So long, mr weddle
weddle announced on Wednesday that the new advisory platform will be for the 2008 Summer Regionals. BAD NEW FOR US: it will only have “limited” ability to stray from model portfolios, and will include funds and “maybe some ETFs”. So the idea of picking the best out of the whole fund/ETF universe is gone. I am gone. 'Bye Jim!
was that on uptick or something?
Q & A on his channel 1 broadcast—see replays
newnew - so you have the time and the knowledge to pick the funds that will work in the future! You also have the time and the knowledge to maintain the allocation, know when to move funds to take advantage of sector rotations. You also have your CFA or at minimum your CIMA. I’m impressed that you’re that good & that educated.
The purpose of managed money is to take us out of the investment equation & turn that over that job to CFA & CIMA’s because they have more experience, knowledge & the time to do it right. This allows us to spend the time managing client’s lives - you know, the thing they actually pay us for.
I agree with you, but I want more flexibility. I want to be able to do what i do now, which is to use model ports OR NOT depending on a particular case. What if I want to ACAT in an account, and the new client wants to stay in a wrap? It will have to be the ol' "liquidate and transfer" no matter what. Is that right, esp in a non-qualified account?
Lets face it- model ports allows Jones to make sure we all use the revenue sharing fund families.Newnew-
Did Weddle say anything about rev sharing and wrap accts? Is that policy going to continue (tongue in cheek!)?[quote=newnew]
I agree with you, but I want more flexibility. I want to be able to do what i do now, which is to use model ports OR NOT depending on a particular case. What if I want to ACAT in an account, and the new client wants to stay in a wrap? It will have to be the ol’ “liquidate and transfer” no matter what. Is that right, esp in a non-qualified account?
Lets face it- model ports allows Jones to make sure we all use the revenue sharing fund families.
[/quote]
Certainly flexibility is not Jones’ strong suit. However, I’m approaching 50 acct’s in wrap & I have only one acct that I’ve done that with, and I’m regretting it!
So, newnew…what’s your plan?
So I guess I was right…I said 2008 they would announce the fee based platforms. The FA would have no control over pricing. The FA would have no control over choices. The FA would be slave to the KoolAid. They will not allow you to take any of the money you have in funds currently and move them into the new program. it has to be all new money. And lastly, Jones’ fee based platform will be holier than thou better than everyone elses.
What are you boys at Jones going to argue about now...That the wrap program at our firm is better than the wrap program at your firm. You guys are the best salespeople in the world.and once again jones sucks…
good comments, except the “jones sucks” is not exactly the kind of comment that keeps a good conversation flowing.
I am looking at options. Have an indy RIA friend who wants me to join him in some way. Perhaps share expenses, but have two indy books. Gotta admit his points on "no commission/no FINRA" are intriguing. No hurry though. Gotta make a good decision-- wirehouse also interested in me.The only thing about the RIA route that gives me pause, is what do you do with the clients who are absolutely against fee-based arrangements? My #2 & #3 clients are commission-based and no way would I want to give them up. I guess there’s nothing to prevent you from using a different platform and still sharing expenses. In fact someone suggested in the recent past that you can run both an RIA platform (outside of a B/D) while running a commission-based platform under a B/D.
The biggest concern I would have with going to a wirehouse is what happens when you decide that you don’t like working for them any better than you liked working for Jones? That may not happen, but you can be more certain that you’ll get along with the boss if the boss is you.
You’re wise to take your time and plan your departure carefully. Whatever you decide, good luck and keep us posted…
[quote=spikedkoolaid] So I guess I was right…I said 2008 they would announce the fee based platforms. The FA would have no control over pricing. The FA would have no control over choices. The FA would be slave to the KoolAid. They will not allow you to take any of the money you have in funds currently and move them into the new program. it has to be all new money. And lastly, Jones’ fee based platform will be holier than thou better than everyone elses.
What are you boys at Jones going to argue about now…That the wrap program at our firm is better than the wrap program at your firm. You guys are the best salespeople in the world.
[/quote]
Wow - that sucks.
At a meeting about a month ago a GP told us that the fee based platform will be:
Offered mid-2008
Will have home office portfolios as well as FA flexibility
Will offer Preferred funds, no-load funds and other load funds besides the preferred.
ETFs and stocks MAY be introduced later.
Auto Rebalancing
"Mature" A share accounts will have procedures to move to fee based, newer A shares will not.
$100,000 minimum
Pricing not yet released
That is all I remember but I feel like a missed something
so at least initially, all clients in the program are stuck with the tax inefficiency of mutual funds. although it sounds like passive no-loads may be included for that, which is good.
Weddles verbal commenta did not seem to indicate much "A flexibility". Indyone: my RIA friend also has a B/D for no load annuities, he said, since I do some insurance too. Not sure how it would come together, but I am very concerned that if I go wirehouse I'll end up indy eventually anyway--so why bother? I'm not that "corporate".Since I am not familiar with exactly how other firm's advisory accounts or wrap accounts work, could someone compare/contrast what is listed above? To me it does not sound too bad, other than the fact that I would like to have stocks and individ bonds included. I am not concerned about the account minimum - I can't imagine putting something smaller than that in a fee account. C shares get the job done for that. Although it would be nice to move A-share accounts in there, it wouldn't seem fair to the client if they recently paid a load. I am guessing its 75 bipswith a 40% payout (it better not be reduced ). My number 1 concern is that I be able to use certain fund families that are hard to incorporate right now due to breakpoints (i.e. Loomis Sayles Strat Income). I sometimes will do a-shares for the core plus a c-share for the random fund, but it's sometimes too difficult to explain to client, therefore not worth the aggrevation. Until we see the ACTUAL model, it's hard to speculate.At a meeting about a month ago a GP told us that the fee based platform will be:
Offered mid-2008
Will have home office portfolios as well as FA flexibility
Will offer Preferred funds, no-load funds and other load funds besides the preferred.
ETFs and stocks MAY be introduced later.
Auto Rebalancing
“Mature” A share accounts will have procedures to move to fee based, newer A shares will not.
$100,000 minimum
Pricing not yet released
That is all I remember but I feel like a missed something
I just reviewed a proposal from Morgan Keegan for some prospects. It sounds identical to what Jones is proposing. They called it the “Preferred Funds Non-Discretionary Program”. I had to wonder if they got in trouble for revenue sharing too.
I've got another prospect that works with the Mutual Fund Store. Same setup. Buddy that works at BAC. Their wrap acct is also the same. I've seen many other programs that look a lot like what Jones is going to send us. I'd like the ability to do stocks and bonds too, but not enough to get upset about at this point. Let's see if they can run it properly first. Then they can add the bells and whistles. I don't ever see Jones giving us full discretionary trading accounts like you see at the big wires. Too much compliance and too much litigation risk. That newnew has decided to leave based on this speculation is funny. Tells me there are other problems/issues and this one is just a trigger.Broker24 - it’s pretty competitive with other places. I’ve seen 3 bank brokerage environments.
I might ask -
- What really is the total universe of funds to pick from?
- Who’s behind the portfolios? Personally I’d be concerned if Jones was handling the allocations, but you may not be. The reason I’d be concerned is that you don’t have deniability. “Let’s fire Edward Jones here. They are significantly underperforming…” Where do you go from there? Also, if it’s Jones managing the portfolios then Jones has to do the due diligence on each fund in the universe. This means there will be a much higher weighting in the preferred funds, and likely a smaller universe.
- Will it be custodied at Jones & therefore be able to use institutional shares or at Fidelity or elsewhere & then have to use shares w/ 12b-1’s(custodians are often compensated by the 12b’1’s). I doubt this will be a problem.
- The account minimum is about right. I have only 2 acct’s that are under $100K & I’m kicking myself for both of them.
- The industry pays a premium payout for wrap acct’s - usually 5% greater than the grid. Firms are looking for a more sustainable business model than burning out their best commission-driven reps also & they want the recurring & somewhat stable revenue stream.
- 75 bps is too small to do these types of acct’s in my mind because there’s a much higher level of liability to these acct’s. Putting on my principal’s hat - determining suitability is required at the time of the sale of a mutual fund. In a wrap account because the disclosed fee is for advice, determining the suitability of the investment is required on an ongoing basis. Essentially, you can’t walk away from these accounts. I require at least 100 bps - 120 bps depending on the type of services I am offering to clients.
- Client costs are competitive if the cost to the client is between 1.3% - 1.5% for the mutual fund wrap program + portfolio management fees.
- Firms often have portfolios for people who are accumulating & different portfolios for those in the distribution phase. Tax efficient portfolios are available within each allocation. Also, many firms are going to Index Plus portfolios where they buy ETF’s for asset classes they don’t believe they can outperform with a mutual fund. This dramatically lowers fees & allows the Bogleheads to have their day. Finally, unified managed acccounts(separately managed accts, ETF’s & funds) and SMA programs are often available for high net worth individuals. I’m sure that Jones will eventually have something to fill each box.
Hope it helps!
yeah, just a trigger. might’ve stayed had this happened already, but I agree they will underprice it–that is what I have heard (75 bps or so gross). Maxstud got the scoop?
People are you really listening to yourselves:
No Control of Pricing No Control of Funds No Control of Fixed Income: I can see it already: "Mr. Customer let's liquidate and transfer that money from XYZ Brokerage firm and move it into our fee-based platform charging .75. It will save you XXX dollars. And then we are going to buy 3 of these individual 30 year bonds out of our inventory paying me 2.5 Net and since you don't need the interest we will dollar cost average the interest payments into this great 5-Pack of Stocks. They will call it diversification. Until Jones sees the loop holes in the pricing models they will continue to promote advisors liquidate and transfer their accounts to Jones. The law of unintended consequences. I can't imagine the struggling Segment 2 Broker getting a $250k rollover and getting paid 40% on .75. They will figure out the math very quickly. $875 on a yearly basis. I just can't see it. Spin it how you want...The true advisory business is taking the clients needs and assessing their goals and then allocating the portfolio accordingly. Not just Liquidate and Transfer!I’ve got one fundamental question about implementing a fee-based program at Jones and it’s frankly the reason I never expected to see such a program at Jones. How do you run a fee-based program, which encourages activity to justify the fee, in a firm who’s mantra is buy and hold?
I hear you, but is here is what is being said: the client will sign a form stating exactly what activities to expect. This will be annual reviews, quarterly rebalancing, and things related to planning tools like personal financial statements and specific goals, etc.
the math of it means it will not be used by newbies. but the guy with a large book can triple his trails from 25 to 75 bps gross. (30M AUM in fees= 2 trips per year all over the world). spikedlookaid is right about the continued over-use of liquidate/transfer.[quote=newnew]yeah, just a trigger. might’ve stayed had this happened already, but I agree they will underprice it–that is what I have heard (75 bps or so gross). Maxstud got the scoop?[/quote]
No, I told you everything I have heard.
I’m all for a fee based option but is funny that you hear people say fee based is better for the client because now the advisor is on the same side of the table as the client. Then you hear [quote=Indyone]How do you run a fee-based program, which encourages
activity to justify the fee, in a firm who’s mantra is buy and
hold?[/quote].
I think it boils down to the fact that most people are told that a fee based advisor is in their best interest, most news articles I read encourage that idea. I believe the way to survive in the early years is a combination of fee based and commission based. If you have a 401(k) rollover you could offer a commissioned based account, if you have someone who owns some mutual funds that they would like to keep then offer fee based. Isn’t that what is in the best interest of the client, or am I naive?
I have always been a buy and hold investor, even before I was in this business, I also have always rebalanced on a yearly basis. Just because I don’t believe I can time the market doesn’t mean that a different investment might come along every once in while that I would want to add to a portfolio or an investment that I have held for a while doesn’t match what I am doing currently. I think fee based accounts will allow me to make these decisions for my clients with out worrying about the commission they would have to pay.
What I’m trying to say is this:
You get the opportunity to transfer an account that has some mutual funds in it like T Rowe Price, High Mark Large Cap Value, Julius Baer International, Metropolitan West Bond, etc. You tell the client, "Yeah, let's liquidate those funds and bring them over here and put them in our American Funds (65% Net Revenue) and sprinkle in some VanKampen. We'll get rid of that bond fund because Bond Funds are bad, you really want 3- 30 year individual bonds that pay a fixed amount of interest and pay me 2.5 Net." What I'm trying to say is when EDJ limits the amount of funds in the program and limits the pricing and limits the flexibilty it really ties your hands to liquidate and transfer good funds and put them in yours. An example I give you is last month, I transferred a Schwab fee based account. I did an analysis of the portfolio and the mutual funds that were used. It was a great portfolio. I didn't sell a thing. I even kept the fee the same as what was at Schwab. The client was happy, I did what was right, and no tax consequences. By the way, all of the cost basis transferred as well. Unlike when I used to work at Jones and tell people, you need to go ask your former broker for cost basis.[quote=spikedkoolaid]I even kept the fee the same as what was at Schwab. The client was happy, I did what was right, and no tax consequences.
[/quote]
Wow! I can call you for advice and I don’t pay anything more for advice??? That’s great! I’m buying, but you know what they say about free advice…
No he said he didn’t change anything. They’re just going to pay the fee to him now, not Schwab.
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses.[quote=Spaceman Spiff] No he said he didn’t change anything. They’re just going to pay the fee to him now, not Schwab.
Spiff - yeah - I said advice didn’t cost anything MORE! He wasn’t getting advice from Schwab. Now, he’s getting advice and he’s paying the same fee. The only reason it ticks me off is that Spiked is probably a really conscientious rep who will give good service, but has devalued himself and others in the industry by telling the client that advice is cheap.
If all you’re paying for is the labor & materials for your house, why would you ever pay an architect? Could it be because they’re required to have those darn drawings - and if you make a material change to the plan for the house you have to go back and get the architect to sign off on the change.
[quote=Spaceman Spiff]
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. First of all Spiff, Jones already has made the statement that commission is better for everyone...they've been saying it for years. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. They don't want to hassle with the planning side of your business? I hate to point out the obvious to you, but you don't have a planning side to your business. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses. [/quote][quote=Philo Kvetch][quote=Spaceman Spiff]
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. First of all Spiff, Jones already has made the statement that commission is better for everyone...they've been saying it for years. - And for years the demographic was the same. Now, with the millions of baby boomer hitting retirement age, the rules are changing. Weddle himself told our region a couple meeting ago that he believed that commission based was best while accumulating assets and fee based was best when spending your assets. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. They don't want to hassle with the planning side of your business? I hate to point out the obvious to you, but you don't have a planning side to your business. - Yes, I do. We didn't used to, but we do now. It's every bit as solid as everyone else. Especially for the people who have embraced it. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses. [/quote] [/quote]Spiff, with all due respect, until you’re able to look at Jones as others see it you never will be able to understand how wrong you really are.
ah…he don’t know what he don’t know…We like him that way…
Give him credit for continuing to look like a drone.
hey spiffy,
".............one time at band camp" have some more koolaid and think of all the nice trips you'll take with Maritz. You know the best darn travel agency with a few GPs on the board.LOL, wow right in a row the usual suspects with nothing new to say, Philo, bspears, foot and jerk. Maybe I should have waiting for CIB revenue sharing post before I posted so it would have been the 5 of you.
Maybe you guys should set up a conference call, all crack open a beer and share your EDJ horror story, sounds like good times to me!
Max, I don't have any connection with Jones other than being a curious bystander. That said, why the hostility and ad hominem attacks? Do you have issues with people telling their opinions? Or is your problem that these folks with "Edward Jones horror stories", as you so quaintly put it, are hitting a little too close to home? In any event, I haven't seen anything by you that shows any of the points made by any of "the 5" to be untrue.LOL, wow right in a row the usual suspects with nothing new to say, Philo, bspears, foot and jerk. Maybe I should have waiting for CIB revenue sharing post before I posted so it would have been the 5 of you.
Maybe you guys should set up a conference call, all crack open a beer and share your EDJ horror story, sounds like good times to me!
Redundant, redundant, and redundant. No new information. Same drone, kool aid, you dont know what you dont no come backs, GP’s this GP’s that. It’s all been said before.
No they’re not hitting to close to home, they have been saying it for 2 years now if it was going to hit home it would have already.
"In any event, I haven’t seen anything by you that shows any of the points made by any of “the 5” to be untrue."
I have no reason to discuss these points with these guys, it’s like going to the Democratic convention to discuss how great a job G.W. Bush is doing.
"Spiff, with all due respect, until you’re able to look at Jones as
others see it you never will be able to understand how wrong you really
are."
The only people that matter is the clients that work with Jones, I sure don’t care what some indy guy or Merrill guy thinks about how we run our business. Laugh and joke all you want, I’m not in the biz to impress people who will never do business with me.
I'm not laughing or joking. As I've posted before, if you guys are happy with it, I'm happy for you, but your lip service changes nothing. I suppose that's as good as you can do Max, given what you have to work with.Redundant, redundant, and redundant. No new information. Same drone, kool aid, you dont know what you dont no come backs, GP’s this GP’s that. It’s all been said before.
No they’re not hitting to close to home, they have been saying it for 2 years now if it was going to hit home it would have already.
“In any event, I haven’t seen anything by you that shows any of the points made by any of “the 5” to be untrue.”
I have no reason to discuss these points with these guys, it’s like going to the Democratic convention to discuss how great a job G.W. Bush is doing.
“Spiff, with all due respect, until you’re able to look at Jones as others see it you never will be able to understand how wrong you really are.”
The only people that matter is the clients that work with Jones, I sure don’t care what some indy guy or Merrill guy thinks about how we run our business. Laugh and joke all you want, I’m not in the biz to impress people who will never do business with me.
Don't ever read my posts again. You have hurt me to no end. If I ever, ever, catch you reading my posts, I will call your GP's douchebags and whinny bitches. DON'T READ THIS POST...STOP....DON'T DO IT
[quote=Philo Kvetch]
LOL, ouch that one hurt.
Max-
The truth hurts....doesn't it.What part of the financial planning process are we missing at Jones? What can you do that I can’t?
I'll tell you what I think I'm missing right now: 1) a fee based platform that lets me work with more than just funds 2) A Monte Carlo tool for future projections Both of those are going to be dealt with sooner or later. Monte Carlo tool is coming on line early next year. The fee based platform they have told us is coming will be a step in the right direction. You keep telling me I don't know what I'm missing. Please, tell me and Max what we don't know. I'd love to know how a real financial planning firm works.[quote=footsoldier]Max-
The truth hurts....doesn't it.[/quote]I said it hurt.
[quote=Spaceman Spiff]What part of the financial planning process are we missing at Jones? What can you do that I can’t?
I'll tell you what I think I'm missing right now: 1) a fee based platform that lets me work with more than just funds 2) A Monte Carlo tool for future projections Both of those are going to be dealt with sooner or later. Monte Carlo tool is coming on line early next year. The fee based platform they have told us is coming will be a step in the right direction. You keep telling me I don't know what I'm missing. Please, tell me and Max what we don't know. I'd love to know how a real financial planning firm works. [/quote] You're quite right Spiff...my mistake. You know everything and have everything that everyone else has. Enjoy the view from the top.Nice comeback. How about answering the question.
I just did...You won't believe anything else anyway.Nice comeback. How about answering the question.
Get to work Spiffy. You can’t make any money on here…oops…unless you can dial and type. My bad…WHat are you calling on today Spiff. CIT bonds, GMAC’s, Household Bonds, anyother mortgage bonds you pushin to the retirees…
No, today was $900K in rollovers.
Philo - I'm serious. You guys are quick to tell us how much Jones sucks. You tell me I don't have a financial planning part to my business. I'm wondering what the heck all these reports I keep printing are for then. What about all those meetings I've had with clients to discuss their plans and goals? I guess I should be thanking you. Evidenlty I don't have the ability to do any financial planning, so I should stop wasting my precious time on it. That gives more that many more hours each day to call people on the new 4.5% AAA 30 year muni @ 3 points. C'mon. Prove to me that I'm wrong. That whereever you are is soooo much better than EDJ.BTW I'm not talking about revenue sharing or GPs pay or any of that other crap that doesn't matter to clients. I'm talking about where the rubber meets the road. What am I missing?
Where did I say Jones sucks? Where did I say anything about revenue sharing and GPs?
What I did say is that if you’re happy at Jones, then I’m happy for you. You, on the other hand, have jumped to defense and claimed you had everything as good as anyone else. All I did was agree with you.
Look, I don’t have a dog in this fight. I asked some questions about the Jones business model and all I get is grief and insults from you creeps. Get a grip, will you?
Would this be a good time for me to make the usual crack about the Jones office in the strip mall wedged between the dry cleaners and the Subway? How about one making fun of cold walking and how it debases the entire industry (and that’s no small feat)?
I'm sorry, that's cheap and I just can't help myself. I'm sure there are some great people laboring at Jones, and it really does make me more than a little sad to see the blur of FA rotations through some of the strip mall locations.My old office has had 3 people in the rotation since I left (first of 07). They now have a new new out dking....I've been driving around at lunch to see if I can get a picture to post...stay tuned.
Spiff, great on the 900k. To bad you won't get paid on it...what was your ROI.
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I'd argue that cold calling debases the entire industry. But that's for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners. I want a real answer from Philo, spears, spiked, foot, et al.[quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I’d argue that cold calling debases the entire industry. But that’s for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners.
I want a real answer from Philo, spears, spiked, foot, et al. [/quote]
You’ve HAD your ‘real answer’, and as simple as I can make it. I can’t help it if you don’t like the answer.
Just curious, Do Jones reps have series 66 licenses? I was under the impression that they don’t. Also, if they don’t, then they can’t actually charge a fee for a financial plan, or document financial advice, correct? But I suppose if the fee accounts are going to be a reality, then everyone will need to get 66’s anyway? Just trying to clear up any misconceptions I may have.
For the record, I don't bash Jones guys (or other firms) to clients. If I'm competing against them I may say something about how they don't focus on financial planning the way my office does, or something about my credentials, but follow it up with "but I think they're a fine firm". I never say anything nasty about the competition to clients, it's a turn off to me when I'm on the other side of the table.Big Taco…I say…“They’re the best trained salespeople in the industry.” It makes its own point.
Yes, everyone who lives in a state that requires the 66 to be an “advisor” has it.
Taco - Thanks for the remarks. Maybe you can answer the question better than the others. When you tell your prospects that Jones doesn't focus on financial planning the way your office does, what does that mean? What info do you gather from them that you believe Jones FAs don't? What reports are generated from that info? What services do you provide that you believe Jones FAs don't? Nobody is ever going to convince me to jump anywhere else unless they tell me why the grass actually is greener on the other side.Spiff, I don’t see that anyone is trying to get you to jump anywhere. However, you’ve made the statement that you have tools as good as everyone else. Have you taken the time to stop in a Merrill or MS office to see what they’ve got? I don’t think so, or you wouldn’t make those kinds of statements.
I’m continually mystified when I see you Jones people take the same combative stance when there’s no reason to.
No, I haven't been to the local Morgan or Merrill office to ask them about their planning tools. And I'm not going to. That's why I'm asking you folks. I'm sure they've got great tools. I'm curious if they are any better than the ones I have on my desktop. If anyone can answer that I'd appreciate it.
Yes, they are.
Look, Spiff, I’m not about picking fights with you. All I’d like you to do is to do the research before closing any doors.
The bar charts are the best!! Keep usin' them. I could sell so much shit from the bar charts, it was awesome. You know Spiff, its just that you and your firm went around all these years talking shit about how different and how much better your firm was than anyone else..ala the WSJ story. Now your great leader has decided that things "have changed" and you want to join the party. Tell me if mine is better, I need to hear it...I need the justification. You will always be behind, because Jones isn't serious about the financial planning aspect. It just wants to put money into the pockets of the gp's. IF they were, why wouldn't they open the platform up....all the way. Because there's some scary funds out there and we don't want our dumbass reps to hurt themselves or their clients. THEY DON'T TRUST YOU TO DO THE RIGHT THING....SO THEY LIMIT WHAT YOU HAVE AVAILABLE. OH AND IT PROTECTS THE RELATIONSHIPS THEY'VE DEVELOPED ...YOU KNOW THE KICKBACKS. IT KEEPS THE VETS OFF THEIR ASS, AND MAKES THE BOYS CLUB CONTENT. WEDDLE, WELL HE CALLS THAT...A WIN WIN.
[quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I'd argue that cold calling debases the entire industry. But that's for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners. I want a real answer from Philo, spears, spiked, foot, et al. [/quote] Spiff, they're baitin' ya, buddy! Relax....this thread actually makes ME want to start taunting you. All will be well.The bar charts are the best!! Keep usin’ them. I could sell so much shit from the bar charts, it was awesome. You know Spiff, its just that you and your firm went around all these years talking shit about how different and how much better your firm was than anyone else…ala the WSJ story. Now your great leader has decided that things “have changed” and you want to join the party. Tell me if mine is better, I need to hear it…I need the justification. You will always be behind, because Jones isn’t serious about the financial planning aspect. It just wants to put money into the pockets of the gp’s. IF they were, why wouldn’t they open the platform up…all the way. Because there’s some scary funds out there and we don’t want our dumbass reps to hurt themselves or their clients. THEY DON’T TRUST YOU TO DO THE RIGHT THING…SO THEY LIMIT WHAT YOU HAVE AVAILABLE. OH AND IT PROTECTS THE RELATIONSHIPS THEY’VE DEVELOPED …YOU KNOW THE KICKBACKS. IT KEEPS THE VETS OFF THEIR ASS, AND MAKES THE BOYS CLUB CONTENT. WEDDLE, WELL HE CALLS THAT…A WIN WIN.
Spears - if you go to arbitration & you have a wrap account & you don't have a file a few inches thick on the funds you've chosen & why you've chosen them & why you didn't choose the one next to it & how you manage watch lists. You lose. Jones and most other firms have universes to pick from because they believe that they can meet client's goals with those universes & manage their risks(and make some money). Clients don't know the difference, and an effective rep at Jones will do the same good job that someone elsewhere does. I know and you know plenty of Jones reps and bank reps and wirehouse reps who do a good job & plenty who have all the tools and do a crappy job.
You know, at the end of the day, my clients don’t care about the kickbacks, GPs, WSJ stories, platforms, etc. They want me to tell them if they can retire. They want me to tell them how much money they have to save to put their kids through school. They want me to look them in the eye and tell them they are going to be alright. They want to know if they need to take more or less risk to reach their goals. They don’t care what tools I use to do it. They don’t care how fancy or plain they are. Whether I use a Monte Carlo simulation or just a strait compounding factor. They simply don’t care.
They don't want to hassle with the planning side of your business? I hate to point out the obvious to you, but you don't have a planning side to your business. - Philo This was the statement that started this whole afternoon's discussion. It's not obvious to me that I don't have a planning side to my business. It was obvious 2 years ago. Not so much now. I'm curious what kind of things that Philo (sorry to keep including you in this, but the quote is yours), et al thinks EDJ should have to actually say they do financial planning like everyone else.Fair enough. Let’s start with this:
A prospect that you’ve been working on comes in for a meeting with his financials. The total’s about $7 million. Prospect tells you he’s looking for comprehensive work. His daughter’s husband is a ne’er-do-well, and he’d like things tied up so that the son-in-law can’t hurt him, but the grandchildren are set. Naturally he’d like trust work (ILIT or whatever) to protect his wife should anything happen to him. He asks you to sketch out some broad strokes and meet with him in 10 days or so.
First question: Who in your company do you call to get together a team of experts to help you?
Second: How many of these experts have you already met?
And so on. You get the idea. Financial planning is not some silly software…it’s defense in depth for the clients’ assets.
[quote=Broker24] [quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I’d argue that cold calling debases the entire industry. But that’s for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners.
I want a real answer from Philo, spears, spiked, foot, et al. [/quote]
Spiff, they’re baitin’ ya, buddy! Relax…this thread actually makes ME want to start taunting you. All will be well.
[/quote]
B24, I don’t speak for anyone but myself on this, but let me assure you that I’m deadly serious…we have the unfortunate power to blow up not only a portfolio but a family’s entire financial legacy through arrogance coupled with ignorance. So to say that “my software is as good as anyone’s so I can do financial planning” is a statement that scares me to my very core. It’s lunacy to believe that solely because one has access to a computer makes one an expert.
[quote=Philo Kvetch]Fair enough. Let’s start with this:
A prospect that you’ve been working on comes in for a meeting with his financials. The total’s about $7 million. Prospect tells you he’s looking for comprehensive work. His daughter’s husband is a ne’er-do-well, and he’d like things tied up so that the son-in-law can’t hurt him, but the grandchildren are set. Naturally he’d like trust work (ILIT or whatever) to protect his wife should anything happen to him. He asks you to sketch out some broad strokes and meet with him in 10 days or so.
First question: Who in your company do you call to get together a team of experts to help you?
Second: How many of these experts have you already met?
And so on. You get the idea. Financial planning is not some silly software…it’s defense in depth for the clients’ assets.[/quote]
Good answer.
Is the Jones reps getting 66s a new thing, or has that been going on for a long time? And don't most of the wirehouse reps NOT have 66s? (I'm guessing because of the whole Merrill rule issue).
Spiff, I'm not singling out Jones about the financial planning. Every client that I've met that also has accounts elsewhere, be it SB, ML, EDJ, anywhere, has never had their advisor meet with them and write an actual financial plan (document advice). It's been mostly transactional relationships at the competitors in my area. I realize that the fact that I've brought over accounts from these firms may be because the relationships were only transactional, and maybe their other clients are receiving a high level of ongoing comprehensive, documented financial advice. But I don't see how that's possible if the competitors in my area (for the most part) don't even have 66s. Isn't that a requisite for charging for advice, or setting up wrap accounts (advisory accounts)? And as far as planning tools/software goes, it's my opinion that all of those tools are just glorified calculators anyway, so as long as you understand the output and can relay it to the client in a way they can understand, that's the important part. That said, we're getting a new software suite in the 1st quarter of '08 that I'm excited about. It will tie into existing advisor apps to pull in data, which should be very nice.Spiff, my question to you is what or how do you define financial planning? I think in order to try and establish "the greener" grass story on this topic is to have clarity first on what you view as planning.
I'd say the vast majority have 66s (or 65/63 combinations) and have had them for years. They're a requirement, as you mentioned, for any kind of advisory account, and it's hard to imagine many wirehouse people who don't have some SMA or fund advisory business. The "Merrill rule" had to do with charging a flat fee on a brokerage account, which never required a 66, since all advice was incidental.And don’t most of the wirehouse reps NOT have 66s? (I’m guessing because of the whole Merrill rule issue).
So then what’s the issue with the Merrill rule? I thought it was that with the rule’s strikedown, the reps NOW needed a 66 to offer a flat fee brokerage account, and the wirehouses didn’t want to take on the potential legal nightmare that having fiduciary reps implies (IARs), or that being both an RIA and B/D implies?
So did the Merrill rule get rid of the flat fee brokerage account, or did it just make it a requisite to have a 66 if you offer said account?Help me out here, I must be confused.
[quote=Big Taco]So then what’s the issue with the Merrill rule? I thought it was that with the rule’s strikedown, the reps NOW needed a 66 to offer a flat fee brokerage account, and the wirehouses didn’t want to take on the potential legal nightmare that having fiduciary reps implies (IARs), or that being both an RIA and B/D implies?
So did the Merrill rule get rid of the flat fee brokerage account, or did it just make it a requisite to have a 66 if you offer said account?Help me out here, I must be confused.[/quote]
Don't feel bad about being confused, most people are, and that goes to the heart of the issue. The end of the Merrill rule meant the end of flat fee brokerage accounts, period. The important word there being “brokerage”. In a brokerage account the rep is technically being paid ONLY for transactions and any advice is considered incidental. The regulations government rep conduct were the same rules as a commission brokerage account, that being that the investments must be “suitable” for the client.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The argument against flat fee brokerage accounts from those that opposed them was that the public was confused about the obligation reps had in brokerage account with the “suitable” requirement and an advisory relationship, which has a higher standard (and different regulations), that of fiduciary.
They claimed clients assumed that reps in both situations had an obligation to avoid all possible conflicts of interest (like any proprietary products, nothing the firm had an underwriting hand in, etc.) as a fiduciary has, instead of simply the obligation to disclose any possible conflicts, as a brokerage account requires.
The end result is that you couldn’t simply get a 66 and “fix” a flat fee brokerage situation (most reps with flat fee accounts already had a 66 anyway), since the “confusion” on the part of the client remained. Any flat fee going forward would have to be an advisory account, with the higher fiduciary standard.
I don’t know how much that helps, but there’s the general lay of the land. IMHO, it’s all about our antiquated regulatory system that separates brokerage from advisory business..
Under the new disclosure rules, financial professionals must advise clients that brokerage accounts are not advisory accounts and that firms’ interests may not always be aligned with the clients’. Firms must also make someone available to clients to discuss the differences between an investment advisor and a broker. And brokers’ financial planning advice must only be “incidental” to the traditional brokerage services they provide.
Thanks EPT. So the flat fee brokerage account is gone forever. Okay.
I thought it was an issue of a rep needing a 66 to offer the flat fee brokerage account, and firms didn't want the reps to have the fiduciary responsibility of an advisory type account. So are most wirehouses also RIAs? Since their reps can offer advisory accounts, then they must be Investment Adviser Representatives (IARs)?
[quote=Big Taco]
So are most wirehouses also RIAs? Since their reps can offer advisory accounts, then they must be Investment Adviser Representatives (IARs)?[/quote] Yep, on that business involving advisory relationships.[quote=ExPropTrader]
Under the new disclosure rules, financial professionals must advise clients that brokerage accounts are not advisory accounts and that firms’ interests may not always be aligned with the clients’. Firms must also make someone available to clients to discuss the differences between an investment advisor and a broker. And brokers’ financial planning advice must only be “incidental” to the traditional brokerage services they provide.[/quote] Actually that's no new. That was all already stated in the 18 or so pages of disclosures the legal department had slipped into the back of flat fee account opening documents years ago. Those disclosures didn't satistfy the critics. The advice in a brokerage account is still incidental, but flat fee option is gone. Now, rolling out in early 2008 at several wirehouses is some account that's supposed to be a hybrid of an advisory/flat fee brokerage account. I don't have the deatils yet and I'm pretty curious just how they plan to walk that fine line.Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you’re focusing on financial planning (other than advice that is “incidental”, and comes up in conversation at review meetings)? By this I mean that many of your clients (10% or more) pay you a retainer to gather pertinent data on their finances, run it through some sort of planning software and meet with the client frequently (quarterly or semiannually) to educate and help implement documented advice and provide a compliant deliverable. I don’t see this being done at any of my local competitors.
Also, I'm not at all suggesting that this is the best way to do business, or that one way is best for all clients.[quote=Philo Kvetch] [quote=Broker24] [quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I'd argue that cold calling debases the entire industry. But that's for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners.
I want a real answer from Philo, spears, spiked, foot, et al. [/quote]
Spiff, they're baitin' ya, buddy! Relax....this thread actually makes ME want to start taunting you. All will be well.
[/quote]
B24, I don't speak for anyone but myself on this, but let me assure you that I'm deadly serious...we have the unfortunate power to blow up not only a portfolio but a family's entire financial legacy through arrogance coupled with ignorance. So to say that "my software is as good as anyone's so I can do financial planning" is a statement that scares me to my very core. It's lunacy to believe that solely because one has access to a computer makes one an expert.[/quote] Not disagreeing with you. I wasn't defending anyone's position. You're point above is quite true, in fact. I think at this point everyone is just trying to swing a bigger %$#@ than each other. Being an Indy or a wire broker, or a Jones broker, or a bank guy does not automatically qualify you as an expert in anything, regardless of the tools. However, many people in any of those platforms are very good at planning, or very bad (or don't focus on it). To address your point, for those at Jones that have high level planning/estate considerations, there are plenty of resources. They just don't roll out the red carpet for Seg 1 newbies trying to do retirement planning for a 28 year old making 32K a year. But believe me, the resources are there. We have a couple guys in the region that are estate planning experts that have actually had estate planning attorneys flown out from St. Louis to assist in advanced planning concepts. These guys partner with a 100 member local estate planning firm that charges about $500/hr. with $10,000 minimum fees. These guys do planning for seriously wealthy individuals (OK, not the UHNW you would get at Goldman or Lehman, etc., but we're talking in the 10's of millions). My point is, the growth at Jones is relatively recent (last 5-10 years), so the majority of advisors are early in their careers. You aren't doing advanced planning two years into an advisory career in this business (absent previous experience). But you can't base your judgement of Jones on what a bunch of unhappy newbies have posted on this board (no, not all of them are newbies, some had very impresive careers at Jones). I have said this before, and I will say it again. It does not matter what firm you work for (within reason), if you want to focus on complex planning issues, or retirement planning, or whatever, you can. It's up to the individual. We have people at Jones (albeit very few) that have 300-500mm in assets, grossing 1-2mm, and bringing home 60% net (net commission + bonus, not including LP/GP or profit sharing). That's not too shabby, and you don't do that by door-knocking and calling on 30 year CIT bonds. The picture that is painted on these threads is often slanted towards the opinions of disallusioned former advisors that did not agree with the business model at Jones. This is fine, but you must understand that not EVERYONE at Jones falls into that category. Most guys I know with more than 6 or 7 years in are netting 200K and not working very much. They don't have many complaints, and have no need to leave, even though they KNOW they could net more by going it alone. One more thing, you're statement -" It's lunacy to believe that solely because one has access to a computer makes one an expert"; It's also lunacy to believe that just because someone leaves Jones and goes independant (or elsewhere), it makes them an expert. It's funny how everyone on this board uses where they work as the barometer for how complex their practice is. Wow, that was long winded. Sorry to hijack that thread.
I'm an IAR and a CFP. That being said, no, I do not engage in formal financial planning with clients on a regular basis. I've tried that in the past and I felt like I was, for the most part, shoving it down the throats of my clients. Most clients want retirement asset and income projections. That can be done with Monte Carlo simulations and/or a simple spreadsheet. If, as a part of my fact-gathering pattern, I see a need for LTC, life insurance, trusts, ILITs, etc., I'll introduce those topics as needed. When I used to work in a more formalized structure, I found my clients to be for the most part, insufficiently sophisticated to desire and appreciate these efforts...their eyes would glaze over and I would hear a lot of "uh-huh's". At that point, I decided that life is too short to waste time doing something that very few appreciated or understood, so I de-formalized the process and made it much simpler. End result is, clients appear to be more satisfied with the process and I have more time to do the things that they are asking for.
...and incidentally, what one of my EDJ buddies told me was that, in preparation for rolling out the fee-based program, ALL EDJ reps got the mandate to take the 66 regardless of time and tenure in the business and whether they even intended to offer any fee-based accounts to clients or prospects. Several of the big vets were pretty pissed by this mandate, but to my friend's knowledge, there were no exceptions made.
The resources are there for the estate planning issues that Philo asked about. A call to the Trust department and you can have more planners in your office than you can shake a stick at. Another call to the Life Consultants at Hartford (the favorite in my region) gets you the funding for some very complex estate tax issues. A call to your favorite local Estate Planning attorney and you get the legal work done. All in your office.
For the average person, I don't need to make any phone calls. The financial planning that I think about is the retirement planning, college funding, income planning, LTC planning, etc. Most people don't walk into your office with $7 million and an estate tax problem. They have to worry about not running out of money at 75. I see what Philo is talking about as just a part of the whole financial planning process. The Estate Planning part. In my opinion it's the most fun part because you can get really creative with ILITs and other trusts. You can also get paid the most because you are usually using insurance to fund the program. But even with those cases if the guy has a $500K/yr need for income, you have to run the programs to see if his $7 mil will be enough to last him. I would echo the sentiments of some of the others about the lack of "planning" out there. It's much more transactional in nature. I read a stat a while ago that said that 2 out of 5 people have actually taken the time to figure out what they need to be saving to retire. And half of them didn't use the right variables. This biz is too focused on my fund is better than yours or my fee based is better than your commission based. I'm as guilty of it as the next guy. I think the guy who is going to come out on top at the end of his career is the one who can both prove why his method of investing makes sense and at the same time get his clients to focus on the bigger picture. The type of car you're driving doesn't matter if you're on the wrong road.So, for almost all cases you know enough to do it yourself, and in the rare instance you get one more complex you’d call whomever answers the phone at the trust department, an annuity/mutual fund wholesaler and a local attorney.
That’s good.
Best of luck to you!
[quote=Indyone]
I see a need for LTC, life insurance, trusts, ILITs, etc., I'll introduce those topics as needed.
[/quote] IMO this is "financial planning" just without the 150 pages of crap that the client throws in a closet and never implements. The best financial planning is the one that makes the clients implement your suggestions, if you're niche market is engineers and analytical types (God help you), you might have a need for all the supporting graphs and charts, for most people it's counterintuitive to the process. Like you I've found simpler is better.[quote=ExPropTrader][quote=Indyone]
I see a need for LTC, life insurance, trusts, ILITs, etc., I'll introduce those topics as needed.
[/quote] IMO this is "financial planning" just without the 150 pages of crap that the client throws in a closet and never implements. The best financial planning is the one that makes the clients implement your suggestions, if you're niche market is engineers and analytical types (God help you), you might have a need for all the supporting graphs and charts, for most people it's counterintuitive to the process. Like you I've found simpler is better.[/quote]A couple years ago I met my first retired Executive prospect. I had a couple of his managers as clients. So I took a shot and he agreed to meet with me. What I didn't know is he had about 5MM of his 8MM net worth in vested stock options. After going through getting to know his situation, completing the fact finder, etc. I mentioned to him I may need to bring in some outside resources to do "more extensive financial planning" His response is something I've built my business on since. "Young man, I agreed to meet with you because I was told you kept it simple" and, "If your just going to show me a bunch of stuff I'll never understand than were wasting each others time"
I took a step back, and approached it like any other case. Ironically we've implemented everything that Indyone mentioned. I've built my business since then by keeping it simple. It doesn't matter how many zeros they have in their NW.
[quote=Big Taco]Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you're focusing on financial planning (other than advice that is "incidental", and comes up in conversation at review meetings)? [/quote]<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I think you’re assuming “Investment advisor” (which is what the advisory accounts/66 is all about, being paid for advice rather than execution of orders) and “financial planning” are synonymous. I know the FPA (I’m a CFP) likes to use the two terms as if they’re one in the same, but I see that as a self-serving argument on the part of their largest constituent group, flat-fee planners. They want to argue that they deserve some on-going fee for “planning” but also think “investment advice” isn’t all that important since they’ve embraced MPT so tightly that they figure that need is met with a five ETF portfolio and annual rebalancing.
It seems to me that many, perhaps most of the people that would benefit from genuine financial planning, expense review, etc., are people with no investable assets to begin with, and I don’t seek those people as clients. More importantly, I don’t see the crowd that considers “investment advisor” and “financial planner” to be the same thing chasing those people down to gain their business.
Like I said, a 66 allows me to charge for investment advice, rather than execution of orders, and with that comes a different level of obligation to the client on the subject of conflicts of interest. That doesn’t mean I have an obligation to go over their checkbook with them to review their spending if I want to embrace the title “advisor”.
[quote=Big Taco]By this I mean that many of your clients (10% or more) pay you a retainer to gather pertinent data on their finances, run it through some sort of planning software and meet with the client frequently (quarterly or semiannually) to educate and help implement documented advice and provide a compliant deliverable. I don't see this being done at any of my local competitors. [/quote]
Yes and no. We can charge a retainer and a fee for planning services. The planning service pricing menu can be complicated, but suffice it to say I chose from that menu in such a way as to provide needed services without additional cost to the client, since in the vast majority of cases I’m already charging a fee on investment management.
I think you’ll find your competitors are meeting with clients on a quarterly or semi-annual basis, but if my plan for the client suggested additional saving for some goal or the re-titling of assets I educated them on that when I delivered the document, I’m not going to schedule regular meetings with them to harangue them again on the subject. I will, however, meet with them to discuss investment results and review/tweak the plan around changes in their circumstances or the investment environment.
I’m so stupid, I just use barcharts and American funds. Dumbass, dumbass…dumbass…I’ll just go back and sell vacuums…its easier…
I must be missing something in this conversation. You keep throwing these questions out here, I answer, then you come back with a response like that. I'm sure I'm not the only one wondering what you would do with that client you mentioned before. Possibly I'm confusing Estate Planning with Financial Planning, because we seem to not be communicating very well. Why don't you spare me the look down your nose and tell me how you would handle that situation. Spears- if you're not going to add anything to this conversation besides your normal snide comments, why don't you just keep your mouth shut.So, for almost all cases you know enough to do it yourself, and in the rare instance you get one more complex you’d call whomever answers the phone at the trust department, an annuity/mutual fund wholesaler and a local attorney.
That’s good.
Best of luck to you!
I was adding what I was taught to do…possibly even by you. If it stung…or if your defending the legend Lee (whats his name)…I can’t help it. Just keeping curtain pulled back there Mr Wizard…
The legendary American funds ICA chart is the holy grail amongst the EJ FA's..and not just the newbies. Spears, I feel your pain.I’m so stupid, I just use barcharts and American funds. Dumbass, dumbass…dumbass…I’ll just go back and sell vacuums…its easier…
[quote=mikebutler222]
[quote=Big Taco]Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you're focusing on financial planning (other than advice that is "incidental", and comes up in conversation at review meetings)? [/quote]<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I think you’re assuming “Investment advisor” (which is what the advisory accounts/66 is all about, being paid for advice rather than execution of orders) and “financial planning” are synonymous. [/quote]
I'm gonna stop you right there. Don't assume what I'm assuming. I know the difference between investment advice and comprehensive financial planning and have explained the difference to clients for years. I understand what a few posters wrote about a 150page book that no client will EVER read. I've understood this from the beginning. That's just a deliverable. A compliant deliverable. It doesn't matter. The value is the client that's actually committed enough to bring in all the statements (paystubs for calculation of income, tax w/holding, FICA, qual. plan contributions, group insurance prems., etc.), other investment account statements, insurance policies, SS estimate, Pension estimate, other incomes, Tax returns, estimations of property values, mortgage info, other debt info, etc. Then it's time to discuss goals: retirement, college saving, vacation home, what will retirement or semi-retirement look like (and figuring out how much it may cost), charitable giving, do they plan on spending all of their money, or do they want to leave an inheritance, and WHEN do these goals need to happen... During the analysis I generally uncover a thing or two that is important, but that I had not considered before I saw all the clients info. After the analysis is done, it's time to explain the clients current situation, how on track they are, and recommendations. This does not need to be complicated. It should be as simple as possible. This should never be: "here's a 150page book. Read it and call me with questions". There's no value in that. The value to the client is that if they understand your assessment, and your recommendations and how to implement the recommendations, then they will most likely be able to achieve their goals, or possibly a more realistic revision of their goals. They've also purchased your time to see you every quarter or 6 months, whereas they may not have been a lucrative client before (most of their investments in 401k). The value to the advisor is that you have a much more complete and black-&-white picture of their finances, you will identify more business usually (other accounts, insurance coverages/replacements, too much money in cash at their bank, etc.), and as your clients realize that you're their financial architect who understands their big picture, they'll bring new business to you. I don't do this for even a quarter of my clients on a regular basis. But it usually deepens the relationship and allows me to offer a higher level of advice.[quote=Big Taco][quote=mikebutler222] <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you're focusing on financial planning (other than advice that is "incidental", and comes up in conversation at review meetings)? [/quote]<?: prefix="o" ns="urn:schemas-microsoft-com:office:office"/>
I think you’re assuming “Investment advisor” (which is what the advisory accounts/66 is all about, being paid for advice rather than execution of orders) and “financial planning” are synonymous. [/quote]
I'm gonna stop you right there. Don't assume what I'm assuming. I know the difference between investment advice and comprehensive financial planning and have explained the difference to clients for years.[/quote]
Then why did your question jump from “incidental”, which is what investment advice is considered by governing regulations, in any form of brokerage account to “focusing on financial planning”? If you weren’t relating investment management with focusing on finnancial planning, I didn’t understand your point.
[quote=Big Taco] The value is the client that's actually committed enough to bring in all the statements (paystubs for calculation of income, tax w/holding, FICA, qual. plan contributions, group insurance prems., etc.), other investment account statements, insurance policies, SS estimate, Pension estimate, other incomes, Tax returns, estimations of property values, mortgage info, other debt info, etc.
Then it's time to discuss goals: retirement, college saving, vacation home, what will retirement or semi-retirement look like (and figuring out how much it may cost), charitable giving, do they plan on spending all of their money, or do they want to leave an inheritance, and WHEN do these goals need to happen... [/quote]
I think you'll find your wirehouse competition does the same thing for those clients in need of comprehensive planning. Most of time I’ll leave it to the client to tally up income and debt information on a questionaire, and won’t ask them to bring in stubs for that sort of debt side issue. I will, however, with most every client ask for everything related to the asset side of the equation. That’s pretty much basic profiling and know-the-client stuff that’s part of wirehouse training.
bspears you have GOT to find something else to talk about- wow, it’s just embarassing…
New new…so your embarrassed by my comments. Sorry, I don’t post my rants to embarrass you, I just try to report the other side…you know…fair and balanced reporting. Try to avoid my postings. This will allow you to continue the lie and feel good about yourself. So the market is down 7%, and the poor schmuck you put into a 5.75 A share is now down what…do the math. I bet you can’t wait until the statements hit in December…ya hooooo
[quote=mikebutler222]
[quote=Big Taco][quote=mikebutler222] <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you're focusing on financial planning (other than advice that is "incidental", and comes up in conversation at review meetings)? [/quote]<?: prefix="o" ns="urn:schemas-microsoft-com:office:office"/>
I think you’re assuming “Investment advisor” (which is what the advisory accounts/66 is all about, being paid for advice rather than execution of orders) and “financial planning” are synonymous. [/quote]
I'm gonna stop you right there. Don't assume what I'm assuming. I know the difference between investment advice and comprehensive financial planning and have explained the difference to clients for years.[/quote]
Then why did your question jump from “incidental”, which is what investment advice is considered by governing regulations, in any form of brokerage account to “focusing on financial planning”? If you weren’t relating investment management with focusing on finnancial planning, I didn’t understand your point.
My point is that when you have a client with only an advisory or wrap account, as far as I'm concerned, the conversations and advice will be account-centric, and not really get into the fine tuning of a documented financial plan. Yes, it will still be an advisory situation/relationship, but will revolve around the assets, not the "big picture" of the client's financial life. You may say that you're very thorough in this respect, and I will not disagree, but if that's true, then I assert that you're underpaid if you're offering comprehensive financial planning included with the price of asset advisory.
[quote=Big Taco] The value is the client that's actually committed enough to bring in all the statements (paystubs for calculation of income, tax w/holding, FICA, qual. plan contributions, group insurance prems., etc.), other investment account statements, insurance policies, SS estimate, Pension estimate, other incomes, Tax returns, estimations of property values, mortgage info, other debt info, etc.
Then it's time to discuss goals: retirement, college saving, vacation home, what will retirement or semi-retirement look like (and figuring out how much it may cost), charitable giving, do they plan on spending all of their money, or do they want to leave an inheritance, and WHEN do these goals need to happen... [/quote]
I think you'll find your wirehouse competition does the same thing for those clients in need of comprehensive planning. Most of time I’ll leave it to the client to tally up income and debt information on a questionaire, and won’t ask them to bring in stubs for that sort of debt side issue. I will, however, with most every client ask for everything related to the asset side of the equation. That’s pretty much basic profiling and know-the-client stuff that’s part of wirehouse training.
[/quote] Trust me: you want all the docs in black and white. Garbage in, Garbage out. I'm not saying clients are incompetent in this respect... but actually they usually are. That's fine if you have them fill out the profile, but have them bring in the docs anyway to back up their questionaire, and it's good for you to have these docs scanned in your database for compliance in the case they review your documented advice and wonder what the basis for your recommendations is.[quote=Broker7]
Only 4% of new news make it to the 5 year mark...good luck...you will need it[/quote] Where did you get that stat? Out of your butt?Mr. Spiff,
I recall that you once mentioned that you had gone from HO to the field, How long ago was that? What did you do before EJ? How large of a book did you take over? What departments did you work in? What segment are you at? As they say on all the law shows on TV "shows credibility"I thought I cornered the market on Spiffy bashing…I need to call my agent. From what I’ve taken from his comments…he’s been out 11 years, trades a little over 6mill in business and wants to be a GP. He likes long walks to Weddles office, when the janitor lets him in after hours. He worked in HR department doing phone interviews of newby’s. He is now…I mean just now…segment 3.
Oh…and he is a cancer. I mean his sign…not an incurable disease destroying his clients accts.
My history with Jones:
11 years with the firm. 5 years in the field. Took over a small office of about $6 mil. Seg 3, probably hit Seg 4 next year. Not a fast starter, but I also have a couple of kids I'd rather watch grow up than spend 60 hours a week working. When I was in home office I spent almost 5 years in New IR Training. Before Jones I was a college boy. Business degree from a small private college. I've never met Jim Weddle. Would love to be a GP.Come on…come on…what’s your sign???
and your aum is?
I'll be fair...I was previously at Jones for 4years...took over a 3.2m office. I left the office, it had 34.5mil Seg 3-17k trailing 4. I've been at LPL for shy 12 months...I will add the Jones transfer and new money coming in Monday...to 17.3mil. If this time next year I'm not at my old level, I will banish myself from this forum.
Show me yours and I'll show you mine.
Just kidding. Just under $25 mil. Not great, I know. Would you like to know my blood type too?
Spiff-
Another sign of your impending transition....11 years with the firm and never met the big guy...Mr. Spiff,
With that sort of limited industry experience and a "leg up" in the field (so to speak), you seem to be taking a very high road when you speak to others. New IR Trainers sales instruction is wonderful, but competive knowledge is limited to an almost evangelical mindset. I'm paraphrasing "EJ is the only firm that is pure and always does what is best for the client" and we know how much that cost you. (no LP for nearly 6 or was it 7 years) Do your family a favor check with a head hunter for brokers to see what your worth really is. If you really want to do right by your young family, you should see if the grass is greener. For the same amount of work your family would be much better off. As for your blood type - it seems to be tainted green, and I don't think it's Vulcan blood either.foot - Does my meeting him change my career or give me any additional asset gathering skills?
When I was in the the home office I met Bachman several times. I've never had a really good reason to go rub elbows with the MP. From a career advancement standpoint I'd say the more important people to meet would be the area leader GPs. Since it's a good ol' boy network if you can get in good graces with those people you might get the chance to take over a juicy office, or get assets when some guy like spears exits the firm, or be first in line for other sweet opportunities. Jim Weddle doesn't make those kind of decisions. Maybe my blood is tainted a little green. My firm has given me opportunities no other would have. I've had offers from several other firms. But you have to weigh the long term gains over the short term ones. I'm happy with Jones. I know Jones isn't perfect. If anyone could point me to the firm or situation that is, I'd gladly jump. At this point indy doesn't attract me.Okay…I’m going to do the math…5 years 25mil in assets. Started with 6… 19/5 + nothing but bullmarket=you bring in 3 mill a year. What the hell. Alright…GET OFF THIS BOARD AND GET ON THE DAMN PHONES OR THE DOORS. You will never be GP with these numbers. I will start mentoring you, because obviously whomever is mentoring you is doing a shit poor job! What number of contacts are you making daily, weekly. How many prospects in your system? How many appts do you have daily, weekly. Number of Green, Yellow and reds. It is now my only focus is to get your numbers up…
For example..today..38 calls in the system..made 14 presentations. Made 1 appt for transfer Monday evening and called an old client who is off Monday. He set an appt to transfer 2 IRA's and Jt acct = close to 1/2 mil. Hell this is Friday, I've posted several times, looked at ESPN website, took daughter out to lunch...wrote paychecks, paid bills. WHat in the sam hell are you doing Spiffy. Aren't you like growth leader or someother bullshit for your region. This is the same bullshit that pissed me off while I was at the network marketing firm.
[quote=Spaceman Spiff][quote=Broker7]
Only 4% of new news make it to the 5 year mark...good luck...you will need it[/quote] Where did you get that stat? Out of your butt?[/quote] Straight form the horses mouth..a GP in the growth dep. Why do you think there is little/no growth in the firm even though 100-200 new news get hired every month?? You were in new IR training..you saw all those shiney faces, get fired or quit if they did not take over an existing office. And the good ones goto other firms or go independent before 5 years. You need to get off these boards and get to work..your numbers are below par. Get to work![quote=Spaceman Spiff]
Show me yours and I'll show you mine.
Just kidding. Just under $25 mil. Not great, I know. Would you like to know my blood type too?
[/quote] One more thing. Do not attempt to make seg 4 with your $24M aum and current asset gathering abilities . You will only be churning and burning you clientsAnd to add…You’ve been blowing you mouth off about doorknocking and how it works…blahblah…and here you are…a card carrying member of the Jones cult and you bring in 3 mill per year. What the hell…you’ve got to be pulling our leg.
[quote=Spaceman Spiff]
My history with Jones:
11 years with the firm. 5 years in the field. Took over a small office of about $6 mil. Seg 3, probably hit Seg 4 next year. Not a fast starter, but I also have a couple of kids I'd rather watch grow up than spend 60 hours a week working. When I was in home office I spent almost 5 years in New IR Training. Before Jones I was a college boy. Business degree from a small private college. I've never met Jim Weddle. Would love to be a GP. [/quote] "......................... one time at band camp" okay spacely sprockets time to start really brown (or green) nosing, 'cuz you're starting to look like the tidy bowel guy just after the flush has started.Spiff, with all due respect, I hit those numbers in 2 years starting from absolutely zero in the 2001-03 bear market. Never had a single account distributed to me in my entire career at Jones. Not to be a total a-hole, but Dude, you’re a slug at best.
p.s. : spiff, I completely agree on the family thing. I always get to every game, etc-- I was even the coach! But Spiff-you can have it all! You have an asst that you do not have to share! It is simple–PROSPECT at work (BOA does the rest), paperwork to asst, make 90K per year minimum, go on free trips, spend time with family!
post here after kids are in bed only.Are you done having fun with me yet?
I realize I don't meet all of your expectations. My apologies. I don't remember ever telling you folks that I was a big hitter. If you construed my comments as such, that was your fault. I'll try to get my numbers up next year so I can have an opinion like the rest of you do.Spiff…
Let all this clowns sit around and play ‘mine is bigger than yours’, and focus on what you need to do to make your goals.
IMHO, It doesn't sound as if Spiff has goals. What's your goals Spiff?
Being the world’s leading authority on everything occupies all of Spiff’s time…he has no time for goals.
Spiff, I commend your honesty. Your numbers really only matter to you and your employer. Some folks here have had a little fun at your expense and that’s OK. I’m man enough to realize that my $300K isn’t at the top of the charts, but I’m also satisfied that it is more than enough to meet my needs. I rarely borrow at this stage in the game…my sum total indebtedness is less than $80K and that covers three houses, a wooded lot to build my weekend getaway, a car, a minivan, a 4WD truck and two motorcycles…one brand new that I just wrote a check for. At the same time, I’m over half a million in retirement assets (not including the value of my book) and I’m probably 40 years from full retirement (by choice - not necessity). For me, here in the corn belt, that’s good enough at this stage in the game. I’m just starting to make the good money, so in a few years, I expect these numbers will look like peanuts.
If you're happy and the bills are paid, that's what's important. Not all of us are built to be cold-calling studs. Meanwhile, all opinions are welcomed (if not necessarily agreed with)...that's what a forum is for.[quote=Spaceman Spiff]
Are you done having fun with me yet?
I realize I don't meet all of your expectations. My apologies. I don't remember ever telling you folks that I was a big hitter. If you construed my comments as such, that was your fault. I'll try to get my numbers up next year so I can have an opinion like the rest of you do. [/quote] Yep you really showed us up!!! you da man! You're right we always believed you were a "big hitter" unfortunately it's your family ube hitting. Hope the missus has a job offer that pays as much as you do because after the 6 years in the field with such a aum, you might be getting a talking to OR some GP's relative will be getting an even bigger book than what you took over....think it can't happen to you, we on the "dark side" have seen that and even worse. Because EJ was the only firm that gave you a chance, you now feel like you owe them big time.... I pity your blindness.It is so quiet in St Louis, you can hear a pin drop........
That bad in the arch city?
[quote=Spaceman Spiff]
Are you done having fun with me yet?
I realize I don't meet all of your expectations. My apologies. I don't remember ever telling you folks that I was a big hitter. If you construed my comments as such, that was your fault. I'll try to get my numbers up next year so I can have an opinion like the rest of you do. [/quote] To be quite honest Spiffy, you set yourself up as a cut above. I am 5 years in and 25% more assets than yourself but that certainly doesn't make me a high achiever but rather puts you in the lower decile of producers. You better get your numbers up as you can't be having a easy time staying yellow at your numbers........He'll be back in home office before you know it.
You guys kill me. I've given you two pieces of info and you have me headed to the home office or worse. I've told you my AUM and that I'm Seg 3. From there you make assumptions about everything else about me.
Seg 3 is a big place. $15,000 to $27,000 gross rolling 4 month average. I could be either a $180K producer or a $300K producer and still be Seg 3. I'll tell you I'm in between those. There's another piece of info. Jones doesn't set standards for AUM. I know guys who have almost 50% more assets than me that are producing less (cough...cough...spears...cough...cough). I like LI, which doesn't require AUM. I can bring in a $25,000 account that may gross $1000, but write a couple of life insurance tickets and bring in twice that. So, my AUM really doesn't have a huge impact on my production. The trails will certainly help as they grow, however. I'm not thrilled with my AUM. I'm doing what I can to make it grow. By my conservative calculations if I simply continue to do what I'm doing now, I'll have a $100 millon office in about 7 years. I'll bet I can hit it faster than that. So, think what you will. I don't care. I don't believe you would think any more of me if I said I was at $500K a year and still at Jones. Then you'd probably tell me I'm stupid for not getting a better payout. So, as I see it I can't win here. But you guys just keep making your assumptions.Home-office watches and monitors these boards, If you work for Jones, they know who you are. Why do you think this forum is not blocked on your jonesnet? Spaceman, do yourself a favor, quit wasting your time arguing on here, and get to work.
[quote=Broker7]Home-office watches and monitors these boards, If you work for Jones, /QUOTE]
Really? What a huge waste of time and resources.
I take back my last post, there is so little going on here it probably would take 5-10 minutes a week.
I just had 12223 deposited in my business checking acct today. That was for work for last week or so of Oct thru Nov 8. I have another 5200 in net production ready to paid in two weeks…that puts my production at 17400 NET NET superstar! THose are SEG 5 numbers in your world. GET TO WORK. ITS SHIT TO BE YOU…go ahead and sell whatever…but it will be a long time before you can out net me. But, geez Wally, I can win two trips a year and pay the taxes on it. I can loan the company money and get 7%…I’ll give up 65% to get that…How many outbounds calls have you made today slacker…
Congrats on a great income stream. I guess indy agrees with you.
Kind of harsh, Spears.
Skrainka on CNBC…the blind leading the blind…Yes it was kind of harsh…I told myself I was going to be nicer…Sorry Spiff. I know your doing your best and its tough with so many Jones offices in your area.
That’s more like it. A little jabbing is fine, but try to keep it in check…
Regardless of whether or not Spiff matches up with your success, he's still ahead of the 90% that didn't make it in the industry... Oh, and incidentally, my net for this run, with the 2% production bonus was a bit over $18K...I guess I can coast for the last half of the month...Old habits are hard to break. Water off a ducks back.
Actually the other Jones reps around (9 within a mile radius of my office, with more on the way) don't really affect my prospecting efforts. There's over 35,000 households in the two zip codes I generally market to. Close to $12 Billion in investable assets. Compare that to my hometown that has 2 brokers in town and 6000 households. $1.6 Billion in investable assets. I'll take my chances here.I would agree…I have somewhere in the neighborhood of 3000 prospects in my system.
spiff, above you said you would do what it takes. Yet you post 3 times during phoning hours (?). the fee-based guys already have their (recurring) revenue --you need activity–right or wrong? Takes activity to get activity (“pipeline” in jonesspeak)
I congratulate Spaceman for not posting during sales hours! Keep up the hard work! Hope to hear from you on sunday.
I post after so many contacts or after a client meeting as a break and gets my mind off this great market. Is it time to climb the wall of worry?
Buy baby buy…
It is interesting that Space has become AWOL during business hours. Maybe the GP's finally reminded him of his job. B2B as Tom Hopkins would say (belly to belly).I think I was a little harsh on him…Sorry again Spiff. OOORRRR…he could be fielding calls on those GMAC’s that are tanking in his client portfolios…
Sorry I disappointed you guys. I had better things to do today than make myself cannon fodder for you.
Home office might monitor these boards. I don't care. When they call me and tell me to get back to work, I'll stop posting. I look at RR throughout the day as a diversion. I do tend to get sucked into a series of posts more than I'd like. That's my fault. I'll work on that. Maybe as a New Year Resolution I'll resolve to stop getting into these EDJ debates with you guys. Of course, sometimes they are the only reason I look at RR. We'll see. I didn't sell many GMAC bonds. I think I have 3 clients that own them. They're still paying interest and I'm not afraid that GM is going out of business.Haven't seen the news on GMAC today? Pretty close to being in default of some credit covenants....59b of subprime on the books...not yet repriced...hmmmm
Feel a bond swap sale coming…Ooh 3 pts Spiffy. Hello are you there?
Considering its a short sales month for you and the GP families…maybe a good way to pump up your commish. Just trying to mentor you Spiff…
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