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Sep 1, 2009 7:38 pm

Do any of you know what the difference is in the standards if you are a Goodknight as compared to someone else?

Also do those standards affect your employment or bonuses?

Sep 1, 2009 8:12 pm

[quote=Spaceman Spiff] Yes, yes, yes…congrats on getting the new account. Bully for you.



We don’t know, because BB hasn’t told us, if the GKN knows anything about investments at all or not. Maybe he’s some sort of wunderkind like ice that knows a ton about investments and portfolio management (as well has how to kick some butt on Xbox Live) and he truly believed that what he was recommending to the client would benefit him in the long run.



We don’t know what American Funds the client owns or what the FA was trying to sell. We also haven’t seen the notes between the original FA and the client. Maybe the client was pissed at the original FA because his funds went down 35% and he didn’t think that should have happened and he figured it was the FA’s fault. At that point, the zero might look attractive as an alternative. We don’t know what stock the client owns or how much of the portfolio it might be. Maybe he owns a ton of USB that no longer pays a great dividend, but he’s not willing to give it up for something that does. There are too many facts here that we’re just making assumptions about that could make or break the allegation that the new Jones FA was churning the account only for the commission.



We also don’t know what the new FA told the client about commissions. BTW, BB, what did you tell the client about the commissions on the zero? What did you tell him about commissions on the VK funds? Was the Jones FA suggesting a wholesale change from American to VK? What are YOU going to do with the account once it’s in your office? Just let everything ride for the rest of his life? That’s not really good portfolio management either. You can’t really build a well diversified portfolio using only American Funds, so how are you going to address that with him?    



My guess would be that your client made so much of a jerk of himself last fall that the original FA knew that they wouldn’t ever be able to patch up the relationship. So, when he had the opportunity to move the account to a new FA, thereby creating a new relationship with an FA with no baggage, he took it. He could have just kept him and ignored him. Collected his $450 a year and never called him again. Of course, just like you, Moraen, I’m just guessing. [/quote]



I am guessing, you are correct and it could have unfolded in any of the ways you could come up with. My opinion is just that the probability is extremely low.



This has happened to so many advisors (Jones or anywhere). BB’s new client could smell the commission on the GKN’s breath. I believe that this is the most likely scenario.



However, you are right. He could be a brilliant market strategist that is destined to take Skrainka’s place as a god among EJ. But I doubt it.
Sep 1, 2009 8:40 pm

I have to tell you, if I wanted to purely generate commissions, I wouldn't have used a zero.  Or just one fund family for that matter.  Maybe BB can shed some additional light on the subject.

Sep 1, 2009 8:42 pm

Spiff, he’s 58 and planning to work until 65 so we’re going to use 72T to pull out $30k per year to fund a $375,000 VUL and then he’ll either be able to have additional retirement income down the road or he can pass all the money to his kids tax-free.

Sep 1, 2009 8:43 pm

double-post

Sep 1, 2009 10:27 pm

Please excuse my ignorance here, this is not intended to be a negative comment, but I don't understand the use of a VUL for this guy at 58.  Take this as me wanting to be educated and possibly use a similar scenario in my own practice in the future.  I understand that you are using something similar to a LIRP.   

Jones suggests that funding be for at least 15 years.  Your client only has 7 until he plans on retiring.  Jones says 15 years because policy changes in the first 15 years can mess up the taxation of the distribution.   Why not wait a year and a half and not have to worry about 72T?    What happens if the policy lapses?   Does the client not need the income so the life insurance is the best option to pass on taxes?    Doesn't he pay taxes on the distribution before it is paid on the VUL?    What does he do if he needs income above and beyond his (assuming here) pension, SS, and insurance distribution?  What if he decides to take a big trip?    Did you tell him how much you're going to gross on this deal?   
Sep 1, 2009 11:12 pm

Spiff, I was just pulling your leg, no one is selling a VUL.  In all honesty I don’t know if the new Jones guy they assigned to him knows anything or not and that’s irrelevant to the discussion.  I’ve given the client’s kid 3 1/2 years of great service, his daughter in law 1 year, and that’s 3 1/2 years more service than the new Ed Jones guy has given the family. 

I don’t know what this guy would pay Jones to buy a zero-coupon, or what he would pay to sell it someday he knows what he pays to make trades, I don’t need to figure it out for him.  I don’t know or care what Van Kampen fund the Jones guy wants him to buy or what the Jones guy wanted to sell to finance the purchase.  Point being, the burden of justification for moving money rests on the new Jones guy, not on me.  This isn’t a competitive situation where the client wants to know how my ideas stack up to the Jones guy, he already told the Jones guy to POUND SAND, and Jones evidently hasn’t received the memo.

I’m aware of American Funds shortcomings, maybe we’ll show the new client managed money or a variable annuity someday, or maybe we’ll just rebalance his American Funds the best we can.  The client can choose what he wants to do, we’re not in a position where we need to do any business we don’t feel good about.

Sep 2, 2009 1:07 am
Ronnie Dobbs:

[quote=Windy3584]Some famous EJ guy, Jack something or other Goodknight

    Seriously, too much time on your hands.[/quote]   This from the guy with how many screen names and god knows how many posts?
Sep 2, 2009 1:38 am

[quote=BerkshireBull]

I think the only scare tactics were those used by the new Jones Rep in criticizing this guy’s holdings to try to make him move. I explained how the compensation schedule works on A-shares, the 1 stock holding the guy had, and how the commissions will work if he purchases the zero-coupon bond the Jones Rep was pushing and the Van Kampen Funds. His account is worth $450 per year in 12b-1 to the rep of record and he himself said that his account isn’t worth much unless he makes changes. He likes the fact that he can sit with his stock and his American Funds as long as he wants with us and won’t be badgered because we don’t have investment-commission goals. (Ours are insurance-based)





-Shame on Jones for ditching a loyal client rather than resolve the hurt feelings over this guy not being able to talk to his broker and having to talk to the BOM (I’d assume) when the market was melting down



-Shame on Jones for not explaining how fees work



-and shame on Jones for rattling this guy’s cage to try to get paid a 2nd time on money he had already paid a sales charge to invest with them[/quote]



Your a tool.    You wont make it in this biz.
Sep 2, 2009 2:44 am

[quote=RealWorld]

Do any of you know what the difference is in the standards if you are a Goodknight as compared to someone else?



Also do those standards affect your employment or bonuses?

[/quote]



The standards are higher for a Goodknight FA. The standards do affect your milestone bonuses.
Sep 2, 2009 2:07 pm
BerkshireBull:

Spiff, I was just pulling your leg, no one is selling a VUL.  In all honesty I don’t know if the new Jones guy they assigned to him knows anything or not and that’s irrelevant to the discussion.  I’ve given the client’s kid 3 1/2 years of great service, his daughter in law 1 year, and that’s 3 1/2 years more service than the new Ed Jones guy has given the family. 

I don’t know what this guy would pay Jones to buy a zero-coupon, or what he would pay to sell it someday he knows what he pays to make trades, I don’t need to figure it out for him.  I don’t know or care what Van Kampen fund the Jones guy wants him to buy or what the Jones guy wanted to sell to finance the purchase.  Point being, the burden of justification for moving money rests on the new Jones guy, not on me.  This isn’t a competitive situation where the client wants to know how my ideas stack up to the Jones guy, he already told the Jones guy to POUND SAND, and Jones evidently hasn’t received the memo.

I’m aware of American Funds shortcomings, maybe we’ll show the new client managed money or a variable annuity someday, or maybe we’ll just rebalance his American Funds the best we can.  The client can choose what he wants to do, we’re not in a position where we need to do any business we don’t feel good about.

  OK, that makes me feel a little bit better about the way you operate.    You never did answer the question, maybe because you don't know, about why the original FA and this guy got into the arguement in the first place.    But you told him, and I quote, " I explained how the compensation schedule works on A-shares, the 1 stock holding the guy had, and how the commissions will work if he purchases the zero-coupon bond the Jones Rep was pushing and the Van Kampen Funds."  How is it that you told him all of these things about the evil new EDJ rep, but yet you just said, and I quote, "I don't know what this guy would pay Jones to buy a zero-coupon, or what he would pay to sell it someday he knows what he pays to make trades, I don't need to figure it out for him."   You said that you " explained to the client (who just wants to sit in what he has) that this new Jones guy will not let-up and will do everything he can to churn his account to generate new commission because he has higher goals he has to hit now that he accepted this client's account and others like him, and if this guy fails, another new Jones guy will get his account and absolutely pisspound him to move his money around all over again."   How are you in one breath telling the client these things about the new EDJ rep, then telling me "In all honesty I don't know if the new Jones guy they assigned to him knows anything or not and that's irrelevant to the discussion"?  What?    I just think it's bad business to toss around inflammatory words like churning when you're trying to get business.  You could have competed on the merits of your service, backed up by the testimony of his family, and your ideas without resorting to scare tactics and bad mouthing the EDJ FA. 
Sep 2, 2009 2:58 pm
This guy has been doing strictly American Funds and trading the stock of 2 local companies for the last 18 years with his 20+ year Jones Vet.  The old Jones guy passes him off over a customer service issue (which I'm not going to ask about unless the client offers and he hasn't told me much about it) to a Goodknight Rep who immediately tries to move this guy out of his comfortable investments which he understands and into something new.  The client doesn't understand why he suddenly needs to move, and I explain that his account has been Goodknighted by his old advisor to a new one of which the old advisor receives some compensation from Jones for doing so and the new advisor now has increased sales hurdles he must hit for having accepted the Goodknight.   American Funds has shortcomings, yes.  Maybe the new advisor is trying to address these shortcomings and make a sale in the process, maybe he's just trying to make a sale.  Bottomline is I can't feel good about writing any business where the client is uncomfortable and I don't need to do so because i have no investment sales goals to hit.  The new Jones guy is ready and willing to write business the client doesn't feel good about.  Why?   Spiff, I don't have the dialogue in front of me but I know I absolutely did not use the word "churning" in front of a client.  I make a very concerted effort not to badmouth other advisors or firms.  You and I both know it only makes YOU look bad to badmouth others.   I still don't understand why you believe I need to know anything about the new advisor.  Do you want me to run Morningstars on his recommendations and if they're highly rated and look suitable go tell the client:   "Your new Jones Guy looks like he's got some good ideas, thus I'm going to defer asking for your business because I haven't the right to ACAT your account away from a Rep who has earned the right to be your advisor by completing the training at Edward Jones and signing up for a Goodknight."  
Sep 13, 2009 2:27 am

Does this surprise you? 90% of the guys(and ladies)  that Jones Hires have no clue about the markets

Sep 13, 2009 2:28 am
Well said Goodknights are for pussies.
Sep 13, 2009 7:14 am

[quote=BerkshireBull]

I should thank this board for helping me understand these Goodknights and pick up a $200,000 account in the process.  This is the father of a client of mine and he’d been with his Ed Jones guy for 20 years and was extremely loyal to him, well they got into a pissing match when the market tanked last year and so his Jones guy Goodknighted his account this spring.  Anyway, long story short the new Jones guy is badgering the client to trade his stocks and move his A-share American Funds into anything he’ll let him.  I explained to the client (who just wants to sit in what he has) that this new Jones guy will not let-up and will do everything he can to churn his account to generate new commission because he has higher goals he has to hit now that he accepted this client’s account and others like him, and if this guy fails, another new Jones guy will get his account and absolutely pisspound him to move his money around all over again.

We're doing the ACAT at the end of the month.  I don't know if it's more that the client likes me and what we can offer him or that he knows he can't stay where he is and will not get any peace as long as he's with Jones. [/quote]

There's your dialogue bud.  Give me this "clients" information so I can call him and clue him to your insanely high commissions, not to mention your inadequate investment experience, knowledge, and platform. I'll also tell him that in about six months time your going to pitch whole life insurance to him and suggest that he put all his money into it. Insurance Agent vs. Financial Advisor. Financial Advisor= better.

Btw change your screenname to insurance related. Stop pretending.