Lack of "tools" at EJ
I constantly read comments on here about Edward Jones FAs not having the same number of tools at their disposal as an FA at a major wirehouse like Merrill Lynch. Can someone please elaborate on this with examples.
EJ guys: Can you provide me with a few examples of prospects not using you because you lacked these resources?
When I say “tools” I also mean products, etc.
The only one that stands out in my mind is a an advisory fee program. I have not lost a client, but rather a few very good prospects. Their premise was that I could not possibly be impartial if I can ONLY recommend commissioned products. Maybe a better salesman would have captured those as clients, but it sure would have made it easier for me…
Other than that, I don't even want to offer options, so that doesn't bother me. I use several non-"preferred" mutual funds in my portfolios, so that debunks the myth that that's all we offer. I am glad we got some very good financial planning software and e-mail. That has been very beneficial for me (whether or not clients use or need these things is sort of irrelevant - it often just speaks to our credibility and service levels). I CAN tell you that without e-mail, there are a few clients I would probably have never captured. I won't get into why, but suffice it to say that I know them well enough to state this.No real alternative assets (hedge funds, private equity, etc.), no options as stated, no adivsory program (coming, but will not allow stocks or bonds in the account from what I’ve heard), limited access to insurance companies (most products available, but I’ve got clients I never could have gotten at Jones in this area.)
Also from what I've heard they are going to discourage the use of the advisory program and continue to encourage A shares, which sucks if you hate A shares. I'm sure I'm forgetting something. Side note, IMO one of the most underrated benefits for an Edward Jones Newbie is being able to have a dedicated assistant. (Once you get an office.) Now that I share an assistant I realize how much more time I have to spend doing crap. It is just not as good. If you go most anywhere else you will have to share (or pay for your own.) This is a HUGE benefit to a newbie.Thanks for the comment. As far as the lack of fee based setup at EJ; isn’t that gong to change in the very near future?
You wirehouse and independent guys and gals: Is it all hot air when you criticize EJ for their lack of products, resources, and sophistication, or, can you back up your comments?
I understand EJ may cater more to middle class type individuals, but is it a result of their lack of resources?
Good points. I posted my last reply before I read your post.
Do people with at least 1mm in investable assets ever consider EJ? Are these the type of people looking for these alternative investments?
Not to drive you crazy Dark Knight, but what specific insurance products does EJ lack that you find useful now?
No bonds or bond funds in the new advisory program? How could this be? From my outsiders perspective, it seems as if the industry as a whole is going to fee-based and fee-only setups. Wouldn’t EJ do whatever they could to offer these setups in comparable ways to other firms?
When I was at Jones I used several non-preferred funds also, the problem with that is Jones doesn’t keep cost basis on most of those non-preferred funds (AIM, Ivy, Janus ect). They do on a couple like MFS, AB. They really is no reason for this except to encourage you to do business with the preferred fund families. At LPL we keep cost basis on anything and everything including no-loads. That is a weakness of Jones. Not a hard one to overcome but still it takes up your staff time in tax season if you have made a sale or exchange of a non-qualified fund.
Thanks for the info.
In a fee based program I assume no load mutual funds are used, correct? Also, do you get the quarterly advisory fee and the 12b trailers? Excuse my naiveness.
In fee based you can use some no load funds as part of the portfolio or ETF’s…some load waived funds do still pay 12b-1 fees and at LPL you might get part of that. Most no load funds and all ETF’s pay no 12b-1 fees. Besides you are getting paid by the client already to do your job!
Good info. That’s what I thought the answer would be.
This is more of a case by case situation. I had a handful of $1mm accounts at EDJ. To be honest, most investors are unfamiliar with or scared of alternative investments, or if they know about them they only know enough to be dangerous. Not having fee based accounts was tougher, especially when the competition was presenting that as an alternative.Do people with at least 1mm in investable assets ever consider EJ? Are these the type of people looking for these alternative investments?
I think your memory is bad. I double checked I was correct before I started spouting off. Jones keeps cost basis on everything that is bought or sold at Jones. I've used some Calamos (not a preferred) in the past and there is cost basis on those that I sold. With that said, they don't keep cost basis on things that were transferred in. In those instances the client and the BOA have to work together to figure out cost basis. I've never heard if LPL does that or not. For the average client Jones has everything that they would need to reach their goals. Most of them want to save for retirement, spend the money they saved and not run out before they die, then pass some on to their kids. They want life insurance, LTC insurance, maybe even a mortgage from time to time. They can do all of that with Jones. For all of the hedge fund, options, etc talk, most people will be very comfortable working with EDJ.When I was at Jones I used several non-preferred funds also, the problem with that is Jones doesn’t keep cost basis on most of those non-preferred funds (AIM, Ivy, Janus ect). They do on a couple like MFS, AB. They really is no reason for this except to encourage you to do business with the preferred fund families. At LPL we keep cost basis on anything and everything including no-loads. That is a weakness of Jones. Not a hard one to overcome but still it takes up your staff time in tax season if you have made a sale or exchange of a non-qualified fund.
Thank you for the information. I’m trying to learn as much as possible before I make a jump into this career.
It seems to me that an FA would not be able to service more than 200 or 300 relationships effectively. Be that prospects, or current clients. With that being said, I think it would be imperative to work with a company that can handle the high net worth people and constantly raise minimums.
Am I missing something?
I think that number is WAY too low. Most Jones offices I know of with established Seg 5 reps are wll over 1000 households. That being said you will prioritize your clients and will only have 200-300 very good relationships.
One thing you might want to keep in mind is that independent reps have countless fee based models to choose from. The hardest part of starting your independent life is sifting through the hundreds of platforms to choose from.fisher - just start. It’s a good business. You’ll work your tail off, and you’ll learn how to accept a no from someone & keep going. It’ll make married life easier once you get there. Jones is a great place to start. Banks are, also.
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HER: WELL AT LEAST TELL ME YOU DONT [GASP]…ENGAGE IN PREMARITAL S*X!
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Just don’t say, “With her?”
fisher - I think you are putting the cart before the horse. I don't think that just because you say you work for ML or some other large wirehouse that it automatically means you are going to land those HNW people. Get some experience in landing clients of any size. Then as you progress in your career you can go after the elephants. Once you are established, set the bar as high as you like.
ice - if she really starts hammering you, ask her if she’s ever read 1 Timothy. You know, the part that says that women shouldn’t be pastors. That should start an interesting discussion.
Thanks all for the advice. I think I’ve gotten the answer I needed from this thread and others on this forum. I just want to make sure I start off on the best possible foot and don’t make some huge mistake that affects me years down the road. Keep the advice and comments coming…
Hey Spiff, I just got off the phone with two of my Jones friends and they comfirmed that they do not have cost basis on non-preferred funds like AIM, Ivy, John Hancock, ect…
Don't confuse linking with cost basis---Jones does not keep cost basis on most non-preferred funds held in brokerage. One of my Jones friends has 24 years at Jones and the other has 13.[quote=Roadhard]Hey Spiff, I just got off the phone with two of my Jones friends and they comfirmed that they do not have cost basis on non-preferred funds like AIM, Ivy, John Hancock, ect…
Don't confuse linking with cost basis---Jones does not keep cost basis on most non-preferred funds held in brokerage. One of my Jones friends has 24 years at Jones and the other has 13.[/quote] You're spot on Roadhard. There is also the fact that you can only do a limited amt of systematic options on mutual funds outside the preferred.I don’t want to argue with your obviously veteran buddies, but what I see on my system, with a client’s account, says they’re wrong. With that said, when I do a search for info on the Jones intranet it does say that they don’t keep cost basis for a lot of fund families, but that they are working on a solution through a vendor. The goal is sometime in 2007. Hmm…maybe someone needs to pay attention to their websites. I can only tell you what I have experienced and what I read. At this point I’m not sure who’s right.
I really do wish Jones would keep cost basis on everything–it would be sooooooo much easier when I transfer them in…and ifffffffffffffffffffffffffffffffff I ever transfer one to Jones I would let the new FA know that cost basis is on the client statement…Jones only does it on the In-depth statement…so everyone if you think you are ever going to leave Jones start now putting your clients on a in-depth statement over the next year. If you need cost basis really bad—then before the client transfers to you–ask them if they have Account Access–if yes, put up their info online–that will give you cost basis–except mutual funds. It is also a great place to get copies of statements so you can ACAT!
Man I hated transfering in my Jones accounts. Why the bleep can't they send the cost basis at least on the ones they keep. I couldn't believe the first fidelity account I transferred in. All of the cost basis was magicaly there. When I was at Jones I didn't even know that was possible. Why don't they at least accept cost basis from firms that will send it?!! Seems stupid.
I don’t undertand this concept. Don’t they have to keep track of cost basis to report capital gains?
jone branches have to manually figure it out, which you can also do after it is sold and send in a wire prior to 12/31
[quote=Dark Knight]
Man I hated transfering in my Jones accounts. Why the bleep can't they send the cost basis at least on the ones they keep. I couldn't believe the first fidelity account I transferred in. All of the cost basis was magicaly there. When I was at Jones I didn't even know that was possible. Why don't they at least accept cost basis from firms that will send it?!! Seems stupid.
[/quote] There is an inter-broker system you have to pay for in order to accept transferred cost basis (sort of like participation in the ACAT system). Jones just doesn't want to pony up for it.I understand they don’t want to pay for it—but it would save money in the long run by not having the FA and the BOA figuring out cost basis. Same thing goes when a account is transferred in…just remember this–mutual funds have a average cost basis and stocks have a cost basis for each dividend reinvestment–so you have to imput each dividend ever reinvested as a seperate purchase—you can not average it. So let’s say I send my client to Edward Jones with GE stock–the client has owned it for 31 years and he reinvested all the dividends—I send you a copy of all his reinvestments–then you have to put each one of those into the cost basis system–you can’t add them all up and place just one figure there–you can with mutual funds by not stocks. Cost basis transfer of data is a God Send. When I transfer a Charles Schwab account in to LPL–they transfer cost basis, so does Merrill, SB, even the banks–Jones is the only one that won’t pay for it – is this because the GP’s don’t want to pay for it? Sorry guys I just had to say it? Recently I had a client transfer from Edward Jones (Not my old branch) and my client requested his cost basis–the FA gave him 1099’s for 16 years and said here you go–go figure it out! Real Professional!
Spiff, I can confirm with 100% certainty that we do NOT track cost basis for many fund families. I use, for example, Loomis Strat Income a lot. When you go into Portfolio, you cannot even ENTER Cost Basis. The box is completely blank (no Edit function, etc.). It's no big deal with IRA's, as they do track Amount Invested, so at least the client can see what was put in and what's it worth now (which is actually better than cost basis for looking at total returns). But in a taxable account, you are screwed if you need Cost Basis for tax reporting.I don’t want to argue with your obviously veteran buddies, but what I see on my system, with a client’s account, says they’re wrong. With that said, when I do a search for info on the Jones intranet it does say that they don’t keep cost basis for a lot of fund families, but that they are working on a solution through a vendor. The goal is sometime in 2007. Hmm…maybe someone needs to pay attention to their websites. I can only tell you what I have experienced and what I read. At this point I’m not sure who’s right.
I found the link in Jonesnet that says they’re working on the fix, but who knows when the last time it was updated or where they are on that project.
I don't use a lot of non preferred funds. I got on a kick a couple of years ago with some Calamos funds. I have a client who own CHY in his single account. I have a cost basis for that. Now that I think about it, that's a closed end fund. Maybe they work differently. The solution is to only sell preferred funds!NOW you’re talking…have another sip…
The Kool-Aid sounds good for me…why make things more difficult when we have great preferred funds that will make our lives much easier?
Yeah I mean c'mon why work harder to help our clients. Let's just do the easiest thing for us. Because you are getting paid a lot of money do serve your clients!The Kool-Aid sounds good for me…why make things more difficult when we have great preferred funds that will make our lives much easier?
Not what I said at all…the preferred funds are top ranked funds that perform just as good if not better than a lot of the non preferred funds out there. So I’m not only making the client more money in the long run but I am also working smarter. Gives me time to actually sit down with my clients on a regular basis to, as you put it serve them. Besides your top 20% how often do you review your clients portfolios with them?
There is nothing sweeter to me than getting a transfer in because their current broker ignores them…HAHAHA
[quote=Eyetattoo] Not what I said at all…the preferred funds are top ranked funds that perform just as good if not better than a lot of the non preferred funds out there. So I’m not only making the client more money in the long run but I am also working smarter. Gives me time to actually sit down with my clients on a regular basis to, as you put it serve them. Besides your top 20% how often do you review your clients portfolios with them?There is nothing sweeter to me than getting a transfer in because their current broker ignores them…HAHAHA
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Tattoo, please tell me you’re doing this just to get people going on this board…
OK…i’ve been on the sideline for too long. I’m a year out (almost) EDJ broker…this is the funniest thread i’ve ever seen…Also, very informative at times…for starters…while I do drink the Kool-Aid…(Grape ;))…I also understand that there are other alternatives that may fit other peoples lifestyles etc…however, for me it is definately the right fit! Just thought Spiff needs another green back to help fight the good fight…For the record, I am in a region where everyone gets along fine…when someone leaves there is never any bashing or talking bad etc…we all help one another…its awesome…at PDP I have run across plenty of Brokers that had other experiences…back stabbing…account pirating etc…but I think that can be said about any firm…Just figured I’d start with my basic $0.02 worth!
[quote=Spaceman Spiff] I found the link in Jonesnet that says they’re working on the fix, but who knows
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Maybe they work differently??? Wow. It would be convenient to understand what an investment IS if your client owns it…go back to Series 7 training on products.
[quote=Eyetattoo]The Kool-Aid sounds good for me…why make things more difficult when we have great preferred funds that will make our lives much easier? [/quote]
You're going to fit in very well...[quote=Cowboy93] [quote=Spaceman Spiff] I found the link in Jonesnet that says they’re working on the fix, but who knows
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Maybe they work differently??? Wow. It would be convenient to understand what an investment IS if your client owns it...go back to Series 7 training on products.[/quote] Thanks for the advice. I'll take it under advisement. I understand the difference between an open ended fund and a closed ended fund. This wasn't a discussion on the differences between the two. The discussion was do we have cost basis for non preferred funds. I know I have a cost basis for that investment.
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