A Jones rep will give you some nickel and dime accounts that he/she does not have time to manage to help get you started.

I was a Jones Goodknight and boy what a joke.  Little did I know how much crap the veteran (Regional Leader) IR was giving me.  It was the bottom scum of his book and if I generated any income, he got half of the net payout.  His monthly expenses were also reduced because I was paying half.  The Goodknight plan is not all it’s cracked up to be.  I left Jones after 4 years when I finally realized that the only folks making any real money were the GPs.  I have had two over $10K net months in a row since leaving and it feels very good to keep what I make instead of giving it all to Jones.  I recommend staying away from this plan unless you feel you can ride with JOnes for the rest of your career.

The Goodknight plan is Jones' way of letting a successful broker pass accounts that he's not servicing for whatever reason to a new broker.  There are tradeoffs of course.  One is, like FFJ said, if you generate commissions from those clients you share the commissions with the vet.  Another is that you generally get the smaller less meaningful accounts.  If the vet is willing to give them away, there is a reason. 

On the positive side, you're not starting from scratch.  You at least have people to talk with.  Maybe there are some diamonds in the rough.  You also work out of the vet's office for a while, usually 6 months to a year before you are in your own office.  Our RL did a GKN recently and the new IR loves it.  He said he gets to pick the RL's brain and bounce ideas off of him frequently. 

It's not a silver bullett to success at Jones because the vet is only going to give you either $5 or $10 million, unless you find a vet willing to do a larger than normal GKN plan with you.  I've heard of some that have done $20 million +. 

I don't know that I'd completely agree with FFJ that you should stay away from the plan unless you feel you can ride with Jones for the rest of your career.  It's an office to start in instead of your car, a small book to work, and a vet to work with.  If you are going to stick with Jones for the rest of your career it doesn't matter how you start as long as you do.  

Whining about a goodknight plan is like complaining when you are in the highest tax bracket. I started with 0 accounts and 0 assets. Accounts I have recieved through “right place, right time” I am thankful for even though I have fired clinets over the years. A goodknight is a head start but not a guarantee for success. If you have the opportunity, explore it and decide if it is the right scenario. At some point you will have made them worthwhile relationships or determined not to spend too much time on them. If you stay you will goodknight them again, if you leave you will forget to bring them.

Starting with something is usually better than nothing.  However, there are a couple pitfalls to avoid:

1) You can't get complacent just focusing on the Goodnight assets.  You only make half the commission of new business and those were accounts that the vet thought were rejects anyway.  You have to go out and generate new business.

2) Make sure the vet is someone you want to be associated with.  People will look at you as partners, so try and find out what their reputation in the community is.  A friend of mine did a Goodnight with a vet who had a poor reputation (both personally and investment wise).  It was a disaster.     

Just an FYI, starting 01/01/07, Jones bumps the House Account (GK) commissions 50% and splits them.  So you and the Vet get 75% of the commissions each.  That’s a pretty sweet deal.  But, again, be careful about who you do it with.  The two of yoo have to see eye-to-eye.  If you are starting from scratch with no experience, I don’t see how it could be worse than working out of your house/car for a year. But absolutely focus at least half your time on your own prospecting, or you will fail.

When Jones offered me a job and Goodknight as incentive, I would have been given the bottom quartile of a vet’s book.  It was 325 accounts, total assets just over $2MM.  Do the math, that is roughly $6,000 per account.  Now, how much commission can you generate off a $6000 account?  It’s almost like it encourages new reps to churn small accounts while elephant hunting for hidden assets within the 325 accounts.  Not to mention it teaches the new rep NOTHING about prospecting and marketing.  I would rather start with 0 accounts worth 0 dollars and build my business instead of handing me the cold tablescraps and instilling a false sense of accomplishment.

A $6K average would be more of a hindrance than a benefit...geeez...

1/1/2007, my new account minimum goes to $250K...anything under that going forward will be earmarked for my "goodknight" program...

[quote=entrylevelFA]When Jones offered me a job and Goodknight as incentive, I would have been given the bottom quartile of a vet's book.  It was 325 accounts, total assets just over $2MM.  Do the math, that is roughly $6,000 per account.  Now, how much commission can you generate off a $6000 account?  It's almost like it encourages new reps to churn small accounts while elephant hunting for hidden assets within the 325 accounts.  Not to mention it teaches the new rep NOTHING about prospecting and marketing.  I would rather start with 0 accounts worth 0 dollars and build my business instead of handing me the cold tablescraps and instilling a false sense of accomplishment.[/quote]

I'd say you missed the point of the Goodknight plan.  I'll bet no one at Jones promised you the moon when they offered you the Goodknight plan.  Every Goodknight IR that I've ever spoken with, except for one and he's no longer in the biz, knows that the Goodknight clients are the bottom of the book.  That's why the vet IR is giving them away.  They also know that those clients aren't going to generate enough $$$ to feed their families, never mind the Jones goals.  They know they have to basically start from scratch and ignore, for the most part, the accounts they share with the vet IR.  That means they have to learn about prospecting and marketing immediately just like every other new IR.  If they don't they won't be here very long.  

Your numbers don't add up to me.  You said that the vet IR was going to give you $2 million to start and 325 accounts.  The minimum a vet IR can give up is $5 million.  We call it Goodknight level 2.  So either you got a snow job from the vet IR or your memory is fuzzy.  Which one?  Are you sure they didn't offer you some assets from an IR who wanted to switch locations?

All I know is I sat down with the interviewer, he showed me his book, said he was unloading the bottom quartile to me through Goodknight if I would eventually accept the position.  His book was roughly $40MM, 1300 accounts.  I know the top quartile was about $28MM meaning the bottom quartile had no more than $4MM, but was pretty sure it was $2MM.  I could be mistaken, however, I asked not only him, but also my recruiter and final interviewer (not the one I would inherit assets from) to re-explain and they all pretty much said the same thing. 

My simple point is why try to entice prospective IR's with a program that the smart ones know is a waste of time anyways.  When I accepted the offer from a national wirehouse, Jones seemed surprised being that they were "giving" me assets and the wirehouse wasn't.

This guys entire book should be GoodKnighted!  My God, 1300 accounts and only 40 mil in assets!  What a nightmare!  I bet his phone is ringing off the hook with people muddling up all his time with nickle and dime time consuming stuff.

In my opinion however the Goodknight program is good for the new IR but it is CRITICAL that you do not let it stop you from doing the same work that any new IR does and that is a lot of doorknocking.  If you do the work you would normally do as a new IR and then look to the stuff that was given to you as a little boost then why not do it.  

So I don't think it is a waist of time to the new IR.  It's some accounts and some clients.  How can that be bad?   

[quote=entrylevelFA]

A Jones rep will give you some nickel and dime accounts that he/she does not have time to manage to help get you started.

[/quote]

When I was at EDJ, it was commonly referred to as the "pass the trash" program.  Veteran IRs were looked at more generously when it came to LP offerings, if they were participating in the Goodknight plan.

But, as it has been said, starting with something is better than nothing.  Some of these clients may have more assets, they probably just haven't been serviced properly.

You also can't look at account #'s, but total households.  I have plenty of accounts with zero in them, but the household has plenty of $$.

Again, as Spiff said, you're missing the point.  Your option is to start from scratch out of your house/car with 0 accounts/$0, or get a few hundred accounts with $5mm+ in assets.  The point of the accounts is that if you can uncover assets in some of those few hundred accounts, it's a bonus.  You didn't have to doorknock and dribble on them.  You just called your "client".  Many of those were probably accounts opened up early in the vet's career that he never went back to (sold a bond or stock, or CD).  Maybe that was 10 years ago and now that person is retiring, left a job, found some money, accumulated some wealth, etc.  The point is not that you're being given a book to sustain you (as you would if you BOUGHT a book), you are being given an office, a vet to help you, and a list of potential clients.  The fact is that the success rate of GK's is FAR higher than new/new's.  It's not a ticket to success.

As far as the $2mm Goodknight you were offered - there must have been some confusion - the rules about the plan are clear - minimum of $5mm.  I sat on the phone with the Goodknight coordinator and my Vet and she even said that if the total falls below $5mm before the plan starts day 1, the vet would have to find some more.  You may have been talking about a $1mm "Partner" plan.  It is $1mm minimum, no strings or other benefits attached.  You are just given the accounts from a vet - no sharing, etc.  This plan is not used all that often, since the benefit is much smaller for vet and GK IR.

1300 accts and 40AUM 

[quote=rook4123]1300 accts and 40AUM  [/quote]

That's what happens when the main thrust is to open 10 accounts/month, rather than look for quality prospects.

[quote=Starka]

[quote=rook4123]1300 accts and 40AUM  [/quote]

That's what happens when the main thrust is to open 10 accounts/month, rather than look for quality prospects.

[/quote]

Yeah, I'm sure neither of you guys ever opened an account with less than $100K in it at the beginning of your careers.  Actually if you think about that book, 1300 accounts is probably around 400 households.  If that's correct the average household is right at $100K.  I'll take those all day long.   For now. 

That's one of the reasons vets do GKN plans. Everyone opens too many accounts when they're new.  Accounts that they look at 4-5 years into the biz and ask themselves what were they thinking.  Accounts they'd just as soon not have.   A lot of brokers just ignore those clients, choosing instead to focus on their most important clients.  As it should be.  The new IR doing a GKN plan goes after whatever is left on the table that the vet IR didn't even take the time to look for.  It's good for the client's relationship with Jones and probably good for the new IR.

Maybe that was 10 years ago and now that person is retiring, left a job, found some money, accumulated some wealth, etc.  The point is not that you're being given a book to sustain you (as you would if you BOUGHT a book), you are being given an office, a vet to help you, and a list of potential clients.  The fact is that the success rate of GK's is FAR higher than new/new's.  It's not a ticket to success

Right and there really is a pony under all that horses##t. 

Everyone opens too many accounts when they're new.  Accounts that they look at 4-5 years into the biz and ask themselves what were they thinking.  Accounts they'd just as soon not have.   A lot of brokers just ignore those clients, choosing instead to focus on their most important clients.

This is one of the biggest advantages of being independent. You are not FORCED to open trash accounts just to say you did open the 10 accounts a month and get a really swell plaque with a golden (fake gold) shovel.  I have one of those plaques and it relates directly back to my pony comment.  I have it filed with the rest of the awards for production I received from Jones and the picture of Ted Jones with his horse and dog.  oohh aaah.

Do I still open small accommodation accounts? Of course I do.  But only because I want to.  When I moved to independent it was a good opportunity to not just "pass the trash" but also to prune my book.

Even so, a goodnight plan if there really are some jewels in the pile of you know what can give someone a better start than just opening a required number of accounts just so you will get your quota.

That's true, Babs, however you really cannot open an independent office without being at a level where you have the opportunity to pick and choose among potential clients.  If one WERE to join a local Indy office and be sponsored for licenses I would expect the OSJ to pass the exact same type of client over to the new rep for "practice".

When anyone first gets into this business I would imagine there's almost always SOMEONE telling them what they have to do, at least until they get their feet wet...

This is a great point.  Very few of those that are Indy could have done it cold with no mentor, no book, no training, etc.  There is always a starting point and some time to learn, adjust to the business, and establish a book.

Babs, do you really think you could have gone Indy without ever having done that first?