Quick Jones Question

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Apr 13, 2006 8:16 pm

What's the relationship between Jones and American Funds?

Apr 13, 2006 8:22 pm

Every Jones client has them and they pay a little revenue sharing as a thank you.

Apr 14, 2006 1:03 am

Jones gets paid about $3 per 10k invested annually. The same as the other 74 largest american fund distributors. And yes, an awful lot of Jones clients have American funds, the vast majority of mine included. And with 1 out of every 3 dollars going into funds finding their way into the american funds family, I don't think Jones is alone.

Apr 14, 2006 7:24 am

Well said, Hulk. Most, if not all have revenue sharing. AMEX, ML, MS, SB among many other big ones have it. In my opinion mutual fund companies should just increase the 12-b1 fees 3 bps just to get rid of the scrutiny.

Apr 14, 2006 9:44 am

greenthingy and mr. peanut head,


As previously stated your firm doesn't seem to hire anyone with decent reading comprehension.  No-one has every denied that other firms have revenue sharing, nor that it's illegal.


All the regulators got after your firm for non-disclosure about how the "preferred" fundcos got pushed onto the unsuspecting public. 

Apr 14, 2006 10:16 am
Moneytree:

What's the relationship between Jones and American Funds?


When one firm pushes 70%+ of all their mutual fund purchases to one mutual fund family, I call that "synonymous".

Apr 14, 2006 1:46 pm
Soothsayer:
Moneytree:

What's the relationship between Jones and American Funds?


When one firm pushes 70%+ of all their mutual fund purchases to one mutual fund family, I call that "synonymous".



Don't you mean incestuous?  

Apr 14, 2006 4:22 pm

Hey Hulk,


ARE YOU SURE AFD's pays revenue sharing to all of it's top companies in the same way?  Jones is one of the few firms to get an ongoing stream of revenue based upon assets on the books.  Most firms receive their rev sharing dollars based upon current years sales. 


21bps (or thereabouts) from Hartford (the #2 Jones seller) versus 3 bps from AFD?  Hartford isn't even in the top 5  in sales at any other b/d except Jones.  Hmmmm.   Overpriced/underperforming funds kick in the most?  Don't you dare defend Jones's revenue sharing policies.  They are an embarrassment to the industry.

Apr 14, 2006 8:05 pm

Zacko,


Hartford has changed the "agreement". See other thread. Don't know exactly what it means going forward.

Apr 15, 2006 12:01 am

Compliance Jerk - My reading comprehension is fine... His question was "what is the relationship between American Funds and Jones?" I answered the question. As for "pushing American funds on the unsuspecting public" - If you honestly belive I'd "push" american funds on a client so the firm makes 3 friggin bucks, you're out of your damn mind. I sell American because I'm not going to have to apologize next year for them.



Zacko - No I'm not sure what the other firms get paid for selling american funds, and frankly I don't care. In my prior post, what led you to believe I was "defending Jones rev sharing?" What's an embarassment to the industry is that someone as juvenile as some of the ex-jones brokers are are actually responsible for other people's money.



Anyone else - Please denegrate me as you wish if it makes you feel better. If you're going to though, at least make me laugh.

Apr 15, 2006 2:04 am
Moneytree:

What's the relationship between Jones and American Funds?


With all the flows to American funds from discerning brokers like Mr Hulk, Growth Fund, CIB, Cap World, and I'm sure a few others will have as many holdings as there are IR's at Jones...roughly 10,000 or so.

Apr 15, 2006 8:01 am

I'm just glad to be indy.  Reading about Jones on this forum and talking to a broker or two still there (most of my friends have left{many for indy}) serves as a reminder of how much better I have it now.

Apr 15, 2006 12:29 pm

More to the point on diversity. 


The danger not only to the client but to the broker of having 70% of his/her book in one mutual fund family can't be overstated.  Remember Putnam??? anyone?  When a mutual fund family "blows up" and you have everyone in it, you are going to have many unhappy clients all at once.  Just because American Funds hasn't blown up on us, and I agree it has been very good for my clients, doesn't mean it won't.


This is one of the major advantages of being able to offer wrap accounts or fee accounts.  You can offer the best funds from many different fund families without being handcuffed to one family for breakpoints (as mandated by our current rules).


Apr 15, 2006 3:19 pm

Babs (as you are affectionately called by others) - I don't have a problem with wrap accounts - 1% is more than fine as long as you are using the lowest fee fund class available for each fund. It's just a different pricing structure.

Apr 15, 2006 5:12 pm

But of course. However, it is more than just a pricing structure difference! 


The point being, by using advisor class shares or no-loads you can have clients with American Funds, T Rowe Price, American Century, AllianceBernstein and any other fund family you like and not be shackled to any one fund family by the restrictive A share rules we have now.


That means you could use an international fund from family A, mid cap value fund from family B, bond fund from family C and so on.  Since there is no load to buy the funds and the wrap fee takes care of your costs (hopefully), then you as the advisor can move assets in the best interest of the clients and not be hampered by artificial and arbitrary aggregation rules. 


It is always nice to have choices....don't you think.

Apr 15, 2006 11:12 pm

It would also be nice to make 1% on your book...I do think.

Apr 19, 2006 4:54 pm

B-shares will be the next wave of class action suits brought against brokers. 

Apr 19, 2006 6:13 pm

Moneytree asked "what is the RELATIONSHIP between AF & EDJ"- Here's a clue and CHALLENGE to all you Drone & Clones - What Mutual Fund Company was the number one fund held by Jones Clients BEFORE American Funds.  AND why were they replaced with American Funds? 

Apr 19, 2006 6:18 pm

Fidelity?  Not enough juice...uh, I mean revenue sharing?

Apr 19, 2006 6:32 pm

it wasn't revenue sharing, morons. It was Fidleity contacting clients and selling no-load funds, which I'm sure would be fine with you, right?