Kool-Aid
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Prime rib for me bozo. If you guys want to contribute to the general knowledge pool please do so, but I am so sick of all the talk about Jones, good or bad. Please move on. Either you like working at Jones, good for you, or you don't and have made a change in career paths, good for others (me).
Why don't you jump into the discussion on GMAC bonds? You must have clients who hold those or who did hold them. I know that they were a very hot commodity at Jones when I was there. How is your firm handling this issue? How are you handling this portolio conundrum? How about the topic of VAs in qualified accounts? How about the use of life insurance to fund non qualified retirement plans? SMA vs wrap programs vs fee for advisory accounts is an interesting topic. How many firms are moving that direction? Which types of clients are suitable for these accounts? How will the increasing regulatory environment affect our jobs?
These are much better topics that beating the dead horse that Jones has become. I'm sure you can come up with one or two of your own.
Have a nice Thanksgiving.
Simply because, The Answer, it was a post stating that people were envious of EDJ.
[quote=babbling looney]
Prime rib for me bozo. If you guys want to contribute to the general knowledge pool please do so, but I am so sick of all the talk about Jones, good or bad. Please move on. Either you like working at Jones, good for you, or you don’t and have made a change in career paths, good for others (me).
Why don’t you jump into the discussion on GMAC bonds? You must have clients who hold those or who did hold them. I know that they were a very hot commodity at Jones when I was there. How is your firm handling this issue? How are you handling this portolio conundrum? How about the topic of VAs in qualified accounts? How about the use of life insurance to fund non qualified retirement plans? SMA vs wrap programs vs fee for advisory accounts is an interesting topic. How many firms are moving that direction? Which types of clients are suitable for these accounts? How will the increasing regulatory environment affect our jobs?
These are much better topics that beating the dead horse that Jones has become. I’m sure you can come up with one or two of your own.
Have a nice Thanksgiving.
[/quote]BL,
1. I don’t have any GMAC bonds on the books. Most of the fixed income portion of my book is in insured muni’s. It’s tough to get any yield on the corporate side unless you venture into high yield which I don’t feel comfortable doing, on an individual basis. Seperate accounts seem a little expensive with yields being so low unless you are willing to cut your fee. Franklin’s Income Fd has done pretty well with a pretty strong management team in place. We stopped buying GMACs for inventory at Jones a year or so before they became junk. General rule we have always used at Jones is no more than 5% of a portfolio in any one individual uninsured /non gov’t backed bond.
2. It’s very hard hard to justify a VA inside qualified accounts. Certainly not for a younger investor who is looking at accumulating for awhile. I can see possibley an older investor looking at the income guarantees and or death benefit but still here it doesn’t happen a whole lot. My business in VAs is almost 95% A share at this time. All supervision of VAs is now under a new seperate Field Service Director at Jones. It is obviously challenging to keep up with all the new living and death benefits of VAs. It seems like we have almost a monthly CE video broadcast on them.
3. I think fee in lieu of commission is dead. Certainly what happened at RJF shows us that it was being abused. SMAs have certainly gained popularity. I belive for the tax consious investor in a high tax bracket they can be a great option. The costs are certainly more transparent and I think that is a good thing. The ability to write off fees outside of a qualified account is a plus. Fees for these accounts need to stay under 2.00% and really under 1.5% for a qualified account for them to be more cost effective than a mutual fund and verses ETFs they are probably not as tax efficient or cost effective but because they are actively managed are more risk averse for the HNW investor. My HNW want to earn a 5% - 6% real rate of return after taxes and inflation. They are more concerned about the down side than making a killing when the market goes up. Mutal Fund wraps for the right investor who does not want to buy and hold a diversified mutual fund portfolio may make sense but certainly will suffer in tax and cost inefficiences. I guess the idea would be to make up for that through timing the market and / or market sectors.
4. As far as Life insurance to fund retirement goes I personally own and old Hartford Stag VUL that I have been overfunding. It serves a dual purpose of life insurance and income for retirement pre 59 1/2 which I hopefully be able to do. I must say it is quite expensive especially in the first 10 years where the costs are higher. Mine is in it’s 12th year now so it’s not as expensive. At Jones we have a LIRP program. (Life Insurance Retirement Program.) I have a couple of executives that have used it, mainly because they came to me with the idea. I have not used it as much outside of that.
5. The regulatory environment will be tougher in the future. No doubt. More and more disclosure. Get used to it, it isn’t going away.
BL, a Thanksgiving present for you.
I hope your prime rib comes out great.
BPD
Mr Big,
What do you get in exchange for he percentage of your commission that Jones keeps?
Ex,
Great question, I’m glad you asked. My pay out last year was around 56%. This includes my net commissions, bonuses, profit sharing and two trips per year. I am on pace to do about 10% better than last year. This does not include earnings on Partnership. (Which by the way over the last 15 years has averaged 22% per year.) Since I have been with Edward Jones there has only been 4 Trimesters where a bonus was not paid.
The 44% that I do not get covers my office staff. I have 2 full time BOAs. Jones pays 100% for one and 75% for the other. This includes salary, benefits and bonuses. One is a partner. They were also trained internally. When I set up my office Jones paid for the build out of it and a few years ago paid for a remodel to be done. I have about 1400 sqare feet with a conference room. Jones covers the lease, office utilities, half the phone, half the postage, half of the yellow page ad, half any marketing events like open houses, client appreciation events, seminars, etc. They pay for AND coordinate all my various insurance and securities licenses each year. They provide live CE Videos that I bring in CPAs and Attorneys to 6 times a year. (This by the way is with out a doubt the best source of new business that I have.) Jones has various training courses I can attend out in the field and at the home office. (I’m not talking about Mutual Fund due diligence trips.) This summer we went on a Mediterenean Cruise with my family of five paid by Jones. I had to pay for my youngest child’s air fare. Next summer we are going on an African Safari. (Just the wife and I, no kids.) Over 55% of the sales force earned trips last Diversification Program period. Jones covers all of the computers, faxes and printers in the office. They supply paper, toner and repair when necessary. I do not have to pay extra for a Quotes system or internet service. Yes, I have jones supplied email. (I know hard to believe.) You would also be surpised with all the new technology Jones is rolling out early next year including a new and improved portfolio analysis system and drum roll please…financial planning software. I do not have ticket charges and can buy VAs electronically through the system. (Not many firms have the ability to do this.) I do not have to buy E & O insurance.
I have several friends that work in the industry at various different firms: LPL, ML, RJF. My buddy at LPL says his net, net is between 62% - 68%. He does around $750 gross per year. I have two buddies at ML that are $Million Dollar producers that have a total payout close to 60%. We meet often and would you believe it, each one of us thinks that we are at the best firm or in the best situation. The bottom line is we are in a great industry and there are many great firms out there. And the more people we help reach their financial goals the quicker we will reach ours.
Happy Thanksgiving!
BPD
[quote=exdrone]
[quote=bengal]What has been the experience of Jones brokers leaving and being cleared to join the new firm? Does Jones hold them up, for example, taking inventory of the leased office to make sure all the Jones equipment, furniture, etc. is there and in good shape before giving an OK to the new firm? Please advise. Thanks. [/quote]
It has been a while now, but Jones used to send out an all wire whenever there was an open office in our state along with the assets in the branch. They stopped doing this about a year before I left. I assume it was for obvious reasons that they stopped.....to save paper.
Anyone know if they are back to posting open offices?
[/quote]
What is an "all wire along with the assets in the branch"?
[quote=BigPayDay] [quote=babbling looney]
Prime rib for me bozo. If you guys want to contribute to the general knowledge pool please do so, but I am so sick of all the talk about Jones, good or bad. Please move on. Either you like working at Jones, good for you, or you don't and have made a change in career paths, good for others (me).
Why don't you jump into the discussion on GMAC bonds? You must have clients who hold those or who did hold them. I know that they were a very hot commodity at Jones when I was there. How is your firm handling this issue? How are you handling this portolio conundrum? How about the topic of VAs in qualified accounts? How about the use of life insurance to fund non qualified retirement plans? SMA vs wrap programs vs fee for advisory accounts is an interesting topic. How many firms are moving that direction? Which types of clients are suitable for these accounts? How will the increasing regulatory environment affect our jobs?
These are much better topics that beating the dead horse that Jones has become. I'm sure you can come up with one or two of your own.
Have a nice Thanksgiving.
[/quote]BL,
1. I don't have any GMAC bonds on the books. Most of the fixed income portion of my book is in insured muni's. It's tough to get any yield on the corporate side unless you venture into high yield which I don't feel comfortable doing, on an individual basis. Seperate accounts seem a little expensive with yields being so low unless you are willing to cut your fee. Franklin's Income Fd has done pretty well with a pretty strong management team in place. We stopped buying GMACs for inventory at Jones a year or so before they became junk. General rule we have always used at Jones is no more than 5% of a portfolio in any one individual uninsured /non gov't backed bond.
2. It's very hard hard to justify a VA inside qualified accounts. Certainly not for a younger investor who is looking at accumulating for awhile. I can see possibley an older investor looking at the income guarantees and or death benefit but still here it doesn't happen a whole lot. My business in VAs is almost 95% A share at this time. All supervision of VAs is now under a new seperate Field Service Director at Jones. It is obviously challenging to keep up with all the new living and death benefits of VAs. It seems like we have almost a monthly CE video broadcast on them.
3. I think fee in lieu of commission is dead. Certainly what happened at RJF shows us that it was being abused. SMAs have certainly gained popularity. I belive for the tax consious investor in a high tax bracket they can be a great option. The costs are certainly more transparent and I think that is a good thing. The ability to write off fees outside of a qualified account is a plus. Fees for these accounts need to stay under 2.00% and really under 1.5% for a qualified account for them to be more cost effective than a mutual fund and verses ETFs they are probably not as tax efficient or cost effective but because they are actively managed are more risk averse for the HNW investor. My HNW want to earn a 5% - 6% real rate of return after taxes and inflation. They are more concerned about the down side than making a killing when the market goes up. Mutal Fund wraps for the right investor who does not want to buy and hold a diversified mutual fund portfolio may make sense but certainly will suffer in tax and cost inefficiences. I guess the idea would be to make up for that through timing the market and / or market sectors.
4. As far as Life insurance to fund retirement goes I personally own and old Hartford Stag VUL that I have been overfunding. It serves a dual purpose of life insurance and income for retirement pre 59 1/2 which I hopefully be able to do. I must say it is quite expensive especially in the first 10 years where the costs are higher. Mine is in it's 12th year now so it's not as expensive. At Jones we have a LIRP program. (Life Insurance Retirement Program.) I have a couple of executives that have used it, mainly because they came to me with the idea. I have not used it as much outside of that.
5. The regulatory environment will be tougher in the future. No doubt. More and more disclosure. Get used to it, it isn't going away.
BL, a Thanksgiving present for you.
I hope your prime rib comes out great.
BPD [/quote]
Since GMACs were brought up, hows about those SelectNotes? I’d like to hear how that one is explained to our EJ customers.
JoeDog
[quote=BigPayDay]Ex,
Great question, I'm glad you asked. My pay out last year was around 56%. This includes my net commissions, bonuses, profit sharing and two trips per year. I am on pace to do about 10% better than last year. This does not include earnings on Partnership. (Which by the way over the last 15 years has averaged 22% per year.) Since I have been with Edward Jones there has only been 4 Trimesters where a bonus was not paid.
The 44% that I do not get covers my office staff. I have 2 full time BOAs. Jones pays 100% for one and 75% for the other. This includes salary, benefits and bonuses. One is a partner. They were also trained internally. When I set up my office Jones paid for the build out of it and a few years ago paid for a remodel to be done. I have about 1400 sqare feet with a conference room. Jones covers the lease, office utilities, half the phone, half the postage, half of the yellow page ad, half any marketing events like open houses, client appreciation events, seminars, etc. They pay for AND coordinate all my various insurance and securities licenses each year. They provide live CE Videos that I bring in CPAs and Attorneys to 6 times a year. (This by the way is with out a doubt the best source of new business that I have.) Jones has various training courses I can attend out in the field and at the home office. (I'm not talking about Mutual Fund due diligence trips.) This summer we went on a Mediterenean Cruise with my family of five paid by Jones. I had to pay for my youngest child's air fare. Next summer we are going on an African Safari. (Just the wife and I, no kids.) Over 55% of the sales force earned trips last Diversification Program period. Jones covers all of the computers, faxes and printers in the office. They supply paper, toner and repair when necessary. I do not have to pay extra for a Quotes system or internet service. Yes, I have jones supplied email. (I know hard to believe.) You would also be surpised with all the new technology Jones is rolling out early next year including a new and improved portfolio analysis system and drum roll please......financial planning software. I do not have ticket charges and can buy VAs electronically through the system. (Not many firms have the ability to do this.) I do not have to buy E & O insurance.
I have several friends that work in the industry at various different firms: LPL, ML, RJF. My buddy at LPL says his net, net is between 62% - 68%. He does around $750 gross per year. I have two buddies at ML that are $Million Dollar producers that have a total payout close to 60%. We meet often and would you believe it, each one of us thinks that we are at the best firm or in the best situation. The bottom line is we are in a great industry and there are many great firms out there. And the more people we help reach their financial goals the quicker we will reach ours.
Happy Thanksgiving!
BPD[/quote]
Thanks for the detailed response. No doubt when you include all the comp angles avail at Jones,(trips, bonus, profit sharing) the "payout" looks competative. Where this arguement breaks down is that you are comparing non cash incentives(trips) and money paid at the discretion of the Jones(bonus and ps)to cold hard cash. When the bonus bracket is high, as it appears to be now the numbers look competetive. When the bonus bracket is lower or nonexistant the payout stinks. And this has nothing to do with how hard you work, and how well the business you built is doing.
The independant route is the logical extension of the entrepeneurial spirit Jones sold to everyone who started there.
joedabroker,
An "all wire" is EDJ's form of internal email. The "wire" is the email, and the "all" part means that it goes out to all branches in a designated area.
translation: an email went out to the branches in the area, with total number of assets in the open branch
[quote=exEJIR]
joedabroker,
An "all wire" is EDJ's form of internal email. The "wire" is the email, and the "all" part means that it goes out to all branches in a designated area.
translation: an email went out to the branches in the area, with total number of assets in the open branch
[/quote]
Why would they do that? To open the branch up to someone else who might want to take it?
Joe D good comments, it's easy to mix it all in to say it's close; What is forgotten is the friend at LPL actually has the ability to control his costs and net unlike he does at Jones or Merrill. As I mentioned on another post too - your payout is of what? Jones and other WH b/ds double dip and the true payout is never really understood. Beyond that, being indy is so much more than just payouts; freedom, choice, ownership, flexibility, v being controlled, constraints, limits.... hmmmm!!!!!
Like I asked earlier, if it's all the same, why in the heck would you allow somebody else who doesn't know what is and isn't important to your business make decisions that affect it? Why let somebody else control your margins instead of controlling them yourself? Why give up $.60 or more for every dollar you earn to get the same thing I get at $.10 on that same dollar? If it's all the same the better proposition sounds like the latter to me!
[quote=csmelnix]
Beyond that, being indy is so much more than just payouts; freedom, choice, ownership, flexibility, v being controlled, constraints, limits.... hmmmm!!!!!
Like I asked earlier, if it's all the same, why in the heck would you allow somebody else who doesn't know what is and isn't important to your business make decisions that affect it? Why let somebody else control your margins instead of controlling them yourself? Why give up $.60 or more for every dollar you earn to get the same thing I get at $.10 on that same dollar? If it's all the same the better proposition sounds like the latter to me!
[/quote]
Exactly! Jones limits prduct offerings to a rediculous level. I'm not just talking about fund families but the funds within them as well, and only a handful of stripped down annuities. Many firms do exhaustive due diligence and still come up with product offerings that are miles beyond the limited selection at Jones. Who do you ultimately trust with your clients money, Jones or yourself? If you think anyone other than yourself is in the best position to decide what is best for your client, you should find a new profession. More products = more tools to serve clients and that is better for everyone.
exdrone- I have never been told that i couldn’t purchase a load mutual fund for a client whether it was “preferred” or not. I do a lot of business on the fund side outside the “preferred”, I have never heard a peep out of anyone. Maybe your observation holds water on the VA side but certainly is not accurate on the MF side.
[quote=noggin]exdrone- I have never been told that i couldn't purchase a load mutual fund for a client whether it was "preferred" or not. I do a lot of business on the fund side outside the "preferred", I have never heard a peep out of anyone. Maybe your observation holds water on the VA side but certainly is not accurate on the MF side. [/quote]
Noggin,
When you get to your office in the morning enter a buy order for HFLAX in your own acct. Tell me what happens.
Are you equally compensated for selling outside preferreds - equally in the compensation structure BPD illustrates? SIMPLY NO - that's really the key point; what about the other questions I raised too, how do you address them?
[quote=BigPayDay]Ex,
Great question, I'm glad you asked. My pay out last year was around 56%. This includes my net commissions, bonuses, profit sharing and two trips per year.
BPD[/quote]
You wrote such a nice, reasoned response that it sort of takes the fun out of jerking the chain. But since you were reasonable, tell me, do you really think it's professional for a brokerage firm to have contests (even if they're called "programs") for trips? It sounds like the old Dean Witter stuff to me. So pre-Spitzer...
Also, when you take these trips, since you're surrounded by other Jones reps, could you really call it the same sort of experience that you'd have if you took your family on your own dime?
Mikeb I have to respond having recently left Ej the trips are phenomenal. The reason they are great is because they are organized for you and all you have to do is sign-up for them at destinations you may not take the time to find or think about. As to whether it is professional ask a EJ “rep” in a small town if they talk openly about the trips, many are embarrassed of their extravagant ilk. This may tell you if it truly passes the mom test. That said, I enjoyed them and my family did our own thing most of the time.