When you folks talk about “platforms” what are you referring to?

[quote=Jones Concerns]Hello One and All,

I found your "community" with Google.  The reason I was even looking around is because I am about to retire with a fairly sizeable portfolio which is currently at Wachovia Securities.

A fellow in my church is a local Edward Jones repesentative and I have been considering transferring the portfolio to him.  So I used Google to see what I could find about Jones.  Did it not used to be called Edward D Jones?

Could one of you offer up a discussion of why I should change, and why I should not change?  My relationship with the individual handling my account at Wachovia is not strained, essentially it is non existant.

The guy at church is a church friend, I do not know much about him but he seems pleasant enough.

Thank you,

Mike[/quote]

Mike, if your relationship with the rep at Wachovia is non-existent, then you should consider a change.  At a minimum, your rep should ask you to come in annually to review your portfolio, and this appointment should be substantive, reviewing all your investments to determine if any changes are necessary.  You should feel good about the review process and the rep should explain in clear english what changes, if any are needed, why or why not changes should be made, how the portfolio has performed and why some or all of it underperformed compared to the averages or benchmarks.  Most reps will also try to make contact at least a couple of times in between the annual review.

A part of me is hesitant to recommend moving your investments to a church friend for fear that if the church friend does a poor job with your portfolio, it will without a doubt, cause a serious strain on your relationship, probably causing both of you to feel awkward, if not resentful each time you see each other at church.  I would certainly take a hard look at him through third parties, such as current clients of his.  I'm assuming you can find other folks at church who work with him and ask them how he does for them.  Pay particular attention to those who've been with him for at least six years, as that would cover a poor market, as well as a recovery.  Anyone with him for three years or less should give you a glowing report, as nearly everyone has been making money during that time span.  I would discount the recommendations of these folks.  If he hasn't been around for more than three years, I would be inclined to wait and see how he does for awhile before entrusting your entire retirement account to him.  The fact that you don't know much about him is a warning flag for me.  Almost all of us seem like nice people to begin with!

You might consider asking those around you who you view as successful who they work with and how long they've been with them.  Again, anyone with three years or less experience with their current advisor won't likely give you a worthwhile opinion.  Once you have two or three good candidates (which may or may not include your Jones friend), you can make appointments and meet with them to see which one might be the best fit for you.  DO NOT let the first advisor you meet convince you to move your accounts at the first meeting.  We are generally well-trained to try and get the business before it walks out the door.  I'm a bit more laid back than that (some would say I was too laid back but that's my style), but it's very possible whoever you go to see first will try and convince you to move the business then and there.  Don't resent him/her for doing that...if he/she doesn't feel like he/she's the best for you, he/she probably won't last long in this business...a lot of our success is about confidence in our abilities.

Now, to answer a couple of your other questions, yes, it used to be calles Edward D. Jones, but now it's simply Edward Jones, and we often call it Jones on here for short.

As to what we mean by "platform", we are generally talking about the tools we have to work with when we take care of clients.  Each company has various available products and investments and various technology for advisors to work with.  You'll find a wide variety of technology and available products available at the various firms if you choose to investigate.  Generally, the large New York firms, such as Merrill Lynch and Smith Barney have the most sophisticated platforms.  However, many regional and some independent firms have sufficient technology and product offerings to take care of 99% of the investment client population's needs, so it's unlikely you would have to limit your choices to those firms.  As an independent, I feel like the gap in technology and product offerings between my firm and the New York firms is pretty small, but you have to consider that my opinion is obviously biased...as is everyone else's on these boards...

I'm going to try and tread carefully here...there are some on this board (myself included) who hold the opinion that Edward Jones' technology and product offerings are lacking...enough so that in no way would I work there under the current system.  At the same time, it's fair to say that Edward Jones has a sufficient platform to handle the needs of most investment clients across the country, so if stocks, bonds, mutual funds and CDs are sufficient to take care of your investment needs, you should be ablt to find what you need at Edward Jones.  That's not meant to be a complete list of their investment products, but I think it's fair to say that's their bread and butter.

Good luck with your search and don't ever feel bad for turning anyone down...this is your money and your future...choose wisely...

Mike-

I think indyone's response is excellent. The only comment I would add is that when you do your homework, make sure you ask about conflicts of interest. That may steer you away from Jones.

If you have significant assets and are considering trust services, some believe the conflicts are even more obvious as they have to act in a fiduciary capacity (essentially free of conflict) and they are using preferred funds as their main investment vehicles where they receive kickbacks.

Its a pay to play environment with this firm and Jones is at the head of the class in this industry as they sell more mutual funds with their preferreds than anyone else. That's why three weeks ago they settled 9 class action suits for 127.5M. And previously they paid 75M into a "fair fund" that is to be distributed to clients who owned preferred funds due to non disclosure. Now they disclose and I would encourage you and anyone else who cares to read them. They are available on their website.

[quote=footsoldier]

Mike-

I think indyone's response is excellent. The only comment I would add is that when you do your homework, make sure you ask about conflicts of interest. That may steer you away from Jones.

If you have significant assets and are considering trust services, some believe the conflicts are even more obvious as they have to act in a fiduciary capacity (essentially free of conflict) and they are using preferred funds as their main investment vehicles where they receive kickbacks.

Its a pay to play environment with this firm and Jones is at the head of the class in this industry as they sell more mutual funds with their preferreds than anyone else. That's why three weeks ago they settled 9 class action suits for 127.5M. And previously they paid 75M into a "fair fund" that is to be distributed to clients who owned preferred funds due to non disclosure. Now they disclose and I would encourage you and anyone else who cares to read them. They are available on their website.

[/quote]

I sure am glad that you are around to point out all the possible issues to Mike. Please go see a therapist on Monday.....

Mike-

Our good friend Mr. Noggin may be an indicator of the type of people Edward Jones attracts. Ones that can't or won't think for themselves, they only know what they are told and they attack those that challenge them and the company policies.

[quote=footsoldier]

Mike-

Our good friend Mr. Noggin may be an indicator of the type of people Edward Jones attracts. Ones that can't or won't think for themselves, they only know what they are told and they attack those that challenge them and the company policies.

[/quote]

My dear Footsoldier,

I have never attacked you but have always suggested 2 things,

Nr 1 That you work for a company that you can truly believe in.

Nr 2 That you seek a competent therapist to work through your issues.

I wish you well as always....

[quote=noggin][quote=footsoldier]

Mike-

Our good friend Mr. Noggin may be an indicator of the type of people Edward Jones attracts. Ones that can't or won't think for themselves, they only know what they are told and they attack those that challenge them and the company policies.

[/quote]

My dear Footsoldier,

I have never attacked you but have always suggested 2 things,

Nr 1 That you work for a company that you can truly believe in.

Nr 2 That you seek a competent therapist to work through your issues.

I wish you well as always....

[/quote]

Noggin,

So you "believe" in your company now?  Someone give your a Kool-aid code red or something?  Whatever happened to gathering enough assets to leave?  BTW the only other people I hear saying that they "truly believe" in their company, product etc, are Mary Kay reps. 

For the record Mike.  Jones is a decent company.  Their research is weak and the reps are less informed than most regarding effective investment and financial planning practices.  They also have inferior tools for analyzing and monitoring portfolios.  They mainly get a bad rap on this forum because of the pious attitude of so many of their employees.  Thats my two cents.

Noggin....pack it up already.  You have seen the light yet now choose to close your eyes.  It just takes some guts and a plan....you can do it. I believe in you.  GO GIRL!

Heed Indy’s words.  They were well crafted and accurate in my opinion.

There are some good IR’s at Jones no doubt.   However, I will be a little more direct than indy.  Their technology is about ten years behind the industry.  Considering the availability of fee-based programs at EdJones, their mentality in terms of offering choices to clients is also about ten years behind the rest of the industry.  Their financial planning capabilities are virtually nonexistant.  Their asset allocation software is rudimentary at best, from what I understand.

There are some big producers at Ed Jones.  There are also some good investment advisors at the firm.   I suspect the number of big producers who are also ethical competent advisors is a rather small percentage.Your friend from church could be one of them.  I have no way of knowing.

Let’s say that you had to pick an advisor tonight.  Had to make a decision and sign the paperwork, and you were given a chance to choose from a large pool of candidates.  You were sent to a conference center and in room A there were 10 Ed Jones reps, in room B there were 10 LPL indy reps, and room C there were 10 Wachovia Reps, and in roomd D there were 10 Merrill FC’s.  You would be very well served to continue past room A, and on to any of the other rooms.  Your odds of getting the right advisor for your needs(as opposed to THEIR needs) would be far better.

What we say about Jones as professional advisors amongst ourselves is one thing.  To give advice to someone on the Internet that we don't know anything about is another.   

In reality,we are not supposed to be posting on "chat boards" or other forums. However,as long as we are not giving investment  advice or product information, I assume we are are on safe ground.  We do need to be careful since we know how many trolls (Nasd Newbie et al) seem to want to frequent this board.

Just a paranoid thought for the rest of you guys.

Babs, I hear ya, and I tried to be pretty careful with what I said (no investment advice, etc.).  It sounds like a legitimate question and my goal was simply to encourage this person to carefully consider their decision.  I understand your paranoia, but surely this isn't out of bounds...

[quote=Indyone]

Babs, I hear ya, and I tried to be pretty careful with what I said (no investment advice, etc.).  It sounds like a legitimate question and my goal was simply to encourage this person to carefully consider their decision.  I understand your paranoia, but surely this isn’t out of bounds…

Thanks for the responses and the emails too.

After reading what you have to say about technology could somebody explain why it would matter to me as a client?  I suppose if I was the broker I would want the newest technology but does it really matter from a client's point of view?

I will be seeing Bob at church today.  He will do the same thing he always does, "Hi Mike, anything I can do to help you with your investments?  Be sure to keep me in mind if I can."  I'll tell him that I will.  It is actually pretty soft sell.

One of you mentioned that I should shy away from people with less than six years experience.  That makes sense, but how can I verify how long Bob has been a broker.

Also how can I verify how well his clients are doing?  Do brokers have something like a score card or report card?  If I ask him for references I cannot imagine him giving me names of people who are disappointed in him, so what good is that?

Cut to the point.

Ask him how long.

 This is your future.

Mike-

If I were you, I would be upfront with the church friend and tell him that you are looking around. You need from him at least 3 references from people who have a similar profile/need (i.e. retirement planning, estate planning, college funding etc.) and at least 6 years of experience. Letters after their names helps but it isn't mandatory. I would rather have a positive recommendation from someone who whethered 2000-2003 time frame because it was the worst of times in the last 30 years. To me, that shows the true character of the advisor, if he can have a stable of references after experiencing a market slide. You want the best during the worst case scenario. What you don't want is the advisor that is going to promise you the world and won't return your calls or as in your situation just doesn't do the work, which is contact clients regularly. Also I would ask for a reference from an attorney or accountant.

As to your question why does technology matter? My answer is if you are going into surgery would you want your doctor not to have the best tools available? Same applies to those in this industry. Jones had the technological advantage ten years ago. Today, it is pitiful. Soon they will have the software capability to calculate IRR (internal rate of return). Your friend has to qualify to use it. Clients want to know how did their investments perform during specified periods.

Email is slated to be done by the end of the year. Technology matters to your advisor, and the end results are it will help your advisor meet your goals.

Mike:

IndyOne gave you good advice in my opinion. As far as checking out the church friend, here's an easy way to do it:

http://www.nasd.com

go to "broker check"

Key in Bob's last name, his first name (most likely under Robert), and his current firm (Edward Jones).

What you'll get is a report of how long he's been there along with if he's worked at any other firms. If there have been any issues with him, this is also highlighted but you will have to get the entire report which is available via the NASD.

Doing biz with a friend has its risks and I personally don't think it's wise to mix business with friendship and or family. Your Wachovia broker/advisor should meet with you at least once a year to discuss your needs/concerns. If he/she hasn't or isn't doing that, then it's probably time to move on and find one who will.

Shop around carefully. Ask a lot of questions. Check each broker or advisor who "sounds good" out with the NASD (via broker check) first. If he/she passes that smell test, ask to speak to 3 existing clients who have been clients for 5 plus years. Make sure they're not family or close friends.

Best wishes to you. Remember, "caveat emptor," which means buyer beware.

Mike, I'll give you a couple of examples of technology tools I use in my annual reviews.  One is called performance detail report.  It gives me a summary of total return for the account for any time period I want to measure since the account has been with my current broker/dealer.  It also reports this same return for every investment in the client account, so I can quickly see what investments have performed well and which ones haven't and make adjustments if necessary.

Another program called portfolio review gives me about every measurement imagineable, including asset allocation, sector allocation, estimated income by month, quality of the bond portfolio, position concentrations, and other things that escape my memory at the moment.  As smart as I'd like to think I am, these kinds of reports always seem to show me something that I feel is important.

I can produce any number of these reports in just a few minutes.  If I didn't have tools like this and had to do all of this analysis manually, I think it would be much harder to effectively manage client relationships, particularly when the client numbers become bigger and bigger.  At some point, it becomes impossible to do all the analysis manually, and review quality by necessity slides unless you have good technology tools.

I don't know much about your rep friend at church and admittedly, I've never used his platform technology, but I think the technology tools available to your advisor are also important to you and the quality of the advice you get.  Footsoldier gave you a nice analogy when he referenced a surgeon having the best tools available.  This may not be life and death, but it's nothing to take lightly either.

The broker check function is a very nice tool to see what your prospective advisor has been up to.  A few years back, an advisor came to town passing himself off as a seasoned expert and making a lot of noise trying to move established relationships.  Broker check revealed that he was newly licensed and had worked for Disneyland the year before....  Once that was known locally, his transfer activity slowed down a lot and he ultimately failed and left town.

BTW, I don't like your friend's tactics at church, even if it is a soft sell.  I don't sell at church. Period.  If someone has a question, I give them my office number and tell them to give me a call.  I think it's tacky to solicit investment business at church.  The tackiness is amplified by repeatedly asking for the business.

One last thought and I'll end this post...if you are really struggling with your decision, there's no reason you can't split the portfolio between two advisors and see how each of them performs for you.  This isn't a very efficieny way of managing your retirement portfolio, but if the decision is difficult for you, that may be a way to hedge your best a bit.

Good luck with your search...

Mike,   

Do you feel your church friend is honest and would have your best interest at heart?  Tough question to answer but this is what it really boils down to.

Good luck.

Are those software programs something that can be bought by an investor?



I like your idea of splitting the portfolio among more than one
advisor.  I suppose to be fair they should not have different
objectives.  I think that if you own a lot of different mutual
funds you are probably not benefiting yourself because the managers of
the funds would very likely buy the same things.  At least I think
I read that somewhere.



What do you folks think of taking an investment course at a local
university?  It seems as though they have such courses aimed at
older people who want to become better informed.

No, Mike, I believe that the programs I use are only available on my platform.  Are there similar programs out there that you can buy?  Probably, but I can't imagine them being cheap.  I pay $100/month for the programs I referenced and I consider that a deal.

Yes, you may get some overlap (duplication of effort) by splitting the portfolio and that's one thing I was referring to when I said it wasn't as eficient (the other has to do with better pricing for larger portfolios).

As far as I am concerned, there's nothing wrong with becoming better informed about what's going on with your investments as long as you realize that a class is no substitute for several years of experience in portfolio management.