Technology at EJ
When I came over to EJ from another firm, which is now gone, we were in the stone age technology-wise. I was just analyzing our new Morningstar platform and realized all I can do is compare funds and get star rankings. Not like I can sort the universe of funds and locate the best performers compared to a relative index or do my own, true due diligence for my clients…!
It strikes me that the goal of the management at this firm may very well be to have 20,000 "thirty someting" reps all happy as heck to drink the kool aid and make 100k per year. And sell lots of banking products to increase fee income for the GPs....! Nuff said. Needed to blow off some steam. Time to hear comments from inside and outside. Thanks!! ((previous post) I have been at EJ for 7 years now, and have rejected the kool aid....as the firm rushes hell bent to grow, less is being done for branches by HQ, and I pay 60% of what I make for diminishing service, some of which I never use. The financial assessment software is difficult to use. I learned the hard way to not waste my time doing stuff for my region. T Then, when you read the firm k-1, you see that, yes, the limited partners are paid first from revenues, but the general partners are allocated $3 for every $1 to the LPs. Hmmm...I have talked to RJ, LPL, and FSC, and received some impressive stuff from Commonwealth. I want to move to a fee based practice, and EJ is finally coming out with a platform based on the AG Edwards program...My estimates are that I would make approx a 60% payout leaving, but need "pay my own expenses" (Jones has always told us they pay for staff, but frankly I have never figured that one out since staff pay is expensed on my P&L!). I have about 60mn under care, and gross about 300. **If y'all were going to start over, and go indy, where would you go and why? Thanks, in advance, for your feedback!!Ahhh…I see light breaking from the dark clouds…LPL was my choice…never looked anyplace else…You can pm me if you want to discuss further…Product choice, great payouts, technology, compliance…Have no idea what RJ or Commonwealth has to offer…
How did you figure you would get a 60% payout with about $300K production? Most of the IBDs you mention would offer payouts in the 90%+ range. Expenses would of course need to be covered still.
He estimates 60% IF he went indy. Its not tied to the $300K in gross he is actually doing nowat EJ. That means he nets $120K (40%), right?
My question stands - where does the 60% Indy payout figure come from?
He’s likely refering to net, net payout. After all expeses.
I was at EDJ for three years. I hit location gain and profitability after 7 month of production. Three years in the wife and I had a kid and I went to get health insurance from edj and realized that Jones was not really a pro-family company. I left in 2000 grossing 250K to go to a wire. I learned a great deal in my 7 years at a wire and left last year to go to RJ. I have moved 75% of my assets so far. Anyway, enough about me. I looked at LPL, Common Wealth, First Allied and Finet (Wachovia). I turned down $700k from a couple of wires. I chose RJ. I liked and like my contact with top management. The research is better than what I had at my wire. I almost went to Finet but did not like that they kept the 12b-1’s from wrap accounts. LPL had a better payout but seemed to offer a lot less support than I get from RJ. First Allied didn’t answer my questions. Common had great marketing materials but offered no transition assistance and seemed focused on mutual funds and had no proprietary research. FYI, My wire has not sued me for leaving. EDJ sued me and was bot off by the wire. If you leave EDJ be sure to take your cost basis info with you because they are the only firm I know of that does not send cost basis info to the receiving firm of an ACAT. Hope this helps…
Or when you leave Edward Jones you request cost basis from your old office and make them do the work!
Net 60 after expenses. sorry. Most IBDs calculate a very low salary for your office administrator.
Is this a statement for or against his assertion? Please explain further.Net 60 after expenses. sorry. Most IBDs calculate a very low salary for your office administrator.
Just got my total annual compensation booklet from Jones. 58% total payout. not bad. Factor in postage, phone, and misc. out of pocket, and I’m still 55%. How can you be at 40% if you are grossing over 300k? I don’t really understand. With the 5%+ profit sharing, quarterly bonuses, LP payout, and winning the trips, how can you be that low?
also call Ameritas in Lincoln NE. I know several reps woth them that are happy. Woodbury as well, i think they are headquartered in MN.
Nice try Rankstocks, not nuyin it.
sorry, “noy Buyin it”
Here’s what I really don’t get about the Jone’s people. Since most of their book is MFD’s and they love their trails, they could go indy and make up to 80+% just off the trails. It seems to me that all the other stuff is just irrelevant. Some of those guys pull 10K+ gross off the trails, I would rather see a check for 8+k then 4+k anyday. That would pay for a boatload of computers, office space, assistant, etc…
So my question becomes..."have they never done the math?" Stating that, I really really want them to stay at Jones and stay out of my way.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
EDJ LPL Assistant salary 2750 2500 Office lease 1400Utilities: Electric 130
Telephone 220 47
Long distance/800# 30 30
Internet access 30 30
Cellular phone 30 30
Branch Office fees
Rep contract fees 125
Bonding fees 10
Branch plan 15
Branch folio 50
Branch plus 50
Quote screen, Yahoo 10
Morningstar 15 15S & P 25
Value Line 20 20
SIPC fee 20
NASD fee 22
Other fees (state fees, NASD Renewal, compliance inspection) 40 68
Insurance: Medical 257 248
E & O 83 150
Office - Hartford 42 42
Advertising 200 250
Postage 100 166
Supplies, Other Office Expenses 50 100
================
TOTAL _____ / Month
______/ Yr[quote=GoneIndy02]
also call Ameritas in Lincoln NE. I know several reps woth them that are happy. Woodbury as well, i think they are headquartered in MN.
Nice try Rankstocks, not nuyin it.
[/quote] I got mine recently too. My bonuses aren't going to be as large as rank's, but I was in the 55% payout range also. I'm not sure I understand why you're not buying it.[quote=new_indy]Here’s what I really don’t get about the Jone’s people. Since most of their book is MFD’s and they love their trails, they could go indy and make up to 80+% just off the trails. It seems to me that all the other stuff is just irrelevant. Some of those guys pull 10K+ gross off the trails, I would rather see a check for 8+k then 4+k anyday. That would pay for a boatload of computers, office space, assistant, etc…
So my question becomes..."have they never done the math?" Stating that, I really really want them to stay at Jones and stay out of my way.[/quote] If you are a vet, you move 80% of the book...8k/mo gross trails=6400/mo cash flow to cover expenses. (Not to mention systematic investments) If that advisor sees the light and realizes the rest of the industry is using advisory fees, all he/she needs to do is bring in 15 million new $, charge 1%, and they are grossing another 150k/yr, netting about 120k/yr profit (10k/net/mo) when they walk in the door instead of 8000/mo. Meanwhile their commission clients are still probably producing around 10k/mo gross on top of trails (8000/mo profit). From that point on the curve gets very steep on the up-side. It really is that simple, and this assumes only 80% moves. I moved 90%. CIBThanks, WestH for the detalied reply!
That info is very useful. One question: can you guys (Indies) really get by with a 30k assistant? Maybe I've been spoiled, but I have a registered assistant, and pay her over 50k. Cost of living here is quite high. I see it this way: any admin tasks a branch administrator does not do have to be done by me or the back office. Frankly, I want to sell and service the investments themselves, not do the related, myriad tasks a good "BOA" does. Another question: how hard did EJ come after you? I just spoke with one of the guard dogs at HQ, and she said they can - and do - still get TROs in Cali. Any and all feed back is greatly appreciated![quote=Effay]Another question: how hard did EJ come after you? I just spoke with one of the guard dogs at HQ, and she said they can - and do - still get TROs in Cali.
Any and all feed back is greatly appreciated![/quote]First and most importantly, be very careful about what questions you ask of anyone at EJ that have ANYTHING to do with brokers leaving. You can very easily send up clear red flags that could lead to more serious problems for you. Tread very carefully here.
If you are seriously considering leaving, hire an attorney experienced in this industry right away. They will explain all the risks, including TROs and what you can and cannot say or do.
Ok people, Here’s the real deal…
Listen to your transition people and you won't have any problem with TRO's in Cali... The Net/Net/Net question is one that always boggles my mind when it comes to Jones versus Indy. Let's say you are in the 55% Net program at Jones...You gross $500k...you get a W-2 with $200,000 on it! Then you file your taxes and your tax guy/girl says, all of your deductions phase out because you bump up against the AMT. You pay uncle Sam $40,000 so now your Net/Net/Net percentage is more like 40%. Indy (I'm at LPL). I grossed $650,000 last year. I paid my assistants, phone, rent, etc. Then I paid payroll taxes, then I contributed to my wife's 401k, my 401k, my profit sharing 25% of payroll, and paid my kids $4000/each so that they could make a roth contribution. I got to deduct my health insurance premiums (Can't do that at Jones). I SAVED/INVESTED $70,000 last year. I can tell you that at Jones I NEVER even dreamed of saving $70,000, I could barely scrape enough together to contribute to my 401k. It's not how much you make it's how much you save....At Jones you can't save enough for the amount of income you are producing...and top of that if you have LP at Jones you get a K-1 that is phantom income that you have to pay more tax on!!!!!Wow Spike…why would you have ever left Jones. I bet with your little bitty payout, you couldn’t afford to take your wife and kids on a vacation…sorry to hear that. I can tell by your post , your sad, regretful, suicidal, broke, have 4(maybe 5) clients and more than likely a pathetic underperformer at Jones. This is the only way you could be in your miserable state was by “not making it” at the mothership.
After reading your post, I've decided to evaluate a possible move back to the green machine, lucky I still have my Doug Hill Framed picture. Thanks for making my decision easier....TO EVERYONE ELSE>>FOR THE LAST TIME......................Do the math.The Math is after taxes people!
[quote=spikedkoolaid] I got to deduct my health insurance premiums (Can’t do that at Jones).
[/quote] That line is so frikin stupid it almost makes anything else you have to say irrelevent.Does Jones offer Medical?
Spears - what’s up with all the bashing recently? Slow time for you? Need something to do? You seem to be back with a vengance. Not that anyone is listenting to your ranting.
Yes.Does Jones offer Medical?
Yeah...as my assistant remarked this morning.."where were all these people when we were at Jones"...again Spiff...you don't know what you don't know....Now that I think about it ...I do have more free time....Shouldn't you be signing in for the Tuesday Night Call Session...
Sorry, I got a credit for my health insurance premiums of $10,000. I was $10,000 at Jones and getting no type of tax benefit. The Math is simple
Own and Run your own Business and save a lot of money W-2 Employee, phase out, don't get deductions, work for someone else... I drank the kool-aid when I was there...I still remember John Bachman saying at a Breakfast meeting when I asked him about fee-based business, "If you are planning on building fee-based business, then you shouldn't do it at Edward Jones." He went on with the mantra of why fee-based doesn't make sense, etc. That is when I made my decision to leave.You know Spiff, When bspears is calm and going easy on Jones, you are perfectly happy with him. The minute he tells the truth....it's that he's got the vengence talk going. Make up your mind.
I don't work Indy, I am free from Jones, and I still save like Spiked. I go on 4-6 trips a year--have since I left. I may go indy someday (5-7 years from now), but this was the right move for me a couple of years back. I'm debt free, making good money, treat my clients like they are my livelihood and important, and spend a lot of time with my family and friends.
You shouldn't stay with Jones any longer than you have to (sounds like you don't have the assets you need yet). Can you still contribute to a Roth? I'm listening to spears---so are others. You should too....[quote=spikedkoolaid]Sorry, I got a credit for my health insurance premiums of $10,000. I was $10,000 at Jones and getting no type of tax benefit. /QUOTE]
Wrong again dumbass.
Forgot to add, if spiked figures out the real answer he’ll disappear and not own up to a stupid fk’n mistake or never figure it out and disappear. Either way he’ll pop up in 2 months with another incredible advantage to his business that NO ONE HAS EVER HEARD OF EXCEPT FOR HIM AND HIS ACCOUNTANT. Fk’n Ge knee ass. Figure that last on out you idiot.
BTW ask your cpa about how you might of had a tax advantage with edj health insurance, when he gets done laughing at you he might have enough breath left to fill you in.
I hear crickets.
Hey Max, I didn’t get a credit for my health insurance either!!! And another thing, my w-2 listed my income $10000 less than my last pay stub!!! What is going on!!! Sorry Max, thought SKO would need some help.
[quote=Primo]Hey Max, I didn’t get a credit for my health insurance either!!! And another thing, my w-2 listed my income $10000 less than my last pay stub!!! What is going on!!! Sorry Max, thought SKO would need some help.[/quote]
No Fkn idea dumbass, maybe you ought to figure it out and call HR. Maybe because you get pre tax deductions? Just a guess but I’m not here to try and help idoits, so I’m just throwing it out there.
[quote=Primo]Hey Max, I didn’t get a credit for my health insurance either!!! [/quote]
Sorry missed this part, you didn’t get credit? Either you can’t read your pay stub or you didn’t get a credit, either way it proves your a dumbass.
Either my sarcasm is not obvious enough or you should read more carefully. A couple of posts back SKO said he did not get a tax credit for premiums paid at Jones. This is because health premiums come out pre-tax as you know, therefore explaining the difference from paystub to w-2. Does that make it more clear? Or are you going to the"dumbass" insult again, resulting in me using the “sticks and stones” defense. In the future, I will attempt to be far more obvious in my posts when I agree with you.
[quote=Primo]Hey Max, I didn’t get a credit for my health insurance either!!! And another thing, my w-2 listed my income $10000 less than my last pay stub!!! What is going on!!! Sorry Max, thought SKO would need some help.[/quote]
No Fkn idea dumbass, maybe you ought to figure it out and call HR. Maybe because you get pre tax deductions? I wonder if that is what I was implying?? Hmmm, if premiums are taken out pre-tax, would that be better than getting a credit at year end?? Would the result be the same?? Would it be more beneficial to have premiums taken out pre-tax instead of allowing the govt to use it all year and get it back?? Would this explain a difference in W-2 income and last paystub?? Would this information make SKO’s statement look stupid?? Was I agreeing with you?? Just a guess but I’m not here to try and help idoits, so I’m just throwing it out there.
[quote=Primo][quote=Maxstud] [quote=Primo]Hey Max, I didn't get a credit for my health insurance either!!! And another thing, my w-2 listed my income $10000 less than my last pay stub!!!! What is going on!!!! Sorry Max, thought SKO would need some help.[/quote]
No Fkn idea dumbass, maybe you ought to figure it out and call HR. Maybe because you get pre tax deductions? I wonder if that is what I was implying?? Hmmm, if premiums are taken out pre-tax, would that be better than getting a credit at year end?? Would the result be the same?? Would it be more beneficial to have premiums taken out pre-tax instead of allowing the govt to use it all year and get it back?? Would this explain a difference in W-2 income and last paystub?? Would this information make SKO's statement look stupid?? Was I agreeing with you?? Just a guess but I'm not here to try and help idoits, so I'm just throwing it out there.
[/quote] [/quote]
As an employee at Jones you are certainly getting the benefit of that money being pretax. As an independent that amount comes directly off of my income however as an independent businessowner I am NOT subject to the 2% floor on miscellaneous business expenses. At the 100K AGI, that is a 2000 dollar difference between employee and businessowner.
spiked,
I hate to burst your bubble, but with maxing out my HSA at around 6k pretax, profit sharing at around 13k last year pretax, and my 401k at $15,500, I saved around 34k pretax last year, not as much as might be available indy, but more than you suggest. We also have the monthly business expense program which allows deductions that can not be added back to calculate AMT and making my business expenses not subject to the 2% gross income misc. deductions. So when I say net/net/net 55%, I really mean it. Why is that so hard to believe?I’m sorry, when I was at Jones they made me pay for my health benefits $1000/month. Was it pre-tax? Has something changed?
Rank-you are one of the few who has achieved savings to the max. The California Crew does not have a Business Expense Plan anymore...By the way, I'm getting a check for $20,000 from EDJ Class Action for having to pay for expenses that should've been paid by my employer EDJ. Last Year- $650,000 Gross $70,000 401k's, Profit Sharing, Roths $125,000 Assistant, Rent, Phone, Etc $165,000 Payroll to Me $14,000 Payroll Taxes $12,000 Income Taxes I'm glad that you finally agree, Rank, that Indy is a better Net/Net/Net. You are an employee and will always be an employee until you choose to leave the mothership!Effay:
You asked: " how hard did EJ come after you? I just spoke with one of the guard dogs at HQ, and she said they can - and do - still get TROs in Cali. "
Well, it all depends on if you took over an established office w/ clients & assets, or did you start your office from scratch. I started mine from scratch, so 99% of my clients did business w/ me, since I'm in a big city, & most clients didn't know who Edward Jones was anyways. Some of them even called me Ed, or Eddie, or A. G. Ed... When I left 9 yrs ago, Jones sent 2 form letters from the legal dept, threatening this & that. But since I worked at Jones for 7 yrs, way past the 2 yr mark, no repayment of anything. I faxed the letters to LPL legal dept & they laughed it off, saying don't worry about it, just form letters Jones sends out to scare ya. Still much less threatening than the ones from Merrill, or other wire houses that Jones poaches on as part their own "healthy growth" campaign. No problems w/ TROs here.[quote=Primo]Either my sarcasm is not obvious enough or you should read more carefully. A couple of posts back SKO said he did not get a tax credit for premiums paid at Jones. This is because health premiums come out pre-tax as you know, therefore explaining the difference from paystub to w-2. Does that make it more clear? Or are you going to the"dumbass" insult again, resulting in me using the “sticks and stones” defense. In the future, I will attempt to be far more obvious in my posts when I agree with you.[/quote]
Sorry, didn’t get the sarcasm, I didn’t read the whole thread.
[quote=spikedkoolaid]I’m sorry, when I was at Jones they made me pay for my health benefits $1000/month. Was it pre-tax? Has something changed?
[/quote]
No idea if it has changed at jones since before 2005, but I have been an EMPLOYEE, most of my life and I have been paying health insurance pretax for about 20 or so years. So I would venture to guess so has the EMPLOYEES at jones.
[quote=spikedkoolaid] You are an employee and will always be an employee until you choose to leave the mothership! [/quote]
No shit Sherlock, your business acumen is incredible, are you also helping Bill Gates and Warren Buffet with business building ideas????
What a wonderful career we have!
Just think about it... 1. Our entrance/licensing requirements are an absolute joke. 2. The majority of those in our field have little to no education beyond high school. 3. The vast majority of us are nothing more than middlemen between our clients and mutual fund companies, i.e., few, if any of us, are even remotely qualified to "manage" money. 4. With auto-rebalancing and asset allocation funds, we don't have to look at our clients' accounts more often than semi-annually 5. We spend less time actually working than any other profession I can think of. 6. We get to puff out our chests and believe that we are actually responsible for making money for our clients. All the while, we get paid more than most lawyers and CPAs who are highly educated, meet extremely strict entrance and licensing requirements and work 80 hours per week. Consider yourselves blessed, guys!I do!
...although I exceed your stated minimums by juat a tad and feel like I work plenty hard, particularly in the first 3rd of the year. BTW, how's the tractor salesman doing these days?Not good. Not good at all.
A few more points about going Indy vs staying at Jones.
1. The Jones FA pays an unusually higher rate on thier health insurance. Why? As stated by home office: to subsidize the BOA and home office employees. When I went Indy I dropped my costs by 30% with the same insurance company and made it a business write off.
2. When you look at the K1 - Make sure to pay attention to the pay increases the top 7 Jones leaders had right after they agreed to pay for legal settlements over the last several years. A few years ago, Doug Hills increase year over year was exactly what he had to pay for the settlement. Its still that way today. As a LP you dont really have ownership control over what happens to your revenue dollars.
3.A truly great FA at Jones will appreciate this. Yes it is great to be Indy and have more control but here is the difference. Working together as part of a respected team. Once I went Indy, I had numerous comments from Attornesy, CPA’s and from my top clients that they liked what I was doing. They were confident in sending referals to me but hadnt been confident that Jones could really help the wealthy. Despite the surveys, they knew that I lacked product and support to handle the wealthy. Jones couldnt handle real estate in their trust management. In fact, the first order of business was to sell it off.
4. I ran the numbers on LP vs what my book of business would be worth. If you are going to goodknight then go Indy and hire your own people. The future value of the business greatly overwhelms what an LP could be worht. But remember, most Jonesers are not business owners. They were school teachers etc. They wont understand what it means or why you would want to have ownership and control of the whole thing.
Go Indy, dont look back, and as happened to me, be prepared to see others follow you when they see the light.
Thanks for the advice and the truly enlightening post. I’ve never heard any of that before. I’ll take it all under advisement.
A couple of points: First, Jones Trust Company can handle real estate. They hire a third party property manager to take care of the property. Second, nobody has ever said that LP was the same as owning the book. It's not even close to the same thing. It's like owning shares of MCD vs owning an MCD franchise. For you to use that as one of the justifications of going indy was just plain dumb. I don't fault you for going indy, just don't compare apples to firetrucks and call it a good comparison.Freeman, you’re right on most points (the Trust dept issue is a strange thing to highlight, but I guess we all have our hot buttons). Fact is, Jones is no different than most wirehouse and regional brokerages. Our payout is what it is, the bonuses are what they are, and the ^%#$ that happens behind the scenes is not unlike most other major firms (in our industry and others). They take care of the select few. When a senior exec gets a fine or some other type of compensation hit, they take care of them somehow. I don’t exactly blame them. That’s just business. When Doug Hill was fined or whatever, he did what he was doing with the blessing of the firm. He was just the fall guy, since he was in charge. So they took care of him. I think it would have been crappier if they didn’t. Just like the other financial execs that get $20mm sendoff packages when they are fired because their firm just wrote off $20B. And I don’t think they owe it to all 30,000 employees to explain every little move they make.
Spiff hit the nail on the head. Comparing Jones or ML or SB shares to being Indy is like comparing being a MCD common stock owner to owning one little MCD shop. Being an advisor at a firm vs. indy is like comparing being a MCD General Manager to the owner of a MCD shop. I am just using a simple analogy, but it should get the point across. It's just not the same. Not everyone WANTS to own the shop. Some of them just want to manage it.I just like flippin’ hamburgers.
No sense in starting a new thread for more or less the same re-hash, but I was curious how many of you on the inside knew about this one…
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080421/REG/241311594/1009/TOC This John Lindsey character sounds like a real prick.Stuff like that happens everyday despite the company.
Or because of the company, just depends on your point of view…
How can someone in a one man(person) office be exposed to the amount of distress claimed in this proceeding. It’s not like she had to walk through the door every morning to a waiting and irritated Branch Manager ready to accost her. Can someone really cause this much trauma over the phone? I honestly cannot believe things were that bad.
This is exactly why everyone should experience service in the military; it allows for “stress” and “heavy-handed” management style to be put into perspective.
Nog, putting aside your well-expresed hate for EJ, there are thousands instances of insecure managers who like to abuse the people below them. I think it was just a volatile combination between a dickhead RL and type A granny FA. Dysfunctional teams exist everywhere.
The power that a RL has in the region is itself a problem. At Jones, scores are being kept at all times by the RL , leadership team and Area leaders. What is often said is that all that matters is running a legal, ethical and profitable business. This is not exactly true ....... I wouldn't say that I have hatred for EJ but rather my eyes are opened and it is difficult to accept what I was told versus the truth. I still think that EJ is a good company to start with but the experience can vary widely from region to region. BTW, one of my friends from the old region went indy today...... his eyes are opened wide.Nog, putting aside your well-expresed hate for EJ, there are thousands instances of insecure managers who like to abuse the people below them. I think it was just a volatile combination between a dickhead RL and type A granny FA. Dysfunctional teams exist everywhere.
Thanks, All, for the good input regarding my question at the beginning of the thread.
I will particularly interested in seeing how the newbies independents do - PLEASE KEEP US POSTED! I continue to have "second and third thoughts" at EJ, and know my personal evolution will take me out into the real world. Probably in the fourth quarter. For all of you other guys, have at 'em! Thanks again. I will keep y'all posted as to my own situation, too. Its funny, we can access these forums from our EJ workstations, but I dont dare post anything from there!Noggin is right. I went indy today and my eyes are open. I will not bash Jones, but I will also not pretend that they are perfect.
There have been numerous benefits to working at Jones, but after a period of time I began to notice that there were imperfections in the system.
Noggin is right about the RL keeping score. Politics plays an important part of the regional culture. Our region wasn’t that bad, but again, not perfect. LP awards incorporate the intangible “volunteerism.” Volunteerism leads to producing reps becoming RL’s and trying to manage a bunch of A-type personalities scattered over two hundred miles. If you have a squeaky wheel, distance may aggravate the problem
The office environment is not hostile, but if you have a huge tool for an RL, I could see where hostility could play.
Congratulations not-noggin, as always keep us posted on your transition successes.
So not-noggin…where did you land or am I too lazy to search for the answer…
I am now with Woodbury. Seems like a good fit.
Congratulations…now get off this board and transfer, transfer, transfer those clients like your career depends on it (it does). If you’ve done a good job for them, they’ll probably refer more new business to you as an independent…I’ve often wondered if that was because they were concerned for me, but I decided that the results were more important than the cause…
[quote=Indyone]No sense in starting a new thread for more or less the same re-hash, but I was curious how many of you on the inside knew about this one…
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080421/REG/241311594/1009/TOC This John Lindsey character sounds like a real prick.[/quote] Actually....he is a good guy and a million dollar producer. I don't know the complaintant...but my guess is that he was right on...obviously, the powers that be disagreed.I know the story. I have met her and know others close to her. SHe is a very nice lady and treated like *@#% by the GPs at Jones. If they did what they did to your wife or daughter you be very angry. If what they did to her in the meeting with the GPs were on tape and it were leaked many of Jone’s clients would transfer their accounts because they would see an ugly, big corporate and unethical side they are very unaware of.
I left 2 years ago and it has been the best thing I have done for my clients, my family and myself. I was a transfer to EJ from another firm and never really fit because I did not drink the KoolAid. It was a scary move but very glad I did it. I feel much better about the level of investment management and service I am able to provide. Its not all just about AMerican funds and long term bonds. NO revenue sharing issues. No conflicts of interest. THe furhter rmoved I am the more I realize how much I was kept in the dark........AND I WAS THE REBEL LOOKING FOR BETTER WAYS. Well thats enough. Indy is much better and in my opinion the lady in the article was very poorly treated, especially by a company who brags about how friendly they are. By the way, she is not the only person I saw treated in an abusive manner. I truly makes my stomach turn when I think of the things that i saw.Spoken like a true…former transfer broker…if you come to a firm and you can’t embrace the culture…you are not being fair to your firm…or yourself…It’s funny to hear someone criticize the use of American Funds…It happens to be a fine Fund family and the least advantageous of the preferred families at EDJ yet still the most used…That being said…my book consists of other investments other than AFS and LT Bonds…
I chose to drink the Kool-Aid because I see how well my clients do and how we are trained from the onset to treat them. It is truly a unique firm, not perfect , of course, and i'm sure being independant is right for lots of folks and I wish you all well. However, for me, Jones is the perfect place...I realize I give up certain things, but after weighing all of the pros and cons...it is the right spot for me...who knows...maybe in 10 years my mind will change but I doubt it....Maybe I have a unique situation where my region is unbelievably helpful from the RL down...The FA's that I know who have left to go indy (and there have been a few) have been treated well by others and to my knowledge, still keep in touch with lots of former co-workers. Just my $0.02Do… you… have… tour…ettes…?
God bless the ellipsis!
EMBRACE THE CULTURE.
I was never accused of notembracing the culture. I was actually quite emraced in the culture of the firm (served as mentor, hosted a Goodknight, faithfully attended regional meetings and served my region). Quite contrary to your statement, it was I ho was not fully embraced by the firm, or at least some in my region......especially my regional leader. I admit I was in an region with especially poor leadership..................not the same region as the lady in the article, but a very tyrannical region that was cold and abusive to many IRs. Important to note is that I personally was not the direct victim the unjust treatment of the regional leader so my move was not runnig away because I couldn't handle the heat. Additionally, I did not move becasue I wasn't making the grade at Jones..... I was seg 4 and would be seg 5 by now. When you say, " Spoken like a true...former transfer broker...if you come to a firm and you can't embrace the culture....you are not being fair to your firm...or yourself" you are sadly only regurgitating the company rhetoric they use to deflect legitmate opposition to their policy or philoshophy. EJ, in my opnion, does some things very well and some things not so well. However, many andivsors at other firms do exceptional and ETHICAL work for their clients and as suprising as it may sound, many of these advisors actually meet face to face with thier clients. I got so sick and tired of the firm trying to impress IR's with the notion that EJ is the only firm that does this. Hey Kool Aid, I am glad that you are happy at Jones. It is a great place for many to run thier practices. For many the Indy world is not the proper place to be. Please understand that I am not laying a whoesale assault on Jones as many do in this fourm, but was adding my 2 cents becasue I feel that the RL and the firm were wayy off the mark on her treatment. Sadly I have seen others treated similarly and can tell you that I would never allow such treatment in my own organization. If you were to perform you own un-biased investigation I think you ay find that she was not treated in a professional manner. I would certainly hope that you would be apped if your spouse or child were treated as she was. PS I did not criticize the use of American funds. I still hold some American Funds positons in my clients portfolios today. What i was commenting on, and must not have done a good job of, was the rhetoric that many at Jones espouse of Americn funds being the best funds and nobody really needs antything else. American funds are fine but I beleive that better portfolios can be built and manged by adding in ETFs and other active mangers in a fee based platform.My posts, too, are both negative and pos on jones-I went indy 2 months ago. Very happy cuz it fits me much better. Also, ETFs mentioned that are not used at Jones: had a friend call to ask why her fairly new account (held with my former RL) had huge cap gain distrib in 07 as the account value went down. Of course, the RL sold what made her the most–and it wasn’t something tax efficient like ETFs! Countrywide, the amount of MFs in taxable accounts at Jones is HUGE-- almost all due to commmisions. CONFLICT>>>>CONFLICT>>>CONFLICT>>>
Check out the touretts guy on youtube
If any of the preferred mutual funds also did ETF's, you would see a lot of ETF's in portfolios at Jones. The reason you don't is that word called access. No ETF companies have wholesalers that call on Jones to my knowledge. No visibility , no business.I have to think that’s more stupidity and poor planning on the part of the FA, not necessarily Jones. You can be quite tax efficient in mutual funds if you want to be.
No, no, no. Jones even has an ETF Focus list of “preferred” ETFs with automatic dividend reinvestment, but it DOES NOT MATTER for one simple reason: 2% commision versus 5.75/4.50/3.5 % . Very very simple. Clients pay taxes because the broker needs it this month.
I’m curious, if you submitted an investment proposal consisting of ETF’s not on the approved list, but still fairly conservative, would EDJ shoot it down? An example of an ETF issuer I like and recommend is WisdomTree, but according to your post, it’s not on the EDJ preferred list.
Of course, I can understand why EDJ would be hesitant to allow the "short"-type ETF's, but the conservative ones? Thanks!That’s a good question. I think as long as it follows our guidelines for purchasing stock, we could buy it (pretty much no penny stocks).
Jones doesn’t actually have ANY input into the portfolios we construct. If we wanted to create portfolios of all John Hancock funds, we could. ETFs are no different. If I decide I want to switch my business completely to EFTs, which BTW I think would be retarded, I could do it. Just because there is a list of preferred funds or ETFs doesn’t mean we are forced to use them.
Oh yeah, Jones just took Putnam off of the preferred list. Thought you ex Jones guys would like to hear that.Did they take Putnum off the recommended list or focus list or whatever they call it? Don’t they have 2 levels of fund families the preferred list and 1 tier lower (I don’t remember the name). I seem to remember that when they took Federated off they just moved it down to a different list.
Yes, they moved it from the preferred list to the focus list. Too many lists around here. Currently on the focus list is AllianceBernstein, DWS Scudder, Federated, Pioneer, MFS, and soon to be Putnam. It’ll be interesting to see if one of those families gets bumped up to the preferred list.
RANKFUNDS SPIFFY…get all your damn Putnam funds and have your BOA make a call list and and and…tell them EDJ’s research has moved the funds to an “underperform” list and move them toooooo toooooo toooooo tooooooooooo AMERICAN FUNDS!! YAHOOOOO…KACHING!!! Its okay if you do this to Maxstud…
I would like to ask how having a preferred funds list is any more controversial than a company, like UBS for example, selling its own self managed funds to their clients? I never see this mentioned along side commentary on EDJ’s mutual fund practices.
Spears, you must have had a good month. You're all over the place!
And thank god Putnam is off the list. About 6 years too late! I think my only Putnam funds are from ACAT's in. Those guys are AWFUL. I also have a few Putnam/Allstate annuities in my book (change of broker stuff), and there is absolutely NOWHERE to hide among their subaccounts. They're down and average of like 18-20%!! Honestly, I don't like exchanging annuities on clients, but I am almost forced to because of the performance.
Because it's no fun to bash UBS or SB or ML. Too many Jones & former Jones guys on this forum. It's just natural.I would like to ask how having a preferred funds list is any more controversial than a company, like UBS for example, selling its own self managed funds to their clients? I never see this mentioned along side commentary on EDJ’s mutual fund practices.
Broker24…I will look the other way if you want to call on your putnam clients and stop the bleeding…
This is defendable in my opinion. When they were giving trip points for preferred funds only, that was a conflict of interest. If there is no compensation or penalty for using those funds, but independent research only, then there's no problem with it. Unfortunately those of us that were newbies did not understand the behind the scenes comp going on and used to think this was the way it was in the hey-day of rev. sharing on P&L. They fixed that after the WSJ article! and rev. sharing settlements. RJ Keeps a "highly recommended" list of mutual funds, which RJ advisors can consider as another source of research. Their track record is quite good from what I've been told.I would like to ask how having a preferred funds list is any more controversial than a company, like UBS for example, selling its own self managed funds to their clients? I never see this mentioned along side commentary on EDJ’s mutual fund practices.
That would net me about twelve bucks. Besides, most of my clients are with Edward Jones Funds American Funds.Broker24…I will look the other way if you want to call on your putnam clients and stop the bleeding…
I’ve only got about $250K in Putnam which includes just under $100K in those old PCM contracts. Most of that is in their asset allocation funds, which aren’t horrible.
CIB - so Amex or ML or UBS giving a higher payout on proprietary funds (instant net and therefore conflict of interest to the FA) is defendable and the preferred list isn't. C'mon. That's a stretch to make Jones look bad and you know it. The non preferred funds not counting on the trips was a really long time ago and it didn't work that way for very long. You're really reaching with this one. So what's the difference between RJ's "highly recommended" list and Jones' preferred list? It's another source of research and not a conflict because why? How is that different than the Jones guys doing research? Our preferred list has a terrific track record. Barron's ranks American Funds #1 over the last decade, Hartford #5, Franklin #7, Oppy #11, Van Kampen #13, Lord Abbett #22, and Goldman #36. Also, all of the focus list are in the top 50. That means ALL of the fund families that Jones recommends are among the best, if not the best as of right now. Now, if they would just teach us how to use them, everything would be fine.To move on the preferred list, you gotta pay!!!@>@>Yes, they moved it from the preferred list to the focus list. Too many lists around here. Currently on the focus list is AllianceBernstein, DWS Scudder, Federated, Pioneer, MFS, and soon to be Putnam. It’ll be interesting to see if one of those families gets bumped up to the preferred list.
[quote=bspears]Its okay if you do this to Maxstud…[/quote]
No worries I have never invested anyone in Putnam or whatever other fund you had you panties in a bunch about. Was it comstock that the EJ guy moved you former clients from? I’m not as stupid as you were when I joined Jones. Glad to see your IQ has gone through the roof since you left. (sw) Still trying to figure out that LPL computer system? By the way since I mentioned it have your figure out why your tech charge argument is so fucking stupid a first year business student could point it out to you?
Stud & Spacehead, To quote the cliche “those who live in glass houses…” I used to have to go on the roof of my building to clear snow off my dish so I could get my computer to work. Are you still hit with $1300 a month P&L expense for your dish. Will Jones let you on Rrep’s website or are they still policing your access to information. UBS does not pay more for the using proprietary funds in fact they pay less in their wrap programs and the A share structure is in line with industry norms. Open your eyes and move beyond the Kool-Aid, look at Ivy, Quaker Strat., Davis, Alger, etc. for some fund options. Hey, you might want to look at a Hedge fund or two. Oh, yeah you don’t have access to financial instruments that can lesson clients risk while not correlating to Growth Fund of America. RJ’s research on the fund side is not based on revenue sharing agreements nor is FINETs. Do you have access to Lipper Data and Morningstar yet? Check them out they seem to have had a bit of success in the fund evaluation arena. "A terrific track record until you drop them off the “list” six years after they have blown up-Way to be proactive! I can assure you that LPL and most other independents’ technology blows EJ’s away. Do you still have to pay for advertising. Do the math… you have most of the downsides of an independent without the upside of ownership and high payout. I love driving by my former RL’s Jones office seeing the ever expanding rust stains on his ugly dish.
Max is having a bad month…I have to say if your so fucking smart, why are you still at the green machine dumbass…
This is defendable in my opinion. When they were giving trip points for preferred funds only, that was a conflict of interest. If there is no compensation or penalty for using those funds, but independent research only, then there's no problem with it. Unfortunately those of us that were newbies did not understand the behind the scenes comp going on and used to think this was the way it was in the hey-day of rev. sharing on P&L. They fixed that after the WSJ article! and rev. sharing settlements. RJ Keeps a "highly recommended" list of mutual funds, which RJ advisors can consider as another source of research. Their track record is quite good from what I've been told. CIB - so Amex or ML or UBS giving a higher payout on proprietary funds (instant net and therefore conflict of interest to the FA) is defendable and the preferred list isn't. C'mon. That's a stretch to make Jones look bad and you know it. The non preferred funds not counting on the trips was a really long time ago and it didn't work that way for very long. You're really reaching with this one. So what's the difference between RJ's "highly recommended" list and Jones' preferred list? It's another source of research and not a conflict because why? How is that different than the Jones guys doing research? [/quote] Spiff, you read my post wrong or I wasn't clear. I was trying to defend Jones' "preferred list." My point was that what RJ is doing really isn't any different than what Jones is doing, and as long as Jones isn't giving extra comp any more, it isn't a valid argument against Jones. I was also saying that when many of us were newbies, we thought preferreds were preferreds because of research, not revenue sharing, and we were wrong. Jones did correct the situation when they fixed rev. sharing on P&L to AUM percentage. CIB[quote=NOLA_Advisor]I would like to ask how having a preferred funds list is any more controversial than a company, like UBS for example, selling its own self managed funds to their clients? I never see this mentioned along side commentary on EDJ’s mutual fund practices.
CIB - I did misread your statement. My apologies.
wired - wow, 3 whole posts and you feel comfortable enough to start bashing already. Well, not like we needed another one, but welcome anyway. Your gross assumptions about Jones tells me you've been gone way too long to really know what you are talking about, so until you get the lay of the land and get to know what you don't know, I'd suggest you shut your mouth. BTW, you can't assure me of squat as far as technology goes because you don't have a clue what technology I have right now. You only know what you had when you left. To answer your questions - yes there is still a P&L charge, but the only thing I use the satellite for is a video link. We moved to T1 a long time ago. We now use SunGard's financial planning station, Morningstar's hypo system for funds and annuities. I know where to get Lipper ratings. BTW, if you're using Morningstar and Lipper as a research source you're a complete idiot. They don't do any research. They just publish ranks based on performance and some other concrete data. They are data compilers. Period. Hedge funds. Good idea. You mean like this one: http://registeredrep.com/advisorland/citi_blow_up_04_29_2008/ I'm sure all of those clients really appreciate their advisor trying to "lessen" their risk. Thanks for the info on the other mutual fund families. I didn't know there were more than 8 families out there.Spiff I am sure glad you didn't take over my office. I would have had real competition.
The young man just advertised a dinner with a market update from (drum roll please)
Putnam. Must be slower out west.
Geez...take a breath. Looks like someone has gotten a few inches under your skin... I can't understand how the system doesn't censor the f-bomb when you can't even say shit without an asterisk. Shit seems so harmless in comparison, given that it simply evolved from the acronym stamped on containers of dried manure, advising sailors to "ship high in transit" so the manure wouldn't get wet, producing methane gas, producing a problem when someone went below deck to inspect with a lantern... update: After viewing this post, I stand corrected...apparently with the new forum, we can cuss like sailors without any fear of censorship...fire away, Max...[quote=bspears]Its okay if you do this to Maxstud…[/quote]
I’m not as stupid as you were when I joined Jones. Glad to see your IQ has gone through the roof since you left. (sw) Still trying to figure out that LPL computer system? By the way since I mentioned it have your figure out why your tech charge argument is so fucking stupid a first year business student could point it out to you?
[quote=Indyone]
[/quote]
This is an urban legend and is not true. The word is derived from the old english ‘scitte’. The legend is much cooler, though.
I hoped to pass that one off, but you blew me out of the water...sh*t!!!
Wow…we learn all types of scitte (or should it be sci**e) on this Board!!!
I hoped to pass that one off, but you blew me out of the water…sh*t!!!
Sorry to out you like that...I should have let it ride for a bit!
Well the 'legend' of the F-bomb came from the Anglo-Dutch wars. When in bivouac, and to boost morale, the King ordered that a special tent was to be erected and reserved for soldiers to have 'conjugal' visits. In order to distinguish this tent from the rest of the encampment, a sign was posted reading, "Fornication Under Consent of the King"; or as the soldiers called it, the F.U.C.K. tent.
Man, you gotta love the American English language. We’ve butchered so many different languages to make up our own. It’s a beautiful thing.
foot - No, you would have just told your clients that the new guy coming in doesn’t know squat. You would have told them that you have so many different options now than you did while you were with Jones. You would have convinced them that Jones is an evil place just out to make a buck. They would have moved with you. And the ones who didn’t, you really didn’t want anyway.
foot - No, you would have just told your clients that the new guy coming in doesn’t know squat. You would have told them that you have so many different options now than you did while you were with Jones. You would have convinced them that Jones is an evil place just out to make a buck. They would have moved with you. And the ones who didn’t, you really didn’t want anyway.
Spiffmeister- The beauty of the situation is that I don't respond to clients when told that they receive a call or an invitation, etc... I just listen and then smile. I don't need to convince anyone that Jones is evil because I don't think that at all. The truth is now after almost two years of independence from Jones, that he looks foolish continuing to contact clients that have no interest in him or Jones. Hopefully he'll see the light someday. Your continuous sarcasm (some would refer to it as rightous indignation) is a true signal that you can't be objective. You just automatically think if we say something you can't agree with, we must be the enemy. For the record...I thank Edward Jones for the training. I generated almost 2.6M and received 1M so they made 1.6M on my efforts (this was during the 8.5 years I was there). They got theirs and now I am taking what I learned and benefiting my clients and my family. Peace brother.... PS. Anyone but Putnam......Spacehead, Wow! You have a short fuse. Has that served you well in life? I have posted in the past but since I moved my book to an independent practice I dropped out for awhile and my ID was deleted from the system. Based on the number of times you post I can understand why you haven’t had time to realize that there are more than 8 fund families available for you to choose from. Congrats on the T1. I know Jones offices that were still on the dish two years ago so I don’t know how you define long ago but hey good for you! As far as the Morningstar thing, if you have access to the hypo system you have access to only about 10% of what the full Morningstar suite can do. I use it to measure the historical correlation of assets to one another. I realize you may not have had time to learn about such things so I can understand in how in your frustration you have resorted to name calling. As far as Hedge funds are concerned I am pleased to let you know I did not use any Smith Barney Hedge funds. I did however get some clients in with Jim Simons and company last year when they opened again to new investors. Since you likely don’t know who he is here is a link: http://www.bloomberg.com/news/marketsmag/mm_0108_story1.html So, grab yourself a big glass of the green Kool-aid you love so much and spend some time learning about life away from the Cult. Rent the movie Falling Down and get some heavy therapy and meds. Good Selling!
SPACE- so a diversifies port of ETFs would be “retarded”? Seems that all those folks who had an FA that “guessed wrong” on Putnam between 1999 and 2007 sure would be better off in indexes. Now they have to pay a new load to guess on the next active manager! What a system… and the ETFs have an exp ratio of .20 and almost no taxable surprises! Pretty retarded…
Spiff defines a long time as about 18 months. That’s when I left Jones and my office was still on the dish and we were early in the transistion process because my office was in the same town as the RL. So Jones HAS NOT been on T1 a LONG TIME! Spiff, you’ve gotta get your times straight. But other than that, most of your comments are spot on for a koolaid drinker.
Maybe cause of the video they run over it?
Or the DOS green screens are pulling down a lot of bandwidth . Sorry Spiff, couldn't be completely slam free.[quote=CIBforeveryone] Maybe cause of the video they run over it?
Or the DOS green screens are pulling down a lot of bandwidth . Sorry Spiff, couldn’t be completely slam free.[/quote]
I actually thought DOS was dead…it was nostalgic to see it in use again. But I must say that it is a lot more convenient this time around with out having to insert and load the 5.25" floppy disk to boot up MS-DOS!!!
wired - I don’t typically have a short fuse. I usually take more than I give around here. You are just one more in line of people who for some reason feel it necessary to talk poorly about your former employer. So, your post caught me at an odd moment in time.
The hypo system we use doesn't just run historical performance numbers. It does everything we need it to do. So we get the MPT stats that all of you people who are obviously much smarter than the average Jones guy probably use all the time. I'm sure all of you know how much alpha your chosen money managers are adding or, if you are using ETFs, how much alpha you are adding. Wait, I'm a Jones guy, why do I need to concern myself with meaningless things like that. N/N - It's easy to pick on Putnam and compare them to a well diversified portfolio of ETFs. But, to answer your question, in my opinion, yes moving to an all ETF strategy would be dumb. ETFs are fine investments if you want to take a passive approach to investing. If you truly believe that you can't beat the indexes over time, then you should absolutely be working with ETFs alone. The problem I have with them is that the portfolio can only be as good as A) The indexes that make up the portfolio and B) the FA who is managing the portfolio. Most FAs don't have the time, knowledge, or desire to make tactical decisions on the markets and make changes to the portfolios as needed. They can't possibly do the amount of research necessary to truly understand what is going on in all of those markets. So, what happens is that they build a portfolio that by design is destined to be average. After all, how do you beat the average if the investment you are using IS the average? Then you charge the client a fee every year to manage said average portfolio, thereby guaranteeing that that portfolio is going to underperform the average. There are some instances where ETFS might be appropriate. For instance, a client wants to invest in gold. He can by a Gold Index ETF or he can buy Krugerands. He might lose the Krugerands. He won't lose the ETF. I'm sure there are many more examples, but that's just one off the top of my head. On my desk I have a bunch of pencils held together with a rubber band. About 50 of them. When clients ask about ETFs I hand them that stack of pencils. I tell them that the pencils represent the S&P 500. We can invest two different ways. I can buy them the ETF that they asked about which would be like buying the entire stack of pencils. There are some good pencils in there, but there are also some really bad ones. Maybe even some defective ones. Or I can go through the pencils, cull out the bad ones, replace them with new ones that are better and then we can buy that stack of pencils. And, if in the future one of the ones we left in gets broken or we find out later that it was bad, I can replace that one too. It's up to you. Which way would you rather go? See, with indexes you don't just get the good ideas, you also get all of the bad ones too.So I guess with your pencil theory, all your clients beat the averages after fees and taxes?
Spiff,
Many firms use tactical re-allocation with their ETF porfolios. Sort of like the way Goldman runs their allocation funds. In this way, you have managers (i.e. the firm) deciding on tactical allocation, as opposed to a bottom up, research-driven approach by the fund managers. I don't think it's simple enough to just compare an ETF to it's index. You have to look at a balanced ETF portfolio and compare it to another type of allocation model (i.e. managed mutual funds). If you strip out some of the components of funds you use (I.e. I like CAIBX), the individual pieces are not necessarily exceptional. So with CAIBX, look at just the bond component, then just the international component, and finally, the large cap domestic value piece. If you looked at each of them versus their actual benchmark, they might be just OK (I've never actually done this, so I don't know the actual numbers). What American Funds does well is manage the mix in CAIBX very well, thus reducing volatility and maintaining good returns. It's like owning CWGIX, BNDFX, AIVSX and Cash individually, managed for the proper mix. I don't necessarily like using ETF's, as I feel very comfortable with active management, but it does not diminish the fact that good tactical ETF allocations can bring reduced risk, adequate returns, and alpha versus ANOTHER portfolio (obviously there is no alpha versus the asset-weighted benchmarks, but you aren't intending to beat the benchmarks). And most of the ETF programs will auto-rebalance based on pre-set criteria (i.e. models). And they can be more tax efficient for taxable accounts. This may not affect you and I as much, as I am guessing (like me) much of your accounts are in tax-deferred accounts.[quote=NOLA_Advisor] [quote=Indyone]
I hoped to pass that one off, but you blew me out of the water...sh*t!!!
[/quote]Sorry to out you like that...I should have let it ride for a bit!
Well the 'legend' of the F-bomb came from the Anglo-Dutch wars. When in bivouac, and to boost morale, the King ordered that a special tent was to be erected and reserved for soldiers to have 'conjugal' visits. In order to distinguish this tent from the rest of the encampment, a sign was posted reading, "Fornication Under Consent of the King"; or as the soldiers called it, the F.U.C.K. tent.[/quote] That too is urban legend!
Yes, flawed in may ways. I see many, many cracks in spiffy’s armor…I’m just one loud voice, but I think we should pull the offer of Independence off the table for Spiff. Not sure he would be what we want on our side…All in favor say I…
spears - thanks. That's one less decision in my life I have to make. Now that I don't have the option of going independant, I can focus on becoming a GP with EDJ. If they're serving kool aid I'd rather be the one making it than drinking it.
Like I said before, I don't think ETFs are bad investments. I have no doubts that if there is a strategy in place, like Goldman's tactical approach with their strategy funds, the returns are going to be decent. But, when I see ETFs in portfolios, they usually aren't using them as a strategy by themselves. The FA has just decided to build the portfolio using ETFs in addition to some other investments. So he throws in 4 or 5 of them and calls it a day. That'll be 1% a year, please. They might rebalance. They might not. I just don't see the efficient, tactical approach that B24 is talking about used with most people.[quote=Spaceman Spiff]
spears - thanks. That's one less decision in my life I have to make. Now that I don't have the option of going independant, I can focus on becoming a GP with EDJ. If they're serving kool aid I'd rather be the one making it than drinking it.
Like I said before, I don't think ETFs are bad investments. I have no doubts that if there is a strategy in place, like Goldman's tactical approach with their strategy funds, the returns are going to be decent. But, when I see ETFs in portfolios, they usually aren't using them as a strategy by themselves. The FA has just decided to build the portfolio using ETFs in addition to some other investments. So he throws in 4 or 5 of them and calls it a day. That'll be 1% a year, please. They might rebalance. They might not. I just don't see the efficient, tactical approach that B24 is talking about used with most people. [/quote] That's because we are seeing the clients that are unhappy or not getting service from their brokers, and probably have crummy portfolios (you're right - a few funds here, a few stocks there, and some ETF's). I have a friend at A.G.EDWACHOVBANK Securities, and he showed me what he is doing with ETF portfolios in their CAAP program. I have to say, it is pretty slick (at least the way HE is using them). I still don't know that I would use the strategy in a NQ account (because frankly, I like my actively managed portfolios), but in a qualified account, I would probably use this strategy for a client with tax issues, rather than individual stocks or actively managed funds.icecold is right on-and he didn’t even mention the uundisclosed MF trading costs. Look at CWGIX-- a big Jones INTL play. it’s 5 year return is a bit LESS that the ex-USA (truly intl, not global) index ETF. But that is really just an example. the bigger point is being able to TRULY manage/rebalance etc since you know EXACTLY how much is in each of the asset categories. So ANCFX beat “the market”? That’s what Am Funds says in their lit. what a joke-- it is similar to two ETFs: large cap value and Intl combined. The ETFs do just as well, but MUCH better after taxes. (your pencil deal is Jonesspeak–the key is CAN you pick the right pencil? Do you KNOW that AF is not the next Putnam? ) I was at Jones, I know the drill. I also know that in 2006 my mentor could not tell me what an ETF was. And 3 months ago when I left, my RL said “what is an RIA?” --------very well trained over 16 years!
Exactly what index are you comparing CWGIX too?
Total Return % +/- MSCI EAFE NDTR_D +/- MSCI World NDTR_D % Rank in Cat 1-Day 0.63 --- 0.16 22 1-Week 1.28 --- 0.20 32 1-Month 2.63 --- -0.92 69 3-Month 3.43 --- 0.79 35 Year-to-date -2.29 --- 1.54 20 1-Year 6.01 --- 7.91 14 3-Year Annualized 17.96 --- 5.43 10 5-Year Annualized 21.07 --- 5.83 6 10-Yr Annualized* 11.87 5.21 6.85 4MSCI ACWI ex-USA is 22.75. CWGIX is 21.1 (5 year), with it’s 5th largest holding being Microsoft. My point, again, was that while these comparisons are imperfect, great reurns are possible with tthe passive approach. Especially without loads and taxes and trading costs. Spiff was perfect in his Jonespeak, saying how much better folks are in active management. Almost no other firm agrees, but only jones gets around 50% of its net income from rev sharing kickbacks from active managers. These active managers visited my jones office to tell me how they “beat the market”. the fine print on their fancy brochures explained how loads were not included, and neither were taxes.
That is exactly what I mean by imperfect. I am saying that jones calls this the portfoilios “intl” piece, and I am saying that it is not exactly that. The index IS exactly that. I prefer the precision of exact. to each his/her own. The jones way is easier to sell and service, but is not for me. To me, the intl portion of a great portfolio should be exactly the intl portion. if I want Microsoft or bonds or cash, I know how to get it—and it ain’t by buying more “intl”!
Hey, if you can manage the risk, more power to you. I prefer to hand that task off to people who actually do it for a living. New World would have been a better comparison, still imperfect, but better and it blows your index away over the last 5 years. As far as tax effeceincy (sp?) you got me there. Here is my problem with most ETF portfolios. They suck. The allocations are based on historical models and ignore current conditions. Most models I have seen put the Intl allocation at 15-35% at the most even though Intl outperforms domestic 8/10 years. Intl has outperformed substantially over the last 5 years and yet these models may increase the allocation a couple of points. Doing it properly, heavy Intl 2003-2007 would create quite a bit of movement in the portfolio eliminating the cost (commission accts) and tax arguments that you have given.
Wow. Not a Jones sales blurb, just a criticism (sp?) of the comparison. If you believe that Cap World vs his index is a valid comparison, then you are the incompetant one. The asset allocation is considerably different. If he was saying that the Jones broker calls CWGIX their Intl allocation to fit a model, then newnew would be right. However I have a brain and am concious, so I noticed immediately that the comparison was not “imperfect” it was WRONG. BTW, I take most of my business from Jones brokers.
icecold is probably referring to your decision to max out intl positions just because they have had so many great years. The portfolios don’t “suck”—they are about the Efficient Frontier etc etc and managing risk moving FORWARD. It was interesting that you complain about using historical models and then only talk about the historical returns of intl. Your argument sopported LESS not MORE
one last thing: unbelievable that you would quote returns AFTER THE FACT to justify the tax inefficiency of these MFs. you said :"Doing it properly, heavy Intl 2003-2007 would create quite a bit of movement in the portfolio eliminating the cost (commission accts) and tax arguments that you have given. "
WOW. Nice crystal ball. Don't worry mister customer, I am HEAVILY weighted in what I know IN ADVANCE is enough positive movement in the portfolio to "make up" for loads and taxes.Who said anything about knowing in advance, Intl (EAFE) went positve relative strength to S&P in July 2002. If you agree investors chase returns, albeit way too late, you would have starting moving domestic equity positions (regardless of your blend) to intl investments. Guess I’m lucky. Funny how you have not refuted my point, it was a terrible comparison. As for the tax issue, I am a very active asset allocator, so in my business, ETFs do not have a big advantage. I will concede the point that they do have an advantage. As for “quite a bit of movement” comment I made, I was very heavy in bonds from 11/00 to 5/03 and made a large move back into equities in general in 2003. I am not tax efficient in my practice nor do I try to be. And before you criticize, my clients did not mind the tax bill I generated for them in 2003 as most made money or held steady during the bear market. Everything is a trade off.
IMHO, you can’t try to compare actively managed funds (especially an AMF) directly to an index. I think the better thing to do, which is what I typically do, is build portfolios, then look at the overall makeup of the portfolio. Trying to piece together active funds that compete directly with an index doesn’t really work. You really have to compare a portfolio of index/ETF funds to a managed portfolio that has a similar breakdown. And I am not saying one is better than the other (though I do like active management), I am just saying that comparing each fund versus each ETF is sort of a non-starter.
At the end of the day it comes down to risk, return, and diversification. There are lots of ways to get there. Rather than trying to pee all over each other, giving ideas on this forum is far more constructive. As an example, I would love for someone to show me a great portfolio of ETF’s. Jones has a Focus List, but they give no direction on portfolio construction. Until rather recently, I have sort of ignored ETF’s. But as I have acquired more large qualied accounts, I have found it helpful to consider ETF’s. I just don’t have the confidence to use them much yet - partly because I like to see long historical returns and STDDEV’s. I am hoping with Jones’ managed model this summer, there will be plenty of resources for this. I know they will be based on models, so I am sure they are providing this. But any suggestions on how to construct the models would be helpful.
Thanks.
i have not refuted your point because it is true. these comparisons are never exact. much more important though is that you cannot justify tax inefficiency but saying that a certain asset class made up for it (intl in this case). You are right–you were lucky.
How about those MF cap gain disrtributions as the market went DOWN. It will happen again. Here is what you and I disagree on: "IT'S NOT WHAT YOU MAKE BUT WHAT YOU KEEP". I believe that, so non-qualified MFs make no sense unless you are in the lowest tax brackets.[quote=newnew]i have not refuted your point because it is true. Thank you. these comparisons are never exact. much more important though is that you cannot justify tax inefficiency but saying that a certain asset class made up for it (intl in this case). You are right–you were lucky. If it’s luck, I have been lucky quite a bit.
How about those MF cap gain disrtributions as the market went DOWN. It will happen again. Agree Here is what you and I disagree on: "IT'S NOT WHAT YOU MAKE BUT WHAT YOU KEEP". If you read my post, I implied this. This is an area we are 100% in agreement on. I believe that, so non-qualified MFs make no sense unless you are in the lowest tax brackets. If you have a reasonably high turnover portfolio, the tax advantages of ETFs are minimized. I do use both MFs and ETFs. I prefer the active management of MFs. But they only make sense when you can get additional return or risk management to make up for the tax structure. You cannot know this ahead of time, but then you really don't know anything ahead of time. [/quote]we agree to disagree which is fine. best of luck.
Spiff and B24,
I appreciate your comments. As for my time at Jones - they could not handle real estate. I have quite a few farm clients sitting on 5-10k in land and they could never get behind a proposal. When granddad dies and the life insurance goes liquid to one kid for $3mil and the other kid gets the $3mil farm you have to be ready. They could never be ready. Even on rental properties. Maybe something has changed in the last 18 months but to do any kind of business planning or real advise was a nightmare.
Having meet Doug several times and having personally spend time with him one on one it was great. I really did like the guy. I understand how comp works out with big firms. BUT what they represent and what they do are two different things. If you are going to tell your IR’s oops FA’s that they are business owners and to treat it like its your business they when you skim off the top to cover a lawsuit you better let us know.
As Indy, I know what I get. At Jones… wells you just dont. I feel bad for the buddies I still have there. Indy is a different world but it is a dramatically better world with a lot more to offer your clients. And at the end of the day, its my clients that are putting my kids through college not a GP.
Freeman, you’re right.
I think the mistake that people make time after time on this board is trying to compare Jones to an Independant B/D platform. It’s not the same thing. It’s not even close. Now, you can compare Jones to AGE/Wach, ML, SB, any of the others, and at least reasonably compare payouts, support, technology, etc.
But to try and compare to LPL or RayJay or whoever is like comparing a Honda Accord to a Harley Davidson (I wanted to use the apples to oranges thing, but that’s way overused).
The fact is, if you compare our total payout to the total payout at a wire, we are very comparable - probably right in the middle of the pack. Depending on your production level, we may be higher or lower. We are higher for newbies, lower for mid-level producers, and often higher for big producers (though the big wildcard is the profitability bonus, which is dependant on several factors; our profit sharing is also uncapped for big producers). I don’t include LP in the mix because it’s really just a very high yield bond that you pay 25% for.
Unfortunately, we just have to accept that we are employees, and although we work in a unique single-advisor, no BOM office, we are not “owners” - we are “operators”. We are much more similar to a BOM than to a independant advisor with LPL. BUT, the point that Jones hammers home to us is that we should RUN the business like it is ours, since we are 100% responsible for our production and profitability (just like at the wires). It really is the way we should run the business.
Let’s all agree to get over this…
I hear you I do......but if you look at all the recruiting information that Jones puts out and it all says "when you run your business". That very statement implies ownership, but you are actually an employee and Jones owns the business and will get you to pay for a lot of the expenses of that business that they already own. An independent on the other hand actually owns their business. That's the big issue.....Freeman, you’re right.
I think the mistake that people make time after time on this board is trying to compare Jones to an Independant B/D platform. It’s not the same thing. It’s not even close. Now, you can compare Jones to AGE/Wach, ML, SB, any of the others, and at least reasonably compare payouts, support, technology, etc.
But to try and compare to LPL or RayJay or whoever is like comparing a Honda Accord to a Harley Davidson (I wanted to use the apples to oranges thing, but that’s way overused).
The fact is, if you compare our total payout to the total payout at a wire, we are very comparable - probably right in the middle of the pack. Depending on your production level, we may be higher or lower. We are higher for newbies, lower for mid-level producers, and often higher for big producers (though the big wildcard is the profitability bonus, which is dependant on several factors; our profit sharing is also uncapped for big producers). I don’t include LP in the mix because it’s really just a very high yield bond that you pay 25% for.
Unfortunately, we just have to accept that we are employees, and although we work in a unique single-advisor, no BOM office, we are not “owners” - we are “operators”. We are much more similar to a BOM than to a independant advisor with LPL. BUT, the point that Jones hammers home to us is that we should RUN the business like it is ours, since we are 100% responsible for our production and profitability (just like at the wires). It really is the way we should run the business.
Let’s all agree to get over this…
True. But I can’t believe that someone with enough intelligence to be in this business (okay, that’s questionable at times) doesn’t see through the fact that you don’t OWN the business, you just RUN the business. I guess I never found myself “duped” the way many on this board seem to suggest. Nor do I think Jones misleads people into thinking they own the business. Maybe I just never looked at it that closely, or maybe I just knew the business well enough to understand what it was.
I agree with Broker24. I would be hard pressed to believe I was actually an owner of my EDJ business without talk of franchise, equity share, etc. Especially since no compete clauses are signed.
The allure of RUNning my own office however is very much alive. Maybe I watch “The Office” too much but can’t stand the thought of a cubicle or open floor office.
I have always thought it was interesting that there is such a comparison made between Jones and indy. But there is very little comparison made between Merrill or Morgan and indy. Perhaps that’s because this board seems to be frequented mostly by people who either work for Jones or used to work for Jones and that is the only comparison they can make. The comparison really is like Harleys and Hondas (good one B24).
nog - ownership isn't an issue until you make it an issue. I have never been under the misconception that I actually "own" my office. I don't pay rent, I don't fix the air conditioner, I don't buy the furniture, I don't mess with the landlord. I can walk away from the securities biz today and wouldn't owe Jones anything and they would owe me anything. In the indy world you've got skin in the game. You walk away today and you have to buy out your lease on your building. You have to figure out what to do with all those computers and furniture. Yes you own it, but what good does it do you now. Sure you can sell it. If you can find a buyer willing to pay you for it. Yes, you own your book. You can sell it when you retire. What happens if you set up a 10 year deal with some guy to buy your book and in year 3 he files for bankruptcy? What now? So, you have all the benefits of ownership, but also all of the headaches. You can be handsomely rewarded for your investments in your business, or you could crash and burn. It's completely up to you. It's a classic risk/reward play. It doesn't make Jones evil nor does it make indy any better. It's just different.[quote=Spaceman Spiff]…I have always thought it was interesting that there is such a comparison made between Jones and indy. But there is very little comparison made between Merrill or Morgan and indy. Perhaps that’s because this board seems to be frequented mostly by people who either work for Jones or used to work for Jones and that is the only comparison they can make. The comparison really is like Harleys and Hondas (good one B24).
[/quote] I have to believe the ML, SB, WACH guys are probably spending their time on the phone drumming up business, e.g., Mark Curtis, SB, $17 billion AUM. While the Jones guys, who don't know how to cold call, piddle on this forum and tell themselves, "I'll go our and doorknock in five minutes...hmm...it looks like rain out there...okay...I'll go after lunch...or maybe first thing tomorrow."When I went to Jones I was under the impression that I would be “running my own office” not that I would own the office. I knew it wasn’t a franchise in the strict sense of the word.
To me running my business meant that I would be able to offer investments to my clients suitable for their individual needs. Instead I found out that we had select investments and inventories of bonds that we were supposed to push. Skimpy bond inventory and only offering partials of the entire bond offering. If I had too many clients in a particular stock that the company didn't approve of, I was told to sell my clients out of it.!! Use an ETF, UIT or fund that wasn't ont he kick back....errr preferred fund family and you caught flack. While I was always green...even got a nifty shovel placque ...I was annoyed to have to go to meetings that I didn't want to attend. Just try to skip out on the regional or interim meetings. I was not able to "run my business" they way I wanted at all. Lies. And those stupid ass calling sessions. Shamrock Friday or whatever. Call people on Thanksgiving and hack a 30 year 5% bond. Sheesh. My biggest dissapointment was all of the hidden fees and costs and the ridiculous profit and loss system that basically ensured that you were not likely to make a profit. Make you pay costs of operating the business that you cannot write off because you are a wage slave W-2 employee. They hold the carrot just out of reach.And if you ran a MCD franchise you couldn’t sell Whoppers.
I would disagree with you that the P&L system ensures that you were not likely to make a profit. It is what it is. It's not like they keep adding things to it the closer you get to profitability. Is it difficult to finally push yourself past becoming bonus eligible? Yep. But, Jones doesn't change the system to make it difficult for you. I've never had Jones tell me I had to liquidate someone's investments. I've had suitability wires for people who own a bunch of one stock before. But they didn't make me sell anything. I don't believe they have the ability to do so. I've also never had them question any trades outside the preferred funds. If we have a selling agreement, we can sell it. I can sell all Calamos funds if I think it's appropriate for my client. I agree with you on the meetings. I despise having a meeting for the sake of having a meeting. But every meeting I've been to at Jones I've learned something that has bettered my business. Except for the call sessions. I've not learned much from those other than I have horrible call reluctance. It's a wonder I survive them.Go to a professional networking site like Linked-In and see how many Jones brokers call themselves “Owner”. I saw a Jones buddy of mine not only lists himself as the Owner of Edward Jones, he also claims he is a RIA. (Think he got the S66 IAR idea confused with what he’s reading in the media!) He’s a great guy and I would trust him with my money, but how do you tell him “you’re an employee and you are definitely not an RIA.”
Just like that. If he’s disseminating info that says he’s an RIA, then he’s going to get himself in trouble. If he’s a buddy, make a point to tell him he’s about to get in trouble.
The ownership issue could be a touchy one. We don't own our offices, but he could argue that if he is an LP, he is an owner in the company. I know, I know, it's not a true equity stake, so don't even start. Ask him if that's why he lists that he is the owner.[quote=Spaceman Spiff]And if you ran a MCD franchise you couldn’t sell Whoppers.
I would disagree with you that the P&L system ensures that you were not likely to make a profit. It is what it is. It's not like they keep adding things to it the closer you get to profitability. Is it difficult to finally push yourself past becoming bonus eligible? Yep. But, Jones doesn't change the system to make it difficult for you. I've never had Jones tell me I had to liquidate someone's investments. I've had suitability wires for people who own a bunch of one stock before. But they didn't make me sell anything. I don't believe they have the ability to do so. I've also never had them question any trades outside the preferred funds. If we have a selling agreement, we can sell it. I can sell all Calamos funds if I think it's appropriate for my client. I agree with you on the meetings. I despise having a meeting for the sake of having a meeting. But every meeting I've been to at Jones I've learned something that has bettered my business. Except for the call sessions. I've not learned much from those other than I have horrible call reluctance. It's a wonder I survive them. [/quote] Horrible analogy Spiff you can do better......I guarantee a call from your RL if all you sell is Calamos....Why? Because I’m not contributing to the revenue sharing pie? Or because you believe Calamos to be a fund not on par with the preferreds?
I'll work on my alalogies for the next time.Source URL:https://www.wealthmanagement.com/forums/whats-firms/technology-ej