Just a rant

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Mar 16, 2006 11:43 am

Sorry for the rant but I'm ticked off.

There is a small town near us where I've received several rather large accounts because a local attorney hates dealing with the local Edward Jones guys.  His response is always that they make his skin crawl because they compete against each other and offer little incentives to work with them.

I've been working with a CPA on one of these accounts because he's the suc-trustee and he kept asking for kickbacks on transfer fees.  If we charged $30 he wanted us to charge $50 and give him the difference.  I always refused because it just isn't legal.

Today we received an ACAT for the account to transfer it to one of the in-town Edward Jones guys.  I called my CPA friend and he said it's because Edward Jones plays the game.  I called the attorney who referred us the account and he said the CPA is probably the most unethical person he'd ever met and he'd found a partner at Edward Jones.  The CPA was begging his clients with sweet deals so that he'd be the executor of their estates and then charging absolutely huge fees and now that the local Ed Jones guy would rebate fees to him, he was cranking it all up. 

The attorney said that on one account worth only about $100k that he had seen fees of over $15k in a single year from the CPA and Edward Jones office.  He said it was common to roll all mutual funds into new mutual funds even if the account would be liquidated in the next few months.  Man I hate that.

Just ranting, sorry.  Hate when you work with a client for 20+ years and do right by them and then in the end the client's unknowing heirs gets screwed by an unethical duo.

Mar 16, 2006 11:55 am

seems everyone on this board encounters the worst of the worst jones guys. I am almost sure that that sort of unethical BS happens in every town in america!

Granted seems to me that you could explain to these clients what exactly is going on and show them how they are getting raked over the coals and win their business back... or at least blow the whistle on the CPA and other broker

Mar 16, 2006 1:33 pm
Beagle:

I've been working with a CPA on one of these accounts because he's the suc-trustee and he kept asking for kickbacks on transfer fees.  If we charged $30 he wanted us to charge $50 and give him the difference.  I always refused because it just isn't legal.


Not only is he unethical and illegal, he's STUPID.  Who on earth would break the law and his ethics code for $20?!!!  What a sleazy moron...I'd find some way to blow the whistle on both the CPA (who should lose his license) and the sleazeball jonser (who should be barred from the industry)

Mar 16, 2006 2:09 pm

I'd be sure that info got into the hands of someone who might it useful.  EJ compliance and State regulators for starters.

Mar 16, 2006 2:55 pm

The $20 isn't an issue because we did all the transfers already so the Jones guy has all the paper work basically done for him.  It's the attorney telling me he knows for a fact that the Jones guy offers a kickback on these estates and it's in cash. 

I know there are ethical Jones guys - I've met them and know one very well.  Problem is I've also met plenty of guys who are trying to milk the client for the last possible commission (not limited to Ed Jones at all).  The problem I have is that this guy doesn't have a manager looking over his shoulder to notice the conversations being made in the office. 

Mar 16, 2006 7:05 pm

sounds like the attorny should help you make the case... if he is ethical!


Mar 16, 2006 9:17 pm

there are bad ones at all firms and good ones at all firms...the question is what does the firm encourage its reps to do, the right things or wrong things such as those.

Mar 17, 2006 9:51 am

hey koo-aid person,


Are you implying that if the firm's mantra is that we are the most honest & Compliant & better than the rest and are always doing best for the client, it's okay to allow a few bad apples???


Encouragement is one part of the equation, if the "ir" doesn't follow guidelines then the SRO, not St. Louis decides if it's Failure to supervise or a rogue broker went the complaints roll in.

Mar 18, 2006 4:26 pm

compliancejerk, nope wasn't implying that at all.

Mar 19, 2006 7:34 am

Beagle.  Report the scumbag.

Mar 19, 2006 12:49 pm

About 20 yrs ago I had a similiar thing happen to me with a jones rep and an atty working with a state VA hospital where mentally disturbed veterans were housed. I had a client who obviously had problems and his mother died and left him a couple hundred in inheritance. Since I did bus. with the Mother, the son opened an acct. with me and he was very cautious so we did only short term bonds/cds,etc. After a couple of yrs. the son couldn't cope with life anymore (his mother pretty much took care of him) so he was comitted to the VA hospital. Next thing I know I get an acat to jones and I called the hospital admin. to see what was up and he informed me that the local jones office handled ALL the vet accts along with a local atty who held POA over the accts. I checked more and found out the atty and the jones guy had a "deal" where the atty w/POA would get kickbacks on the accts. If that had happened now, I'd report the SOBs.   Scumbags indeed.

Mar 20, 2006 3:18 pm

I"ve spoken with the attorney and he's not reporting anything.  It's a relatively small community where these people live and he told me that if he reports anything, he'll lose serious business.  Plus since he knows it is all in cash, extremely difficult to prove anything.

I've spoken with our NASD rep and he basically just said that without proof or a customer complaint, it's extremely difficult for him to do anything about it.  Great huh?

I emailed the state CPA organization and they said it's business outside the business of being a CPA but that he should still be ethical.  They basically said the same thing, without a client complaint or the complaint of another CPA, nothing will really ever come of it.