We're #2! EJ Punked by RJ in '08 JD Power Survey

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Aug 2, 2008 12:55 pm





http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008102
 
What are the EDJ folks gonna hang their hat on now?  I guess you can remove that one form letter from the "WordPower" system that you send to clients when they transfer their account out.  You know, the one that goes something like, "I'm really suprised that you would want to leave the firm that has been named #1 for three consectutive years by JD Power and Associates." 
 
Spiffy, are you sure that Jones has not experienced significant talent drain since 2003?  1000 reps to RJ alone--and they just blew by you like you were standing still.  Hmmmmmm.....
Aug 2, 2008 3:38 pm

Personally, I don't put much weight in those rankings (didn't even know we had that fancy WP letter!). I think we are often comparing apples to oranges. Many of the Jones clients are very small accounts, so they are thrilled to be given so much attention. If you compared similar account sizes, I would guess the rankings look very different (we would do better in the under $250K range, while other firms would do better in the larger account range).



I am curious, I have never really looked at the rankings, but do they differentiate between the RayJay advisor channel, and their indy channel?



Sooth, I have to tell you, I don't think there is a "talent drain". We continue to grow every year. We are (I think) over 12,000 advisors at this point. Every firm is going through the talent "turnstile". In my town, Merrill has lost two huge teams to MS, then one team left SB and WENT to Merrill, then a team left UBS and went to Merrill, then two guys left AGE and went to SB. We had one AGE guy open an office with us. It's crazy. This industry is becoming worse than Major League Baseball free-agency.

Aug 3, 2008 7:03 pm

Hey Sooth-
You forgot Jonesspeak-you just say "we've been ranked #1" by bla bla bla and use it over and over regardless of how outdated it is.

Aug 3, 2008 11:08 pm

We're #4, we're #4...another 10 points and we catch the big green machine!!!

 
At first blush, it looks like most firms are clustered pretty closely, although RayJay had a nice margin of victory.  I haven't paid much attention to this survey in the past, as I had doubts about how one firm kept consistently coming out on top and questioned the survey methodology.  Now that it appears the competition is pretty wide open, I'm curious as to how different the survey results are from previous years and why, although I'm not curious enough to do the necessary legwork.
Aug 4, 2008 11:47 am

I didn't know we had a letter like that either.  I can't say I've actually lost an account in the recent years that I didn't mind losing.  And I wouldn't send one anyway.  Once you've made a decision to move, a letter isn't going to change your mind. 

 
IMHO the RJ ranking could be compared to Barry Bond's HR record.  Put the number down with an .  In this case the * means - caution:  small sample size between 30 and 99.  So, they survey somewhere between 30 and 99 clients, call it a day and say RJ wins.  Good for you guys.  Congrats on the win!   
Aug 4, 2008 1:52 pm

Spiff, you're like the kid on the playground that keeps getting beat up by the bully for calling him fat, then keeps getting up off the ground and doing it again. 

 
I have no idea how this survey works, but I would say, that there are just as many "angles" that Jones gets going their way as do any other firm.  My personal opinion is that we fair so well in these surveys because so many of Jones' accounts are small, and we tend to service those clients (more than wirehouse firms in general).  However, if they did a survey of ONLY accounts over, say, $250K, I am willing to bet that the results might look a bit different.  When you are not getting service, you tend to rate every question poorly (in other words, if you haven't had a call from your advisor in 2 years, you probably don't care how great their "statements" are, and might not even realize that your investment returns have been better than the market, so you rate everything poorly - after all, how could it be that some firms rate great on everything or poorly on everything across the board??  I find it hard to believe that SB or MS are only average at everything, yet Jones and RJ are good or great at everything.  Doesn't make sense.).
 
My opinion is that at most firms, advisors are good to the clients that matter to them (and this is what we are all TAUGHT to do, the ole' 80/20 principle).  Because Jones' strategy has historically been focused on quantity rather than quality (IMHO), we probably have a higher % of "satisfied" clients versus some other firms.  So for example, a good Merrill rep might be very good and focused on his top 100-250 clients, but has 1,000 clients because of his years in the business.  At Jones, you might treat your top 500 clients the same way (but they are smaller accounts than at Merrill), so there is a better likelihood of "surveying" more happy Jones clients than Merrill clients.
 
I know I'm talking in circles, but my point is that you have to look at these surveys a bit more mechanically, and understand, that though the results may be fair, accurate, and impartial, they are only based on the sample you looked at.
Aug 4, 2008 3:08 pm

Hey, if I can't call the fat kid fat every once in a while after he's call me a nerd, then what fun is it? 



Sooth coming on here and equating a random survey in 2008 with a talent drain since 2003 was just retarded.  You know, never mind that the last three years JD Power did the survey Jones scored #1.  The talent drain FINALLY surfaces in 2008 when Jones comes in second.  And Jones actually gained points from last year's score.  Like I said, retarded.
 
This notion that there has been this massive talent drain in the last 5 years is, likewise, a stupid statement.  Has Jones had advisors go to RJ, LPL, et al?  Yep.  Have there been some good advisors leave?  Yep.  But we've also hired some great ones too.  In my own personal experience, Jones has lost more "talent" to the GP ranks at the home office than they have to RJ and LPL.  Take Todd Osterhage.  If you don't know him, he's the GP who tells us to hawk mortgages, credit cards, and other banking stuff.  He was an AWESOME retirment plan prospector and the seminar KING in the STL area.  Now, he's trying to get our BOAs to get clients to take credit cards.  That's a waste of talent if you ask me.  If there has been a talent drain at Jones, that's where it's been.    
Aug 4, 2008 3:16 pm

It's interesting that under the : "Financial Advisor" rating, only RJ & LPL rates 5 stars, as "Among the Best", whereas Jones rates 4 stars "Better than most"...

 
Maybe a new different slogan from now on: 
"At Edward Jones, our Financial Advisors are Better than most, but definitely not Among the Best like those FA's at RJ & LPL..."
 
Aug 4, 2008 6:51 pm
Spaceman Spiff:

 In my own personal experience, Jones has lost more "talent" to the GP ranks at the home office than they have to RJ and LPL.  Take Todd Osterhage.  If you don't know him, he's the GP who tells us to hawk mortgages, credit cards, and other banking stuff.  He was an AWESOME retirment plan prospector and the seminar KING in the STL area.  Now, he's trying to get our BOAs to get clients to take credit cards.  That's a waste of talent if you ask me.  If there has been a talent drain at Jones, that's where it's been.    

 
Yeah, I don't get this concept:  someone is a phenomeal salesman making the firm a ton of money...so let's take them out of the field and make them (basically) middle management.?Why not just give them more GP equity and keep them raking it in from their office??  You always get some more moderately paid but talented person to fill the staff roles.
Aug 4, 2008 7:40 pm
WestH:

It's interesting that under the : "Financial Advisor" rating, only RJ & LPL rates 5 stars, as "Among the Best", whereas Jones rates 4 stars "Better than most"...

 
Maybe a new different slogan from now on: 
"At Edward Jones, our Financial Advisors are Better than most, but definitely not Among the Best like those FA's at RJ & LPL..."
 
 
I love it!!!  When Jones is number one three years in a row..."JD Power is a mickey mouse operations"  ..."there rankings don't mean squat"....and lots more B.S.....As soon as we fall to number 2 (even though our score increased and still a fine ranking)...suddenly the rankings are very meaningful among the trolling, jones hating, donkeys on this thread!  PRICELESS...shows the true jealousy that is out there!
Aug 4, 2008 7:56 pm
Cowboy93:
Spaceman Spiff:

In my own personal experience, Jones has lost more "talent" to the GP ranks at the home office than they have to RJ and LPL. Take Todd Osterhage. If you don't know him, he's the GP who tells us to hawk mortgages, credit cards, and other banking stuff. He was an AWESOME retirment plan prospector and the seminar KING in the STL area. Now, he's trying to get our BOAs to get clients to take credit cards. That's a waste of talent if you ask me. If there has been a talent drain at Jones, that's where it's been.



Yeah, I don't get this concept: someone is a phenomeal salesman making the firm a ton of money...so let's take them out of the field and make them (basically) middle management.?Why not just give them more GP equity and keep them raking it in from their office?? You always get some more moderately paid but talented person to fill the staff roles.





I always wonder about this myself. But to be honest, it happens in many. many businesses. In my last career, my company would regularly take top-producing salesmen and make them sales managers. Sitting around writing reports, meeting with upper management, and getting the scoop on what's going on with their underperforming sales team. I always said - pay them more and let them keep selling! You could add 50K to their salary and they will be bringing in 1mm more than than the guy you would get to replace him.



I think at Jones, it stems from a few things; (1) some people are wired to be performers and leaders. So some of those top-producing FA's can actually be great leaders - and want to be (most had past careers), (2) I am sure they are incented enough to become GP's, (3) from Jones' perspective, they have had these guys build huge books, and are not going to grow them much more (if you have a $150mm book and are doing $1mm gross, you are not going to grow too much from there), so split it into a few offices and let the new guys grow 2 or 3 $50mm books to $100mm. That actually makes good business sense, (4) some current GP's were just burned out of the FA life - not everyone loves it.



I have to tell you, I think the last thing I would ever do is give up an easy 250-500K paycheck (well, not THAT easy) to move to STL and have 7 bosses above me.



Spiff, any idea what financial deal is for an FA to go to STl and become a GP (and give up a big book)? I assume it involves some sort of big buyout of their book to do it (replaced with GP shares or something)....

Aug 4, 2008 8:07 pm
Hey Kool-Aid:
 
I love it!!!  When Jones is number one three years in a row..."JD Power is a mickey mouse operations"  ..."there rankings don't mean squat"....and lots more B.S.....As soon as we fall to number 2 (even though our score increased and still a fine ranking)...suddenly the rankings are very meaningful among the trolling, jones hating, donkeys on this thread!  PRICELESS...shows the true jealousy that is out there!



That works both ways you know....and I am neither pro- or anti- Jones but I am able to see both sides.

Aug 5, 2008 9:58 am

J.D. Power - just getting in on the firm J.D. Power. This firm is commissioned by so many industries that frankly I would suggest that they are not unbiased in their rankings. Have you ever noticed they rank ie. Airlines and Auto Sector. Amazes me how each time the particular company gets some ( nominal ) J.D. Power Award for as an example - The Best On Time Performance for an Airline. Read the fine print ....for an airline that has it head office located in a city under 500,000 people or for the Auto Sector ....for individuals under the age of 65 that have retired from Government Employment. Pay or commission J.D. Power and I will bet any firm/company will WIN some sort of award even if they have to invent a category.

Aug 5, 2008 10:18 am

Here your Award Ice.....Best Under 30 Year Old Realtor that had Parents Investing In Commercial & Residental Properties. Enjoy and get the Award on the Trophy Case

Aug 5, 2008 11:47 am
B24:
Cowboy93:
Spaceman Spiff:

 In my own personal experience, Jones has lost more "talent" to the GP ranks at the home office than they have to RJ and LPL.  Take Todd Osterhage.  If you don't know him, he's the GP who tells us to hawk mortgages, credit cards, and other banking stuff.  He was an AWESOME retirment plan prospector and the seminar KING in the STL area.  Now, he's trying to get our BOAs to get clients to take credit cards.  That's a waste of talent if you ask me.  If there has been a talent drain at Jones, that's where it's been.    

 

Yeah, I don't get this concept:  someone is a phenomeal salesman making the firm a ton of money...so let's take them out of the field and make them (basically) middle management.?Why not just give them more GP equity and keep them raking it in from their office??  You always get some more moderately paid but talented person to fill the staff roles.



Spiff, any idea what financial deal is for an FA to go to STl and become a GP (and give up a big book)? I assume it involves some sort of big buyout of their book to do it (replaced with GP shares or something)....

 
As far as I know they don't get a buyout of their book.  A lot of them take a HUGE paycut for a few years to move to STL and do the GP thing.  They get paid a meager salary - $120K or so if I remember right, plus whatever the GP pays out.  Of course it's not typically paid off immediately.  Once it is paid off, that's when they start making the money they are so famous for. 
 
When I was still in the home office we used to get new GPs from the field frequently.  I asked one of them once why in the world they left the goldmine to come to STL.  She said that for her it was about the challenge.  She knew that she could make a lot of money running her office.  She knew that she could do that job.  But she was getting burned out doing it.  You know you can only have the same conversation so many times before it becomes flippant and boring.  So, the move to be GP was a new challenge for her.  It wasn't about the money initially.  They probably all have different reasons for the move. 
 
One reason they come into the home office is just simply for the opportunity to add those letters to their name.  In the field, you can only be a GP if you are already a RL.  There can only be one RL per region.  So if you are a top producer, but not the RL, then a GP in STL may be your only ticket to those letters.  Thus the talent drain that I mentioned before.    
Aug 5, 2008 1:05 pm

Ice .....EVERYBODY gets a J.D. Power Award Take a picture with the Award and use for upcoming seminars in the local paper. Enjoy and  now you can say you rate with the Big Boys. See how easy we can get everyone happy?????

Aug 6, 2008 9:17 pm

I'm not sure how you go from trying to discredit JD Powers to a talent drain at Jones but hey who says you need logic to be a lifer at Jones.