,  I was a $540,000 Gross/$54,000,000 AUM/8 year New/New. 


So at Jones when you had a prospective client come in from another firm to transfer the account, you always made them liquidate at the other firm, that way the money coming in was in cash and you could get paid.  I remember giving a toast at a regional meeting at a bar to the "Liquidate and Transfer Form." 


One specific example I remember was early in my career at Jones.  I was reviewing a portfolio and I asked my mentor for help.  Without even listening to my questions he replied, "Liquidate and Transfer."


I remember selling my prospective client on selling the Franklin CA Tax Free fund that she owned for 10 years.  We bought individual 3 pt bonds.  This was back when there was no aggregation rule.  It's funny how that Franklin is one of the preferred families paying Jones revenue sharing now.  More to come...



The discussion should be called spikedkoolaid secrets. Everyone has an opportunity to run their business how they see fit. It's pretty obvious that you have taken very little responsibility for your actions in the past other than to blame it on someone else. I guess in some sad way you are proud of yourself, perhaps a responsible man would go back to those clients that were offended and ask for their forgiveness. 

Apr 23, 2006 10:57 pm

and you don't think this happens at other firms?

Apr 23, 2006 11:59 pm

None that I run into. Interesting to know there was a toast to the "Liquidate and Transfer" form @ a jones regional meeting. I have trapped the jones L&T form by having the client (former) call the jones broker and question the time lag of being out of mkt. (Mmmm.lessee, don't those guys believe in "buy & hold?) 

Apr 24, 2006 1:20 am

I don't know where to start!  I left Jones because I was making $220,000/year and was being taxed at 35% and 11% state.  I hit the AMT every year and I was tired of Jones making promises they couldn't deliver (limited partnership).


The liquidate and transfer form was a way that you could avoid the switch letter because the money was coming in as cash.  It looked clean to the field supervisors. 


I have taken full responsibility for what I have done the last eight years.  I did all the things I have said.  Was I proud of every thing I did, NO!  Was I excited about missing breakpoints, NO!  Was I fired up that Jones had no Fee Based Program, NO!  Was I pumped about liquidating the Franklin CA Tax Free Fund and putting it in 3pt bonds, so I could get, "paid", NO! 


I am just exposing what a lot of top producers at Jones are forced to do because they have to figure out a way to make money every month. 


These top producers are great salespeople.   Doug Hill has said it many times.  "You people are the best salespeople on the face of the planet."  I think back to that comment and realize you have to be a great salesman to sell someone on selling out of a perfectly good tax free fund and putting them in a 3pt Tax Free Muni Bond.  It is well known at Jones that you don't want to sell "bond funds" but instead put them in a bond that is fixed interest.  That way when interest rates rise you can do a bond swap and get paid again.  More to come... 

Apr 24, 2006 4:40 am

Spiked,


I'm laughing so hard I spit Kool-aid all over my office, monitor, and oh man I got the dog too.  Now my wife is yelling at me to clean this mess up. 


"I am a much better financial advisor by working through Fee-Based"


You should put that on your business cards.

Apr 24, 2006 6:59 am

Spiked, you were "forced" to do those things to make more money?


I feel bad for your clients.  You were ethically challenged at Jones.  Unless, you've changed as a person, there is no reason to think that you won't continue to be "forced" to do things to make more money.  


Apr 24, 2006 8:28 am

"It is well known at Jones that you don't want to sell "bond funds" but instead put them in a bond that is fixed interest."


Maybe its because bond funds just suk, esp when clients are taking the income.

Apr 24, 2006 10:19 am

Well we finally got some KoolAid drinkers to respond!  Read Jones Secrets Revealed part I before you start popping off about Spiked's motives,etc. 


Tossthekoolaid is a perfect example of flawed investment advice from EDJ Reps that have been around awhile.  Maybe you should run some hypos on taking income from Bond Funds.  I suggest you start by looking at Van Kampen High Yield Muni and Goldman Sachs High Yield Muni and then go to Lord Abbett Bond Debenture.  These are all preferred funds in your stable and would provide a nice income to your clients and actually have a little bit of growth. 


I don't know where these Jones myths get started about Bond Funds Suck, but they sure do get ingrained in the culture/koolaid.

Apr 24, 2006 11:05 am

Spiked is correct on much of what he says. 

Apr 24, 2006 12:23 pm

Bring on some more Spiked.  I love it.  The system at EDJ turns reps into desperate commission seekers.  Even vets live for the next new account and it NEVER ends.  


Speak up clones, what do you have to say for yourselfs?  

Apr 24, 2006 12:39 pm

Why then do the brokers give the company such high marks?  Every broker I've talked to on and off the record has positive things to say, and they are making serious bank.  I have done some detective work, and the Jones reps in my area have accumulated plenty of assets.  It is strange that this company is bashed so badly and so often here.  Kinda reminds me of how hated WalMart, Microsoft, and McDonalds are. 

Apr 24, 2006 12:39 pm

If you are starting every month at close to zero--what real choices do you have?  You are a running a transaction based business at Jones--end of story.


When explained the difference, clients like the fee based approach much better.  Either way, at Jones--you don't have the choice.  As a indies--we do.



Apr 24, 2006 12:47 pm

Totally true Malcolm and Zacko...was always the most amazing thing to see guys who were netting 30k every month scrambling around and as desperate as the new news.

Apr 24, 2006 12:59 pm
spikedkoolaid:

I don't know where these Jones myths get started about Bond Funds Suck, but they sure do get ingrained in the culture/koolaid.



I can't tell you were it started at Jones, but as for me, I think it was Peter Lynch who said "never, never, never buy a bond fund". Perhaps he overstated the case against them 

Apr 24, 2006 2:32 pm

Jones sounds pre-historic you must kill some thing every month to eat!


I would not enjoy living like that!


Apr 24, 2006 2:41 pm

I've known many reps that are in wires or even indies that are mostly transactional brokers.  The major difference is that they have targeted the clients that want a transactional broker and, for those who don't, they have the option of going fee-based.