EDJ...30 months out and wanting out
I took over an office...of course I am the 5th broker in 7 years. I am doing okay but they are adding two new offices in my area...I am very tired of trying to bring in new business. I know they say you can make a lot of money..since my salary has been gone my checks are very small most months. Even the good months are small by the time everything comes out of them. I am above standard The networking piece is okay BUT the door knocking sucks!!! I actually hate door knocking on residential. (small buiness owners are great, most of them are chamber members.)...I have 2 questions
1. How much if I switch to a bank or another firm would I owe EDJ? (can't find my origianal contract) 2. Is there any way to have a salary and some commision? What options are there for me?I’m not an EDJ employee although I did at one point go through their interview process and recall the fact that a) there is no non-compete and b) there is a three-year period before which you will owe the firm ‘training costs.’ They’re coming after a friend of mine for 75k who took his licenses elsewhere. Since you’re only six months away, why not take that issue off the table by waiting six more months. Having done the work of a full service environment, I would not move that book into a bank. Depending on your assets brought in and in the office you inherited, you may have a good situation at a wire which would provide a two-year base. Or just go indie and bump up your payout. No door knocking at a bank but much more restrictive environment.
I asked a similar question – what options are there – in a post a couple of weeks ago. ‘What Else is there’ was the topic. It got some good responses.
As for question No. 1, it is probably best to ask an attorney. I think – I think – you are off the hook for training costs after three years.
Yur friend who left that is looking at 75k how many months out was he? Thanks I will look at the "what else is there" thread..
I am just tried of a lot of things at jones...most of all the good old boys club.With just 6 months to go, you could probably negotiate it down. When you get the attorney’s paperwork from them, make sure your attorney answers it. It will probably be like 15-25K. They can probably negotiate it down to like 5-7K. Hopefully your new BD will pick that up (you shoudl negotiate that into new contract).
FYI - you’re still going to need to prospect. The bank is no Golden Goose. Even Top Producers still prospect. You don’t have to doorknock, there are many other ways to do it. But it sounds like you haven’t developed those other processes yet (seminars, networking, referrals, etc.).
I have been doing seminars and have been very sucessful with networking. I just can not stand door knocking…My numbers are fine according to their standards. It just when your town has been door knocked by 4 other brockers it is not very effective…My referrals are starting, I feel if the market was to turn around this would also help…it has been a rough 18 months. I have just had my two best month ever…Starting at zero every month …actually I start in the hole ever month, because of office expenses and postage, this is really hard to take.
I understand that when you make more money your expenses do not go up as much as the money you make. When you are new the percentage of what you make each month that goes to expenses is really high.My friend quite after 7 months in. He left because they were jerking him around on getting his office even though he hit the required numbers to do so. A partner in a nearby branch objected to the location or had some other conflict. I don’t believe your contract states that the 75k decreases proportional to your time served; it may be 3 years or nothing, so why not just wait it out. That said, I don’t know a single person who has ever paid up to EDJ, and a couple who haven’t even been asked to after leaving despite an affiliation with a subsequent firm.
My friend quite after 7 months in. He left because they were jerking him around on getting his office even though he hit the required numbers to do so. A partner in a nearby branch objected to the location or had some other conflict. I don’t believe your contract states that the 75k decreases proportional to your time served; it may be 3 years or nothing, so why not just wait it out. That said, I don’t know a single person who has ever paid up to EDJ, and a couple who haven’t even been asked to after leaving despite an affiliation with a subsequent firm.
X, your facts are actually off a bit. Plenty of people get the attorney letter. Many pay up. Most negotiate it down. And the contract does pro-rate the amount owed.
[quote=monopolybet]I have been doing seminars and have been very sucessful with networking. I just can not stand door knocking…My numbers are fine according to their standards. It just when your town has been door knocked by 4 other brockers it is not very effective…My referrals are starting, I feel if the market was to turn around this would also help…it has been a rough 18 months. I have just had my two best month ever…Starting at zero every month …actually I start in the hole ever month, because of office expenses and postage, this is really hard to take.
I understand that when you make more money your expenses do not go up as much as the money you make. When you are new the percentage of what you make each month that goes to expenses is really high.[/quote] I feel ZERO pity for you on the doorknocking thing. Within a 1-1.5 mile radius of my office are 12 EDJ FAs. 6 of them have been out under two years and are doorknocking. That doesn't count the other 6 who have been through here in the last several years. If you don't like doorknocking residentials, figure something else out. BTW, moving to a different firm or a bank is a short term fix. And your thought process on the market going up tells me you don't understand this business at all. If there was ever a time to suck it up and go ring your neighbor's doorbell its right now. Stop reading this, grab your notbook and go ring the doorbells. People are hungry for information. Willing to talk to you. The longer this market stays down, the better for you. If you don't want to doorknock, do a ton more seminars. One a week. They don't have to be big and fancy, just somewhere that people can go to hear what's going on in this market. If you haven't found the Outlook and Opportunities seminar and presented it to your clients and their friends yet, do it now. You are three years out. Your paychecks aren't supposed to be big yet. If you didn't understand that going in, then you either didn't do your homework or you only heard what you wanted to hear from the recruiter. It SUCKS building a business. Any business. So quit whining and get back to work.Geeze, GREAT POST SPIFF! Goodluck Monopoly, I think the 7/11 by my house may be hiring.
That was a great post, Spiff. Well done.
Thanks spiff…I will give it another try…to get out there more, and less in front of the desk…as far as the better market…is not so much for new people, but people who (especially new people under 25 k put in an A shares) whose accounts have done nothing but go down…takes a while to figure out that you won’t get hit by a car when you cross the road if you offer a b or c share option on small amounts!!! Just realizing that the people you invested in the market, could have been a little more defensive in the portfolio…knowing as a newbie you do not know it all…It keeps me up at night…sorry I sounded so lazy…mostly I am afraid of making a mistake…I really want to do my job well. I guess I am just frustrated and very discouraged. I did not know how hard this job is and trying to provided for a family and another baby on the way!!
Spiff is right short term, wrong long term. Right that you do have to suck it up and do a very hard job. Wrong in that I’ve seen many bright, hard-working, decent people wash out at Jones – so what they’re doing to develop their advisors doesn’t seem to be working. You don’t see this in other industries. Even military boot camp instructors do a better job getting their trainees into the field.
You're right. We don't know how to do anything right. We don't know how to recruit, hire, and train anyone to be successful. Nobody ever makes it at Jones. The good ones all leave and go independant. The bad ones stick around and sip the kool aid all day long. We suck. Spears is right. I'm leaving. I think I'll go join Primerica.Spiff is right short term, wrong long term. Right that you do have to suck it up and do a very hard job. Wrong in that I’ve seen many bright, hard-working, decent people wash out at Jones – so what they’re doing to develop their advisors doesn’t seem to be working. You don’t see this in other industries. Even military boot camp instructors do a better job getting their trainees into the field.
ej is about to see the biggest departure rate ever seen in this environment. the transactional broker will starve. noone wants to invest so the commission broker is done.
It took you long enough to admit it spiff. I, however, would suggest a smooth transition for you to “AMWAY”…good luck and good selling.
?? EZ, were you aware that we have grown 9%+ this year? When is this "departure" anticipated?ej is about to see the biggest departure rate ever seen in this environment. the transactional broker will starve. noone wants to invest so the commission broker is done.
And on the “commissioned broker is done” thing…
I personally dislike the commission model. But to be honest, I don't think it will EVER be dead. There are many, many, many people out there adamantly opposed to paying fees. Now, for people that want a true "advisory" relationship where they are actually getting something for their fees - yes. But not all clients want or need that. And one thing that will prevent this from happening - there are probably as many CPA's that support the commissioned model as not (and that oppose fees). And as we all know, CPA's are the "respected voice of reason" for many clients.So, if transactional brokerage is done, why are my clients buying all these great muni bonds this week? Oh yeah, because I'm calling them to tell them to buy them. I'm creating transactions. Hmmm...doesn't sound like starving to me. And we haven't even mentioned the stocks my clients are buying. No one wants to invest? Really? Buffet must be a complete idiot. And my clients who are following his advice seem to be bringing serious money to the table. But, in case you're right, since you so often are, I'll brush off my resume. Maybe I can use spears as a referral on my Amway resume. Or maybe he can just sign me up under himself.ej is about to see the biggest departure rate ever seen in this environment. the transactional broker will starve. noone wants to invest so the commission broker is done.
Spiff I think you misunderstand. I think Jones is a great firm. … But if you look at the original post – five brokers in seven years – you can see where the growth model has its flaws. I’m sure someone will eventually take over this particular office and make it work. When that day comes, I hope he’ll light a candle for the five carcasses in his storage room.
I know they are trying to change -- fewer trunk of the car starts, more Goodknights, but they still don't develop their human capital the way other businesses do. (I know this is an industry-wide situation.)You’re reaching, buyandhold. Go back to work.
BH,
I think the turnover has nothing to do with commission vs. fees. I doubt that if each of those brokers used fees , they would have survived.[quote=Spaceman Spiff]
So, if transactional brokerage is done, why are my clients buying all these great muni bonds this week? Oh yeah, because I'm calling them to tell them to buy them.[/quote]
Do you ask them if they believe interest rates will be going up from here, as part of the sure to come inflation?
No, I ask them when in history the spread between munis and treasuries has been so high. They scratch their heads. I tell them never. We buy the bonds.
You're comfortable PREDICTING inflation rates? You're more of a man than I am. I can't even predict what I'm going to wear tomorrow, much less where inflation is going.Heh. Might as well plan tomorrow’s wardrobe, the country is so frozen and mortified right now.
Well the world population is going from six billion to nine billion in under fourty years, so inflation looks inevitable. Some real men are throwing money into KOL right now, you've got enough munis, dude.[quote=Spaceman Spiff]No, I ask them when in history the spread between
munis and treasuries has been so high. They scratch their
heads. I tell them never. We buy the bonds.
The current government has promised billions of new dollars coming into the economy. The current leader in the presidential polls has promised to add anohter trillion.
When government does that it's going to be inflationary. What happened to interest rates from 1977 to 1981?
What happened to the value of bond portfolios during those years?
Why not stay in cash for two to three years while you wait to see what happens.............oh wait, I know. Investors would object to paying you 200 basis points for your advice when that advice was to stay in cash.
A cynic would conclude that financial "advisors" would rather offer bad advice than good advice as long as they get their fee.
Do you guys ever think that the right thing to do is go to cash and wait for two or three years?
Putz, I cannot believe that even you would be such a wuss as to wait in cash for two or three years. Dude, keep your spending in cash but for **** follow your own advice about inflation. Cut the crap, options other than for specific protection and anything other than core bonds is wussy BS. Stay invested in blue chips.
Mark my words, if you are bored and tired of smelling your own *****, start paying attention to ETFs like KOL. Be a man, old man.I had a client ask me today about my fee. Seems he is down 8.5% ytd and wanted to know why he is paying me 1.25%. I reminded him that his Vangaurd fund is down 32% ytd, he wasn’t paying me for the 8.5% he lost, he was paying me for the 23.5% he didn’t lose. ACAT signed, now I have all of his money. The fees are for advice, which transactional brokers have a hard time understanding. If that advice is to go to cash or bonds, so be it. Of course, he didn’t have to pay commissions on any changes when we went to bonds back in January, as he would have in a brokerage account.
[quote=Getthere]
Putz, I cannot believe that even you would be such a wuss as to wait in
cash for two or three years. Dude, keep your spending in cash but for
**** follow your own advice about inflation. Cut the crap, options
other than for specific protection and anything other than
core bonds is wussy BS. Stay invested in blue chips.
[/quote]
KIds, the deal in being a financial advisor is to make money for the client--not 100 to 200 bps for you.
It is probable that the market will trade within a narrow range for the next ten years as the mortgage crisis unwinds, we deal with a deep recession coupled with the inflationary pressures that build when the Treasury prints money or borrows money.
It appears that the Treasury is going to be borrowing huge--as in HUGE--sums of money in the coming years. All that borrowing is going to force corporations and municipalities to pay higher and higher rates in order to attract investors.
Corporations paying higher rates does no favors for bond prices, nor for stock prices.
In light of my belief that the market will go nowhere for ten years or so I see no reason to run the risk of the stock market which will almost certainly be flat for a decade when a flat return can also be generated by putting your money in an insured bank account.
I understand that this drives financial "advisors" crazy because you have to offer advice, even if it's terrible advice, in order to justify your pound of flesh.
I have argued against the AUM concept since it first raised its ugly head and I see the coming year to two years as a chance to bury the idea on the trash heap of history.
Considering how little most "financial advisors" actually do getting a base salary and a chance to earn a bonus is more than fair.
KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[quote=Primo]KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[/quote]
I am not suggesting that you work for free.
What I am suggesting is that you work for a reasonable base salary and a shot at a bonus pool based on the profitability of your cost center.
Oh, where a little statment can lead. I think the reason so many edj brokers leave is they are not making it financially...I came in with a years worth of extra money to help me get through...I say it is way more then the money. The new broker is out on his own.. at the beginning.he does know the difference between a roth and a trad, a fixed or a variable annuity let alone how to use a portfolio system that does not even know which mutual fund is which. (have you tried to rebalance a por folio lately?...it takes 2 years to know to use another system like instant xray...to understand what you should be doing...then you ad a crazy market. There is very little help because the guy who recruited you is out of the country on the diversification trip you won for them by blindly following them.. thinking this was an easy job,,just go and and knock a few doors till you find some one who knows less then you do!!" I quess I am saying I am over my head!!! I do not know what to do!!! I owe them for the training that I never got, or how to really make it in this business, how to really be a financial advisor....
Maybe I can go back out and knock a few doors and NOT talk about financials......(now I feel a little better!!)I MUST be going crazy I have read all your post for the last 3 years…It is kinda fun to jump in a get you all engage in my life at jones!!! gotta love it!! This is more fun then watching uptick live!!!
[quote=Provocative Put] [quote=Primo]KIds, the deal in being a financial advisor is to make money for the client–not 100 to 200 bps for you.
You work for free Put? I have no problem justifying me fee. The market is down 27% since 01/01/2007. The vast majority of my clients are still in the black. The flaw in your thinking is that everyone who charges fees puts clients into an asset allocation fund and simply adds the vig. What you are missing is that some advisors actually provide advice, and their clients are better off for it.[/quote]
I am not suggesting that you work for free.
What I am suggesting is that you work for a reasonable base salary and a shot at a bonus pool based on the profitability of your cost center.
[/quote] So this is how you are paid?
[quote=Provocative Put]What I am suggesting is that you work for a reasonable base salary and
a shot at a bonus pool based on the profitability of your cost center.
[/quote]
Cost centers by definition are not intended to make a profit. Otherwise they would be called "Profit Centers."
Regardless, if you were to base an FA’s bonus on the profitability of his profit center, how would that significantly reduce his incentive to charge what you deem to be a high fee, if that helped lead to higher profits for his profit center?
This seems to be a solution in search of a problem.
[quote=Morphius]
Regardless, if you were to base an FA’s bonus
on the profitability of his profit center, how would that significantly
reduce his incentive to charge what you deem to be a high fee, if that
helped lead to higher profits for his profit center?
[/quote]
How about this idea. The only fees the client pays are to the mutual funds and other packaged products that they buy.
Your profit center gets credit for a sales charge when a product is bought and also gets credit for any trails that follow.
Surely you’re not going to say that the quality of your advice depends on how much you’re going to be paid. Are you?
[quote=Provocative Put]
How about this idea. The only fees the client pays are to the mutual funds and other packaged products that they buy.
Your profit center gets credit for a sales charge when a product is bought and also gets credit for any trails that follow.
[/quote]
So your plan is for the mutual fund house to be paid, but not the advisor, since 12b-1 fees are simply for marketing expenses.
And who, exactly, do you expect to do this work for free? The brokerage firm or the advisor?
I would also like an answer to my question. How are you paid Put? Although I doubt you would be so brave as to answer a direct question with a direct answer. My form of compensation may be disliked by some, but at least I do not make holier than thou comments without the ability to back them up and offer an alternative.
monopolybet,
How did you win a trip for someone? A hire is one tick on a checklist of requirements. The reality is that you “probably” cost other FA’s time and production. Try a bit of personal responsibility. Blaming a lack of success on someone else for helping you, just not as much as you wanted, is lame at best. Pffft. This gets old.
monopolybet,
Ok, I watch these forums and am rarely inspired to respond to things said here, but I feel compelled by some of things things being said. Monopolybet, this business is very hard. Starting any business is grueling work that can tear your guts out when things don't go well. This is why most small businesses fail. This is nothing to be ashamed of. Most very successful people have failed multiple times. The people on this forum that act like they have never failed is surprising. Who here has not failed at something in their lives? If you haven't your either lying or just plain lucky. However, I also agree with ytrewq in that you cannot blame other people for your failure. You have to learn from it and make yourself better. You have to regain your resolve, fix your mistakes, and get back to work. EDJ is what it is, there will always be excuses. You have survived in this business longer than a lot of people and you should reflect, learn, stop worrying about failure (and Edward Jones), and start planning how to make yourself more successful.
[quote=monopolybet]
Oh, where a little statment can lead. I think the reason so many edj brokers leave is they are not making it financially...I came in with a years worth of extra money to help me get through...I say it is way more then the money. The new broker is out on his own.. at the beginning.he does know the difference between a roth and a trad, a fixed or a variable annuity let alone how to use a portfolio system that does not even know which mutual fund is which. (have you tried to rebalance a por folio lately?...it takes 2 years to know to use another system like instant xray...to understand what you should be doing...then you ad a crazy market. There is very little help because the guy who recruited you is out of the country on the diversification trip you won for them by blindly following them.. thinking this was an easy job,,just go and and knock a few doors till you find some one who knows less then you do!!" I quess I am saying I am over my head!!! I do not know what to do!!! I owe them for the training that I never got, or how to really make it in this business, how to really be a financial advisor....
Maybe I can go back out and knock a few doors and NOT talk about financials......(now I feel a little better!!)[/quote] First, let me say that I believe EDJ does a horrible job teaching advisors how to properly build portfolios. As far as I know, there isn't a training class that teaches you what a non correlating asset is and why you should use it. Jones is pretty happy for all new advisors to take one of the "model portfolios" from one of the vendors and have you use that all day long. That's why every wholesaler out there has his/her four pack or Checks & Balances type of a presentation. It's simple for the advisor to understand, simple to pass on to clients in a quick meeting and not a lot of moving parts. So, Jones, being the simple company that they have been in their history, likes to keep it this way. So, the more I kept losing accounts to guys at Morgan, or ugh, Amex because they'd show my clients X-Ray or some other version of that, the more I realized that I was woefully unprepared to do battle with those guys. I could have no more explained alpha or std dev than the man in the moon. But, I felt it was important to me and my clients to understand those concepts, so I called on a few vets in my region, bought them lunch, and had them teach me how to use something like X-Ray to build a portfolio. Then, I called my Goldman wholesaler and had him explain it to me again. Then I called Scott Thoma (who now runs Advisory Solutions) and had several conversations with him. All of that led me to several conclusions. First, if I ever get to be a GP I want to create a training program for all of those people out there like me who really want to understand what they're doing. Second, I don't want to be an analyst. While I enjoy the numbers, I just don't have the time or energy to put that much work into it. If I'm going to keep advising I'd rather get my CFP than my CFA. Third, my portfolios were horrible. I love American Funds, but you just can't build a solid portfolio using one fund family. Not to withstand a time like this. Fourth, once Advisory Solutions came out, if I could pass off the day to day management to a program like that my clients will be better off for it in the long run. It takes hours to properly work through the FAST tools and get everything the right way. If I can build a business going forward around a fee based platform that where I don't have to worry so much about paying the bills, perhaps my clients will get the attention they deserve. New client acquisition becomes a function of wanting to grow my paycheck, not create one for this month. My mentor can't help me do that. Home office can't do it for me either. It's up to me. I can do it at Jones or I can do it at LPL or MER or the bank. But I still have to do it.[quote=monopolybet]
Oh, where a little statment can lead. I think the reason so many edj brokers leave is they are not making it financially...I came in with a years worth of extra money to help me get through...I say it is way more then the money. The new broker is out on his own.. at the beginning.he does know the difference between a roth and a trad, a fixed or a variable annuity let alone how to use a portfolio system that does not even know which mutual fund is which. (have you tried to rebalance a por folio lately?...it takes 2 years to know to use another system like instant xray...to understand what you should be doing...then you ad a crazy market. There is very little help because the guy who recruited you is out of the country on the diversification trip you won for them by blindly following them.. thinking this was an easy job,,just go and and knock a few doors till you find some one who knows less then you do!!" I quess I am saying I am over my head!!! I do not know what to do!!! I owe them for the training that I never got, or how to really make it in this business, how to really be a financial advisor....
Maybe I can go back out and knock a few doors and NOT talk about financials......(now I feel a little better!!)[/quote] Hey Sunshine, you're obviously not cut out for this business. You should cut your losses and go work for a salary somewhere. You think independants have it any better? You think LPL or RayJay is holding FA's hands through this? You think Merrill or SB is letting their FA's cry on their shoulders? Pull up your bootstraps Boy and toughen up. Nobody said your BD was going to feed you leads, or walk you through each appointment, or help you cold call or cold walk. Don't try to divert the topic by talking about some stupid trip that your recruiter is on. He earned it by his own hard work, not from recruiting your sorry a$$. And we all went through the training, so we know that's also a bull$hit argument. Personally, I don't expect much from Jones. I expect my computer to work, my phone to work, and to be able to enter trades. Everything else is on me. Face it, whether you get a W2 or K1 income doesn't really matter. It's YOUR business. That's how it is in almost all sales professions. Build it or lose it. There's more than enough resources online, in books, and through other veterans. If you expect your BD to teach you everything there is to know about selling, and every possible method of prospecting, you're going to fail. And to be honest, Jones has far more resources for this than I would even expect. And if you can't figure out how to use Portfolio or Morningstar or Sungard, then you are just a dumba$$. Good luck.“I love American Funds, but you just can’t build a solid portfolio using one fund family. Not to withstand a time like this.”
Spiff, just a sidenote - nobody builds portfolios to withstand a time like this. Even the non-correlating assets have declined considerably. Unless you somehow knew this was all going to happen, and you managed to get everything into cash or international bonds BEFORE the meltdown, you were SOL. In a "traditional" bear market, AMF does very well, as would many other balanced protfolios, multiple fund families or not. You can't really build a portfolio that will preapre you for a state of de-leveraging where supply far outstrips demand in nearly all asset classes. Personally, I think Jones' problem is that they do TOO MUCH hand-holding - to the extent that FA's rely almost exclusively on them for all of their information and training. That's a big mistake. I spend probably 1-2 hours every night after everyone goes to bed just reading and researching the industry - investment theory, asset allocation, economic theory, practice management, client acquisition, you name it. No one firm has the market on all good ideas (sound familiar?). It's important in this business to think for yourself and develop your own ideas and your own personal "brand" or identity - not just be a kool-aide drinker. I like the firm, but it by no means defines me. Sorry, I digressed a bit.[quote=iceco1d]
By the way Putsy - Primo and I are still patiently waiting for responses to our questions...or are you just going to take your 37 years of experience and bail to a new thread each time someone paints you into a corner?[/quote]
It is not possible for me to be painted into a corner. The only question that I can recall ignoring was the idiotic one asking me how I am paid.
I have been explaining, on this forum, that I am living on a six figure wirehouse pension. However, if I were an advisor I would resign rather than engage in the fraud that involves raping clients for 100 to 200 bps because nobody is worth that much for doing virually nothing that an adult of average intelligence could not do for themselves.
In short, I believe that the business model in use today is fraud. I argued that when I was in a position to be heard but was overruled. Part of my argument was that the law suits will come out of the woodwork when the market declines.
I believe that more than ever right now. I suggest that all over the country there are plaintiff attorneys licking their chops. It is almost impossible to justify the fee structure, and now that arbitration panels are no longer required to have industry representation there won't be voices to try to represent your point of view.
I have been explaining, on this forum, that I am living on a six figure wirehouse pension.
Consider taking some math classes at the local junior college. You accuse the fee-only model of rape at 1%, which is a gross charge before expenses. Along with ETFs, you are looking at something like 1.25% - 1.5% total asset management costs to the client. Your little six-figure pension cost more than that to the clients, old mother hen Putz. So far, you've made anecdotal claims to superior portfolio management (beating the market over a long period of time) which we all know is probably bs. Certainly not a sustainable model for an industry of retail advisors. You kind of remind me of the six figure retired school principal client I have who doesn't mind paying his taxes. You're both socialists (witness your proposal for a base and bonus arrangement for the wirehouses which continues to reward management and the ivory tower) - except he doesn't whine - he's grateful. You can't handle the free market finally aligning best interests and best practices for both client and advisor. I was posting here two years ago about this topic - with regards to industry ethics, I can't believe it is finally happening. This is a pretty boring business, but the pace of change is exciting! It's more fun to go with the flow.[quote=Getthere]
Your little six-figure pension cost more than that to the clients[/quote]
Nonsense. My pension is the result of more than thirty years of service to the employer. When I was asked to do something I did it, and did it well. As a result my annual compensation increased and along with that so did my retirement benefits.
My former clients are not paying my pension, nor are anyhbody else's current clients. Retail clients do not generate enough to cover the cost of running a retail effort--there is not a major firm that would not be delighted to do away with retail brokerage.
What is fraud is the idea that a salesman who just happned to be there when a client made a decision should be entitled to an ongoing share of that client's account. Would you think it fair if you had to pay an annual fee of 1.5% of your home's value to the real estate agent whose sign happened to be in the yard when you saw the house?
I suspect you're thinking, "Hell no, I paid that comission when I bought the house."
Well, I feel the same way about clients and their investments. They should pay a sales charge when they buy whatever they buy, and they should pay a sales charge if they add to that investment.
If what an "advisor" does is truly valuable let the funds that the "advisor" rearranges from time to time surrender part of their management fee to the "advisor." It's fraudulent for the fund to charge a management fee and the "advisor" to also stick their hands into the honey pot.
As I've said, I have been instrumental in the employment of thousands of registered people. If I were to make a list of those who were more than sales people who think of this as a "good gig" instead of a profession it would not fill a single page.
Sales people should be paid for making the sale--anything that skews that into something else is going to be thought of as fraud by those whose assets declined because their "advisor" had no idea what to do.
If you were a client who was down $100,000 and an attorney says to you, "If you want I'll sue them for you. If you don't win all you'll have to pay me is a few dollars for copies but nothing for my time. However, if you win I wll take 1/3rd of what you win as my fee.
In short you have nothing to lose and everything to gain. What do you say?"
Very few clients will not say, "Let's go for it." They, the client, don't see it as suing you--they're suing your employer or your insurance company. They'll even tell you that it's nothing personal, but they have to be made whole and this gives them a chance.
The attorney will sue for millions in an attempt to settle for hundreds of thousands. When you get the suit you'll read it and not even recognize what they're talking about. You're going to be portrayed as a soldier in an organized crime family--your boss will be a Godfather type and your compliance department will be described as Keystone Cops who were asleep at the switch.
And it will all be because of the entry on the client's statement making bad into worse. You might have avoided it if you had settled for a sales charge when you sold the investments--but that's expected. Nobody thinks they can't lose in the market--but what frosts their arse is the greed of taking a fee for poor or no advice.
I know what I'm talking about--most of you will come to learn it in the next few months.
I know what I’m talking about–most of you will come to learn it in the next few months.
[quote=Getthere]
What I am, Ferris, is the voice of reality. I am speakinig for your clients. The Dows off another 400 points right now.
Do you actually believe that your clients are not thinking about what they can do to get their money back?
Can you imagine what a fool you will appear to be when you're taking the stand to explain your educational background and your investment expertise?
Do you disagree with me--do you think clients are not considering paying an attorney 1/3 in order to get back twice what they lost?
Just becasue there hasn't been a bear market for a generation does not mean that the plaintiff's bar has not been waiting for this opportunity.
If that's discouraging to you, suck it up man. Deal with it.
[quote=iceco1d][quote=B24]“I love American Funds, but you just can’t build a solid portfolio using one fund family. Not to withstand a time like this.”
Spiff, just a sidenote - nobody builds portfolios to withstand a time like this. I disagree. Maybe nobody builds portfolios to produce stellar returns in a time like this, but you can certainly build a portfolio to nicely "withstand" a time like this. ICE, I would love to see it. Not some back-tested portfolio you came up with after the fact. And I am not including income base guarantees on VA's or fixed annuities. I am talking account values (of VA's) and real portfolios. Stocks, bonds, funds, cash, alternatives, etc. A portfolio that was established BEFORE the meltdown. And what would your definition of "withstand" be? A gain? A "small" loss? I am not criticizing our doubting. I am genuinely curious. Even the non-correlating assets have declined considerably. Unless you somehow knew this was all going to happen, and you managed to get everything into cash or international bonds BEFORE the meltdown, you were SOL. In a "traditional" bear market, AMF does very well, as would many other balanced protfolios, multiple fund families or not. I also disagree with Spiff, in that you cannot build a decent portfolio from one fund family. Maybe most, but certainly not all. You can't really build a portfolio that will preapre you for a state of de-leveraging where supply far outstrips demand in nearly all asset classes. Personally, I think Jones' problem is that they do TOO MUCH hand-holding - to the extent that FA's rely almost exclusively on them for all of their information and training. That's a big mistake. I spend probably 1-2 hours every night after everyone goes to bed just reading and researching the industry - investment theory, asset allocation, economic theory, practice management, client acquisition, you name it. No one firm has the market on all good ideas (sound familiar?). It's important in this business to think for yourself and develop your own ideas and your own personal "brand" or identity - not just be a kool-aide drinker. I like the firm, but it by no means defines me. Sorry, I digressed a bit.[/quote] By the way Putsy - Primo and I are still patiently waiting for responses to our questions...or are you just going to take your 37 years of experience and bail to a new thread each time someone paints you into a corner?[/quote][quote=Ferris Bueller]
So I ask you once more, why are you here?[/quote]
Because I can discuss the industry better than anybody else who is here.
If you don't like what I have to say just ignore me. It won't hurt my feelings if the resident moron chooses to ignore me.
Old Mother Putz:
Some of us have been through a down market before, have even dealt with complaints at a b/d after a down market. In fact, that's about the time wrap accounts came around - and what complainers could go after, if the risk tolerance and suitability had been properly documented - was stuff like B shares. It's true, oversight on the wraps has been tightening, hopefully in time to justify the fees some advisors have been charging. Duh. Here is why I think you're a dumb**** hypocrite: you got yours, and now you're sniping from the woods. You're too dumb to know where your pension comes from (or don't want to admit it), and you were too dumb to win the arguement about wrap accounts at your old brokerage. You were too dumb to use the example of Scottrade or e-Trade options trading examples before, and did not mention things likes retail wirehouse costs for such trades, and the fact that these strategies are mainly entertainment for the old and often liberal and wealthy clients who want a lot of touch - like Bond Guy's clients, maybe. And you're too dumb to sit here and try to intimidate experienced professionals (more like the newbies) with you BS. I'm back to my original theory: you learned enough at online forums to BS your way in here. You managed to BS Bond Guy into thinking you're a retired industry veteran. You're too dumb to understand this business, you're an advisor wannabee. Go back to your Yahoo forum, Old Mother Hen Putz.B24- I guess my point wasn’t made very well. Jones spends a lot of time and money teaching new FAs how to ring doorbells and make phone calls. They teach them how to use the ICA guide. They teach them the difference between investments, but not how to use them. At least when I was teaching KYC/EG/PDP we didn’t teach those skills. I know that Jones doesn’t really want to have a bunch of CFAs running around with their pocket protectors and their financial calculators, but a little bit of knowledge goes a long way. Who taught you how to structure a portfolio? Was it Jones? Or did you have to figure it out yourself? Jones does a great job of teaching us HOW to sell WHAT we sell. They don’t do a great job of teaching us WHY to sell WHAT we sell.
Ice - My blanket statement of not being able to build a quality portfolio from one fund family was a bit over exaggerated. You certainly can. However, clients will typically be better off in the long run if you open up the options beyond any one fund family.[quote=Ferris Bueller]
He's real. Here's where he fails. He comes here to say he told us so. To tell us that we are going to be in trouble. He comes here to gloat, but he never offers any advice or any help so we can better our situations. He mistakes our dislike of him for us not wanting to hear the truth. We understand our situation better than most, but unless there is something we can do about it, his bs is just that... bs.[/quote]
To an extent that is somewhat accurate. When I was around here eighteen months ago you, and your ilk, were:
1. Sneering about how stupid your clients were to trust you with their money, but that since the market only goes up there was no end to the gravy train.
2. Laughing about how being a high school drop out did not prevent you from making it into a business that is widely thought to only employ college educated professionals.
At that time I was loaded with suggestions on how to hedge a decline. You and your ilk insisted that the magazine block my ability to contribute because I was "negative" even suggesting that the market could decline.
But lo and behold I was right--even more right than I expected to be. I am not here to gloat, although a lesser person certainly would.
Instead I'm here for a second shot at those who are bright enough to listen.
What can you do at this point? The reality is not much other than to attempt to humanize yourself in the eyes of your clients. Far too many of them do not think that bringing an action against you is going to affect you personally--it will.
I think way too much faith has been put in the idea that E & O insurance is going to provide some sort of shield--those policies may not be worth a plug nickle when they issuer is faced with covering billions of dollars in losses. Hell, may not be worth a plug nickle--they won't be worth a plug nickle.
There is a TV ad these days showing an award being handed down in a court and the plaintiff's attorney saying, 'They have savings, investments and their house--we'll find their assets and get them."
If I were one of you posers I'd be scared to death about the impression that will be given when I admit that I don't have a formal education and no real expertise to be offering investment advice.
Arbitration panels are being skewed away from having any industry representation so your fate will be in the hands of three--or five--men or women who value education and when you sit there with your schidt eating grin and claim, "Ain't this business great, I don't have a degree or any formal training yet I made a fortune" they will not think it's funny.
The reality, Ferris, is that you don't belong in this business. You quit school and decisions have consequences. From where I sit if an arbitration panel lifts your ticket and awards so much money to your cleints that you end up living the lifestyle of a college dropout it will be nothing more than Karma.
You should feel free to ignore me--I'm only expressing my opinion to those who are reading it. I dare say a lot of them agree.
As I remember, Jones uses a lot of American Funds at A shares. First of all, just getting to buy them rather than spending the money at the mall is an accomplishment.
Second, you could do a lot worse than buying and holding A shares. You could exchange between stocks and bonds, and get a better return than some old dip trading options on e-Trade. Third, David Kelly, Chief Market Strategist at JPMorgan Funds, says, " I think the trend line is certainly in our favor the have the markets moving higher as opposed to moving lower, at least based on the catalyst from falling oil, from falling interest rates... " David Tice thinks the market may go to 5000. Who knows? Your buy and hold clients will be real clients when you get through this - those who pull out now should stay out of stocks (unless they needed the spending money). Most of the major firms are hot are reps getting the CFP pretty quickly after they are established. It's tough to get new kids in this business, and I think Jones is reputable and doing okay - they make huge investments into training the next generation of advisors.What can you do at this point? The reality is not much other than to attempt to humanize yourself in the eyes of your clients. Far too many of them do not think that bringing an action against you is going to affect you personally–it will.
You, sir, are the one who needs some basic education. If I trusted you, I would my put formal education and professional licenses and industry experience up against you any day. You are a BS'er, you don't even try to prove your claims and your personal attacks are poison to a "selling" environment. You fail to attempt to sustain your negativity with any current industry research, you don't cite any evidence. I'm certain you don't read any industry articles, and if I trusted you, I'd put money on the claim that you don't have your CFP. If you really are experienced, you know what I am talking about. I'll tip my had on my spirituality, though, and tell you why I think you should be banned, assuming you are not really dumb or incredibly needy: evil is real. Old Mother Hen Putz: dismissed. Folks here should call BS on this guy, if it was my forum I'd ban his IP.[quote=Getthere]
if it was my forum I’d ban his IP.[/quote]
How do you feel about that Freedom of Speech deal?
How about burning books.
The Dow is off 520 right now. Do you think your clients are losing faith in your “advice?”
You dumb*** amateur. If I trusted you, I’d say, prove that I don’t manage more money right now than you ever managed.
I don't give a crap if the market goes to zero today. What is your house worth today, if you had to sell it today? Zero. You're just a poser - day trader, addicted to chat forums. I wouldn't advocate the sale of one scrap of stock today, if, God forbid, a major city somewhere in the world was nuked. Given my time in the business, and the amount of money I managed, today has been a perfect day. Not one phone call or email from a client - a huge pay check, - a plenty of time to abuse the likes of you. Back in your hole, Mr. Crab. Old Mother Chicken - you never really worked in this business, you have no scrotum. Now go over to your Google forum, and type in KOL, have some gonads and put in some buy orders, chicken brain.if it was my forum I'd ban his IP.
How do you feel about that Freedom of Speech deal?
How about burning books. Stupid people should not be allowed to vote. Suze Orman, and other affected advisor wannabees, should be banned. You should be required to substantiate your BS. I'm just about to end a perfect day here, by going golfing. Good-bye chicken brain, it was real.
[quote=Getthere]
[/quote]
Yep, that's the type of "advisor" I'd want. The down is down over 600 points and this "advisor" is going to play golf.
The reason he hasn't had any phone calls from his client is because he won't answer his phone.
If he was a real professional he'd be on the phone with his client to tell them what was going on.
Investors like it when their "advisor" tells them what's going on instead of forcing them to hear it on the news. It instills confidence in the relationship.
Old Mother Chicken Brain, the market closes in five minutes. Still not a perfect day. I proactively contacted every client - before this downturn began - and reduced stock allocations. Contacted every one since to have “the conversation”.
You want somebody to call you up every day and hold your hand? Move your money to Schwab retail, wimp. You came here to get your hand held, didn't you? Here's my advice: go back to your Yahoo forum with your fellow hobbyists. Maybe you can make friends with a real advisor - know what - if you have the right relationship - and you get real worried, you can call them - on their cell phone - on the golf course!I repeat, it’s the “advisor’s” job to keep the client informed.
Nothing will piss off a client more than to even think that their
"advisor" is playing golf on a day when the Dow is down 500 or so
points.
They, the clients, actually believe that the “advisor” is watching out for them.
We know that that’s a joke, that an “advisors” role is to meet with
them once or twice a year and give them a printout of the previous
period–send them a birthday card–give them a burger or two at the
client cookout on the parking lot–and to wear cool clothes.
If you think Getthere is not a professional you’re wrong–he has a business card that says, "Financial Advisor."
It is to laugh.
Hah! I now recognize you, troll, from other forums! Your agenda rings true.
You have learn much industry knowledge in your years spent at forums, lasshopper. Ignore her, reason with her at your peril. She has nine lives.[quote=Getthere]
Hah! I now recognize you, troll, from other forums! Your agenda rings true.
[/quote]
Ya gotta get up early to get a jump on you.
Tell me something, how can reasoning with anybody be at the peril of those who are reasoning?
<SPAN =mw-line>For the benefit of everyone else here, reason with her at your own peril.
Diagnostic criteria (DSM-IV-TR = 301.50)The Diagnostic and Statistical Manual of Mental Disorders, a widely used manual for diagnosing mental disorders, defines histrionic personality disorder as a pervasive pattern of excessive emotionality and attention seeking, beginning by early adulthood and present in a variety of contexts, as indicated by five (or more) of the following:
Is uncomfortable in situations in which he or she is not the center of attention Interaction with others is often characterized by inappropriate sexually seductive or provocative behavior Displays rapidly shifting and shallow expression of emotions Consistently uses physical appearance to draw attention to self Has a style of speech that is excessively impressionistic and lacking in detail Shows self-dramatization, theatricality, and exaggerated expression of emotion Is suggestible, i.e., easily influenced by others or circumstances Considers relationships to be more intimate than they actually are. Retrieved from "http://en.wikipedia.org/wiki/Histrionic_personality_disorder" Hidden category: Articles with specifically-marked weasel-worded phrases http://en.wikipedia.org/wiki/Histrionic_personality_disorderGood luck, lady.
I’m not siding with anyone on this thread, but this market has made me order CFP material. I would like to move my knowledge to another level. Looking at my client portfolio’s, I’d say my level is pretty damn low.
I thought you have everyone in cash, spears.
[quote=B24]“I love American Funds, but you just can’t build a solid portfolio using one fund family. Not to withstand a time like this.”
Spiff, just a sidenote - nobody builds portfolios to withstand a time like this. Even the non-correlating assets have declined considerably. Unless you somehow knew this was all going to happen, and you managed to get everything into cash or international bonds BEFORE the meltdown, you were SOL. In a "traditional" bear market, AMF does very well, as would many other balanced protfolios, multiple fund families or not. You can't really build a portfolio that will preapre you for a state of de-leveraging where supply far outstrips demand in nearly all asset classes. Personally, I think Jones' problem is that they do TOO MUCH hand-holding - to the extent that FA's rely almost exclusively on them for all of their information and training. That's a big mistake. I spend probably 1-2 hours every night after everyone goes to bed just reading and researching the industry - investment theory, asset allocation, economic theory, practice management, client acquisition, you name it. No one firm has the market on all good ideas (sound familiar?). It's important in this business to think for yourself and develop your own ideas and your own personal "brand" or identity - not just be a kool-aide drinker. I like the firm, but it by no means defines me. Sorry, I digressed a bit.[/quote] One of the problems at Jones is there are very few negatively correlated investments that you can actually sell to a client. That certainly is a limiting factor. There is a world of alternative investments that are not allowed.....I don’t know about you guys, but I put everyone’s money in Amgen. That non-correlating stock has worked out pretty well this year!
[quote=noggin] [quote=B24]“I love American Funds, but you just can’t build a solid portfolio using one fund family. Not to withstand a time like this.”
Spiff, just a sidenote - nobody builds portfolios to withstand a time like this. Even the non-correlating assets have declined considerably. Unless you somehow knew this was all going to happen, and you managed to get everything into cash or international bonds BEFORE the meltdown, you were SOL. In a “traditional” bear market, AMF does very well, as would many other balanced protfolios, multiple fund families or not.
You can’t really build a portfolio that will preapre you for a state of de-leveraging where supply far outstrips demand in nearly all asset classes.
Personally, I think Jones’ problem is that they do TOO MUCH hand-holding - to the extent that FA’s rely almost exclusively on them for all of their information and training. That’s a big mistake. I spend probably 1-2 hours every night after everyone goes to bed just reading and researching the industry - investment theory, asset allocation, economic theory, practice management, client acquisition, you name it. No one firm has the market on all good ideas (sound familiar?). It’s important in this business to think for yourself and develop your own ideas and your own personal “brand” or identity - not just be a kool-aide drinker. I like the firm, but it by no means defines me.
Sorry, I digressed a bit.[/quote]
One of the problems at Jones is there are very few negatively correlated investments that you can actually sell to a client. That certainly is a limiting factor. There is a world of alternative investments that are not allowed…[/quote]
That’s true if you only stick to the Preferred Funds. But generally I agree.
I use a lot of non-preferred fund families (Ivy, First Eagle, Loomis-Sayles, etc.). I also use funds from Franklin, Goldman, and Hartford that are not on the preferred list (though they are preferred families).
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