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Jones To Decrease Payout to Financial Advisors

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Nov 27, 2007 7:32 pm

All kidding aside, I doubt management is so dumb that they would cut payouts.  I just don’t think they will be that short sighted and or stupid.  It would be right up there with the Wall Street Journal ad.  (FYI Spiffy actually penned that little article)

Nov 27, 2007 7:46 pm

You would think so–but in the last year they have raised minimums from 14k a month to 18k a month–going to fee based in the next year (Not because it is in the client’s best interest but because they are looking for a way to be paid to issue money out to the baby boomers – their words).  Next will be a consolidation of offices in cities and towns.  Not all of these are bad–but cutting commissions to 30% from 40%–stop paying the LPL recruiters 10k for each one–they will be contacting LPL directly themselves.

Nov 27, 2007 8:11 pm

…and I was hoping they were going to tell us that the overtime lawsuits had forced them to begin paying us some sort of minimum salary!

  DANG IT!
Nov 27, 2007 8:32 pm

[quote=Borker Boy]…and I was hoping they were going to tell us that the overtime lawsuits had forced them to begin paying us some sort of minimum salary!

  DANG IT![/quote]   Speaking of that has anyone heard when or even IF those will be paid out? It was big talk but I haven't heard anything about it, nor has it been published.   I was back home over the holiday and ran into the local Jones guy or should I say ex-Jones guy. He switched to LPL 6 months ago and has never been happier. Says he wished he did it 5 years ago. He made it sound like Jones is in a tailspin....is it really that bad?
Nov 27, 2007 9:05 pm

Well…the Jones guys would answer the tailspin question, but they can’t get Jim away from the mirror…

    Hill -"Jim, get the hell away from the mirror and get over here.  We need for you to come up with some bullshit positive spin to the cutbacks"     Jim -"Don't bother me now, I just put some new mouse in my hair, and it won't stay in control.  Can we just push the old Irish guy..whats his name.....and have him talk about how good George Putnam Fund is...and how great our partners are...    Hill- "He won't sober up...so its up to you Jimmy boy.  Its why you get the big bucks. Now don't "F" it up or I'll shoot your ass full of holes.  The company depends on it."   Jim-"Okay..Okay..can I get a shirley temple before I go on air?"  "You know all the Reps just love me"
Nov 27, 2007 10:13 pm

Seems that Jones GP’s have been having it both ways (benefits of employees and making them pay expenses/mistakes) and can’t continue the stream of income under their current structure. SSB did the same, and made the less producing brokers pay the brunt of the cost. I would expect the same from Jones.

If they don't change someone will sue again for overtime and win. And that's got to frustrate them big time. But they'll just take it from the troops on the frontline and keep the kumbayah rollin. Spiff...hearing anything from the inside?
Nov 27, 2007 10:14 pm

[quote=bspears]Well…the Jones guys would answer the tailspin question, but they can’t get Jim away from the mirror…

    Hill -"Jim, get the hell away from the mirror and get over here.  We need for you to come up with some bullshit positive spin to the cutbacks"     Jim -"Don't bother me now, I just put some new mouse in my hair, and it won't stay in control.  Can we just push the old Irish guy..whats his name.....and have him talk about how good George Putnam Fund is...and how great our partners are...    Hill- "He won't sober up...so its up to you Jimmy boy.  Its why you get the big bucks. Now don't "F" it up or I'll shoot your ass full of holes.  The company depends on it."   Jim-"Okay..Okay..can I get a shirley temple before I go on air?"  "You know all the Reps just love me"[/quote]   Dude, you are strange.
Nov 27, 2007 10:20 pm

Not strange…but funny, very funny.  Not sure how long you’ve been with Jones, but all I ever remember of Fess S is his George Putnam fund spew…all the time. He’s a pretty funny guy, but not sure I’d have him manage a CD ladder.

Nov 27, 2007 11:16 pm

I don’t think there is a timeframe or a dollar amount per FA on the overtime settlement yet.  At least nothing that has hit our system. 

  Jones is not in a tailspin.  There have been several lawsuits that have been settled recently, but that money came out of a fund set up specifically for that purpose.  While it probably did affect the bottom line to some extent, it did not put the company into a tailspin.  The former FA you spoke with is just plain incorrect.    I don't just say that as a kool aid drinker, but with some facts to back it up.  If a company starts struggling they start to look at options to save money.  Jones doesn't do layoffs, but they will do home office hiring freezes.  That's not happening.  They would look at cutting benefits like profit sharing.  That's not happening either.  LP  and GP returns would be going down or they would only be receiving the guaranteed minimum.  I'm sure GP earnings were something above 70%, that's just a pure guess.  LP earnings were something like 25% when I got the 3rd quarter LP letter.  They would stop spending money on trips.  Yes, they changed the qualifications, but not enough to matter to many people.    From a profit standpoint net revenues were up 20% year over year at the end of the third quarter and net income before unusual items was up 49%.    If you folks want to call that a tailspin, so be it.          
Nov 27, 2007 11:26 pm

[quote=footsoldier]Seems that Jones GP’s have been having it both ways (benefits of employees and making them pay expenses/mistakes) and can’t continue the stream of income under their current structure. SSB did the same, and made the less producing brokers pay the brunt of the cost. I would expect the same from Jones.

If they don't change someone will sue again for overtime and win. And that's got to frustrate them big time. But they'll just take it from the troops on the frontline and keep the kumbayah rollin. Spiff...hearing anything from the inside?[/quote]   Lower producing brokers will always pay the brunt of the cost.  That's why they don't get profitability bonuses.  I've also heard it said, on this board, that GPs like those brokers who are profitable, but not bonusable.  That way they get max $$ coming into the firm, but nothing leaving.  Not a bad gig.  If you factor in profitability bonuses, larger producing FAs get a higher payout than lower producing FAs.    I believe they are going to have to make changes regarding the overtime issues.  Maybe they will stop making me pay for postage and the phone.  Who knows.  That's all nickel and dime stuff in the big picture.  Cutting payout to 30% without some sort of corresponding boost from somewhere else would be catastropic to Jones.  Way more stupid than the WSJ article (that I had nothing to do with).  I told my BOA today that if they announce that they are going to reduce my income by 25% I'll be either heading back to the home office or going indy.  We'll have to see what happens.  Hey spears, want to share rent?
Nov 27, 2007 11:32 pm

Spiff,

Just curious what changes were made to the trip qualifications?  Was it an extra category or just gross production?  It used to be $107,500 every 6 month trip, what is it now?
Nov 28, 2007 12:39 am

Spaceman,

the truce is still on, but it is hard for anyone who works there to see the situation objectively.   It might be a recoverable tail spin, but to force a paycut on the company's  "only profit center" is a logical move of a company that is in trouble.  Look at the financial sector as a whole.  I wouldn't doubt it if there are a few more consolidation mergers in the near future.
Nov 28, 2007 1:10 am

So you are saying if you make a mistake at EJ you dont pay for it now?

Nov 28, 2007 1:19 am

[quote=Spaceman Spiff][quote=footsoldier]Seems that Jones GP’s have been having it both ways (benefits of employees and making them pay expenses/mistakes) and can’t continue the stream of income under their current structure. SSB did the same, and made the less producing brokers pay the brunt of the cost. I would expect the same from Jones.

If they don't change someone will sue again for overtime and win. And that's got to frustrate them big time. But they'll just take it from the troops on the frontline and keep the kumbayah rollin. Spiff...hearing anything from the inside?[/quote]   Lower producing brokers will always pay the brunt of the cost.  That's why they don't get profitability bonuses.  I've also heard it said, on this board, that GPs like those brokers who are profitable, but not bonusable.  That way they get max $$ coming into the firm, but nothing leaving.  Not a bad gig.  If you factor in profitability bonuses, larger producing FAs get a higher payout than lower producing FAs.    I believe they are going to have to make changes regarding the overtime issues.  Maybe they will stop making me pay for postage and the phone.  Who knows.  That's all nickel and dime stuff in the big picture.  Cutting payout to 30% without some sort of corresponding boost from somewhere else would be catastropic to Jones.  Way more stupid than the WSJ article (that I had nothing to do with).  I told my BOA today that if they announce that they are going to reduce my income by 25% I'll be either heading back to the home office or going indy.  We'll have to see what happens.  Hey spears, want to share rent?[/quote]

You would room with sourpuss spears?
Nov 28, 2007 4:26 am

They are going to drive out the 10 yr. guy doing 250k. This person should already be considering independent.

My bet is 300k and up differnce is nominal.
Nov 28, 2007 4:46 am

[quote=advisor28]Spiff,

Just curious what changes were made to the trip qualifications?  Was it an extra category or just gross production?  It used to be $107,500 every 6 month trip, what is it now?[/quote] It is now 108,000 but you have to be averaging at least 18K to sign up for the trip. That is the yellow line now if you are out past 4 years. Hope that helps.
Nov 28, 2007 2:46 pm

Spiff, if Miss Jones doesn’t take the rent offer, then sure…no problem.  I’m not a sourpuss, just love to have a little fun every now and then.  Just like the couple who transferred 360k yesterday…“Jones is a joke”…with the referrence to the turnover in my old office.  Their words…not mine.(this time)  

  I do have some caution criticizing the rumored pay cut.  So far LPL has done a lot of good things, but who knows if someone comes in and buys them out.  Things can change on a dime in this industry...look at E-trade.  Also, LPL still has backoffice problems.  Long wait times, things slipping through the crack.  Nothing my client sees, but something I'm definately aware of.  So maybe today Weddle announces a 25% pay raise and not a cut. 
Nov 28, 2007 4:50 pm
bspears:

Not strange…but funny, very funny.  Not sure how long you’ve been with Jones, but all I ever remember of Fess S is his George Putnam fund spew…all the time. He’s a pretty funny guy, but not sure I’d have him manage a CD ladder.

  Yes, Fes is one of the funniest guys I have met.  I would assume he was more put together in front of clients.  He built a pretty big business.
Nov 28, 2007 5:31 pm
spikedkoolaid:

In response the pending litigation on overtime abuses Edward Jones has had to revamp their compensation policies.  Word is that the 40% is going to 30%!  Any Word?

  Wrong again.  No change in commisions.
Nov 28, 2007 5:36 pm

I know you guys had high hopes for bad news coming out of the home office, but it was...get this...GOOD NEWS!!