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Jul 29, 2008 7:24 pm

[quote=iceco1d]Ack Borker Boy! 

  NC Tiger, I disagree with Borkers F&F statement.  Mind you, he has far more tenure in the biz than me [just as a caveat].   Here is my take on friends & family - don't expect them to make or break you...unless they are in an extremely well-to-do network, it will probably just fool you into thinking you are doing well for a few months.  However, I truly feel that I am the best advisor in my area, and that I can and will do the best for my clients.  If I feel I am the best, why on Earth would I want my closest friends and my family members to go to a less advisor?    Now, if you aren't the best, by all means, do NOT "practice" on your family and friends.  But once you are confident in your abilities, why wouldn't you want them as clients?  I know that when the going gets tough, like it is now, I want my f&f to have the best advice available.[/quote]   To be frank, I don't necessarily feel that I'm the best advisor in my area. Heck, I had no  experience in this business prior to a little more than two years ago, and I have to believe that there are other guys who are "better" at this than I am, i.e., more experienced. If that's not the case, that's pretty scary. (Is it likely that a doctor, lawyer or CPA with two years' experience is better at their job than those with 15 or 20?)   Either way, I'd be perfectly comfortable--relieved, actually--if my F&F were with another Jones FA. We receive identical training, and are more than likely going to put together nearly identical portfolios. No rocket science here...just American Funds!
Jul 29, 2008 7:27 pm

[quote=Borker Boy][quote=snaggletooth][quote=Borker Boy]I’m glad you have an “ace in the hole,” but I can tell you that many, many people have failed because they came into the business thinking their grandmother with $6 million  would be their career-maker. Investing six million dollars will provide you with a good month or two, but that’s as far as it’ll go.

  I made the mistake of rounding up all my family and friends from day one. I put together pretty little portfolios for them and after about nine months--BAM!--the market began it's decline. Now I regret that I have them as clients. Every single time I see them they ask me about their accounts and tell me how scared and upset they are.   It's put quite a strain on many of my relationships. My advice: let someone else handle your family and friends' money.[/quote]   It's too bad you didn't put them in a variable annuity.  They'd probably be happier since their guaranteed income would be going up despite this market.  [/quote]   My mother-in-law is in a VA, and, unfortunately, no matter how many times and ways I explain to her that her income is guaranteed, she still tells me at least twice a week how concerned she is about her account value being down so much.   Those additional annuity expenses, coupled with a down market, are really taking a toll on her account balance, i.e., the amout she can "walk away" with versus what she invested. And that's all she seems to care about.[/quote]   Well hopefully your wife is able to comprehend things.   I would tell her, "Look Ma, if we weren't in this VA, this little downturn you've been hearing about would be like crashing a car without airbags.  But you will be fine because we were prepared enough to get you airbags for this situation".   She also needs to hear this, "If you need to draw income from your accounts, the most important thing to you will be your guaranteed income amount.  That is this number here.  Notice how it is $50,000 more than this number?".  Say these things slowly.   The annuity expenses are not going to make your account values look drastically different.    What insurance company is it with?  What riders are on it?  What sub-accounts is it invested in?
Jul 29, 2008 7:30 pm

[quote=Borker Boy]

  Either way, I'd be perfectly comfortable--relieved, actually--if my F&F were with another Jones FA. We receive identical training, and are more than likely going to put together nearly identical portfolios. No rocket science here...just American Funds! [/quote]   The best EDJ reps are the ones who are masters of splitting breakpoints.  
Jul 29, 2008 7:50 pm

So I’ve heard.

Jul 29, 2008 8:16 pm

Put me in the school of thought that would wade very carefully into F&F business.  Leave current accounts where they are for the most part.  Start with smaller amounts/new money and use plain vanilla/simple investments.  Over time, if you do a reasonable job with smaller amounts, you’ll get the whole pie later (and be better equipped to handle it).  Besides, new money is where you make the best GDC/AUM, and not having those large F&F accounts will keep you hungry and active when you need it most.

Jul 29, 2008 8:34 pm

[quote=snaggletooth]

The annuity expenses are not going to make your account values look drastically different.    [/quote]                                                                          
Jul 29, 2008 8:56 pm

Borker,

Have you made any changes to the portfolios for your F&F's?? Maybe thats what there looking for instead of buy and hold and hold and hold as the market deteriates...If you sit on your hands because Jones says to...well..it makes you look like you don't know what your doing.  If they bring it up again...say...we can move some or all to a mmkt....BUT...there will be a time in the near future were I will call and say..."its time to dca back into the market...(if you haven't been dcaing your new money, now is the time to start) You can puke history of the markets to your clients all you want, but in the end all they see is less and less and less.  Instead of hiding, get out in front of the situation and be proactive. If your mother in law is scared... They won't blame you for the market, they'll blame you because you didn't do anything but tell her/them to hold on.  Especially friends and family...they think because of the connection, you will do more than any other advisor, but after awhile, your credibility will suffer big time...
Jul 29, 2008 9:00 pm

[quote=Borker Boy][quote=snaggletooth]

The annuity expenses are not going to make your account values look drastically different.    [/quote]                                                                           [/quote]   I'm curious to know what annuity companies you use and what riders you put on your contracts.  I'd even like to know what sub-accounts you pick.  I think your world of annuities is much smaller than mine.    
Jul 29, 2008 9:03 pm

Much smaller, but Spiff will jump in here and say…"we have access to everthing out there, we just choose to work with 2 or 3 preferreds, because there the best and better than yours and always the best and we’re better because we only have 2-3 of the best , which are better the your best…because we are teh only ones who get to use the best…because we are Jones and we are the best…

Jul 29, 2008 9:57 pm

[quote=bspears]Borker,

Have you made any changes to the portfolios for your F&F's?? Maybe thats what there looking for instead of buy and hold and hold and hold as the market deteriates...If you sit on your hands because Jones says to...well..it makes you look like you don't know what your doing.  If they bring it up again...say...we can move some or all to a mmkt....BUT...there will be a time in the near future were I will call and say..."its time to dca back into the market...(if you haven't been dcaing your new money, now is the time to start) You can puke history of the markets to your clients all you want, but in the end all they see is less and less and less.  Instead of hiding, get out in front of the situation and be proactive. If your mother in law is scared... They won't blame you for the market, they'll blame you because you didn't do anything but tell her/them to hold on.  Especially friends and family...they think because of the connection, you will do more than any other advisor, but after awhile, your credibility will suffer big time...[/quote]   So, what if Borker does what you suggest and moves some money to MMKT.  Right now earning 1.5%.  At what point will he be able to convince his F&F to move back in?  6 months after the bottom?  12?  18?  Didn't you talk to people in the middle of 2004 that hadn't moved back in yet?  Didn't they miss one of the best years in the last 10?  The reality is that you can't call the bottom, just like you can't call the top.  You miss the first 6 months of a post bear rally and you'll miss the majority of it.  If you want them to make a change, tell them to add more.  NOW.  Don't let THEIR fear determine how YOU run their portfolio.  If you do, you'll soon be answering the question "why has my best friend's advisor been averaging 8% for her, while you're only averaging 5%?" 
Jul 29, 2008 10:00 pm

Guys,  I didn’t mean to bring up a brawl about annuities.  I have no plans of selling my freinds and family.  If it got extremely bad, maybe.  I am just wondering whether to take the plunge.  I met with an Jones FA for about an hour today, who has been in the business for about 6 years, no previous experience.  He got me really juiced about the rewards for hard work.  Took me monthly through his commissions from 6 years ago to today and it looks nice! Nice trend upwards. Totally worth the effort, all through door knocking!

Jul 29, 2008 11:54 pm

NCTiger, you sound foolish.  I’m not saying this because of Jones.  Rather, I’m saying it because it sounds as if you are going to go with Jones without looking into all of your alternatives.  Look at all of your alternatives.  If Jones is the best, then go with them.

Jul 30, 2008 1:36 am
anonymous:

NCTiger, you sound foolish.  I’m not saying this because of Jones.  Rather, I’m saying it because it sounds as if you are going to go with Jones without looking into all of your alternatives.  Look at all of your alternatives.  If Jones is the best, then go with them.

  I agree 100%.  I was leaning the same route toward EDJ until I spoke to a person I respected who is a large investor.  He directed me to speak with ML.  I had multiple conversations with ML and decided it would be a better fit.  I do not regret the decision whatsoever.   Check out all your options before you make your final decision. If it were me I would call up the manager of the local wirehouse offices and see who is willing to meet with me.
Jul 30, 2008 2:33 am

[quote=bspears]Borker,

Have you made any changes to the portfolios for your F&F's?? Maybe thats what there looking for instead of buy and hold and hold and hold as the market deteriates...If you sit on your hands because Jones says to...well..it makes you look like you don't know what your doing.  If they bring it up again...say...we can move some or all to a mmkt....BUT...there will be a time in the near future were I will call and say..."its time to dca back into the market... (if you haven't been dcaing your new money, now is the time to start) You can puke history of the markets to your clients all you want, but in the end all they see is less and less and less.  Instead of hiding, get out in front of the situation and be proactive. If your mother in law is scared... They won't blame you for the market, they'll blame you because you didn't do anything but tell her/them to hold on.  Especially friends and family...they think because of the connection, you will do more than any other advisor, but after awhile, your credibility will suffer big time...[/quote]   Holy sh1t! Are you being serious? Your answer to my F&F's concerns is to allow them to pressure me into doing something? If they bring it up again, tell them we'll move it to money market and then DCA back in when I tell them to? And, they'll blame me because I didn't do anything but tell them to hold on? Are you delusional?!?!   It's one thing to rebalance, it's another to jump in and out of the market based on my opinion of when we're at the bottom.   I expected more from you, dude. That's disturbing.
Jul 30, 2008 5:54 am

Borker Boy,

  Dude, are you going to get around to telling me what crap VA you used for your mother in law?  I'm curious to know what garbage you can offer, how much it costs, and what sub-accounts you use.   I think it's your inventory that causes your distaste of annuities.
Jul 30, 2008 12:39 pm

AIG SunAmerica Polaris Platinum II-A share with Marketlock.

Jul 30, 2008 1:36 pm

So Borker, we can just agree your mother in law could put her money at E trade, set up a rebalancing quarterly and cut you out of the picture, because you don't manage money...you sit on it..and make sales calls. This whole buy and hold your firm blows sounds good in theory, but guaranteed the conversation your mother in law and wife are having, aren't real flattering.  Good luck with the buy and hold..it will come back....I think someone on here said something about the market always goes up...And yes the clients I put into fixed rates last August are STILL happy, and the ones who declined my offer..well ...I documented the conversation....and we may be having a conversation in October about a move back....How many of your buds have you been buying BAC for on the way down...down ...down...down...down....down....I bet the up day had you feeling real good yesterday...

Jul 30, 2008 1:43 pm

Wow...okay so now everyone should be buying a balanced ETF portfolio, set up quarterly rebalancing, add money when they can and live a happy life.  Go on financial website, answer a few questions and out spits how much my wife and I need to be saving to have x amount at retirement.  Then, I can go to Vanguards website and plug in my age, risk tolerance, income and bammmmmmmm.....out spits my allocation mix....damn...why the hell does anyone need Spiff or Borker....Should I believe Vanguard vs Spiff or Borker or even Spiff and Borker together...Are you good money managers or just good salesman...Resume builder...I am proficient at Doorknocking...

Jul 30, 2008 2:18 pm

Let see…Monday…a lady walks into my office…throws her statements on my desk.  Balance at the first of the year 117k.  June 30th 93,379.  She said her dumbass broker says to hold on and it will come back…“I want it out of there”…he hasn’t done shit and I keep losing money"…hmmm…I wonder if this is borkers mom in law…I wonder if the broker would have said…You know Margaret, I can see your a little scared right now… and the statement doesn’t look good, and my training tells me to hold on, rebalance back to our original allocations.  Lets agree to put half your money in an insured mmkt and reallocate the rest back to our original allocation.  Lets get back together in say 30-60 days and reevaluate how your feeling, if your still scared, maybe we should discuss your risk tolerance.  See, here in the client profile you filled out you stated you didn’t feel a move was necessary unless there was a 25% decline in the account.  Also you stated this money wasn’t going to be used for 11-20 years…see here where you marked this. Mam, sometimes we overestimate our tolerance, because we’ve never had to go through a major downturn. Some think the market always goes up…

Jul 30, 2008 2:33 pm

Who are you talking to? 

  Is this last post what you actually did to this lady?  If so, you're more stupid than I originally thought.   That lady is letting her emotions drive her decision making process.  That's always a recipe for disaster.  Emotions never tell us the right thing to do.  It's usuallly just the opposite.  Sell when things are bad, buy when thing are great.  The wise advisor doesn't let his client's emotions dictate his asset allocation strategy.  Because he believes he is correct and has more knowledge of the markets than his clients do.       Borker - that annuity is a good one.  You mother in law is just nervous like everyone else right now.   She won't be as hard on you when the market goes back up.  As it always has.