Edward Jones-Pushing Advisory & Performance
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I thought this might turn into a conversation about the merits of Advisory and it has but my questions have gone unanswered. Let me re-phrase them.
If you could afford to go without a paycheck or much of one do you think it would be worth it to do nothing but wrap accounts for a year? Even if your firm may fire you for lack of performance? And yes, Jones would. (Remember they still want it both ways) For the first time I feel restricted by Jones. I have never felt that the parameters they put around the way I operate my practice have had much of an impact on me.....until now.Your questions are spot on which is why it really only works to go full advisory fee based when you are Indy and don’t have to worry about hitting a monthly production goal as long as you are viable over time. Jones is conflicted as hell and they are once again putting the guys in the middle of the pack in a dilemma.
[quote=LockEDJ] [quote=Moraen] …
Lock - I agree with a lot of what you say, but I personally don’t think that AS is such a good plan. You say it’s cheap, but all-in it’s still pretty expensive. Plus, the models are flawed (at least when I was there).
…[/quote]
I’m not all the way out of Jones, but my looking tells me that to get a solution with the due diligence of third parties gets to be pretty darn expensive. We can present ours anywhere from 1.35 to 70 bps. I look at the costs of working with someone like Lockwood or a SMA and think woosh, that’s a whole lotta bps. If you want someone to manage money for you for around 1.25% and the FA is outsourcing it … well, I dunno.
Could it be better? Perhaps but I don’t think so within the framework of Jones. After all, how can you introduce alternative investments into the AS world and not make them available in some form outside AS? Insofar as liability goes, one of the FAs has pointed out that we’ve moved to a point now where the Jones FA is at greater risk than before. Interesting ideas.
Tired. Happy both the Bills and Jets won today.
G’nite,
Alex[/quote]
Lock .70 to 1.35 ALL-IN? Does that include any mutual fund expenses?
No.[quote=LockEDJ] [quote=Moraen] …
Lock - I agree with a lot of what you say, but I personally don’t think that AS is such a good plan. You say it’s cheap, but all-in it’s still pretty expensive. Plus, the models are flawed (at least when I was there).
…[/quote]
I’m not all the way out of Jones, but my looking tells me that to get a solution with the due diligence of third parties gets to be pretty darn expensive. We can present ours anywhere from 1.35 to 70 bps. I look at the costs of working with someone like Lockwood or a SMA and think woosh, that’s a whole lotta bps. If you want someone to manage money for you for around 1.25% and the FA is outsourcing it … well, I dunno.
Could it be better? Perhaps but I don’t think so within the framework of Jones. After all, how can you introduce alternative investments into the AS world and not make them available in some form outside AS? Insofar as liability goes, one of the FAs has pointed out that we’ve moved to a point now where the Jones FA is at greater risk than before. Interesting ideas.
Tired. Happy both the Bills and Jets won today.
G’nite,
Alex[/quote]
Lock .70 to 1.35 ALL-IN? Does that include any mutual fund expenses?
Hold on, Morean … miscommunication. Chalk one up under the category, “Don’t post while you are tired.”
No, I meant that the AS can be pushed out to clients as low as 70 bps. We don't have Lockwood, but I see the administration fees a BD puts around them + the fees from Lockwood + the advisor's take, and I that seems incredibly expensive. My point being, the Jones AS offers due diligence and third party administration at generally above 1; what I see from BDs that offer due diligence and third party admin seems to be closer to 2. I'm very willing to be corrected on the percentages. Don't tell me about your own due diligence or you're great manner of dividing and conquering the market; most FAs are and should remain salesmen. Let's match an apple with an apple, and I do believe the Jones AS is inexpensive. Educate me on how I am wrong. FWIW, for one of my clients, in a classic 70-30 AS solution, has experienced a 19% return YTD net of fees. I have no issue with those returns, so to say their solutions are flawed ... I think you have a hard time. This is substantially better than let's say the S&P Growth Allocation offered through iShares (in fact, it's better than any asset allocation offered through iShares on a YTD basis.) With due respect, A.[quote=LockEDJ] Hold on, Morean … miscommunication. Chalk one up under the category, “Don’t post while you are tired.”
No, I meant that the AS can be pushed out to clients as low as 70 bps. We don’t have Lockwood, but I see the administration fees a BD puts around them + the fees from Lockwood + the advisor’s take, and I that seems incredibly expensive. My point being, the Jones AS offers due diligence and third party administration at generally above 1; what I see from BDs that offer due diligence and third party admin seems to be closer to 2.
I’m very willing to be corrected on the percentages. Don’t tell me about your own due diligence or you’re great manner of dividing and conquering the market; most FAs are and should remain salesmen. Let’s match an apple with an apple, and I do believe the Jones AS is inexpensive. Educate me on how I am wrong.
FWIW, for one of my clients, in a classic 70-30 AS solution, has experienced a 19% return YTD net of fees. I have no issue with those returns, so to say their solutions are flawed … I think you have a hard time. This is substantially better than let’s say the S&P Growth Allocation offered through iShares (in fact, it’s better than any asset allocation offered through iShares on a YTD basis.)
With due respect,
A.[/quote]
19% seems a little on the low side YTD, but if you say it’s working, then I believe you. Who sits on the Advisory Solutions board? Are they Jones people? That’s who it would be when I left. These are the same people who were saying Lehman wasn’t going bankrupt, yes?
Guys, this conversation is getting a little silly.
Bottom line, Jones rolled out their first advisory platform one year ago. As with all things "Jones", they will start out slow and make modifications as they go. I know they already have another several models that they are rolling out by year-end, and will likely make more modifications as we go forward. They are working on addressing the whole "production goals" thing as it relates to AS, as to make it more attractive for new assets. My belief is that they WANTED existing assets going into it first, so they they could basically test out the concept with more seasoned veterans before letting the whole firm go hog-wild. As far as the rigidity of the platform, I believe that Jones is doing this to cover their fiduciary a$$es, and make sure they tightly control it in the beginning. My guess is that they become more flexible as time goies on. I bet at some point they allow individual securities. Now, this will likely start out as the "model portfolio" and some sort of pre-constructed bond ladder or something, but again, baby steps. Jones is never at the cutting edge. We should just accept it for what it is right now, and understand that it will improve as time goes on.I am a Jones guy and I can’t believe anyone would sit here and say that it is fine to move money into the AS from old A share money unless they are willing to say that their philosophy has changed.
I also do not think Ejones is a joke, however about 30% of their brokers are. Are we really this ignorant to call each other names or argue back with JD Power award and we manage money!!! Anyway this is a huge problem at Jones. If I am not a bad broker who is taking old money and converting it, then like others on here I am only doing it with new money. I have not found a way to make it work yet and the idea of putting 20K in a 5% load and the rest in AS is SICKENING. And non defensable. EX: I put 375 in AS and had a horrible June 9K gross. My RL called and asked "what happened, did I take the month off? ha ha.. ". Lastly, we SHOULD all know by now that one way is not always the best. For some people AS is good, for some people load funds are good, for some situations VAs are good, for some C shares are good. If you are saying I ONLY do XYZ then you are probably not all that good at financial advise.[quote=LockEDJ]FWIW, for one of my clients, in a classic 70-30 AS solution, has experienced a 19% return YTD net of fees. I have no issue with those returns, so to say their solutions are flawed … I think you have a hard time. This is substantially better than let’s say the S&P Growth Allocation offered through iShares (in fact, it’s better than any asset allocation offered through iShares on a YTD basis.)
With due respect, A.[/quote] Uggghhh...19%...here's my company's 100% proprietary moderate aggressive allocation fund, in a 66/34 model. FWIW, no one here uses the fund because its a joke, unless the client is opening up a roth or something w/$2,000, and its still up 23%. A lazy sloth could put together a moderately aggressive portfolio this year that has earned at least 25%. http://www.google.com/finance?q=NASDAQ%3AAXMAXyep, investment management should be left to professionals. Does the Edward Jones Investment Policy Committee still made up of 0 CFAs, 1 dude with an MBA and 7 former INVESTMENT REPRESENTATIVES housed out of the mutual fund catered HQ? What a joke, when I was there “asset allocation” asset classes were dubbed Income, Growth and Income, Growth and Aggressive Growth. Did Dave Ramsey set that up? I can see why DR would, he’s talking to millions of people on free radio, but EDJ? A rep is supposed to select the underlying funds in those categories while understanding risk?
It should be cheap, its made up of uneducated jokers that eat mutual fund food from HQ (not so dissimilar from other companies).
Well ... you got me there . At least it's not me doing the pickin' and grinnin'. I'm curious though as to whether or not anyone sees this as an expensive solution.…Who sits on the Advisory Solutions board? Are they Jones people? That’s who it would be when I left. These are the same people who were saying Lehman wasn’t going bankrupt, yes?
You know the answer to that because you've asked it before, make your point that it sucks and move on.
Lock .70 to 1.35 ALL-IN? Does that include any mutual fund expenses?
[quote=Moraen] Lock .70 to 1.35 ALL-IN? Does that include any mutual fund expenses?
You know the answer to that because you’ve asked it before, make your point that it sucks and move on.[/quote]
Actually, I was asking the question to your point about me not being there. Things could have changed since the last time someone answered it. After all, I am not at Jones any more.
My point is not that it sucks, just that it is disingenuous to say that you are charging between .7 to 1.35 bps. The client is paying more than that. Just like when people would sell A-shares. “You only pay this ONE-TIME Advisory fee of 3.5%, then it’s free!”. I lost track of how many times I heard people say that.
Full disclosure is recommended. Also, I believe I said it could be better. Not that it is a horrible platform. There are better available.
[quote=GoodTimes] yep, investment management should be left to professionals. Does the Edward Jones Investment Policy Committee still made up of 0 CFAs, 1 dude with an MBA and 7 former INVESTMENT REPRESENTATIVES housed out of the mutual fund catered HQ? What a joke, when I was there “asset allocation” asset classes were dubbed Income, Growth and Income, Growth and Aggressive Growth. Did Dave Ramsey set that up? I can see why DR would, he’s talking to millions of people on free radio, but EDJ? A rep is supposed to select the underlying funds in those categories while understanding risk? It should be cheap, its made up of uneducated jokers that eat mutual fund food from HQ (not so dissimilar from other companies).
[/quote]
Ouch!
[quote=Moraen] [quote=voltmoie] [quote=Moraen] Lock .70 to 1.35 ALL-IN? Does that include any mutual fund expenses?[/quote]
You know the answer to that because you've asked it before, make your point that it sucks and move on.[/quote]
Actually, I was asking the question to your point about me not being there. Things could have changed since the last time someone answered it. After all, I am not at Jones any more.
My point is not that it sucks, just that it is disingenuous to say that you are charging between .7 to 1.35 bps. The client is paying more than that. Just like when people would sell A-shares. "You only pay this ONE-TIME Advisory fee of 3.5%, then it's free!". I lost track of how many times I heard people say that.
Full disclosure is recommended. Also, I believe I said it could be better. Not that it is a horrible platform. There are better available. [/quote] For some reason I thought you were baiting Lock to answer the question the way you wanted so you could make your point. My bad! It's what Jone's has to offer, provides a good value, and is better than slapping people in American Funds. You would agree yes? Clients don't like it, they can go elsewhere - but we both know it's more than about just the "best platform" I'd also argue it's a great platform for the Jones sales force. I'd be scared as hell if some of these guys were handeling a true wrap account.
[quote=voltmoie]
7 of them are CFA's. The Investment Policy Committee makes allocation/strategic decisions. Then there are additional people from Equity Research, Product Review, and Investment Advisory departments. There's a lot of input from a lot of different areas.yep, investment management should be left to professionals. Does the Edward Jones Investment Policy Committee still made up of 0 CFAs, 1 dude with an MBA and 7 former INVESTMENT REPRESENTATIVES housed out of the mutual fund catered HQ? What a joke, when I was there “asset allocation” asset classes were dubbed Income, Growth and Income, Growth and Aggressive Growth. Did Dave Ramsey set that up? I can see why DR would, he’s talking to millions of people on free radio, but EDJ? A rep is supposed to select the underlying funds in those categories while understanding risk?
It should be cheap, its made up of uneducated jokers that eat mutual fund food from HQ (not so dissimilar from other companies).
B24, seriously. These are Jones employees we are talking about. They suck. They are stupid. Geeeez, you should know this by now.
I agree. I was planning on interviewing with them until I read all this stuff: "Awful, awful awful!!!! I have been bounced to three different advisors in the last 4 years and neither was worth anything. I have lost over 30k. The only thing E.J advisors advise is to invest in what makes THEM more money, not the client. I could have done a better job myself with my eyes closed. I only heard from the advisor when he needed to sell one of my stocks or mutual funds so he could make more money or qualify for a trip contest E.J was having. THIS IS A VERY UNETHICAL COMPANY.B24, seriously. These are Jones employees we are talking about. They suck. They are stupid. Geeeez, you should know this by now.
The advisors are just SALES PERSONNEL! This was a very expensive lesson for me.
RUN FASTER THAN THE SPEED OF LIGHT AWAY FROM THIS COMPANY." "Edward Jones is a horrible company...the Financial Advisors use their fake smile and play the "best friends" game and act as if they want to become part of the family with all of their wealthy Clients...yes, the ones with alot of money, their top clients that they know they will continue to make some good commission off of and bring money into the company...the others can all bite the dust...The Financial Advisors are what the company focuses on, if you are in any other position, you are nothing, and I mean nothing, not important and not appreciated or so it seems from what myself and my husband have noticed in the past (with the support people) before deciding to leave and go elsewhere where we are treated properly and satisfied...the poor workers that are not F.A.'s do all the work and barely make anything while the F.A.'s reap all the rewards...I felt so sorry for the lady up front...barely making ends meet, driving an old car, and couldn't afford medical benefits as one hard working lady told us while we would wait for so long to meet with the F.A., always running behind schedule and making others wait...See you have the F.A. with the big home, fancy car, weekly golf games and playing on the computer in his office claiming to be busy at times when he was in contact with other F.A.'s and betting on sports...fantasy football ring a bell al you F.A.'s out there? lol...every time I called to speak to the F.A., I had to deal with the gatekeeper or front office person and I always got the same response "Mr. L is in conference with a client or on a phone conference" may I take a message or assist you with something?... or some crap they seem to tell these people up front to say...they are lazy every day for half the day, strolling in late and these poor support people are the ones doing all the work...we have seen this at 3 different Edward Jones locations...and on one occasion, I couldn't believe I saw this poor woman cleaning the office and running personal errands too? All for a low hourly wage...it's pathetic...without these support people, the F.A.'s would not be able to make it...also, we were upset because whenever we would ask the F.A. about Stocks, the F.A. told myself and my husband, I am sorry but I am not good at picking stocks, always forcing American Funds on everyone...what kind of F.A. should be working for E.J. if they don't know how to pick stocks? It seemed like most clients got the same advice...the F.A. staying away from Stocks and focusing mainly on Mutual Funds...forcing American Funds on the Clients all the time...I guess we had such a bad experience and they do some under handed things in that firm, FINRA and SEC should check out each branch location at least 5 times a year, I am sure they are bound to catch something that they are doing that is against the rules and regulations...All I can say is RUN, AS FAST AS YOU CAN AWAY FROM EDWARD JONES"!!!" http://www.rateitall.com/i-92963-edward-jones.aspx
Wow, for a “client”, this person sure seemed to know an awful lot about what their advisor does every minute of the day. Knows the BOA’s hourly wage, what the BOA drives, that she couldn’t afford benefits, what the FA is doing on his computer, that they “stroll in late every day”, always running behind schedule, …
Give me a break.