Jones fee-based platform rumors
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[quote=now_indy]If I was a Jones guy looking to annuitize my business, I would go the UIT route. First Trust has some awesome UITs, with incredible (fairly long term) results. They pay a decent up front (2.25% or less), and then pay 1.3% every 15 months. That's just about 1%/yr on the money. Jones IRs can buy these with no ticket charges, not a bad option in my opinion.[/quote]
Yep. Also, if you really stick to the strategy, you should blow them out after 12 months, and get paid the 2.25 again.
Jones doesn't offer First Trust. Van Kampen is their main source for UIT's.
I have been working with First Trust, and I have been impressed with them. If some of you do have access to them, you owe to yourselves and your clients to check them out.
Supposedly, management at Jones (3Mil Hill) did not want to invite them in. Which is code for, no upfront greenback, no entrance to 10,000 Jones FA's. First Trust was started by a Van Kampen (mutual fund family in the preferred category) family member who supposedly did not care to play with Jones.
[quote=footsoldier]
Jones doesn't offer First Trust. Van Kampen is their main source for UIT's.
I have been working with First Trust, and I have been impressed with them. If some of you do have access to them, you owe to yourselves and your clients to check them out.
Supposedly, management at Jones (3Mil Hill) did not want to invite them in. Which is code for, no upfront greenback, no entrance to 10,000 Jones FA's. First Trust was started by a Van Kampen (mutual fund family in the preferred category) family member who supposedly did not care to play with Jones.
[/quote]
I started using UIT's, exclusively, over 5 years ago. I haven't sold a mutual fund since then. I tell my prospects that the reason that noone's ever shown them UIT"s before is that the commissions suck. NOthing like driving a little wedge between them and their broker.
[quote=footsoldier]
Jones doesn't offer First Trust. Van Kampen is their main source for UIT's.
[/quote]
I bought a couple of First Trust UITs when I was with Jones. I think I just had to put the CUSIP in the buy screen. For you Jones guys, here is their website:
http://www.ftportfolios.com/Retail/dp/home.aspx
Check out the Target UITs (like the double play, and focus four). Remember, they don't pay upfront as well as funds, BUT they pay about 1%/yr in the long run. Having a good chunk of your book in these would be nice.
Thanks for the link the First Trust. I use http://fisbonds.com/FISBonds/PublicSite/index.aspx
for my UIT portfolios. They also have a great selection of individual bonds, convertable, revertables, indexed cds and structured products.
[quote=now_indy][quote=footsoldier]
Jones doesn't offer First Trust. Van Kampen is their main source for UIT's.
[/quote]
I bought a couple of First Trust UITs when I was with Jones. I think I just had to put the CUSIP in the buy screen. For you Jones guys, here is their website:
http://www.ftportfolios.com/Retail/dp/home.aspx
Check out the Target UITs (like the double play, and focus four). Remember, they don't pay upfront as well as funds, BUT they pay about 1%/yr in the long run. Having a good chunk of your book in these would be nice.
[/quote]
Every so often I get interested in UITs, especially since I despise MFs in non-qualified accounts. But the lack of available information always causes me to stay away.
Is there anywhere that one can find historical results from their different strategies? Also do you know of any comparison of UIT return after-tax and expenses compared to mutual funds?
[quote=vagabond]
Every so often I get interested in UITs, especially
since I despise MFs in non-qualified accounts. But the lack of
available information always causes me to stay away.
Is there anywhere that one can find historical results from their different strategies? Also do you know of any comparison of UIT return after-tax and expenses compared to mutual funds?
[/quote]UIT's are basicly little frozen mutual funds with an assured liquidation date. You get paid an upfront commision and then the deferred sales charge over the life the UIT.
There is a big tendancy to put out gimicky UITs.
Some UIT's have fairly long lives others have fairly short lives. There have been some scandals involving unsuitable UITs. Because UIT'
s often have the same total fee's as normal mutual funds but a much shorter life than a permanent A-share.
[quote=AllREIT] [quote=vagabond]
Every so often I get interested in UITs, especially since I despise MFs in non-qualified accounts. But the lack of available information always causes me to stay away.
Is there anywhere that one can find historical results from their different strategies? Also do you know of any comparison of UIT return after-tax and expenses compared to mutual funds?
[/quote]
UIT's are basicly little frozen mutual funds with an assured liquidation date. You get paid an upfront commision and then the deferred sales charge over the life the UIT.
There is a big tendancy to put out gimicky UITs.
Some UIT's have fairly long lives others have fairly short lives. There have been some scandals involving unsuitable UITs. Because UIT'
s often have the same total fee's as normal mutual funds but a much shorter life than a permanent A-share.
[/quote]
This is why it would be nice to be able to track and compare the performance of the strategy that is used (the performance of the actual UIT wouldn't be of of much value because of the unique holding period). You can do this with the UITs that Jackson National uses in their VA, but I have yet to see any performance data on other UITs.
Correct me if I'm wrong, but aren't most of they hypo's I see on Van Kampen and First Trust Portfolios (Some of which can be done at Edward Jones.) Simply backward tested? Meaning they find the best backward model and show this great record but it didn't exist over the time period? Even if they have I would bet there are others that sucked that got cancelled.
Anyway I dipped into them the last couple years and they have significantly underpeformed the mutual funds I use and the overall market. I've quit using them at least for the time being if not permanantly.
[quote=vagabond]
Is there anywhere that one can find historical results from their different strategies?
Try looking on the first trust website. www.ftportfolios.com
[quote=AllREIT]
[quote=vagabond]
Every so often I get interested in UITs, especially
since I despise MFs in non-qualified accounts. But the lack of
available information always causes me to stay away.
Is there anywhere that one can find historical results from their different strategies? Also do you know of any comparison of UIT return after-tax and expenses compared to mutual funds?
[/quote]UIT's are basicly little frozen mutual funds with an assured liquidation date. You get paid an upfront commision and then the deferred sales charge over the life the UIT.
There is a big tendancy to put out gimicky UITs.
Some UIT's have fairly long lives others have fairly short lives. There have been some scandals involving unsuitable UITs. Because UIT'
s often have the same total fee's as normal mutual funds but a much shorter life than a permanent A-share.
[/quote]
Allreit you're a bright guy but in this case you're a little off....
Mutual funds and UIT's do NOT generally have the same fees. Mutual funds and longer-term UIT's generally have about the same total sales charge, but mutual funds also charge annual management and 12b-1 fees. UIT's do not. Generally the admin costs on a longer-term UIT run about 25-30 basis points. As we all know, your typical equity mutual fund used by a financial advisor is going to have an annual expense ratio of around 1 percent, maybe a little higher. Too, mutual funds have trading expenses which are hidden in the net returns, not reported in the annual expense. UIT's do not have any hidden trading expenses.
There are some odd UIT's out there now and then. Then again, what might seem 'gimmicky' to you might be considered unique, special, or attractive to someone else. It's different opinons that make a market, after all.
Yes there have been issues with unsuitable use of UIT's. There have also been problems with unsuitable sales of variable annuities, Equity Index Annuities, penny stocks, internet stocks, aggressive mutual funds, CMO's, and High Yield Bonds, to name a few. Just about any product can be subject to suitabililty issues if not used properly.
This is almost a new topic, but it is a related question. I have been wondering how Jones changed everyone over to FA’s when most don’t have their 66? Plus with the buy and hold strategy that Jones professes wouldn’t the additional fee be counter to the jones philosophy? Finally, I don’t see truly managed accounts with FA discretion as part of the mix, so exactly what are they managing when they are just going to call and sell the client on a new product just like they always have?
new_indy-Jones made everyone get their 66. It was required by a
set date in early 2007. Also, many “old school” reps who had been
there awhile were not happy at all. Not all of them, but many
voiced their concerns quite loudly.
[quote=new_indy]This is almost a new topic, but it is a related
question. I have been wondering how Jones changed everyone over
to FA’s when most don’t have their 66? Plus with the buy and hold
strategy that Jones professes wouldn’t the additional fee be counter to
the jones philosophy? Finally, I don’t see truly managed accounts
with FA discretion as part of the mix, so exactly what are they
managing when they are just going to call and sell the client on a new
product just like they always have? [/quote]
Who knows how the fee platform will play out.
EDJ wraps up centrally done ETF/index portfolios.
EDJ wraps up SMA’s
And yes, fee based is going against the EDJ strategy of selling a few easy to undertand products on a commision basis.