The Main reason people leave Jones

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Dec 31, 2005 12:11 pm

The reason people leave Jones usually is because they can't hack building a business the correct and ethical way.  others leave for other reasons, but most are not willing to put in 3-5 years worth of really hard work selling appropriate low cost investments that don't pay the broker as well as those annuities, wrap accounts, and market timing churn and burn mentality.  


We know we do it right...lots of the other firms preach (push)annuities, wrap accounts, market timing/churning.  We preach annuities w/out surrender fees and half the expenses to the client.  Pays us less money, but better for the customer.  Hmmm....  No fee based accounts just buy your mutual funds with A share expenses and hold for 20 years.  Hmmm...do the math on A share versus fee based account over 20 years and see which comes out better for the client.  Math doesn't lie if you don't believe me.  Check the SEC website for a mutual fund cost calculator.  I got to figuring what I needed in C shares or a wrap account versus having a book of A shares.  Wrap fee broker or annuity broker gets just as much in trails from $20M under management as someone that had $80M in A share funds.  Strange huh.  Is that best for the client or the broker?  My thoughts are that there are so many people on here that leave Jones in the first few years to go somewhere else because they can't hack it the ethical way.  The "say" they make more money at the new firm.  But it is strange the payout portion is much the same.  Hmm...  If they make more money it is usually because they do things the easier less client friendly way by selling things that pay themselves more money. Annuities, wraps, and market timing (churning) They get on here and bash the firm.   I think the Jones guys and gals are just proud that they have been able to build a sound ethical business the client friendly way.  Yep, there are other firms with brokers/advisors that do it the "right way" for the client but not may other firms that structure their business model the "right way" for the client.  I think the Jones folk are just taking up for themselves and the ethical businesses that most Jones folks have built.

Dec 31, 2005 12:44 pm

Yeah...you figured it all out. I thought about moving to Jones, but I just love making money too much.

Dec 31, 2005 12:47 pm

I hope I run across your clients one day.  I would like to help them the ethical way.

Dec 31, 2005 12:50 pm
JonesIR:

I hope I run across your clients one day.  I would like to help them the ethical way.


I'm sure that when they start to hate making money, they'll love what have to offer. The only problem is that they won't be happy about having people bumping their cars with shopping carts, while parked outisde your office.

Dec 31, 2005 12:54 pm

JonesIR,


I have nothing good or bad to say about Jones, but your above statement shows you truly don't understand the business. 


?  What are you doing with all of your clients you sold A share Putnam funds to in 2000?  Are you selling them another A share?


Did you know that using ETF's/closed end funds and stocks can sometimes serve the client better maybe with lower expenses even when you toss in 1% for your FEE.  It is OK to charge clients an ongoing fee if you spend time with them, helping them. Take someone with 200K in A shares, you receive 500 a year in 12-b-1. Your cut 40% =$200 how many hours can you devote to him/her.  Not many, you need to be out knocking on doors, finding new money so the big boys at Jones can get their revenue sharing and 60%.  Wake up!  If you want to truly help people you need to spend time with them, that time costs them money.


Slapping someones rollover into an A share then moving to the next person is not what a financial advisor does.  That is what a financial salesperson does.  As an advisor I meet with my clients often, I update their plan, set goals and make sure they are saving/invest the money they need to sucessfully meet their goals.  If they stray from the plan, I help get them back on course.  Now if I spend 10 hours a year with above example/the 200K rollover, I am not going to make $20 per hour for my time, nor am I going to make it up from someone else, sorry to put you in your place, sounds like the top dogs really did a sales job on you.


I have never worked for or known anyone that worked for Jones.  I do ACAT a few accounts every year from there though!

Dec 31, 2005 1:03 pm

Bankrep, I spend the time with them just as you do with your clients, the difference is that they are charged much, much less and get larger returns.  Again, math doesn't lie.  I get plenty of referral business from those clients because they realize the deal they are getting.  Rebalancing and good service at 1/4 the cost to the client.

Dec 31, 2005 1:58 pm

You are too funny and obviously someone new to the firm.  Good luck to you as you have a great start in saying the right things to your GP friends.  Rebalancing at Jones means moving from an A share held for a year or two to a preferred A share at full boat.  Is that a more efficient way than auto-rebalancing at no additional cost?  Well, I guess I am asking the wrong person since you do not have this option quite yet.


And don't try and preach about your A share annuity option.  Only the "real" players in the firm know why you offer this share class. 


Dec 31, 2005 2:02 pm

Let me also attempt to walk you through a new client that comes to you.  You take a look at the funds he already has and you say I can do better with American Funds.  You present them the ICA chart, get the ACAT signed and off you are.  And don't tell me this crap doesn't go on.  If you are naive enough to believe it doesn't go to your power players and ask them how many non-preferred funds are on the books at Jones.  This may wake you up a bit.

Dec 31, 2005 3:32 pm

Let me correct your response.  First A share to A share is called an exchange if done in the same mutual fund family.  There is no need to sell some one into another family of funds if the fund they have is in a reputable family of funds and meets their goals and objectives.  By the way, many other brokers make this their standard practice.   Also, I have many people that transferred funds in which we either held or exchanged for other funds in the same family of funds.  Now sometimes, you know some fund families have a horrid reputation.  In that instance you need to discuss apprpriate options with client which may mean sell out and buy something else.  Jones does not advocate switching back and forth, and you should knno that since you worked for them at one point. 

Dec 31, 2005 4:01 pm
JonesIR:

Let me correct your response.  First A share to A share is called an exchange if done in the same mutual fund family.  There is no need to sell some one into another family of funds if the fund they have is in a reputable family of funds and meets their goals and objectives.  By the way, many other brokers make this their standard practice.   Also, I have many people that transferred funds in which we either held or exchanged for other funds in the same family of funds.  Now sometimes, you know some fund families have a horrid reputation.  In that instance you need to discuss apprpriate options with client which may mean sell out and buy something else.  Jones does not advocate switching back and forth, and you should knno that since you worked for them at one point. 


Please address the widespread problem of Jones clients getting dings on their cars, from shopping carts, while parked outside of Jones offices.

Dec 31, 2005 4:18 pm

Age old question:


"How much do we deserve to be compensated for our services?"


As much as an MD?


As much as a sanitation worker?


A teacher?


An astronaut?


Where should we fall on the compensation chain?

Dec 31, 2005 4:21 pm

As much as the market will tolerate, just like MD's, janitors, teachers, and astronauts.

Dec 31, 2005 6:38 pm

Jones IR,


Imagine that an IR preaching about ethics - priceless.  Your ignorance is grand - just like 'ol Doug said, sell your client a growth and income fund and they'll thank you for it...yea, mutual funds are the only real investment for all.  You just proved what a cookie cutter chop shop jones is, people I know, including myself, leave jones once they learn this.  You show me a fund family that has the best of class for every asset class out there stupid.  How do you help clients that need tax friendly investment advice?  Any knowledge will tell you MFDs are horrible for this.  God your dumb!

Jan 1, 2006 7:55 pm
JonesIR:

Bankrep, I spend the time with them just as you do with your clients, the difference is that they are charged much, much less and get larger returns.  Again, math doesn't lie.  I get plenty of referral business from those clients because they realize the deal they are getting.  Rebalancing and good service at 1/4 the cost to the client.


You charge less because


1.) your firm doesn't offer any other choice


2.)  you make it up in 3 or 4 years when you switch them to another fund family A-Share position...


3.) You don't really add that much value...

Jan 1, 2006 8:47 pm

JonesIR wrote:


So with your business model, you will forever have to add new clients/assets...  How can you adequately service 4000 clients your going to have in 15-20 years.  Most Indy's I speak with manage between 80-200 clients and complain about time.  Can you imagine the level of service a client with an advisor like that receives, not shouldn't they be paid for working for their client.


Why don't they just cut you out of the picture and go to a fidelity investor center?  They'll save more....

Jan 2, 2006 8:40 am

JoeD and Bankrep - you both hit it on the head.  In order to grow they have to constantly add more and more clients all the while they put clients in investments that get called, mature or need to go to a new fund family so they can make a living. 


jonesir - I wonder how much of your $9.5 million book is in Van Guard or some other no load if you are so concerned about saving your clients money?  Why don't you charge a nominal fee to build a no-load portfolio?  Oh, that's right you're at Jones.

Jan 2, 2006 2:21 pm

JonesIR,


I have a couple suggestions for you.  First, stop posting on this site until you have spent a couple months reading other's posts.  Second, get to know someone at another firm (we don't all eat babies like they tell you at Jones) see how they do business and what tools they have.  This prob help you see what the competition is really doing, and might keep you from looking like an ignorant, pontificating, buffoon.

Jan 2, 2006 3:34 pm

Exdrone- Good post!! I have learned an amazing amount about how to build my business from people who are employed at other firms. At the least, you start to understand how their business works and how you might effectively compete against them. Ther are many people on this forum that I have a lot of respect for because they have earned it, it takes a lot more than 9.5 M AUM to earn respect....

Jan 3, 2006 10:12 am

The problem is, at 2.5 yrs and $9.5MM, at EDJ that makes him a "veteran".  And, now he is preaching to the "rookies."

Jan 3, 2006 10:55 am
JonesIR:

The reason people leave Jones usually is because they can't hack building a business the correct and ethical way. 


That pretty much demonstrates the "we're honest, you're not" brainwashing that makes Jones a laughing stock outside their firm. Every one of us here could pick apart the bogus reasoning on products and services that makes up the rest of the post, it’s enough to say that no firm has a monopoly on ethical reps, much less one that took a massive fine for paying brokers more to sell one group of families of funds over all others and takes reps on sales contests trips.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />