Jones Fee Based

As soon as Weddle gets away from the mirror and his comb.

But, on  a serious note, they are about to have summer regionals…and I assume this is when they’ll roll out the new plan. They might even announce a partnership with HR Block…you just never know.

[quote=bspears]But, on  a serious note, they are about to have summer regionals..and I assume this is when they'll roll out the new plan. They might even announce a partnership with HR Block...you just never know.[/quote]

Didn't they announce it LAST summer regional?!%  (If you're wondering the answer is yes.)  I predict no details till at least 08 regionals.

Gad, could be…I skipped the summer regionals.

I am sure it will be a big question at the regionals.  They have been talking about it for over a year now and nothing yet, so I hope they are getting close. 

I don’t remember any such announcement last year, but the RL didn’t invite me back this year.  I’m shocked!!  I had my “How to survive after Edward Jones” presentation all done and was going to show “How I made more money in 5 months than I ever did at Jones” video all qued up too.  I guess it’s just my loss to not see all of the great awards handed out especially the ones signifying the first $100K ney year for those guys and gals who have been out 7-10 years.  Oh, I forgot, those guys got their award last year and now work with LPL.  Well the golden shovel award is still a big crowd pleaser.

I left my wood plaques on my desk when I left.  I left a message with a buddy of mine still at Jones, asking if they’re needing a speaker I could talk about alternative investments and how to add value to a portfolio.  No callback, though…

In our region, they used to give out a C.A.R.E. package to all the newbies that were knocking on doors...I always equated it to a participation trophy I received when I was five. 

Jones is so good at dangling the carrot and never implementing.  I believe the internet/email conversation went on for 3 years.  I know paying 40% payout on the Managed Account Fee Based Platform took 3 years.  So my guess it would be sometime in 09.

Oh, and by the way, it will be "the best, most ethical, and have the customer's interest first." 

[quote=success]Any word yet on what it will look like and when it will be unveiled?[/quote]

The day before the SEC completely outlaws them? 

Great conversation from you guys outside looking in.  No word on the fee based yet.  Seems like everyone just forgot about it.  My guess is the whole Merril lawsuit has put everything on the back burner.  I vividly remember Weddle telling us at the Fall regionals last year that we should expect something fee based before the end of the first quarter or early second.  Well...?

Who knows.  I heard a couple of years ago that we were going to get PDAs that would sinc w/ our systems.  Just this month we can get one of those new fangled phones with that new internet thing in it and use one of those with our systems.  We're moving at light speed now, buddy.

I expect we'll get some sort of update from our area GP at the summer regionals next week.  Until I get an email telling me it's up and running, I'm not holding my breath.  Can anyone say C shares? 

Spiff,

Every new post from you seems to be more and more sarcastic.  Do we sense some dissatisfaction with the Green and White, or do you just like pulling our leg?  I believe you'd do great and love life more if you didn't have to attend the great summer regional meeting and receive all of those great awards.  Come to the light and be truly happy.

You know…I think we need to pull back a little on recruiting to the indy side.  I’ve got 2 other LPL offices in my town and even though I can prospect to no end, the prospects see little benefit to move from one lpl to another, unless they’re not getting the service.  I love spiff, but maybe he should stay for now.

GP's want you to forget about it so they can continue raking it in through the back door.

Spiff you do sound different.

[quote=Spaceman Spiff]

Great conversation from you guys outside looking in.  No word on the fee based yet.  Seems like everyone just forgot about it.  My guess is the whole Merril lawsuit has put everything on the back burner.  I vividly remember Weddle telling us at the Fall regionals last year that we should expect something fee based before the end of the first quarter or early second.  Well...?

Who knows.  I heard a couple of years ago that we were going to get PDAs that would sinc w/ our systems.  Just this month we can get one of those new fangled phones with that new internet thing in it and use one of those with our systems.  We're moving at light speed now, buddy.

I expect we'll get some sort of update from our area GP at the summer regionals next week.  Until I get an email telling me it's up and running, I'm not holding my breath.  Can anyone say C shares? 

[/quote]

Well, Spiff, at least you can poke fun at the mothership.  You mention C shares, do they still cut the payout on C shares at Jones to 35% vs A shares at 40%?  It's funny, we used to catch hell for using C shares years ago at Jones so they just cut the payout!  Now they're offering fee based???? 

[quote=bspears]But, on  a serious note, they are about to have summer regionals..and I assume this is when they'll roll out the new plan. They might even announce a partnership with HR Block...you just never know.[/quote]

Ahhhh...the summer regionals...what fond memories!  Nothing like spending three days at the local state park in some musty room.  Hey, in our free time let's take the canoes down the river!

Last year it rained like a SOB and then a water main broke and half of our rooms were without water.  Oh what a wonderful smell you’ve discovered.  It was just about 2 months after allthe fun Icould handle that I bailed.  And 2 weeks after I bailed, 3 guys who were Seg 5 bailed.  Must have been the fond summer regional memories that did us in.  B.S. help me, they’re trying to take me back.  If only I could have fed my family, I would have stayed just for the R.L.'s corny jokes.

OK, here's why I sound different.  Not a sign that I'm jumping, just the facts. 

I lost a good account this week.  Sorry, lost a good prospect this week.  Guy I doorknocked 3 years ago.  Dripped on him on and off.  Total portfolio of over $650K.  Perfect Jones client.  Mostly funds with Fidelity.  75 years old.  We've had 3 meetings in the last 3 months.  The last one he tells me he can't understand my proposal, can't figure out how much it costs, and can't see any reason why he would move to me just to buy different mutual funds.  He wants to do ETFs instead. China, Oil and Gas, Energy, and FTSE.  He read a book on them so now he's an expert. 

Three years of work and I lose out to a book.  This fee based post kind of hit a sore spot.  Part of me thinks if I had the ability to do fee based I might have had a better shot.  You want to do ETFs?  OK.  You want to do stocks?  OK.  You like your funds?  OK.  No problem.  Let's transfer it all in. 

So, there you go.  I'm not jumping.  I enjoy the regional meetings (there go the "you sound like a smart guy" references).  I don't like the start from $0 every month.  Neither do my wife and two girls.  But I'm not dissatisfied with the green and white.  The kool-aid is on rapid diffuser.  If they could just get the mixture a little sweeter I'd be a happy Joneser for the rest of my career.  

[quote=Spaceman Spiff]

OK, here's why I sound different.  Not a sign that I'm jumping, just the facts. 

I lost a good account this week.  Sorry, lost a good prospect this week.  Guy I doorknocked 3 years ago.  Dripped on him on and off.  Total portfolio of over $650K.  Perfect Jones client.  Mostly funds with Fidelity.  75 years old.  We've had 3 meetings in the last 3 months.  The last one he tells me he can't understand my proposal, can't figure out how much it costs, and can't see any reason why he would move to me just to buy different mutual funds.  He wants to do ETFs instead. China, Oil and Gas, Energy, and FTSE.  He read a book on them so now he's an expert. 

Three years of work and I lose out to a book.  This fee based post kind of hit a sore spot.  Part of me thinks if I had the ability to do fee based I might have had a better shot.  You want to do ETFs?  OK.  You want to do stocks?  OK.  You like your funds?  OK.  No problem.  Let's transfer it all in. 

So, there you go.  I'm not jumping.  I enjoy the regional meetings (there go the "you sound like a smart guy" references).  I don't like the start from $0 every month.  Neither do my wife and two girls.  But I'm not dissatisfied with the green and white.  The kool-aid is on rapid diffuser.  If they could just get the mixture a little sweeter I'd be a happy Joneser for the rest of my career.  

[/quote]

SS, this is a classic case of rookie ignorance. First, you kept dripping on him. If the guy was a good prospect, he would've met with you 3 years ago. Second, you had 3 appointments with him where one should've been enough. Also, you gave him a proposal. Do your presentations on a legal pad and NEVER let anyone take anything home. Tell them that it is a TOOL that YOU will use to manage their money and that they can see it anytime they want, if they make an appointment first. Again, use a legal pad. You demonstrated that you add NO value. Here you are moving all over the place, offering MF's, ETF's or whatever HE wants, instead of insisting that you know what you're doing and if he wants you to manage his money, he will have to do things YOUR way.

If ALL you look for are people who want what you do and want it now, you're gonna find people who want what you do and will get the business now. Anything else and you're wasting your time. Take this sh*t to heart.

[quote=Spaceman Spiff]We’ve had 3 meetings in the last 3 months. 
The last one he tells me he can’t understand my proposal, can’t figure
out how much it costs, and can’t see any reason why he would move to me
just to buy different mutual funds.  He wants to do ETFs instead.
China, Oil and Gas, Energy, and FTSE.  He read a book on them
so now he’s an expert. [/quote]



Spiff,



This is where the danger comes in,



What I’d do is explain that while China, Energy and the like have an
important role to play in any portfolio that faces the future. But to
get the greatest effect it’s important that they be part of a greater
plan.



BTW: This is the exact reason that John Bogle doesn’t like ETF’s, they
appeal to traders. This guy will get hammered when the China bubble and
collapses.



Will EDJ participate on the next KayneAnderson
(or other MLP) fund? If so I’d call him when that starts going, and try
to schedule a meeting to talk about it. The MLP funds are very useful
since they convert the MLP’s K-1 income into classical form 1099-Div
income.

[quote=Spaceman Spiff]

75 years old.  We’ve had 3 meetings in the last 3 months.  The last one he tells me he can’t understand my proposal, can’t figure out how much it costs, and can’t see any reason why he would move to me just to buy different mutual funds.  He wants to do ETFs instead. China, Oil and Gas, Energy, and FTSE.  He read a book on them so now he’s an expert. 

I hate to break this to you, but the client is right. Lets see what your proposing: You should pay me $16,250 for our three meetings and I am going to replace your current mutual funds with the two mutual fund families I am schlepping. For the 16k I get a different allocation from what I had, that has built up to $650,000, which is more money that you have. ALSO, I am 75 so my life expectancy is about 6 years. He should take 1/2 his money and but a portfolio of etf’s.

Spiff, you do seem to be awakening a bit. This is what happened to me.

You will be more competitive with a real fee-based platform (I'm not convinced Jones will give you one). It truly demonstrates that your recommendations are unbiased when you are not paid better to recommend one product over another, and the client will see that.

And Spiked...from what I hear..."it is going to blow the doors off of the industry." (Just like A share annuities did, right?)

Spiff, keep your eyes open. You will be amazed what you start to see if you are just willing to. I am sure glad I did. 

[quote=STL Sucks]You should pay me $16,250 for our three meetings and I
am going to replace your current mutual funds with the two mutual fund
families I am schlepping.[/quote]



An additional issue is very likely that none/few of the funds in the
EDJ lineup are sexy or meet his percieved needs (). Clearly Spiff,
didn’t show that he could deliver more than $16,250 of value to this
client.



() GFA/CIB are the perfect investments for everyone.



Someone in his situation has a set of needs, and needs investments that
will match those needs. In the initial sales call, you want figure out
what the clients explicit needs are (e.g needs that the client verbally
states).



So you ask if his current investments provide enough income, what his
goals are, how his life would be different if he could meet his goals
etc.



Then you match investments (benefits) to explicitly stated needs.



A typical older person needs income oriented investments with strong
diversification to lower portfolio volatilty. Some folks really want
very strong and direct exposure to non-US assets. Other people are
crazy for hard assets/natural resources.



Using just two EDJ Fund families is like trying to paint the Mona Lisa
with only orange and red crayons. I.e in the entire EDJ universe there
is only one TIPS fund, and damn few good value/international offerings.



Then again, the fact that he mentioned the FTSE suggests that he may
have caught the vanguard virus, and is now pretty much immune to your
blandishments. Vanguard offers a FTSE All-world x-US ETF (VEU) for only
25 bps. Or maybe he wanted the FTSE RAFI index funds from powershares.



If the client wants to invest in china, you want to have something
useful to say. If the client wants Oil/Gas you want something useful to
say. If the client wants Gold you want something useful to say.



But if all you can say is “Growth Fund of America!”, then you aren’t
saying anything useful that sophisticated clients want to hear.

I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make

zero to little use of proper breakpoints and suggest A-shares of 7 preferred

fund families.



This screws people so badly on the upront fees that there is no point in

moving it out of Jones.



I’m surprised the SEC doesn’t crack down on EJ’s illegal use of A-shares. I

told one victim what a breakpoint was, and she just about screamed.

Spiff, I could say something sarcastic…but man, I feeeeel your pain.  I took it very personal when something like this happened.  I felt inferior, like a schlump.  It made my calls sound terrible…I was pissed and down on myself.  Started second guessing myself.  I’d go to meetings and some new guy who took over an office would brag about all he was getting and he won his first trip…blah blah blah.  All this crap just built up to the point I didn’t believe ANYTHING coming from my RL, home office, anywhere. It was the end.

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

This is not normal at EJ. Jones advisors in general use breakpoints to the clients' and their own detriment. You will not convince me otherwise.

And yes, CIB for everyone!

[quote=CIBforeveryone]

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

This is not normal at EJ. Jones advisors in general use breakpoints to the clients' and their own detriment. You will not convince me otherwise.

And yes, CIB for everyone!

[/quote]

CIB? I know the "In Butt" part, but what does the "C" stand for?

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make

zero to little use of proper breakpoints and suggest A-shares of 7 preferred

fund families.



This screws people so badly on the upront fees that there is no point in

moving it out of Jones.



I’m surprised the SEC doesn’t crack down on EJ’s illegal use of A-shares. I

told one victim what a breakpoint was, and she just about screamed.[/quote]



The classic presentation is to

[quote=Bobby Hull][quote=CIBforeveryone]

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

This is not normal at EJ. Jones advisors in general use breakpoints to the clients' and their own detriment. You will not convince me otherwise.

And yes, CIB for everyone!

[/quote]

CIB? I know the "In Butt" part, but what does the "C" stand for?

[/quote]

Rhymes with Rock.

[quote=CIBforeveryone]

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

This is not normal at EJ. Jones advisors in general use breakpoints to the clients' and their own detriment. You will not convince me otherwise.

And yes, CIB for everyone!

[/quote]

And all this time I though the name meant Combat Infantryman's Badge.....

[quote=Baller][quote=Bobby Hull][quote=CIBforeveryone]

[quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

This is not normal at EJ. Jones advisors in general use breakpoints to the clients' and their own detriment. You will not convince me otherwise.

And yes, CIB for everyone!

[/quote]

CIB? I know the "In Butt" part, but what does the "C" stand for?

[/quote]

Rhymes with Rock.

[/quote]

Good. I was afraid that it might rhyme with "rum."

EDJ FEE Based....As I have heard it will resemble R shares for the 8 preferred fund families. (Quite the Platform) 

[quote=AllREIT] [quote=AGE_Inside_Info]I have seen many an EJ brokers $500-$1,000,000 proposals. Most that make
zero to little use of proper breakpoints and suggest A-shares of 7 preferred
fund families.

This screws people so badly on the upront fees that there is no point in
moving it out of Jones.

I'm surprised the SEC doesn't crack down on EJ's illegal use of A-shares. I
told one victim what a breakpoint was, and she just about screamed.[/quote]

The classic presentation is to

1) Use two preferred fund families to split up money, away from the break points.
2) Buy some bonds
3) Buy a Dow stock so you  have something to talk about.

If you play your cards right it would take well over $1M in client assets to hit any break points
[/quote]

Actually from what I've seen we (Jones FAs) tend to use breakpoints much better than anyone else out there.  I can't tell  you how many $250K B share portfolios I've run into.  Most of them coming from Amex, but several others from AGE and even Merrill.  I've always thought that a broker that uses B shares on that dollar amount is just too scared to tell the clients that he gets paid to do his job.  So he hides behind the you don't pay any sales charges on B shares scam.  Or he says he can build a better portfolio by using 9 different fund families.  However, he wants to get paid better than C shares. 

AGE you're, well...lying.  Sorry, I know it's harsh, but too bad. First, compliance wouldn't let an account like that fly. They freak when you get above 2.  Second, it would be incredibly rare for any of us to use all 8 fund families.  Most of us have 3, maybe 4, that we use most of the time.  Maybe you've seen it once, but not frequently.  The "illegal use of A shares" comment is just flat wrong.  Maybe you were thinking about our illegal use of revenue sharing.

AllREIT is pretty close to standard at Jones.  We have a pattern, just like everywhere else.  B shares at AMEX, C shares at AGE, wrap everything at Merrill.  Bobby does annuities.  Doesn't make ours a bad presentation.  As long as we can make the returns our clients are looking for I don't see why it matters how many fund families we use or if we use options or ETFs or gold.  Where do they want to be and how much risk/return will it take to get there.  Manage the portfolio to meet the goals. 

Spiff-

You wrote...

Maybe you were thinking about our illegal use of revenue sharing.

It sounds like you are finally getting it.

No, just a little attempt at humor.  Revenue sharing isn't illegal.  We certainly know how to use it to our benefit.  Evidently the regulators felt that our lack of disclosure (and of everyone else who didn't hurry up and put some disclaimer on their website) wasn't up to par.  If it was illegal, we couldn't do it anymore.  Let's not rehash this again, please. 

Trust me people, I get it.  I know there are things I'm giving up by staying at Jones.  I like it here.  A lot of you didn't.  I'm hoping that there are some changes in the near future that make my job easier and better for my current and future clients.

Spiff,

I was on the leadership team in my region and past advisor of Jones, one thing I didn't enjoy was having to prospect new people every month because of no reaccuring revenue (I had 12 gross monthly in A share trails).  This ultimatley took time away from my best clients so insurance planning and estate issues were out the window due to the required hunting each month.  I just cant believe EDJ is using the term financial advisor, I think asset gatherer is more appropriate.  Just a thought...if you and your clients are happy then all is well.

Correction to last reply $9,200 monthly trails 

Spiff-

Were you around when we were encouraged to NAV to Hartford because of revenue sharing and how it impacted our bonuses?

And were you around when we found out some 6-7 years later that the GP's owned an income interest (sounds like LP) in the Hartford Mutual Funds. And how did we find out...when they were forced to disclose it on the website! When revenue sharing issues came out, Jones management deserved to pay every penny of the SEC settlement.

Dude...The conflict is so glaring you have been blinded. While maybe not illegal since everyone else does it (NOT), probably one of the most unethical tactics ever used in the industry to manipulate brokers.

I was a successful Jones broker who left and I did it to mainitain my integrity. The stench of management was more than I could take. I was sick every time I represented the firm in public, because I knew the truth. I worked for a bunch of hypocrites. Don't tell me never to rehash the truth.

The reason...is you can't handle the truth.

Spiff is getting wooosy with all the blows. Take one on the chin for your friends the GP's and maybe, just maybe, they'll bring you aboard the gravy train. 

OR NOT!!

I've been at Jones for over 10 years.  I've heard the conversations about using Hartford or Goldman or Federated when it mattered to our P&L statements and therefore our bonuses.  I know some people looked at it and some didn't.  I know of one large producer who is no longer with the firm who made a wholesale change to Hartford from American because of revenue sharing.  You are correct that it was a bad practice.  I'm not going to argue with you.  I prefer the setup we have now.

Are you telling me you REALLY cared that the GPs had a stake in Hartford?  Or was it just one more thing to put in your "I hate Jones" scrapbook?  I found it interesting, but I can't say I was shocked.  I don't use a lot of Hartford funds anyway, so I guess it didn't really matter to me.  I don't think it made my blood pressure go up like it evidently did yours. 

I have yet to find a major player in our industry that doesn't do revenue sharing.  We do have a smaller list than everyone else, however.  Maybe that's the difference.  So maybe technically I can't use the word "all", but I'm awfully darn close. 

As far as I can tell there are only three groups of people who really care about revenue sharing.  First, GPs because that's where a lot of their income comes from.  Second, our compliance officers because they have to ask about it everytime they visit our offices.  And third, ex-Jones brokers who always bring it up as one of the major reasons they left and why Jones is evil. 

My clients care about three things:  Their goals, their returns, and contact from me like I promised.  They have a difficult enough time trying to figure out how to save money, much less trying to figure out how Jones makes money. 

[quote=advisor28]

Spiff,

I was on the leadership team in my region and past advisor of Jones, one thing I didn't enjoy was having to prospect new people every month because of no reaccuring revenue (I had 12 gross monthly in A share trails).  This ultimatley took time away from my best clients so insurance planning and estate issues were out the window due to the required hunting each month.  I just cant believe EDJ is using the term financial advisor, I think asset gatherer is more appropriate.  Just a thought...if you and your clients are happy then all is well.

[/quote]

Really?  You ran a $50 million office (based on your $9200/month trails) and you couldn't do insurance or estate planning?  Not even on your best clients?  Now, I know those issues can be time consuming, but it's not like you have to do it more than once for your best clients.  And you really don't have to do much work.  C'mon.  You've got to find a better excuse than prospecting for not doing the timeblocking to get everything done.  At $50 million I would expect that referrals were a large part of your business.  I don't buy it. 

I don't know why you don't believe we're FAs.  Is there something that we should be doing that we're not doing now?  Retirement planning, estate planning, college planning, LTC planning, cash flow analysis, asset allocation models, investment planning, income planning.  I know I've missed some.  What part of that doesn't make us financial advisors? 

UH…how about 65 year bonds paying 4.77%…net 3

What’s wrong with bonds? If they’re viewed as a vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see the

problem.

Space-

I can hear a conversation of yours to an attorney.

" I know we are part of a dirty industry that does unethical things, but I can't control what my management does, and the seven preferred families are relatively good fund families, so I don't have a conflict because I don't receive any of the money directly just indirectly. All my clients care about is performance and that I call them regularly.

Spiff....Jones is perfect for you.  Please don't leave. They need happy ostriches.

Spiff,

Take a look at your current households and accounts, do you really see every client quarterly or semi-annually? What are the size of your avg households?  You will end up as many vets that were in my region if your as successful as you should be at 10-15 years in the biz, 3,000 accounts and 1,200 households (This is what the Jones Model is built to do).  You will have pages of bond calls which as a new IR you dream of however becomes a nightmare for a vet down the road. Can you honestly tell me your clients are benefiting from your advisory services?  Jones has those capabilities you listed above, my point is the way the model is devised you can't sustain seg 5 numbers and sit with all of your clients, and by the way your adding 10 more next month...so then you goodknight, which I did and it becomes an endless cycle of revolving door clients.  If you honestly read through your household list of clients your memory would start to fade on page 10.

[QUOTE]Are you telling me you REALLY cared that the GPs had a stake in Hartford?  Or was it just one more thing to put in your "I hate Jones" scrapbook?  I found it interesting, but I can't say I was shocked.  I don't use a lot of Hartford funds anyway, so I guess it didn't really matter to me.  I don't think it made my blood pressure go up like it evidently did yours.  [/quote]

Did the clients fully understand that both EDJ and you had a personal stake in hartford funds above and beyond the standard A-share comission.

Did they understand how that relationship could influence your recomendations in going with a Hartford fund vs funds from another family?

[quote]I have yet to find a major player in our industry that doesn't do revenue sharing.  We do have a smaller list than everyone else, however.  Maybe that's the difference.  So maybe technically I can't
use the word "all", but I'm awfully darn close. [/quote]

I don't think anyone else in the industry gets as large a %age of income from revenue sharing.

When AF funds perform poorly, a la Magellan etc, EDJ is going to be in a world of hurt as clients pull out of AF and EDJ as well.
[quote]As far as I can tell there are only three groups of people who really care about revenue sharing.  First, GPs because that's where a lot of their income comes from.  Second, our compliance officers because they have to ask about it everytime they visit our offices.  And third, ex-Jones brokers who always bring it up as one of the major reasons they left and why Jones is evil. [/quote]

Clients have a latent interest in it. Because it could color your suggestions away from their best interests.

[quote]My clients care about three things:  Their goals, their returns, and contact from me like I promised.  They have a difficult enough time trying to figure out how to save money, much less trying to figure out how Jones makes money. 

[quote=Philo Kvetch]What’s wrong with bonds? If they’re viewed as a vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see the

problem. [/quote]



Cause EDJ tends to only sell long bonds which are not terribly appropriate for many clients.



Yet another latent risk for EDJ,. b/c if interest rates should rise,
clients will not be please to see thier 30 year debentures trading at
83.

AllREIT,

There is a lot of truth to your bond statement which is undeniable among past and current EDJ reps.

[quote=AllREIT]

[quote=Philo Kvetch]What’s wrong with bonds? If they’re viewed as a

vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see

the

problem. [/quote]



Cause EDJ tends to only sell long bonds which are not terribly appropriate

for many clients.



Yet another latent risk for EDJ,. b/c if interest rates should rise,

clients will not be please to see thier 30 year debentures trading at

83.

[/quote]



And if interest rates fall?

Philo,

Now that we all have been enlightened by the opposite effects of Rates and Price... I think the point lies in the motivation of which long term bonds are sold not in whether they have a place in portfolios if the client is educated ahead of time.  If you like I can put this into deep south terms: You buy your milk cow for the milk, if the price of beef goes up you don't kill your milk cow.

Enjoy.............

[quote=advisor28]

Philo,

Now that we all have been enlightened by the opposite effects of Rates

and Price… I think the point lies in the motivation of which long term bonds

are sold not in whether they have a place in portfolios if the client is

educated ahead of time. If you like I can put this into deep south terms: You

buy your milk cow for the milk, if the price of beef goes up you don’t kill

your milk cow.

Enjoy…

If you catch yourself using it don’t feel ashamed…no need for name calling but I’m always happy to educate the rookie’s.

[quote=advisor28] If you catch yourself using it don’t feel ashamed…no

need for name calling but I’m always happy to educate the rookie’s.[/quote]



Thanks again, pinhead.



A word of advice, if I may: given your, shall we say less than average

capabilities, don’t try to educate anyone.

Less then average capabilities? If I may: given your less than average response no offense taken.

[quote=advisor28] Less then average capabilities? If I may: given your less

than average response no offense taken.[/quote]



That’s good, pinhead. You should know, however, that I don’t care whether

you’re offended or not.

Best of luck to you, I see your a senior member of the forums since 2005…your probably mid 40’s and drive a red sports car too. That is if the misses keeps her job, I can imagine it would be tough on one income.

[quote=advisor28] Best of luck to you, I see your a senior member of the

forums since 2005…your probably mid 40’s and drive a red sports car too.

That is if the misses keeps her job, I can imagine it would be tough on one

income.[/quote]



Wrong again, pinhead. But you should be used to that.

[quote=Philo Kvetch]


And if interest rates fall? [/quote]



Clients don’t mind their bonds trading at 112, but they hate it alot worse to see them underwater at 83.



Anyways the main reason an EDJ’er sells a bond vs BFA/CIB is to avoid running up the break points in the AF bucket.



http://www.americanfunds.com/funds/classes/details.htm#break points



------



Owning long bonds, when you can own long TIPS is very dangerious and IMHO underpriced bet on lower than expected inflation.

I think the same could be said regarding stocks, reits, etfs, mfds, etc.

Clients like it when the price is up, and don’t like it when they’re down.

What’s your point?



As to the breakpoints, are you saying that they’d rather take 3 points on a

bond trade, so they don’t have to give the client some Washington Mutual

Investors at 4 1/2%?



No Allreit, your arguments don’t make any sense.

Philo,

Lets reintroduce you to the topic, you seemed to have missed it yet again.  Many EDJ brokers are only selling long term bonds in order to net 2 and above regardless of whether appropriate for the client or not.  This is the corrupt nature of a pure transaction model as previously stated..just nod if your getting this.

[quote=Philo Kvetch]I think the same could be said regarding stocks, reits, etfs, mfds, etc.

Clients like it when the price is up, and don’t like it when they’re down.

What’s your point?



As to the breakpoints, are you saying that they’d rather take 3 points on a
bond trade, so they don’t have to give the client some Washington Mutual
Investors at 4 1/2%?



No Allreit, your arguments don’t make any sense.[/quote]



My point is that the long bonds typically sold by EDJ aren’t
appropriate since most people won’t hold them for the full 30 years,
and they add needless interest rate risk to the portfolio.



As for AF breakpoints, you realise that they don’t stay at 4.5% forever.



The classic high earning B/D portfolio is going to be 2 sets of
A-shares, some bonds, and then a Dow stock. This looks good to everyone
yet maximises total GDC vs putting it all in AF.

Pinhead, the statement made was:

"Anyways the main reason an EDJ’er sells a bond vs BFA/CIB is to avoid

running up the break points in the AF bucket."



My retort was that it wouldn’t make sense to go for a 3 point commission to

prevent the client from hitting a 4 1/2% breakpoint.



Please try not to confirm ALL of my suspiscions about you.

UH...how about 65 year bonds paying 4.77%..net 3

Listed above was the first comment about bonds by BSpears..

This is where the topic of bonds began until you brilliantly asked what is wrong with bonds? When commission generation was the topic. It is clear ALL of my suspiscions have been confirmed thus far.

[quote=AllREIT] [quote=Philo Kvetch]I think the same could be said regarding stocks, reits, etfs, mfds, etc.
Clients like it when the price is up, and don't like it when they're down.
What's your point?

As to the breakpoints, are you saying that they'd rather take 3 points on a bond trade, so they don't have to give the client some Washington Mutual Investors at 4 1/2%?

No Allreit, your arguments don't make any sense.[/quote]

My point is that the long bonds typically sold by EDJ aren't appropriate since most people won't hold them for the full 30 years, and they add needless interest rate risk to the portfolio.

As for AF breakpoints, you realise that they don't stay at 4.5% forever.

The classic high earning B/D portfolio is going to be 2 sets of A-shares, some bonds, and then a Dow stock. This looks good to everyone yet maximises total GDC vs putting it all in AF.



[/quote]

Look, I'm no fan of mutual funds to begin with.  But to play the Devil's Advovcate here, let's use an hypothetical $50,000.  At 3 pts, broker GDC is $1,500 in a bond, and at 4.5 in AWSAX is $2,250, plus 25 bps starting in month 15.  So to say that a Jones broker uses the bond for selfish reasons is just plain nonsense.

Philo,

Your out of your league.......However I wish you the best, as I can tell your clients must love to hear how much you know.

For an income oriented client it is hard to beat GNMA’s. Govt guarantee and as long as you stay away from premium GNMA’s, the principal flows rather quickly back.

Believe it or not your case is true however both you and ALLREIT missed the topic…

[quote=advisor28]Believe it or not your case is true however both you and ALLREIT missed the topic....[/quote]

Gee pinhead, it's a good thing that you're the only one who "gets it".

I just call it like I see it…Maybe tomorrow you’ll awake a new man or woman. Just remember if you have an appointment tomorrow work intently on listening you might just close some business and at the same time do whats best for your client.

I just left Jones last week and truly think the main reason new reps
sell bonds is because they are easy to sell over the phone.  Not
easy to sell per se, but easy to say here is something paying a stated
rate.  Try selling a MF over the phone, not as simple.  And I
don;t for a minute think it is a blanket practice to split $ up amongst
many fund companies to avoid breakpoints.  Simply not true.

Correct.. However searching the inventory at Jones high net bonds is common practice for most advisors.

[quote=advisor28] I just call it like I see it…Maybe tomorrow you’ll awake a

new man or woman. Just remember if you have an appointment tomorrow

work intently on listening you might just close some business and at the

same time do whats best for your client.[/quote]



I too call 'em as I see ‘em, pinhead. I always endeavor to do what’s best for

my clients. That’s how I’ve survived and thrived in this business. So take it

from this ol’ boy from the Deep South…shut up and learn from your

betters…such as myself.

[quote=advisor28]

Correct… However searching the inventory at Jones

high net bonds is common practice for most advisors.

If you havn't figured it out by now there is no hope for you. This topic was moving quite nicely until you arrived, but stick around you may learn somthing..

The iron horse:  I’m sorry about the side show Philo has been searching for active topics and stummbled into this one I would be curious to hear your honest answer.

[quote=advisor28]

If you havn’t figured it out by now there is no hope

for you. This topic was moving quite nicely until you arrived, but stick

around you may learn somthing…

advisor28-I am not certain which question you want a response to, I
will assume it was the “high net” one.  I would say yeah, if 2
bonds are 30 year bonds paying the same stated rate and no "extra"
features, the broker will choose the higher net bond 99/100
times.  But I am not sure if that is what you are asking me.



But I have no idea if people would sell a 30 yeaar instead of a 10 year
due to a higher net.  I have no way of knowing that, unlike most
people on here who seem to know the ins and outs of all the Jones reps
transactions.

Most Jones brokers I know consider the commission on the bond nearly as much as they consider the other details of the bond.  Most (of the ones I know) shy away from selling shorter term bonds due to low commission. 

Come on People---

This is one is so obvious...Sell the 30 year at 2.75 net and then if the bond price falls you do a tax swap and get paid again and the client thinks you saved them money on the swap.  This was a system wide acceptable practice in 1994. 

I remember all the EDJ Vets teaching me the above technique.

Your all nuts if you don’t believe the jones advisor is not selling based on the net to broker.  MAKE IT PAY…isn’t that the mantra of Jones…puked at every regional meeting…MAKE IT PAY…NET TO BROKER…CALL SESSIONS>>>HEY EVERYBODY…PUT THE PHONES DOWN…PULL UP THE CORPORATES…WE JUST GOT A NEW ONE IN PAYING 2.5…LARRY GIVE US A SCRIPT THE NEWBIES CAN USE TO SELL THIS BOND.,…HURRY WE’VE ONLY GOT 3 MILLION IN INVENTORY…MAKE IT PAY, DAMMIT!!!  LETS UP THE ANTE WE’RE ASKING FOR…EVERYBODY NEEDS TO SAY…“IF YOU HAVE 50,000 AVAILABLE, I THINK YOU SHOULD BUY SOME TODAY”   HOLY sh*t…I JUST WET MYSELF IN ANTICIPATION…

ok, that is pretty funny.  I remember a call session my 2nd month
selling where a muni bond was “just placed in inventory” and a seg 5
came into the room waving the printout saying pretty much the same
thing as above.  we only have x amount, and these babies are not
gonna last.  And is there anything better than typing inv,newir
and waiting in anticipation.



In all seriousness though, Jones never makes you sell anything you
don’t want.  I realize newbies get steered in a direction, but
ignorance is not a defense.  If you want hang yourself out there
as an advisor, you better at least have an idea of whether a 30 year
Corporate is appropriate.

[quote=theironhorse]ok, that is pretty funny.  I remember a call session my 2nd month selling where a muni bond was "just placed in inventory" and a seg 5 came into the room waving the printout saying pretty much the same thing as above.  we only have x amount, and these babies are not gonna last.  And is there anything better than typing inv,newir and waiting in anticipation.

In all seriousness though, Jones never makes you sell anything you don't want.  I realize newbies get steered in a direction, but ignorance is not a defense.  If you want hang yourself out there as an advisor, you better at least have an idea of whether a 30 year Corporate is appropriate.
[/quote]

Define appropriate

appropriate-suitable or fitting for a particular purpose, person, occasion.



Give me a specific situation and we can decide if it is appropriate.  I mean c’mon, define suitable.

[quote=theironhorse] appropriate-suitable or fitting for a particular

purpose, person, occasion.



Give me a specific situation and we can decide if it is appropriate. I mean

c’mon, define suitable.



[/quote]



Well, you’re the one who brought it up. Let’s use your example. When is

a 30 year corporate appropriate?



I would maintain that, for example, a 30 year AAA rated 6 1/2% with say

5-10 years of call protection would rarely be inappropriate for a balanced

portfolio.



What are your thoughts?

Philo-I get the impression you thought my post meant this investment
was rarely, if ever, appropriate.  But far from it.  I have
sold plenty of bonds just like you listed above to clients seeking a
balanced portfolio.



All I meant was people bash Jones and the 30 year bond scenario all the
time, and rarely hold the individual IR accountable-they simply blame
it on Jones.  I was referring to a call session where you sit
there with your list of 500 names and call down the entire list trying
to sell the same bond to each of them-because Jones has newbies do
this.  But end of the day, it is YOU steering the ship.  I
was not bashing the usefulness of the product.

[quote=bspears]Your all nuts if you don't believe the jones advisor is not selling based on the net to broker.  MAKE IT PAY...isn't that the mantra of Jones...puked at every regional meeting...MAKE IT PAY....NET TO BROKER....CALL SESSIONS>>>HEY EVERYBODY...PUT THE PHONES DOWN...PULL UP THE CORPORATES..WE JUST GOT A NEW ONE IN PAYING 2.5...LARRY GIVE US A SCRIPT THE NEWBIES CAN USE TO SELL THIS BOND.,..HURRY WE'VE ONLY GOT 3 MILLION IN INVENTORY...MAKE IT PAY, DAMMIT!!!  LETS UP THE ANTE WE'RE ASKING FOR....EVERYBODY NEEDS TO SAY..."IF YOU HAVE 50,000 AVAILABLE, I THINK YOU SHOULD BUY SOME TODAY"   HOLY sh*t...I JUST WET MYSELF IN ANTICIPATION....[/quote]

I resent the implication as a jones broker. It's certainly fine to hate call sessions and I think that is a way to teach younger brokers the discipline necessary to succeed in this business. When you make blanket statements like that, you show your mental immaturity.

[quote=theironhorse]ok, that is pretty funny.  I remember a call session my 2nd month selling where a muni bond was "just placed in inventory" and a seg 5 came into the room waving the printout saying pretty much the same thing as above.  we only have x amount, and these babies are not gonna last.  And is there anything better than typing inv,newir and waiting in anticipation.

In all seriousness though, Jones never makes you sell anything you don't want.  I realize newbies get steered in a direction, but ignorance is not a defense.  If you want hang yourself out there as an advisor, you better at least have an idea of whether a 30 year Corporate is appropriate.
[/quote]

So Jones is innocent in this?  Most of the people they train don't start with a clue about investments.  Yes the advisor has some responsibility, but if I were a client I would still be pissed at both the advisor and the firm for their method of training.

Noggin…if your new to the industry and you start at Jones, and you go to these training sessions…and you watch what the vets are doing…you pretty much follow their lead.  You see this as what your suppose to do…maybe this is why going to non Jones functions are frowned upon.  I know, you can do whatever you want, but if the RL knows your heading to industry functions outside of the Jones propaganda…well, lets just say the LP will be a little short, or none at all and YOU know it!!!

[quote=gad12]

So Jones is innocent in this?  Most of the people
they train don’t start with a clue about investments.  Yes the
advisor has some responsibility, but if I were a client I would still
be pissed at both the advisor and the firm for their method of
training.

[quote=AllREIT]

[quote=gad12]

So Jones is innocent in this?  Most of the people
they train don’t start with a clue about investments.  Yes the
advisor has some responsibility, but if I were a client I would still
be pissed at both the advisor and the firm for their method of
training.

[quote=Philo Kvetch] [quote=theironhorse] appropriate-suitable or fitting for a particular

purpose, person, occasion.



Give me a specific situation and we can decide if it is appropriate.  I mean

c’mon, define suitable.



[/quote]



Well, you’re the one who brought it up. Let’s use your example. When is

a 30 year corporate appropriate?



I would maintain that, for example, a 30 year AAA rated 6 1/2% with say

5-10 years of call protection would rarely be inappropriate for a balanced

portfolio.



What are your thoughts?[/quote]



And do such desirable bonds exist? Can you buy them? And for what price/YTW/YTM?



IMHO such a bond would again be nappropriate though not as bad
investing in Unicorn Bellies for Jan 2007 Delivery. A 30 year bond has
a high duration, and thus is going to have alot of bounce to it. The
embedded call option gives the bond negative convexity which is
undesirable.

Dude, you're talking about people who are looking to get a safe income stream.  They're going to hold the bond until they die (use the estate feature), it matures (full principle back), or it gets called (full principle back).   They'll get the checks, go to the boat and blow it.  If we used the words duration, bounce, and convexity they'd say fine.  I'm going to the bank to buy a CD.  I understand those. 

Jones uses the bonds during call sessions as a prop.  Something to start a conversation with.  The number of people who actually buy something from those new guys is small.  If they do buy it's usually $10k or something similar.  Just enough to keep the guy from calling him every other week.

The new guy at Morgan selling all C shares because that's what his BM does is as much a problem as the new Jones guy selling a 30 bond.  Newbies are sheep, willing to go wherever they perceive is the best information.  Usually that comes from the guy in the front of the room who makes the most money.  They really need to be talking with the guy who doesn't attend those meetings and thumbs his nose at the corporate gibberish.

Spiff-

There you go again. Spouting off that C shares are bad for any reason you can think of. The difference between you and the normal Jones guy, is you have a brain. You have chosen not to use it...

[quote=footsoldier]

Spiff-

There you go again. Spouting off that C shares are bad for any reason you can think of. The difference between you and the normal Jones guy, is you have a brain. You have chosen not to use it...

I didn't realize that Jones was the only Firm that sells products on the phone.  It's amazing to me that we get bashed for calling up QUALIFIED prospects on the phone and telling them about whats available. 

Lets see, Joe Schmoe 65 year old prospect buys CD's at the bank and thats all, should I: A. Call him and sell him an Equity Indexed annuity with 10 year surrender with all of his money; B. Call him and let him know that he can lock in 6.5% on an AA rated Bond for SOME of his money; C. Not ever call him (apparently what you guys must do) because it wouldn't be right to offer someone a product that actually serves him well; D. Sell him a C share annuity with 1.5% expense + 1.0% annual in a bond fund with a 4.5% yield and a 20 year return of 5%?  Which is the best idea? 

Wow, when did Merrill, SB, AGE(WACH), RJ, LPL and others stop calling clients to share an idea, gather information, and set up appointments? What do you do, stand in the window until someone walks by?

[quote=AllREIT]

[quote=Philo Kvetch] [quote=theironhorse] appropriate-suitable or

fitting for a particular

purpose, person, occasion.



Give me a specific situation and we can decide if it is appropriate. I mean

c’mon, define suitable.



[/quote]



Well, you’re the one who brought it up. Let’s use your example. When is

a 30 year corporate appropriate?



I would maintain that, for example, a 30 year AAA rated 6 1/2% with say

5-10 years of call protection would rarely be inappropriate for a balanced

portfolio.



What are your thoughts?[/quote]



And do such desirable bonds exist? Can you buy them? And for what

price/YTW/YTM?



IMHO such a bond would again be nappropriate though not as bad

investing in Unicorn Bellies for Jan 2007 Delivery. A 30 year bond has

a high duration, and thus is going to have alot of bounce to it. The

embedded call option gives the bond negative convexity which is

undesirable.

[/quote]



There are quite a few out there. If you were a broker you’d know that.



To your other point, I hope you don’t talk to clients/prospects like that.

You sound like a jerk.

Philo,

Please give us a rest, your appointments must last hours with all the wisdom you have to share..not to mention your grasp of the Websters Dictionary.  You certainly seem to be a crowd favorite around here.

[quote=advisor28]

Philo,

Please give us a rest, your appointments must last hours with all the

wisdom you have to share…not to mention your grasp of the Websters

Dictionary. You certainly seem to be a crowd favorite around here.

Seek Life Elsewhere.

[quote=advisor28]

Seek Life Elsewhere.

It would be nice to finish a topic without a constant U-turn, however what ever blows your skirt up…after constantly get less then stellar responses it just gets old, I guess I expected more. (Me and the clients both)

[quote=advisor28] It would be nice to finish a topic without a constant U-

turn, however what ever blows your skirt up…after constantly get less then

stellar responses it just gets old, I guess I expected more. (Me and the

clients both)[/quote]



Again, pinhead, I must ask; What’s your point?

My point:  Your lack of comprehension when it comes to the prior topics has lead to a pattern of dismal response and utter waste of time.  You see in short a forum is a place where capable advisors can share points of interest and at times debate tactics and current issues relating to our industry.  Now if you try real hard my hope for you is that one day you’ll contribute to this process…

[quote=advisor28] My point: Your lack of comprehension when it

comes to the prior topics has lead to a pattern of dismal response and

utter waste of time. You see in short a forum is a place where capable

advisors.can share points of interest and at times debate tactics and

current issues relating to our industry. Now if you try real hard my hope

for you is that one day you’ll contribute to this process…[/quote]



Since we’re being candid here, I must confess that I’ve never seen a post

of yours that has led me to believe that you’re anything but a pinhead.



I mean this in all sincerity…if your posts reflect your intellect and ability,

this business is far too complex for you.



Now I’ll leave the last word between us to you, pinhead. For some reason

it seems important to you.



See you in the funny papers, kid.

I was a kid at one time.  This business is only as complex as you make it.  Best of luck.