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Mar 13, 2009 5:24 am

Keep in mind, that is a 4% wrap fee on a $300m account.

Mar 13, 2009 5:27 am

Let’s give the guy a chance to respond, maybe he is telling the truth.

Mar 13, 2009 5:47 am

Of course he's telling the truth!  Why would he lie? 

I just transferred an account from Jones, where they were charging him a 5.75% commission every three years... I'm telling you man... it's everywhere!  Accounts flying in left and right with HUGE fees.
Mar 13, 2009 12:40 pm

Wind for President!

Mar 13, 2009 1:53 pm

[quote=wind3574]He had 3 accounts…2 IRA’s and 1 Trust… One of his IRA’s was a managed account, that he was paying a 4% wrap fee on. It came out to be roughly $12,000 a year for one managed account. That alone was 52% of the income/dividends that he earned annually on all 3 accounts combinded. Not to mention all the unnessesary fee’s he was paying in B and C shares. You really dig deep in someone’s portfolio and you can almost always find an advisor, who’s taking advantage of them…Good way to get accounts…

  This approach works well...but only if you are focusing on whats best for the client and not going to just put them right back into something they shouldnt be in...I've transferred over accounts...just to get them out of a wrap fee and not made a dime....Eventually i'll get some business by doin whats best for them...   JAXSON - What sort of things do you mean? My background...Bachelors in Psychology...Master's in Business... Work- DHS facility for abused children...Business to Business Corporate Sales....Managed a touring band for awhile....   This is my first go round with this industry, but it's payin off in big ways. I'm puttin up some great numbers. I also just kind of read what I can. I glance at the WSJ and things, but it's so full of crap nowadays.... I get a book off Amazon every now and again...and reglance over my old series 7 stuff from time to time...and I will definitly get advice from Vets if needbe...[/quote] So he should pay you 5.75% upfront so in 5-8 years he can realize the cost difference??? But wait you work at Jones so in that time frame you will have switched his fund company so he pays another 5.75% or maybe 4.25%..   I think it's stupid that you're selling point was fees, when you are going to jack him for 5.75% and then never doing anything else with the portfolio because you are strapped into one fund company... Doesn't Jones still endorse Putnam
Mar 13, 2009 2:22 pm

No Jones doesn’t reccommend Putnam… Why do you guys always have to bash everything? Don’t you have anything better to do? Whats the purpose of this forum if you do nothing but bash people on it? I was simply answering a question…Doesn’t matter what kind of fee’s SB allows or jones allows…

  This guy had a 4 % wrap fee on $300,000 managed account. Those are facts. I'm not going to dispute that. As far as all the sh*t talking on the B and C shares, seriously guys grow up. I said "unnecessary fees", meaning why pay 2% a year on a fund for 7 years when A shares work out less in the long run. Same goes for the opposite, why buy an A share if your only going to hold the thing for 3 years for some reason, then C shares would make sense.   Stop trying to question everything I say, I'm not on this site to argue about what I put up as numbers, or the difference between A, B, and C shares...grow up
Mar 13, 2009 2:37 pm

[quote=Sam Houston][quote=wind3574]Yes…I have had a few clients who I pointed out that they were paying major fees, but had an ok portfolio, so we just transferred over… The managed account was a Lord Abbot managed account through Smith Barney. the fee was 4%. absolutely rediculas… I do not work at SB or use LA as a money manager.  That fee says to me SMA.  Yes?

  As far as B shares go, it just depends on how long they have had them. If its long enough well sell them, or if they are decent enough to hold onto then we can wait for them to convert. Some people might pay less to sell out now, rather than pay 2% per year for another 3 or 4 years....how do you not know this stuff?  What are you putting these people into.  Your own stock porfolios?  Class appropriate MF's?  [/quote] [/quote]   I am trying to have a conversation with you but you keep getting distracted.  Maybe we can learn something from each other.  Answers?
Mar 13, 2009 2:54 pm

Sam - I apologize, I just get tired of the crap in here…Yes i am putting them in class appropriate funds. Most people hold these things long term, or plan to so A shares are definitly appropriate. What I am finding is most advisors just don’t want to have the commission talk to the customers, so they put them in B shares or C shares. I just try to get rid of as many “unnecessary” fees as possible. I guess alot of guys in here find it hard to believe someones actually doing whats best for the client… Right now it’s difficult for older generations, so I try to focus more on single bonds, cds, UIT’s, and the occasional bond fund for them.

  No SMA...It was just an IRA account, managed by Lord Abbot. SB really screwed him on the deal. He had 2 IRA accounts. 1 with nothing but bonds and bond funds, the other with single stocks. When SB had LA take over the stock account they transferred the bonds into the managed account, and were taking the 4% "Management fee" on not only the stocks, but the bonds too....That kind of thing pisses me off...
Mar 13, 2009 3:28 pm

Ok, last couple of questions then we can wrap this up.  $1mm client, $300m in one ira.  How much in the other ira and how much in the trust?  Mainly MF’s in the trust (b and c shares)?  Did you transfer everything in kind?  Did you cover all three transfer fees?  How did you determine the 4% wrap fee?  Listed on statment as a 4% wrap fee?  Extroplating a quarterly fee?

Mar 13, 2009 4:13 pm

I don’t even know if a fully loaded VA can come out to 4%.  Something sounds fishy.

Mar 13, 2009 4:18 pm

[quote=wind3574]Sam - I apologize, I just get tired of the crap in here…Yes i am putting them in class appropriate funds. Most people hold these things long term, or plan to so A shares are definitly appropriate. What I am finding is most advisors just don’t want to have the commission talk to the customers, so they put them in B shares or C shares. I just try to get rid of as many “unnecessary” fees as possible. I guess alot of guys in here find it hard to believe someones actually doing whats best for the client… Right now it’s difficult for older generations, so I try to focus more on single bonds, cds, UIT’s, and the occasional bond fund for them.

  No SMA...It was just an IRA account, managed by Lord Abbot. SB really screwed him on the deal. He had 2 IRA accounts. 1 with nothing but bonds and bond funds, the other with single stocks. When SB had LA take over the stock account they transferred the bonds into the managed account, and were taking the 4% "Management fee" on not only the stocks, but the bonds too....That kind of thing pisses me off...[/quote]   Only being out (new/new) for a couple months, how may UITs have you positioned in client portfolios?  Which ones do you like the best (VKAC, FT etc)?  Back in the day, you weren't really able to talk UITs until PDP or Top Gun class or something like that.  The thing that's most odd is the fact that a rookie, with no prior industry experience, would be posting truly amazing numbers on an internet forum.  How many EJ reps are there out 2-3 months doing that type of production...not too hard to narrow it down, I'd guess.
Mar 13, 2009 4:27 pm

i am also curious how he has a wrap program using B and C shares.  is this possible at other B/D's?

Mar 13, 2009 4:51 pm

Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.



Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions



IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)

IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares

Trust = $500,000 in bonds and mutual funds…B and C shares



This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…





We are breaking it into…



IRA = Stock positions/ Equity Mutual funds

IRA = Bond positions/Bond Funds

Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)



Mike - It does sound fishy…Thats why I transfered it.

Mar 13, 2009 5:03 pm
wind3574:

Ironhorse, you might want to re-read the post. He has 3 accounts. One Trust account, One IRA with single stock positions, and One IRA with bonds and bond funds. There were no mutual funds in the managed account.

Sam - the account was $300,000 roughly and he was paying $3000 a quarter in “Advisory Fees”, is how it was listed on the statement. If you do the math $3,000 x 4 = 12,000/$300,000 = 4%. Thats why I transferred it over, that sort of thing pisses me off, especially transferring bonds over into the managed account just to take 4% of his income from those as well. Here are his 3 postions

IRA = Single stocks , and they transferred his bonds into it…$300,000 (Managed w/ 4% fee)
IRA = $200,000 bond funds and some really crappy tech funds B, C, & Class T shares
Trust = $500,000 in bonds and mutual funds…B and C shares

This is why I do things this way. When people see how they are being screwed, they typically just want it out of wherever it is and they ask for your advice. Then you have the opportunity to build a relationship with them, because they want it…


We are breaking it into…

IRA = Stock positions/ Equity Mutual funds
IRA = Bond positions/Bond Funds
Trust = Tax Free Money Market, Tax Free Bonds, Tax Free UIT’s, and Tax Free Bond Funds…(He lives off the income from this account)

Mike - It does sound fishy…Thats why I transfered it.

  Not saying it's impossible but, is there any chance at all you were working of the year-end 2008 statement it it was 3,000 for the year?   If not, 4% is waay high. That seems a bit more plausible (1% wrap fee).   I assume these are VKAC IMITs or MUTs you're using...Just curious why you'd use those as opposed to all individul MBDs.  Does Jones still have the aggregation rule on individual fixed income?
Mar 13, 2009 5:34 pm

No, I was working off the 4th quarter statement. It was $3,000 per quarter. It said it plainly on the statement. It was 4%. We really shouldn’t be arguing this, because thats what it was. The client called SB and gripped and they said “Oh well, we can cut it in half”…



I don’t feel comfortable putting $500,000 or half of his portfolio in individual bonds for diversification reasons. But the largest reason we are spreading it out between Bonds, Bond Funds and UIT’s is the fact that we can get a better rate this way. We can get some good Munis paying 5% or so and we can have that solidity in safety, but I put some of it in bond funds to take advantage of some of the higher rates being paid on the lower rated bonds and also the upside to the growth of the share price. I would never have my clients own these individually but by investing some of their money in Tax Free Bond Funds he can take advantage of having a portion in High Income. Alot of bond funds are paying 5-8%, so its really mostly to raise their total income. By doing this I added about $4,000 projected a year to his income from what he was previously getting.



Am I being asked all these questions because noone believes a rookie can be successful and do things right?..Just curious…Kind of tired of all my actions being questioned…

Mar 13, 2009 5:46 pm

Wind, you are being questioned because many of us can’t imagine how a b/d would ever allow one of their reps to screw a client with a 4% fee.  It doesn’t sound possible.  Therefore, my thinking is that you are wrong about something.  For instance, maybe it’s an account that has a maximum fee of $3,000 per quarter.  I don’t know, but logic says that something doesn’t add up with this.

Mar 13, 2009 5:49 pm
wind3574:

No, I was working off the 4th quarter statement. It was $3,000 per quarter. It said it plainly on the statement. It was 4%. We really shouldn’t be arguing this, because thats what it was. The client called SB and gripped and they said “Oh well, we can cut it in half”…

I don’t feel comfortable putting $500,000 or half of his portfolio in individual bonds for diversification reasons. But the largest reason we are spreading it out between Bonds, Bond Funds and UIT’s is the fact that we can get a better rate this way. We can get some good Munis paying 5% or so and we can have that solidity in safety, but I put some of it in bond funds to take advantage of some of the higher rates being paid on the lower rated bonds and also the upside to the growth of the share price. I would never have my clients own these individually but by investing some of their money in Tax Free Bond Funds he can take advantage of having a portion in High Income. Alot of bond funds are paying 5-8%, so its really mostly to raise their total income. By doing this I added about $4,000 projected a year to his income from what he was previously getting.

Am I being asked all these questions because noone believes a rookie can be successful and do things right?..Just curious…Kind of tired of all my actions being questioned…

  Actually, no, you're misreading me.  The extraordinary level of your success as a new EDJ FA is astounding.  As such, you should be a blueprint for all rookies. However, surely you can understand how one might question just a teeny tiny bit the validity of the claims, no?  I suspect that if I were as off the charts as you when I was new I probably wouldn't be posting this stuff on an interenet message board.  Your numbers, if true, are so far out of the norm that it wouldn't be hard for EDJ to figure out which rookie out 3 months is spending time posting on a board (and, although your intent is not to post anything that could get you in trouble, "slips of the tounge" do happen).  If the numbers aren't true then...well I guess there'd be some justification for the skepticism, right?   In any event as I mentioned out of curiosity, does Edward Jones still have the bond aggregation rule for indivdual bonds? 
Mar 13, 2009 5:51 pm

i don’t see how it is possible.  not saying you are lying, just that without seeing anything i cannot make heads or tails of it.  my b/d would not allow it.  i believe our ceiling is 2.5%

Mar 13, 2009 7:13 pm

Well, I typically don't post on this site until late night after work. I don't usually spend my days posting...but i am away from town for a week.....In any event...The fee WAS 4%. The client even called the Advisor on it and the Advisor said, "Oh well, we can cut that in half", sh*t 2% is still rediculas.....so he transfered the account to me. the clients question to the advisor was "Why did you do this 5 years after I started this, why not earlier? Why address this after I find out"...The advisor even admitted it......So questioning it is not really necessary...I may be new but I can read a statement ya know?

Johnny - Yes Jones still has the aggregation rule....I'm only actually investing about $300,000 of the Tax free account.....He does have some good stuff in it..I'm not selling everything...I've spoken with compliance already....It's not an issue...   I'm just getting alot of  "are you sure's"...I'm new guys but I'd like to think I'm brighter than the average joe...ya know?
Mar 13, 2009 7:35 pm

[quote=wind3574]

I don't usually spend my days posting...but i am away from town for a week.....

  [/quote]   That's convenient