Edward Jones Settlement Checks
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[quote=Starka]Spiff, Jones didn't get slammed because they were the only one with revenue
sharing...they got it because of the 'holier-than-thou' letter in the WSJ.
Bachmann should have kept his yap shut.[/quote]
Yeah, that did paint a big target on John's back didn't it. Maybe he should have asked someone besides Doug if he should send it.
Spiff, I believe it’s your firm which should get off the Holier than thou train. Look at your companies balance sheet…isn’t it wonderful how much money can be made (upfront or underhanded, you pick) from the unsophisticated investor…Great business model. The investors in the know…don’t use EDJ’s. If EDJ wanted to do what’s right…let go of revenue sharing, open up the platform to alll that is out there…let the brokers mingle with other brokers (outside of the cult meetings)…THis fine was a drop in the bucket…EDJ didn’t flinch… moved on as a cost of doing business. You guys print money in Stl. All at the expense of the unsophisticated investor. Reminds me of…hmmm…Primevest maybe? How about the payday loan companies…You should only use us for emergency’s(but we won’t turn you down otherwise)…profitting off the unsophisticated loan applicant…YOU GO SPIFFY!!
Are you serious? Have you seen how many times other brokerage firms have been fined big money or small money time and time again for things like failure to supervise or something like that. You're right, Jones didn't flinch when we had to write a check. It is a part of doing business. I don't think anyone at Jones will argue that it's better to disclose the revenue sharing than try to hide it. It is better the client knows everything upfront.
I suppose your going to tell me that all of the "smart" investors go seek out some indy broker somewhere. That because someone is affilitated with LPL or RJ that it automatically makes them a better broker and that the smart investor knows and understands this. How do other companies like Merrill or UBS survive? They must all have stupid, unsophisticated clients too. Can you tell me what firm all the smart people invest at, cause I'm tired of working with the stupid ones out there. Boy, I hope that company doesn't have a healthy balance sheet, cause I'd hate to see that they're making any money off of those intelligent investors.
Yes, we make money off of our clients money. Upfront from comissions, through revenue sharing, from fees and interest from different places. It's called running a profitable business. Yes, we do print money in STL. And we're getting better all the time. Last I heard this was a country where you were allowed to do that. I hope I never hear anyone at Jones apologizing for the amount of money we make. I hope we make so much money that they start raising salaries for home office associates and BOAs. I hope the GPs continue to make the money they do. Some of them are friends of mine and I like hearing that their hard work and sacrifice has paid off for them.
At the end of the day I don't think my clients give a rip if the name on my door says EDJ/Spaceman Spiff, FA or Spaceman Spiff's Investment firm as long as at the end of the year their statement has bigger numbers than on Jan 1. Sophisticated or unsophisticated everyone has goals and dreams and plans. Someone has to help them acheive them. This pissing match about mine is bigger than yours because I'm affiliated with this or that is stupid. This experience is about finding the right group of people you can help acheive those goals and doing it to the best of your ability. Indy, wirehouse, or regional firm is irrelevant in the grand scheme of things.
To be fair, independent firms do have revenue sharing agreements. Here is LPL's blurb about it on their website. One big difference is that the rep receives NONE of the revenue sharing payment that goes to LPL. The only benefit to the rep is that the ticket charge ($23) is either waived or reduced.
*******************************************
Sponsorship Programs
The mutual fund families that participate in the Sponsorship Programs are listed in the chart below.
The payments made under the Sponsorship Programs are calculated based upon the assets that are held at the participating mutual fund family, excluding assets held in fee-based advisory programs at LPL. LPL may receive compensation of up to 0.15 percent of the assets held at the mutual fund family. For example, if you held $10,000 dollars with a participating mutual fund family for one year, LPL could receive a payment of up to $15 from the mutual fund sponsor. LPL Financial Advisors do not receive any part of these payments.
LPL also assesses Financial Advisors a $23 ticket charge for automated purchases of mutual funds. Generally, the mutual fund families that participate in the Sponsorship Programs subsidize some of these ticket charges. As indicated on the chart below, in some cases the ticket charge is waived completely, and in other cases it is discounted. Every mutual fund offered by LPL also may be purchased without a ticket charge by processing the transaction with a check and application sent directly to the mutual fund company. We believe that these programs do not compromise the advice your Financial Advisor gives you.
Mutual Fund Sponsors
AIG SunAmerica
AIM Investments
Alliance Bernstein*
Allianz Global Investors
BlackRock
Columbia Funds*
Delaware Financial
Dreyfus (load)
DWS Scudder Investments*
Eaton Vance Managed Investments
Federated
Fidelity Advisor
Franklin Templeton Investments
Goldman, Sachs & Co.
ING Funds
IXIS Asset Management
John Hancock Funds
Lord Abbett
Oppenheimer Funds*
Phoenix Investments
Pioneer Investments
Prudential Financial
Putnam Investments*
Sun Life Financial Distributors, Inc.*
The Hartford (Planco/Hartford)*
Van Kampen Investments*
WM Group of Funds
*Ticket charges for purchases of mutual funds offered by these families are paid for by the mutual fund sponsors.
Purchases of mutual funds offered by the mutual fund families above without an asterisk are subject to reduced ticket charges.
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I find it funny how WE make all this money. WE are ok with the money. Don’t you mean they and them?
[quote=now_indy]
To be fair, independent firms do have revenue sharing agreements. Here is LPL’s blurb about it on their website. One big difference is that the rep receives NONE of the revenue sharing payment that goes to LPL. The only benefit to the rep is that the ticket charge ($23) is either waived or reduced.
*******************************************
Sponsorship Programs
The mutual fund families that participate in the Sponsorship Programs are listed in the chart below.
The payments made under the Sponsorship Programs are calculated based upon the assets that are held at the participating mutual fund family, excluding assets held in fee-based advisory programs at LPL. LPL may receive compensation of up to 0.15 percent of the assets held at the mutual fund family. For example, if you held $10,000 dollars with a participating mutual fund family for one year, LPL could receive a payment of up to $15 from the mutual fund sponsor. LPL Financial Advisors do not receive any part of these payments.
LPL also assesses Financial Advisors a $23 ticket charge for automated purchases of mutual funds. Generally, the mutual fund families that participate in the Sponsorship Programs subsidize some of these ticket charges. As indicated on the chart below, in some cases the ticket charge is waived completely, and in other cases it is discounted. Every mutual fund offered by LPL also may be purchased without a ticket charge by processing the transaction with a check and application sent directly to the mutual fund company. We believe that these programs do not compromise the advice your Financial Advisor gives you.
Mutual Fund Sponsors
AIG SunAmerica
AIM Investments
Alliance Bernstein*
Allianz Global Investors
BlackRock
Columbia Funds*
Delaware Financial
Dreyfus (load)
DWS Scudder Investments*
Eaton Vance Managed Investments
Federated
Fidelity Advisor
Franklin Templeton Investments
Goldman, Sachs & Co.
ING Funds
IXIS Asset Management
John Hancock Funds
Lord Abbett
Oppenheimer Funds*
Phoenix Investments
Pioneer Investments
Prudential Financial
Putnam Investments*
Sun Life Financial Distributors, Inc.*
The Hartford (Planco/Hartford)*
Van Kampen Investments*
WM Group of Funds
*Ticket charges for purchases of mutual funds offered by these families are paid for by the mutual fund sponsors.
Purchases of mutual funds offered by the mutual fund families above without an asterisk are subject to reduced ticket charges.
******************************************
[/quote]Looks like you have a much more direct benefit from revenue sharing at LPL then I do at EDJ. Congrats.
bspears,
Cut my boy Spiff a break...at least he uses logic and put some thought into his responses..."The kook-aid is not strong in this one."
Spiff does seem to speak with logic, but maybe this is a home office ploy to get us to believe that Jones has returned from the dark side, and now they are using the force on us to make us just forget. LOL!!!
To be fair, independent firms do have revenue sharing agreements. Here is LPL's blurb about it on their website. One big difference is that the rep receives NONE of the revenue sharing payment that goes to LPL. The only benefit to the rep is that the ticket charge ($23) is either waived or reduced.
Now-Indy is right. I think that all broker/dealers have some sort of an arrangement like this. I have disclosures to hand out to explain the same thing to my clients. Some "Partner" fund give me a reduced ticket charge. Seriously, even though we independents need to control costs as any business owner does, the difference in ticket costs is not enough to make me choose one fund over another.
If ticket charges are an issue on commission accounts for small trades, I just de-network the account and send it back to the fund family where there are no ticket costs.
[quote=STL Sucks]I find it funny how WE make all this money. WE are ok with the money. Don't you mean they and them?[/quote]
No, I mean we. As I see myself as a part of the whole at Jones, I use the inclusive pronoun we instead of the exclusive pronouns they and them. While the they and them make a lot more of the money than I, I'm still OK with the way I put it.
Revenue sharing, even when we actually got paid based on the fund families we sold, has never been a reason to pick one family over another, ie Hartford vs. American. Unless you had a huge office, the difference in profitability wasn't enought to matter. I do know that some brokers did look at it, but not my office. In fact, I'd say the majority of us didn't look at it that way. Just look at the amount of money that goes to American and you have your proof.
Hey spears, are you going to answer my question about where all the "sophisticated" investors go?
Spiff,
The issue with RS is the closed society you IR's work in at EJ. You have to work really hard to find info. on other non-preferred families. Yes...it can be done but goes against human nature...i.e...98% of EJ fund sales are in the preferred families. You EJ guys can tell me all day about how you can use other families but when it comes down to it...98% of the funds are preferreds (this stat came from EJ about 5 years ago but I'm guessing it still applies)
Pay to Play…Spiff…don’t kid yourself…the sophisticated investor is NOT seeking you out, or Primevest either. Plain and simple. Have you seen the portfolio review tool being used by LPL? Ex…I have a client who, by the JONES BAR CHARTS, was well diversified. When we ran the portfolio through LPL’s, I find 77% of her money is in Large cap growth and value. No midcaps…no smallcap value…no reits…and yes it was all in American Funds because of breakpoints. Now, the reason Jones doesn’t break it down that far for allocations…is welll…you guessed it…they would have to offer more funds than they do…and then they would have to have pay to play arrangements in place. SO to answer your question…sophisticated investors go to anyother B/D, independent or wirehouse, that trully works on investment planning and not SELLING. Good day and Good SELLING SPIFFFFFY!!
[quote=bspears]Pay to Play…Spiff…don’t kid yourself…the sophisticated investor is NOT seeking you out, or Primevest either. Plain and simple. Have you seen the portfolio review tool being used by LPL? Ex…I have a client who, by the JONES BAR CHARTS, was well diversified. When we ran the portfolio through LPL’s, I find 77% of her money is in Large cap growth and value. No midcaps…no smallcap value…no reits…and yes it was all in American Funds because of breakpoints. Now, the reason Jones doesn’t break it down that far for allocations…is welll…you guessed it…they would have to offer more funds than they do…and then they would have to have pay to play arrangements in place. SO to answer your question…sophisticated investors go to anyother B/D, independent or wirehouse, that trully works on investment planning and not SELLING. Good day and Good SELLING SPIFFFFFY!![/quote]
The only tool you used was the bar charts? Wow, did you ever look at the REIT’s that Jones follows or the REIT mutual fund list that is on the system or use instant x-ray to see where you fell in the style boxes?
You beat me to it Max. Every new guy that I can get to listen I try to teach them that the bar charts are a great basic tool. They can work their entire career and not look past that and do very well for their clients. However, if you really want to know what is going on in a portfolio, or where the holes are in the other guys portfolio you're trying to steal, you have to use the X-Ray tool. That tool is the major reason I don't send every dollar I get to American Funds anymore. Too much overlap, too much large value and growth. Not enough of everything else. To be fair to American Funds though, I believe you can build a good portfolio using their funds and for basic investors, they are hard to beat. And if you put some real thought into it, and not just toe the company line, you can fill all of the Morningstar boxes with the appropriate amounts. And Jones doesn't have to add more fund families to do it.
It's not Jones' fault that you weren't a think outside the box kind of guy while you were here. Maybe it took leaving for you to figure out that there's more to investing than bar charts. I'm sure you're clients are better off now for your leaving.
I'm curious. When you refer to an investor as sophisticated, what qualifies that person as such in your mind? Is is the amount of money they have? Is it a stock vs. mutual fund vs. ETF investor? The reason I ask is that out of the thousands of people I've met in my short career, only a small handful of them I would classify as sophisticated. And they weren't looking for advice from advisors at any firm. They have a Schwab or Vanguard account and they are doing it themselves. Teach me what to look for, Oh Wise One, in my search for intelligent investors.
[quote=Spaceman Spiff]
The reason I ask is that out of the thousands of people I've met in my short career, only a small handful of them I would classify as sophisticated.
[/quote]
That includes all of the Jones reps Spiff has met in St Louis
[quote=Teleman]
Just deposit them into the ira's. My client checks are running any where from the puny 10 to a few hundred. Many of these checks are in non qualified accounts. I tell them to spend it if they want or we can drop it in their account asnd put it back to work "THE RIGHT WAY" this time.
A word to Spiffy- The word independent means, "NO PREFERRED FUND FAMILIES" It means, I can use anyone I want. Revenue sharing is heavily employed by Ed Jones as their "Shelf space fee". Ej has a desirable distribution channel and most of the fund families will prostitute themselves to this extortion method by Jones. Even their sacred American Funds.
[/quote]
Uh, independent doesn't mean no preferred funds. What about ticket charges you have to pay for "non preferred" funds. You're telling me that doesn't push you towards the preferred funds?
I use mutual funds VERY sparingly, but the one I use when needed carries a
full ticket charge. So no, I’m not pushed towards any ‘preferred funds’.