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Sep 24, 2009 1:30 pm

As long as people sell variable annuities, there will be B-shares

Sep 24, 2009 2:03 pm

When they come out with guaranteed income for life benefits for mutual funds regardless of market performance, I will drop annuities in a heart beat.

  At one point LPL was talking about it with our fee platforms...but with all the uncertainty I think the insurance sponsor saw too much downside possiblity. Supposedly, its still on the table for discussion...
Sep 24, 2009 2:09 pm

As a side note...

I was at Jones when they instituted A share annuities. At the time, they reduced commission on B share annuities to 35% from 40%. Is that still the case? 1/3 of my book is annuities for one sole reason, guaranteed income...I have never recommended B share, have some on the books, but find the hybrid L or C to be more suitable if liquidity is an issue.
Sep 24, 2009 3:18 pm

LockEDJ- You are seriously lost. I do question you.

  1. Only an idiot would say that selling A shares to someone and then moving them into a Wrap is comparable to while selling mutual funds not moving ALL the dollars into fixed income at 3.75%. Only an IDIOT. Literally. Commissions are supposed to be fair. When you sell A shares and then change them to 1.35% annual without changing how you think business should be done (as Volt identified by his B share example) YOU ARE CHURNING. PERIOD.   2. You said you were forced to sell Lehman bonds. You weren't. Yes at PDP you call people to do business with you. You are forced to call people. (like that is a bad thing) If you call on a bond and then find it is unsuitable you are supposed to sell them something else.   3. I did sell a lot of A shares and still do. However I sell A shares when the are appropriate. (long term holdings, a buy and hold person). I did not turn around after charging them a load and switch them to a 1.35% annual because people who liked/needed to move in the market from fund to fund were already in C shares.   4. I know that you moved your clients to AS to benefit your pocketbook. I am not inferring anything. I am flat out saying it. And how I know is based on your answers here.  I think that kind of business tactics will end up with you selling vaccums door to door in about 7 months.  You are that 30% at Jones.
Sep 24, 2009 4:44 pm
voltmoie:

[quote=LockEDJ]I’m glad you agree with me. This is a sales job. And I don’t believe anywhere I abdicated my responsibilities to my clients, and I’m sure you aren’t inferring that I did. Right?

Insofar as newbies, this is what happens at every PDP class. Perhaps you’ve forgotten what happens at St. Louis, and it’s time for a veteran like yourself to go there and contribute your time. But you’re given a choice on two items, and you call all day on people you’ve never met products that might have no relevance in their lives.

Re: C shares - Perhaps I misworded. Never told that we were forbidden to sell either B or C. Let’s say heavily dissuaded. But I am curious, exactly how much C share business is on your books from when you were in your first two years? I wonder quite frankly if this isn’t selective memory but if not, bully for you.

I asked this before so I repeat … have you ever considered why, if you are selling A shares to benefit the client on the basis of long term cost, you don’t simply sell him all bond funds initially? Are you making a decision there that realistically only benefits your pocket book? Seems like it to me and you certainly know this to be true. You have a responsibility to act as a prudent man might do on his own behalf.

In those responsibilities includes not making decisions with your client’s money only to benefit your pocketbook, well only you benefit by not buying in all at Bond fund prices.

[/quote]

Come on man, you are not the dollar tree of financial advisors.  I’m trying to get PAID and help my clients meet their goals in the process. I didn’t take this job to run a charity. 7 times out of 10 if you truly lay out the facts the client is going to pick a C share over an A share … and I’m not talking the 6 year speech.  I think you need to give Putnum as a rick of choosing an A share and then see what they say.

Plus, in a down market I think there is a great case to be made for selecting B shares over A.  I want every dollar in the game I can get - especially after the hit most people took. ( no idea if we are really in a down market anymore)

  I disagree. If you run a hypo on virtual any mutual fund you will see that the overall performance of a B-share is smaller than an A-share.   C-shares I understand the reasoning, B-shares I don't.
Sep 24, 2009 8:06 pm
SometimesNowhere:
C-shares I understand the reasoning, B-shares I don’t.


You don't understand the B share reasoning? It's 4 hidden points. Nothing more to understand.
Sep 24, 2009 10:28 pm

In obviously no particular order …



4. As to your allegations of “knowing” my book, well, I have only one AS. I have another proposal right now; in both cases, the client held their A share mutual funds for a long time (in excess of 6 years) in qualified accounts and had purchased them from another FA. I seriously don’t see how that suggests churning, and believe me I made sure our HQ agreed with me before proceeding. If your problem is with St. Louis, then fine. Don’t make it about me or individual advisors that follow the company line.



2. As to not being forced … well, I’ll bet you have some interesting ideas as to what it means when someone says no (Volt may feel free to insert random lewd joke here). When a newbie FA in my class objected (gasp, horrors!) that the bond selected that day might not be appropriate, he was given two options … one of which was to make their way to the airport. Of course, that’s not being forced.



This is not being made up for the benefit of anyone here. This is factual, it happened in my classroom and frankly I don’t give a crap if you believe it or not, but only an idiot would dismiss it as inconceivable. At any rate, it seems pretty discordant with your ideas of selecting individual solutions to clients.



3. I have no idea what you are talking about here.



1. I’m assuming this is your half-assed response to my question, which again, you never answered. Would a prudent man knowingly pay more for a product than they had to? How is not initially investing into bond funds so terribly different than using four A share mutual funds for a purchase with $100k and avoiding breakpoints? Why are you avoiding the question?





The subtle issue I am trying to make to you, and you blithely seem to be avoiding, is that every day and with every decision a financial advisor needs to rationalize what he is doing. Any FA can justify his acts - or find a way to vilify another. I try to believe we’re all on the up and up. You, it seems, would prefer to find jerks behind every statement.



***********



It seems you’d like me to come to some sort of cathartic revelation regarding fee-based business. Sorry, the skies didn’t clear and a thunderbolt didn’t shoot through for me. Edward Jones made available to me a better way for my clients. I believe it is an inexpensive way for them to operate and have said so over and again here. For some of my clients, it works and I will continue to make it available to them and only in situations where St. Louis sees fit.



As my last point, I don’t need to sling mud at you, but you feel the need to do so at someone that in all actuality hasn’t the accounts you so fiercely think I’ve been harming. In so doing and in a public forum, you denigrate the very company you seem proud of. Congratulations and good luck. Edward Jones really needs more self-righteous knuckleheads like you. Welcome to ignore.

Sep 24, 2009 10:53 pm
LockEDJ:

Then, you know that when they buy A shares, that they could possibly get the best possible cost by buying all bond funds. Right? Later, you could rebalance into equity from the bond funds. So why don’t you do that?

  This is strictly forbidden and you can get in pretty big trouble by doing this.
Sep 25, 2009 2:46 pm

EDJLock - You are clearly a moron and a bad broker

Sep 25, 2009 3:24 pm

This thread is seriously flawed…

Sep 25, 2009 3:40 pm
3rdyrp2:

[quote=LockEDJ]Then, you know that when they buy A shares, that they could possibly get the best possible cost by buying all bond funds. Right? Later, you could rebalance into equity from the bond funds. So why don’t you do that?

  This is strictly forbidden and you can get in pretty big trouble by doing this.[/quote]   Riiiiiiiiiiight!  I had a wholesaler tell us to do this in front of our compliance officer.   me "lets stick that 500k in this fund while we wait a few days to see what the market will do, best part is there is no sales charge.  Then I'll call you Monday and if North Korea has not set off a bomb we'll make those moves we talked about"   client "okay"   Next   ...okay, I've not done that yet but that's how I envision it :)
Sep 26, 2009 1:33 am
voltmoie:

[quote=3rdyrp2][quote=LockEDJ]Then, you know that when they buy A shares, that they could possibly get the best possible cost by buying all bond funds. Right? Later, you could rebalance into equity from the bond funds. So why don’t you do that?

  This is strictly forbidden and you can get in pretty big trouble by doing this.[/quote]   Riiiiiiiiiiight!  I had a wholesaler tell us to do this in front of our compliance officer.   me "lets stick that 500k in this fund while we wait a few days to see what the market will do, best part is there is no sales charge.  Then I'll call you Monday and if North Korea has not set off a bomb we'll make those moves we talked about"   client "okay"   Next   ...okay, I've not done that yet but that's how I envision it :)[/quote]   Voltmoie, You are wrong 3rdyrrp2 is right.  Envision it how you want.  It does not matter if it "benefits" the client in your mind or not.  Violate the spirit, letter, or intent of a regulation and it is the same.  Prospectus aren't written for you to find a way around.  They are written so there is a legal, documented standard to follow. PS: I could care less what your wholesaler said and who they said it to.
Sep 27, 2009 12:57 pm

3rd and ytrewq are correct. That said, I do remember the growth leader at a regional meeting telling us to do that a few years back.

Sep 27, 2009 1:36 pm

[quote=ytrewq]

  Voltmoie, You are wrong 3rdyrrp2 is right.  Envision it how you want.  It does not matter if it "benefits" the client in your mind or not.  Violate the spirit, letter, or intent of a regulation and it is the same.  Prospectus aren't written for you to find a way around.  They are written so there is a legal, documented standard to follow. PS: I could care less what your wholesaler said and who they said it to.[/quote]

Pretty much like I could care less what guys I don't know write on message boards
Sep 27, 2009 3:17 pm

[quote=voltmoie] [quote=ytrewq]

  Voltmoie, You are wrong 3rdyrrp2 is right.  Envision it how you want.  It does not matter if it "benefits" the client in your mind or not.  Violate the spirit, letter, or intent of a regulation and it is the same.  Prospectus aren't written for you to find a way around.  They are written so there is a legal, documented standard to follow. PS: I could care less what your wholesaler said and who they said it to.[/quote]

Pretty much like I could care less what guys I don't know write on message boards
[/quote]   I only responded in this "tone" because of your reponse to 3rdyrrp2.  Riiiiiight!!!  wasn't necessary.  Neither was my "care less" quote.  I think all of us on this board could benefit from advice from each other.  We just get caught up in one upping and insulting each other instead.  Been guilty of it myself plenty of times.
Sep 27, 2009 3:53 pm
Moraen:

3rd and ytrewq are correct. That said, I do remember the growth leader at a regional meeting telling us to do that a few years back.

  I find it ironic that an EDJ "growth" leader is showing advisors at a regional meeting a way to reduce their income.  Albeit an illegal way to reduce it as well.
Sep 28, 2009 2:50 am

As a former Jones rep of 15 years, recently turned Indy, I will tell you that this behavior is definitely ill thought out and two faced, like many recent policies and changes in the firm. Not to mention being manipulative and deceitful to clients who have put their trust in you. It is no secret that Jones reps are playing with their new toy (the Advisory Solutions) with money churned from perfectly good American Funds and the like. What happened to the good old “buy and hold” and taking the high road of watching out for the client in regard to fees and expenses? This is not the firm I hired on with and is a disgrace to the memory of Ted Jones. Get a clue.

Sep 28, 2009 12:51 pm
3rdyrp2:

[quote=Moraen]3rd and ytrewq are correct. That said, I do remember the growth leader at a regional meeting telling us to do that a few years back.



I find it ironic that an EDJ “growth” leader is showing advisors at a regional meeting a way to reduce their income. Albeit an illegal way to reduce it as well.[/quote]



Actually, it wasn’t sell them a bond fund. It was, sell them a an equity fund and then convert it to a bond fund.
Sep 28, 2009 4:47 pm
Moraen:

3rd and ytrewq are correct. That said, I do remember the growth leader at a regional meeting telling us to do that a few years back.

  Regardless of how well thought of that growth leader may be, you will be the one that has to justify what you did for the client. I always found it rather odd that at Jones I had no E & O coverage. As long as you did "things" the way that you should, then they would go to bat for you. I was always amazed at the things I heard come out of the mouths of other folks that were on the leadership team with me when I was at Jones.......   On a positive side, one of the alltime best was a rep at Jones that did a lot of fixed income and would never do a corporate and did only AAA. The rep did all GNMA's pretty much with a little bit of agencies. I imagine those clients have appreciated that advice. I bet the rep has had a bunch returning from those GNMA to reinvest....