Sure.  That is standard in most Bank insurance platforms as well.  The trails and any ongoing commissions from insurance premiums are assigned to the insurance agency.  I image that somewhere in the contract you signed with Jones are similar provisions.

As an independent, I made sure the agencies that I have contracted with do not have that provision.  The up-line from me does still take a small rake off of the commission but my pay out is still 100% to me and not overridden by the B/D.

Even thought they still get the trails, you can have the client sign a letter that they want you to be the servicing agent.  That way the statements will no longer go to Jones or the guy who took over your office. You may not be getting the trails, but your client will perceive YOU as the agent and they will have dropped off of the B/D radar.

Wow, this one is news to me. I never delivered a LTC policy at EJ. I guess now I have been made into a liar when I told clients anything they bought or invested in with me at EJ could be taken to any other firm. This stinks for the big ltc producer gone indy. Better educate the greatest salesforce to not tell their clients the same thing I did for many years.

I had a Hartford Leaders contract purchased 5-6 years ago and was amazed to find out that somehow Jones was named as the owner. In order to transfer to my new b/d, or me to become broker of record, an ownership change had to happen from Jones back to the client. Until I figured it out. I know the contract was qualified so I am betting that's what triggered the unique ownership?

Now I may have done something wrong originally, but is this common where some b/d retain ownership of the contract? Another indy had the same problem, so I am assuming that this was standard at Jones.

Take a stab at who kept the trails when I left?  Curious if anyone else experienced the same.

Yes. Jones is named as the owner on qualified contracts and the client has to request to have ownership transfered back to themselves if/when you leave.  I found this out the hard way when a client I had transfered an IRA VA to Jones and who then followed me when I went independent was no longer the owner of their own annuity contract.  He was pretty irritated to discover that the mere fact of transfering the annuity contract to me when at Jones caused him to lose owership.  Big pain in the butt.

Also. Jones does not keep mutual fund cost basis information that can be transfered to other firms.  All the funds in a family (American, Franklin etc) are held in a bulk holding of Jones as far as the fund families are concerned.  They cannot go back and find out cost basis information of funds at Jones. They have no history.  So......the moral of that story is keep track somehow yourself so if/when you leave Jones you can help your clients with cost basis. 

My former firm kept the cost basis, but refused to provide it to clients…even with a written request from the client.  Nice, huh?

[quote=babbling looney]

Also. Jones does not keep mutual fund cost
basis information that can be transfered to other firms.  All the
funds in a family (American, Franklin etc) are held in a bulk holding
of Jones as far as the fund families are concerned.  They cannot
go back and find out cost basis information of funds at Jones. They
have no history.  So…the moral of that story is keep track
somehow yourself so if/when you leave Jones you can help your clients
with cost basis. 

[quote=Indyone]My former firm kept the cost basis, but refused to provide it to clients…even with a written request from the client.  Nice, huh?[/quote]

Unbelieveable, and certainly not in the clients’ best interest.  One could suggest this is pretty unethical.  I wonder if it would help to drop a dime to the NASD…

Regardless it is petty behavior like that which gives us all a black eye with the public.

[quote=joedabrkr] [quote=Indyone]My former firm kept the cost basis,
but refused to provide it to clients…even with a written request from
the client.  Nice, huh?[/quote]

Unbelieveable,
and certainly not in the clients’ best interest.  One could
suggest this is pretty unethical.  I wonder if it would help to
drop a dime to the NASD…

Regardless it is petty behavior like that which gives us all a black eye with the public.
[/quote]



I agree, if nothing else this firm will create major problems with the
IRS for clients. No way that you can “lose” this information with all
the NASD data retention requirements.

Babs-

Thanks for the confirmation. Cost basis has been a nightmare. I now have clients signing letter requesting their info and then my assistant continues to follow up. Two wI eeks ago we received a letter from Jones refusing to disclose cost basis for a retirement account. They felt it wasn't necessary since any income taken would only be subject to ordinary income taxes not capital gains.

I was amazed when I  read that the greatest company in the world would treat any client, former or current, in this manner. After all doesn't a client have the right to know how much they have paid for their investments, including div's reinvested in any account?

Note. I was in a meeting several years ago in SL when someone asked the multi-millionaire GP MIS director, Rich Malone,  why we didn't participate in the national cost basis ACAT system. He said the assistants at the branches did a better job of keeping track. BS. Again.

OK Spiffy. Tell us why it doesn't matter. Defend your company. We are all waiting.

Is the GP pay(home office GP’s that is)  public info…Like Jim Weddle, John Bachman, and Kevin Alm?

If so where do you find it?

[quote=AllREIT] [quote=babbling looney]

Also. Jones does not keep mutual fund cost basis information that can be transfered to other firms.  All the funds in a family (American, Franklin etc) are held in a bulk holding of Jones as far as the fund families are concerned.  They cannot go back and find out cost basis information of funds at Jones. They have no history.  So......the moral of that story is keep track somehow yourself so if/when you leave Jones you can help your clients with cost basis. 

[/quote]

This seems wierd, how do EDJ clients calculate their schedule D's then?[/quote]

While at Jones the company keeps all that information and the client's get their regular 1099's.  The issue would arise when the clients moved their accounts elsewhere.  Unless they (or I) kept manual records of mutual funds interest and dividends reinvested and additional purchases into the funds, when they transferred out Jones would not give up that information without a fight and the Fund Company didn't have that info either.  The mutual fund companies didn't have record of individual accounts just that there were eventykabilion dollars in Captial Income Builder as a bulk account. 

Actually servicing the customer's account and providing detailed tax information beyond the selling point was not a very big priority in the Jones "playbook".  It was so simplistic.  Here is what you invested  and here is the value today with no breakout of what was reinvested or what what capital growth.

Maybe it is different now, but the biggest nightmare was cost basis on the systematic buying of stocks.  Jones has/had a system where people could buy $100 min a month of a stock for a small fee ($4.00 I think it was?).  The money was pooled among many clients and the stock bought as a block and then distributed to each account.  Actually, pretty nice for the smaller investor to accumulate stock without going directly to a drip program at the transfer agent.

In my practice now, I keep track of all purchases on a spread sheet for each client so that when it comes time to sell, we can decide which shares for them to declare on their tax returns for gains and hopefully not loses .   The cost basis system on the B/D platform also allows us to designate blocks of stock and funds with different cost basis figures.  This really helps me with my larger stock holding accounts with multiple cost figures (some inherited, some bought all at different times.)

OK, I'll bite.  What's up with the personal attack?  I haven't even chimed in yet and you're already dragging me in? 

Actually, as far as the cost basis info goes, I agree with you.  I think it's stupid that info like that doesn't transfer from firm to firm.  Not just from Jones to somewhere else, but everywhere. 

Maybe I'm stepping on a land mine, but I really don't know why you need cost basis on a qualified account.  Amount invested for tracking investment returns I understand, but not cost basis.  I actually called American Funds this morning and asked about a client's IRA held there.  They don't have cost basis for her IRA.  They don't keep it.  They were happy to provide copies of statements so we can build her account history.  Why don't you ask the client to bring in their EDJ statements and you can have your assistant figure it out.  I can't imagine American Funds is the only vendor that doesn't track it.  Why don't you explain to me, no teach me, foot, why you need "cost basis" for an IRA account.   

I don't think the former employer Indyone was talking about is Jones, so it's not just our problem.  

I figured the "Jones Secret" the original poster revealed about the LTC thing was pretty common knowledge.  Guess not.  I love how this place turns an industry practice into a Jones secret in a heartbeat.  

[quote=footsoldier]Babs-

Thanks for the confirmation. Cost basis has been a nightmare. I now have clients signing letter requesting their info and then my assistant continues to follow up. Two wI eeks ago we received a letter from Jones refusing to disclose cost basis for a retirement account. They felt it wasn't necessary since any income taken would only be subject to ordinary income taxes not capital gains.

I was amazed when I  read that the greatest company in the world would treat any client, former or current, in this manner. After all doesn't a client have the right to know how much they have paid for their investments, including div's reinvested in any account?

Note. I was in a meeting several years ago in SL when someone asked the multi-millionaire GP MIS director, Rich Malone,  why we didn't participate in the national cost basis ACAT system. He said the assistants at the branches did a better job of keeping track. BS. Again.

OK Spiffy. Tell us why it doesn't matter. Defend your company. We are all waiting.[/quote]

While not ideal, I didn't spend much time getting cost basis on IRAs.  If it was easy to get, I put it in.  Otherwise, I just use performance reports to evaluate client holdings and report to the client.

It's been some work, but I'm down to just a handful of non-IRA clients that I need to finish up cost basis reconstruction.  After some hard lessons, I make it a priority to have the client get cost basis information prior to the move.  Sure, it usually raises a flag with the current advisor, but it eliminates a lot of headaches going forward.

For the record, I think it's petty, juvenile and ridiculous not to help departing clients transfer cost basis information and LPL makes it very easy for clients transferring out...sending it electronically to those firms which can receive it that way, and giving good information on client statements if they can't receive it electronically.  I never refused anyone who asked asked.  I know of at least one large (7-figure) banking relationship that my former employer is losing as a result of refusal to cooperate...how stupid is that?!!!

Why don't you explain to me, no teach me, foot, why you need "cost basis" for an IRA account

Because inquiring minds want to know?  Seriously the client probably would like to know the breakdown between invested amount, reinvested cap gains and dividends and the actual underlying growth in the account to determine exactly where the growth is coming from.  I would want to know.  Why shouldn't the client have that information available to them?  It isn't just qualified accounts from Jones that lack this information.

Why don't you ask the client to bring in their EDJ statements and you can have your assistant figure it out.

Yeah...that'll be fun.  Let's take 4  to 6 years of statements (if the client still has them) and hand calculate the reinvested dividends and capital gains AND get the purchase price of every systematic investment into the fund or stock.  Very effective use of time.

Of course that is the method to the madness.  Make it so hard and inconvenient for the client to leave Jones, that some will just say never mind and stay put.

As I prepare to move, I’ve changed all client statements to in-depth over that last couple months.  As I’m looking at one it seems to have all the info I need.  Therefore, client brings in most recent statement to my new office and bingo?  Is there anything I’m missing?  With time to prepare it would be great to know ahead.

[quote=babbling looney]

Yes. Jones is named as the owner on qualified contracts and the client has to request to have ownership transfered back to themselves if/when you leave.  I found this out the hard way when a client I had transfered an IRA VA to Jones and who then followed me when I went independent was no longer the owner of their own annuity contract.  He was pretty irritated to discover that the mere fact of transfering the annuity contract to me when at Jones caused him to lose owership.  Big pain in the butt.

[/quote]

Same thing happened to me. We had to have JONES sign the paperwork to bring it to me.  It was a qualified Hartford VA that I bought electronically over the Jones system, and was setup with Jones as the owner/custodian.  Jones eventually signed the forms, but not before we had to get Hartford involved.  They had to call Jones at least twice to see what the holdup was. Yes, big pain in the butt.

It just seems wong to have a B/D be the OWNER of a contract…If I were a client, I’d have a hard time understanding that…heck as an advisor, I have a hard time understanding that…

[quote=Indyone]It just seems wong to have a B/D be the OWNER of a contract…If I were a client, I’d have a hard time understanding that…heck as an advisor, I have a hard time understanding that…[/quote]

The b/d is the “legal owner” as trustee for a qualified plan.  That’s what they’re talking about.  That would be the case at ANY b/d with a contract owned by a trustee in a QP.

Think back to your CFP exam and the definition of a trust and especially a trustee.  Technically the definition of the trustee includes the concept that they take legal title of an asset for benefit of the “beneficiaries”.

aw, JoedaCFP2B…I don’t remember all that crap…you learn it for the exam, then POOF…what you don’t use everyday is gone!  At any rate, thanks for clearing that up…