Edward Jones Advisory Solutions

EJ doesn’t rebate 12b1 fees to the client in AS?

I think you've got it right. It's more expensive than holding A share mutual funds. However, you should offset that by looking at being able to buy best of breed investments, automatic rebalancing and investment selection - as well as reduction in noise (tinkering with the account).

[quote=LockEDJ]

I think you’ve got it right. It’s more expensive than holding A share mutual funds. However, you should offset that by looking at being able to buy best of breed investments, automatic rebalancing and investment selection - as well as reduction in noise (tinkering with the account).

EJ doesn’t rebate 12b1 fees to the client in AS?

True Lock… If you have to choose between ONLY two choices. Either put all your money in one fund family at A shares or have your clients pay 2% per year for Edward Jones services in managing those mutual funds. I think those are both two bad options…

joel - WTF- I could use joneslink but I want to be clear of my understanding. Btw idiot ass, AS just started last year so when I started at jones has no bearing.

[quote=RealWorld]joel - WTF- I could use joneslink but I want to be clear of my understanding. Btw idiot ass, AS just started last year so when I started at jones has no bearing.

JONES FIGHT!

OK, this is weird.  Advisory Solutions is jsut like every other MFD wrap program on Earth.  Client pays 1.35% max, plus there are mFD expenses (averaging about 65 bips on the active model, and like 25 on the index model).  They use ONLY ETF’s, Index Funds, load-waived A-shares (for those that don’t have institutional shares), and institutional share classes.  What little 12b-1’s we receive get reimbursed directly back to the client’s account.  We no longer accept ANY revenue sharing in Advisory Solutions (we used to rebate those back as well).  How is that different than most other MFD wrap programs?

True Lock… If you have to choose between ONLY two choices. Either put all your money in one fund family at A shares or have your clients pay 2% per year for Edward Jones services in managing those mutual funds. I think those are both two bad options…

[quote=RealWorld]True Lock… If you have to choose between ONLY two choices. Either put all your money in one fund family at A shares or have your clients pay 2% per year for Edward Jones services in managing those mutual funds. I think those are both two bad options…

Some people just like to bitch. AS provides a level of diversity at a reasonable price. I have a wealthy client primarily in AF’s. I would like to switch him to Adv Sol, or better yet to the MAP when they revamp it. It will give us the flexibility to use “best in class”, low expense funds in a reasonably priced platform. My long term concern for my clients is that if something happens to them, will their spouse or progeny be able to understand and maintain their investments. 1% to 1.5% is a very reasonable amount to pay for that level of service. And having our managers manage other groups of funds adds a level of safety much needed in this post-Madoff time.

[quote=RealWorld]I had a conversation with another Jones person about the “real” cost of Advisory solutions.

[quote=RealWorld]joel - WTF- I could use joneslink but I want to be clear of my understanding. Btw idiot ass, AS just started last year so when I started at jones has no bearing.

The thing that bothers me with Adv Sol is that it’s the only platform we sell. There are a number of good fee based platforms out there and I would like my pick of them. Plus, we were told that one of the best things about Jones is the lack of proprietary products.  But even with that being said, I would like to ask the original poster what a “reasonable fee” is? And what great and unique service does he provide his clients? And finally, if he can’t see any value in a product like advisory solutions, maybe he just doesn’t know enough about this business.

OK, this is weird.  Advisory Solutions is jsut like every other MFD wrap program on Earth.  Client pays 1.35% max, plus there are mFD expenses (averaging about 65 bips on the active model, and like 25 on the index model).  They use ONLY ETF’s, Index Funds, load-waived A-shares (for those that don’t have institutional shares), and institutional share classes.  What little 12b-1’s we receive get reimbursed directly back to the client’s account.  We no longer accept ANY revenue sharing in Advisory Solutions (we used to rebate those back as well).  How is that different than most other MFD wrap programs?

[quote=RealWorld]True Lock… If you have to choose between ONLY two choices. Either put all your money in one fund family at A shares or have your clients pay 2% per year for Edward Jones services in managing those mutual funds. I think those are both two bad options…

I thought you Jonesers could opt for the canned approach or build a custom model?

[quote=RealWorld]True Lock… If you have to choose between ONLY two choices. Either put all your money in one fund family at A shares or have your clients pay 2% per year for Edward Jones services in managing those mutual funds. I think those are both two bad options…

Breakpoint

Max

Min

$25k to $100k

2.25%

1.00%

$100k to $250k

2.15%

0.90%

$250k to $500k

2.05%

0.80%

$500k to $1MM

1.95%

0.70%

$1MM to $5MM

1.85%

0.60%

over $5MM

1.75%

0.50%

OK, yes you do have to create new paperwork. Considering the philosophy of Edward Jones ... as well you should, true?

Piker … like I said, the price is the price. Focus on value, the service you provide.

Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

[quote=chief123]

[quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

[quote=LockEDJ][quote=chief123]

[quote=LockEDJ]

OK, yes you do have to create new paperwork. Considering the philosophy of Edward Jones ... as well you should, true? False... if my goal is "growth and income" how is that helped when the market is collapsing? Why do i have to continue to hold when nothing is going up.. If the true philosophy of edward jones is time in the market, then they should only advise buying index funds...

[quote=LSUAlum][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

[quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

That is usually used as an arguement for “staying the course,” and I think every firm has something out there like it.  For compliance reasons, I’ve never liked those pieces.

Rebalancing and market timeing are completely different concepts. Rebalancing simply takes SOME of the gain and moving it to a predetermined asset class. Timing is an attempt to predict the market. You have a greater probability of predicting red or black on the roulette table.

[quote=chief123][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

Active management funds time the market? Since when? I thought they looked in depth at company fundamentals to determine which companies would be most profitable, thus go up in value the most. That’s not market timing.

Rebalancing and market timeing are completely different concepts. Rebalancing simply takes SOME of the gain and moving it to a predetermined asset class. Timing is an attempt to predict the market. You have a greater probability of predicting red or black on the roulette table.

Active management funds time the market? Since when? I thought they looked in depth at company fundamentals to determine which companies would be most profitable, thus go up in value the most. That’s not market timing.

Again, that isn’t market timing. It’s diversification. The reasoning is that all asset classes trade in a cycle, and you have the greatest probability for success to be invested at certain percentage levels into the major asset classes. To maintain your position throughout the growth cycle of an asset class eventually leads to a loss of profit, since all classes trade in a cycle. And by rebalancing you maintain a determined footing accross all asset classes in order to take advantage of the next big mover. It’s solid portfolio management, not market timing.

Now its even sounding like market timing to me - you just do it on a schedule and you aren’t IN and OUT.

Again, that isn’t market timing. It’s diversification. The reasoning is that all asset classes trade in a cycle, and you have the greatest probability for success to be invested at certain percentage levels into the major asset classes. To maintain your position throughout the growth cycle of an asset class eventually leads to a loss of profit, since all classes trade in a cycle. And by rebalancing you maintain a determined footing accross all asset classes in order to take advantage of the next big mover. It’s solid portfolio management, not market timing.

If large mutual funds are in and out of the market frequently, and using market timing exclusively, then why are capital gains and losses so small?

If large mutual funds are in and out of the market frequently, and using market timing exclusively, then why are capital gains and losses so small?

[quote=chief123][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

I too think it is costlier to the client and would use ETF portfolios to try and trim some of that off.  Mgd is the trend in the industry throw, either those select clients pay you more or you must find more clients for the next transaction commission and try to service hundreds or even thousands of clients.  It all comes down to the client gets what they pay for and they can vote with their feet. 

[quote=LSUAlum][quote=chief123][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

[quote=B24][quote=chief123][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

So then it sounds like, to over simplify things, you and B24 are willing to “spend” some upside on portfolio hedges - not saying you are currently doing this.

[quote=chief123][quote=LSUAlum][quote=chief123][quote=Wet_Blanket]Just as an aside, one thing that I always found interesting in this industry.  Clients are often told that market timing doesn’t matter, and x% of returns is from allocation, the time you get in doesn’t matter that much…yada yada yada.

So then it sounds like, to over simplify things, you and B24 are willing to “spend” some upside on portfolio hedges - not saying you are currently doing this.

Have you conducted any analysis on your downside / upside capture ratio?

[quote=chief123][quote=LockEDJ]

OK, yes you do have to create new paperwork. Considering the philosophy of Edward Jones ... as well you should, true? False... if my goal is "growth and income" how is that helped when the market is collapsing? Why do i have to continue to hold when nothing is going up.. If the true philosophy of edward jones is time in the market, then they should only advise buying index funds...

Have you conducted any analysis on your downside / upside capture ratio?

[quote=AGEMAN][quote=LockEDJ]

I think you've got it right. It's more expensive than holding A share mutual funds. However, you should offset that by looking at being able to buy best of breed investments, automatic rebalancing and investment selection - as well as reduction in noise (tinkering with the account).

[quote=AGEMAN][quote=LockEDJ]

I think you've got it right. It's more expensive than holding A share mutual funds. However, you should offset that by looking at being able to buy best of breed investments, automatic rebalancing and investment selection - as well as reduction in noise (tinkering with the account).

[quote=AGEMAN]

I would really like to hear what people think that the EJ Advisory Solutions impacts their bread and butter business of revenue sharing on the mutual fund business. American Funds has had a huge outflow of assets which has been a #1 fund company at Jones for years and supplies a significant portion of the revenue sharing dollars. As more dollars shift into AS how will that affect the revenue sharing agreements and will Jones be able to get those companies to sponsor the lion’s share of the expenses for regional meetings and diversification trips understanding that fewer and fewer dollars will be flowing?

I am certainly thankful for the all of the comments and responses esp. from other about the products others carry.
As far as Jones people … don’t be so defensive on here, I just wanted to get a “non regional meeting” answer from some people.
Frankly I am not sure what each other company’s expenses were for their MF wrap accounts, that is why I asked.
A price is a price and I understand that, however it is difficult to make that arguement when you don’t do anything for that price. It isn’t that AS has bad funds or has done anything bad, it is just hard to justify when we do nothing for the fee.
If we did anything for the fee besides ask questions, then I would be keen to charging what we want. Heck I even think I would love to go indy and charge 2.5%. A fee isn’t a problem as long as you get something in return.
Last question about AS, are you all saying that at every other firm clients are paying similiar fees but they are all working on discretion?

You’re missing the big picture on Advisory Solutions.  It’s not about the fees or the funds or the research.  It’s about taking one more thing off of your plate and letting you do the things that you’re the best at.  If  you’re like most Jones FAs you don’t know MPT from your elbow and couldn’t fully digest a Morningstar report to save your life, much less tell your client why he or she should own a fund for any reason beyond performance and fees.  Your clients would be better served in the long run if you were to focus on things like FAST rather than on things like whether American is a better fund family than Hartford or if A shares are better than C shares. 
Yes, your clients are going to pay a fee.   If your relationship with those clients don’t change, then you’re certainly not earning that fee.  AS gives you the freedom to spend 3 hours on their Financial Statements, Concept Profiler,  At Retirement/Retirement, etc and not feel bad about doing it.  That’s where you’re going to earn your fee.  Those reports are also the place where you can show them the why of investing instead of focusing on the how.   

[quote]I would really like to hear what people think that the EJ Advisory Solutions impacts their bread and butter business of revenue sharing on the mutual fund business. American Funds has had a huge outflow of assets which has been a #1 fund company at Jones for years and supplies a significant portion of the revenue sharing dollars. As more dollars shift into AS how will that affect the revenue sharing agreements and will Jones be able to get those companies to sponsor the lion’s share of the expenses for regional meetings and diversification trips understanding that fewer and fewer dollars will be flowing?[/quote]    
Is this a serious question?  You are pulling my leg.  You have got to be better at MATH than this!  So your question is, "What will Edward Jones do when the tiny % Revenue Sharing Fees are replaced by the ± 1.35% Advisory Solutions fee?  I’ll take a shot at that one.   Make more money.   Probably more than enough to pay for those meetings and Div Trips.  Thanks for the question.   You heard what I think.
 
 

[quote]I am certainly thankful for the all of the comments and responses esp. from other about the products others carry.
As far as Jones people … don’t be so defensive on here, I just wanted to get a “non regional meeting” answer from some people.
Frankly I am not sure what each other company’s expenses were for their MF wrap accounts, that is why I asked.
A price is a price and I understand that, however it is difficult to make that arguement when you don’t do anything for that price. It isn’t that AS has bad funds or has done anything bad, it is just hard to justify when we do nothing for the fee.
If we did anything for the fee besides ask questions, then I would be keen to charging what we want. Heck I even think I would love to go indy and charge 2.5%. A fee isn’t a problem as long as you get something in return.
Last question about AS, are you all saying that at every other firm clients are paying similiar fees but they are all working on discretion?[/quote] 
 
My guess is that Edward Jones will be like everyone else and just make more money? It’s not like every other wire house doesn’t have wrap accounts.
 
Don’t kid yourself. Every single ‘innovation’ in this business is to make the firms more money. Those RIA’s that claim that they only do fee based business because it ‘eliminates potential conflicts’ are lying. I can tell you, from experience as an Indy that does mostly fee only business, that I do it because it smoothes out the revenue stream. It makes it easier for me to manage their money. It lets me forcast future earnings better. All of these help our industry. Is it better for clients? Well, that depends. A DCA’er who buys dividend paying stocks and reinvests those dividends is not better off in an account like this. It helps some of our clients to be sure. But the ‘fee only’ proliferation IS NOT because of any other reason than it helps our industry.

I can attest that Fee Based / Only business absolutely eliminates ALL conflicts of interest.  It’s been proven that Commisson-Focused FAs are more likely to steal your car.  Also, only Fee Based / Fee Only can get into heaven.

Damn, I only made that last post to show off my new Avatar - but the crop cut it down too much.
 
Make-It-Rain.jpg731×1023

I think it helps clients in that we focus more on putting the right investments in place, rather than the right commission on our grids.  I know for a fact that a lot of commission-based advisors make decisions based on the commissions.  I know plenty of FA’s in my region that “love” UIT’s.  Why?  Why do you think?  Does 4.5% ring a bell?  I have guys TELL ME how to “maximize” gross.  Some long bonds, some UIT’s, lower fund breakpoints, I’ve heard it all.  I am sure I am not alone in witnessing this.  And I know it’s not just at Jones.

I’ve seen plenty of fee-based advisers do a “set them and forget them” with advisory clients.
Worst question I’ve ever been asked:
FA called compliance to run an issue by us for hopefully our blessing.  Client had a fee-based account and died.  The executor is working with the FA to straighten out the financial accounts.  FA asked me if he had to tell the executor about the account.  He didn’t spell it out, but he gave me the impression that he wanted to continue collecting the fee.

[quote][quote]I would really like to hear what people think that the EJ Advisory Solutions impacts their bread and butter business of revenue sharing on the mutual fund business. American Funds has had a huge outflow of assets which has been a #1 fund company at Jones for years and supplies a significant portion of the revenue sharing dollars. As more dollars shift into AS how will that affect the revenue sharing agreements and will Jones be able to get those companies to sponsor the lion’s share of the expenses for regional meetings and diversification trips understanding that fewer and fewer dollars will be flowing?[/quote]     
Is this a serious question?  You are pulling my leg.  You have got to be better at MATH than this!  So your question is, "What will Edward Jones do when the tiny % Revenue Sharing Fees are replaced by the ± 1.35% Advisory Solutions fee?  I’ll take a shot at that one.   Make more money.   Probably more than enough to pay for those meetings and Div Trips.  Thanks for the question.   You heard what I think.
 
 [/quote]

Think about the question a little more next time before you answer…The great majority of profit from EJ comes from the revenue sharing agreements supplied by those mutual fund companies BECAUSE they were 1 of only 7 or 8 and because one of them was used for 60% of all the mutual fund flows. BTW, the revenue sharing fees aren’t tiny… Say a FA has been in business for 20 years and has sunk say 50-60% of his assets in mutual funds with American, do you really think that he will be able to move that high of a percentage of clients quickly into AS so that he can build a fee based business?

[quote]Active management funds time the market? Since when? I thought they looked in depth at company fundamentals to determine which companies would be most profitable, thus go up in value the most. That’s not market timing.[/quote] 
 
Sure it is… They are just using fundamentals…and not technical… But they are still saying that a basket of "x’ stocks will go up quicker than basket of “y”

[quote]I would really like to hear what people think that the EJ Advisory Solutions impacts their bread and butter business of revenue sharing on the mutual fund business. American Funds has had a huge outflow of assets which has been a #1 fund company at Jones for years and supplies a significant portion of the revenue sharing dollars. As more dollars shift into AS how will that affect the revenue sharing agreements and will Jones be able to get those companies to sponsor the lion’s share of the expenses for regional meetings and diversification trips understanding that fewer and fewer dollars will be flowing?[/quote] 
 
No they won’t get as many companies too sponsor nor will they get the companies that do sponsor pony up the amount of money they do now… HOWEVER…75% of jones is funds… and if you can quadruple the amont income you are bringing in by just xfering from 25bps to 125bps then you don’t have to worry about it… But i bet expansion stops for 3-4 years for the catch up…

[quote]I can attest that Fee Based / Only business absolutely eliminates ALL conflicts of interest.  It’s been proven that Commisson-Focused FAs are more likely to steal your car.  Also, only Fee Based / Fee Only can get into heaven.[/quote] 
 
Depends on platform… I have a buddy at LPL that buys investments in their fee program(SAM) based on ticket charges and then rebalances only once a year to avoid tickets(no because he believes its the best thing to do)…

[quote][quote][quote]I would really like to hear what people think that the EJ Advisory Solutions impacts their bread and butter business of revenue sharing on the mutual fund business. American Funds has had a huge outflow of assets which has been a #1 fund company at Jones for years and supplies a significant portion of the revenue sharing dollars. As more dollars shift into AS how will that affect the revenue sharing agreements and will Jones be able to get those companies to sponsor the lion’s share of the expenses for regional meetings and diversification trips understanding that fewer and fewer dollars will be flowing?[/quote]       
Is this a serious question?  You are pulling my leg.  You have got to be better at MATH than this!  So your question is, "What will Edward Jones do when the tiny % Revenue Sharing Fees are replaced by the ± 1.35% Advisory Solutions fee?  I’ll take a shot at that one.   Make more money.   Probably more than enough to pay for those meetings and Div Trips.  Thanks for the question.   You heard what I think.
 
 [/quote]

Think about the question a little more next time before you answer…The great majority of profit from EJ comes from the revenue sharing agreements supplied by those mutual fund companies BECAUSE they were 1 of only 7 or 8 and because one of them was used for 60% of all the mutual fund flows. BTW, the revenue sharing fees aren’t tiny… Say a FA has been in business for 20 years and has sunk say 50-60% of his assets in mutual funds with American, do you really think that he will be able to move that high of a percentage of clients quickly into AS so that he can build a fee based business?[/quote]
1:  I have thought about it.  Your question is a question of math.  How can a higher fee on the same dollar MATHEMATICALLY mean less money?
2:  Your 20 Vet scenario describes me exactly and the answer to your question is yes.  I am about 80% fees/trails and it is way more profitable than revenue sharing.  I checked my bonus and my P & L.
 

Love the make it rain avatar.

I thought you would appreciate it…but I’m still shopping around for a good avatar.  Is it possible to load one up from a website instead of saving it to your computer?

I have a friend that is indy, 90% fee-based.  He says he generally only uses NTF funds (i.e. load-waived A-shares for the most part) so he can avoid the ticket charges.  Not saying it’s right or wrong, but it sort of flies in the face of “fee-based is totally impartial”.
Unless the industry ever does away with commissions altogether (fat chance), there will always be some level of conflict.  However, I think this disipates as your practice grows and you become a “go-to” firm, and people don’t care what they pay to work with you.

I can’t tell if you are talking to me or not B, but I’ll respond anyways.
I would, and did, argue that Fee-Based isn’t some “divine” compensation type.  It all depends on the client’s situation.  There are times when commission-based makes more since, etc.
I hate the Expense-conscience Vanguard-loving DIYers who preach the bible of “Fee ONLY” as the most conflict-free option.

Also, in the past, whenever I got a marketing piece that sells Fee-Based advisory accounts, and uses the phrase “makes us sit on the same side of the table as the client” or something like that (illustrating that there is no conflict and the FA has the same goals as the client), I STRUCK IT DOWN WITH MY MIGHTY REJECTED STAMP.

[quote]I can’t tell if you are talking to me or not B, but I’ll respond anyways.
I would, and did, argue that Fee-Based isn’t some “divine” compensation type.  It all depends on the client’s situation.  There are times when commission-based makes more since, etc.
I hate the Expense-conscience Vanguard-loving DIYers who preach the bible of "Fee ONLY[/quote]" as the most conflict-free option. 
WB, I was just responding in general.  I think the only thing that matters is full-disclosure to your client.  I think clients appreciate you being very upfront about the costs.  "Mr. Client, this is going to cost you x.xx% per year.  You could pay LESS in direct commissions with another method.  That would require either (a) you doing it yourself, or (b) paying commissions and utilizing 1 or 2 fund families for all your investments.  Here’s the pros and cons: blah, blah, blah (talk about multiple fund families, no fund family is best at everything, the funds we would use would strip out 12b-1’s so the cost is a little closer, the fact that your out-of-pocket cost would be higher, we can’t use the exact same strategy with a single-fund family, etc.).  I just want to make sure you are clear on your options."
Now, if you are commission-only or fee-only, you can still have that conversation, but it just means that they would have to go elsewhere if they decide not to “choose” your method.  From what I have experienced, more potential clients have walked away when I was commission-only than have balked at paying fee-based.  This is likely because fees have become more industry norm, and the financial media has started touting it as “conflict-free”.
However, I am now seeing more and more financial “experts” saying you should only work with an advisor that works on a one-time flat-fee only for advice or ongoing flat-fee for investment advising, not an AUM fee.  The only problem with that is I am not sure how we could actually make a living that way. 

[quote]

However, I am now seeing more and more financial “experts” saying you should only work with an advisor that works on a one-time flat-fee only for advice or ongoing flat-fee for investment advising, not an AUM fee.  The only problem with that is I am not sure how we could actually make a living that way. [/quote]
I don’t have a single client that would want that arrangement. Set it and forget it til next year? No. The reason my clients have me and have referred me is they respect having eyeballs on their account each and every month. The reason I’ve been chosen to intercede is because their fears and lack of expertise.
Flat-fee advising then, becomes a pay-as-you-go scenario. Worried about what CNBC said? Sure, give me a call. I’ll starting talking to you right after I turn on the clock, at $150 an hour. Feel free to chat away. I just don’t see that being very popular in my neck of the woods.

Lock, I agree with you.  I just don’t think it makes sense.  The only scenario where it appears to work consistently is at the top-end of our business, like the family offices, where an annual retainer might be $100K or more.  And it works because they are doing more than just managing investments - they are paying bills, coordinating estate plans, doing tax work, charitable giving, etc.  In these situations, there is not a direct correlation between work performed and AUM (although the AUM will obviously be extremely high).

I agree with both of you.  Whenever I think of a Fee-Only adviser, I think of an adviser handing over a Morningstar analysis.

Fee only solutions can make it less of a conflict for advisors. But by the same token, commission only advisors are not inherently obligated to a conflict of interest.
At the end of the day someone said lets do this for a fee of AUM instead of commissions because it made sense to their business. They weren’t some benevolent group that decided to change the way the industry billed out because they wanted to.

Good discussion and I certainly agree with you there is not 1 way for everyone to work. That is primary reason that I hope Congress stops all these non 7 licsensed annuity people from acting like investors (to me that is the worse thing in our industry).
Of course it is important to annutize your business and there is nothing wrong with that. My beef with AS instead of some INDY doing it themselves is the hidden fee side. Most advisors think that the client LITERALLY only pays 1.35%.
I want to have my business paid on a AUM basis but I don’t really want to have all my clients money in mutual funds or have Edward Jones manage the mutual funds for me. Does anyone think there will be a time in Jones for an advisor who wants to be a CFP planner or are we being led further and futher into the salesman role?

The other benefit of fee based business is that it eliminates the benefit of churning. I’ve seen cases of four segment fives with monthly income varying by a factor of 100%. All with the same basic AUM. A 15% or 20% variance is fine, but not 100%. After hearing about some of the trades I wonder how they get through field supervision.

Another benefit of Fee based business is that you don’t even have to talk to a client more than once a year to collect a check.

[quote]Good discussion and I certainly agree with you there is not 1 way for everyone to work. That is primary reason that I hope Congress stops all these non 7 licsensed annuity people from acting like investors (to me that is the worse thing in our industry).
Of course it is important to annutize your business and there is nothing wrong with that. My beef with AS instead of some INDY doing it themselves is the hidden fee side. Most advisors think that the client LITERALLY only pays 1.35%.
I want to have my business paid on a AUM basis but I don’t really want to have all my clients money in mutual funds or have Edward Jones manage the mutual funds for me. Does anyone think there will be a time in Jones for an advisor who wants to be a CFP planner or are we being led further and futher into the salesman role?[/quote] 
A) You must have some really dumb advisors in your region.  What makes them think that the fee negates (that means gets rid of) the internal expenses.  You should tell anyone that says that to you that McDonald’s is hiring. 
B) I think it’s just the opposite.  I think most people at Jones, FAs and GP’s alike, would love to go to a planning model.  I think they realize they can make the same or better money and have fewer headaches with platforms like AS.  In the near future, according to the GP in charge of AS, you’re going to see fee based accounts where you can use individual holdings as well as the models if you choose.  There’s a reason they’ve spent so much time, effort ,and money on programs like FAST.  It’s not so we can sell more tax free bonds.  It’s so we can plan with our clients who might otherwise want to leave us and go find a “planner”.   

[quote]The other benefit of fee based business is that it eliminates the benefit of churning. I’ve seen cases of four segment fives with monthly income varying by a factor of 100%. All with the same basic AUM. A 15% or 20% variance is fine, but not 100%. After hearing about some of the trades I wonder how they get through field supervision.[/quote] 
I always wondered about this too.  A guy with $80mm in AUM doing $650K, and another guy with $80mm doing $350K.  Both with commission-based books.  Now, there’s lots of variables (insurance, type of product, etc.).  But it does seem illogical.  Of course, if you were fee-based, you are probably doing $650-900K on that $80mm.

Spiff- I hope that you are correct. As far as the charges of AS, ask some of the people in your region. I bet more than half of them think AS is 1.35% total charges.

FEE BASED BUSINESS IS THE ONLY WAY TO GO.
PERIOD.
YOU JONES GUYS FIGHTING IT ARE IN MF DENIAL
YOU AND YOUR FIRM ARE LIVING IN THE 80’S
START CONVERTING YOUR BOOK NOW

 

okey dokey

[quote=Wet_Blanket]I thought you would appreciate it...but I'm still shopping around for a good avatar.  Is it possible to load one up from a website instead of saving it to your computer?[/quote]

I took the good avatar.  I think I had to save it to my computer first and then upload it.  Then I deleted it from my pics.

EDJ does rebate 12b-1 fees. HOWEVER, they didn’t originally. It wasn’t until EDJ was fined $100MM for something similar that they decided to refund 12b-1 fees. Again, HOWEVER, at the same time they instituted a 0.09% “administrative fee” to pay for “marketing materials and administrative costs.” You know about how much the 12b-1 fees come out to be on an average advisory solutions portfolio? About 0.09%.

Last year when my company was in the merger process we ran short of funds and I contacted one of my friend who is working with investmentbank.com/financing/ and asked his advice.He knows the market well and successfully secure acquisition financing at the lowest cost of capital. If we face any problem in this process, we can seek the advice from such companies it helps when issuing companies work with advisors who both understand the unique structuring criteria of non-bank lenders and who have direct access to thousands of financing lenders across a variety of industries. For such purpose companies looking for acquisition, financing turn to these companies for financial needs.

These companies charge on the basis of final settlement of the deal . Their charging method is on the percentage basis.

Hi

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