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Recruiting someone from Jones

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Feb 22, 2010 7:03 pm

Chief, you are right.  But Jones doesn't make excuses for that.  They are good at what they are good at.  They don't claim to be the right firm for mulit-millionaires and institutional money.  They will never try to be that.  Honestly, we compete with banks, solo-indies, Ameriprise, and the lower end of the wirehouse channel.  But I think we compare favorably to all of those in terms of service to the client.

Feb 22, 2010 7:31 pm
chief123:

[quote=Incredible Hulk]Unless you are in a NYC, LA or Chicago I would have to disagree with the HNW comments. Possibly the UHNW folks, but they are so few, it’s kind of a silly comment to make to a 10 year vet. If that broker is worth having at Wells, then he not only has “access” to that crowd, but he damn well better have some on the books.



What do you mean by this?

A. Jones can’t compete in large metro markets(i agree)

B. There are no HNW people in those markets()[/quote]



The OP stated something along the lines of an EDJ broker can’t compete for the HNW clients. I think that is a terribly misinformed statement. If the Jones broker can’t compete for a HNW individual at EDJ, then he won’t be able to at WFC.



You’re highlighted statement, apparently not composed well on my part, was me stating that in smaller markets there are not enough $10M accounts to compete for. I have a number of $1MM+ HHs, but not a single one over $10MM. There are probably a handful of folks in my area with NLIA north of $10MM, but not enough to make me leave EDJ and go to WFC so I can “compete” for that money. In say NYC, there are probably a $hit ton of $10MM HHs. There it might make sense to be able to “compete” for those clients. In Paducah, KY I don’t think that’s a viable argument.
Feb 22, 2010 7:40 pm

On the flip side, in a major metro market, smaller clients (under $1mm) are being ignored, so there is probably a lot more low-hanging fruit for an EDJ guy.  I think you have to decide what kind of client you want and can be supported in your market.  If you only want $1mm+ clients and your market supoprts that, then I agree, EDJ will limit you.  But in that same market, why not go after the $250K-$1mm crowd and rake it in?  EDJ is perfect for that market.  Someone with $500K doesn’t need limited partnerships, hedge funds, and SMA managers.  Someone with $10mm+ does (or could).

Feb 22, 2010 10:25 pm

[quote=Spaceman Spiff] 

Why in the world would anyone from Jones be wanting to talk with someone from AG/Wachovia/Wells if for any other reason than the upfront check?    Is the check the only thing he's going see as a benefit to him?   [/quote]   I always chuckle when Jones people act as if "The Check" has no value or even worse, is some evil being (The Blob, The Thing, The Check!).  It is $$$ and it counts.  It spends just like The Commissions, The Bonus, The LP, The Trip, and The Profit Sharing ("You Get Paid FIVE Ways At Jones...").  Five of those six are taxable (P/S is tax-deferred of course).  If everything else is the same and you also get a big pile of money TODAY, isn't that better/more?
Feb 22, 2010 10:29 pm

[quote=Incredible Hulk] [quote=chief123] [quote=Incredible Hulk]Unless you are in a NYC, LA or Chicago I would have to disagree with the HNW comments. Possibly the UHNW folks, but they are so few, it’s kind of a silly comment to make to a 10 year vet. If that broker is worth having at Wells, then he not only has “access” to that crowd, but he damn well better have some on the books.[/quote]


What do you mean by this?
A. Jones can't compete in large metro markets(i agree)
B. There are no HNW people in those markets()[/quote]

The OP stated something along the lines of an EDJ broker can't compete for the HNW clients. I think that is a terribly misinformed statement. If the Jones broker can't compete for a HNW individual at EDJ, then he won't be able to at WFC.

You're highlighted statement, apparently not composed well on my part, was me stating that in smaller markets there are not enough $10M accounts to compete for. I have a number of $1MM+ HHs, but not a single one over $10MM. There are probably a handful of folks in my area with NLIA north of $10MM, but not enough to make me leave EDJ and go to WFC so I can "compete" for that money. In say NYC, there are probably a $hit ton of $10MM HHs. There it might make sense to be able to "compete" for those clients. In Paducah, KY I don't think that's a viable argument.[/quote] My grandma lives on kentucky lake... nice area...
Feb 22, 2010 10:36 pm

Typically, no it doesn’t.  When I get a check for bonus, LP, profit sharing, or even the trip (which I happily pay the taxes on) it is an immediate bump to my bank account with zero strings attached.  My guess would be that will the vast majority of upfront money there are strings attached.  Some of them production based, some of them time based.  How many times on this forum have we seen postings like “Forgivable Loan…Spent the money” from people who thought they would be incredibly happy with XYX firm, but two years into a 5 year term have spent the money and want to exit?  Dozens? 

  It's a tempting offer to take the money and run.  I'm just saying that money shouldn't be the major impetus for moving firms.  Should it be a consideration?  Absolutely.    As to your last comments about taxes - surely you aren't implying that the upfront checks from transition packages aren't taxable income are you?  If they're not I'm going to make a mint jumping from firm to firm. 
Feb 22, 2010 11:05 pm

I said 5 of 6 for a reason—the five Jones ways + upfront.  Yes, of course it is taxable (as it is “forgiven” each year).  I have heard Jones people say “well, that upfront money is taxable!” as if most of their comp wasn’t.

  You are right--people (including FAs) often do dumb things with large chunks of money.  I suspect we don't hear as much about those who prudently salt the cash away in CDs until their time is up (ie the "loan" is forigven, etc).   If we are in this business to do well by doing good, I think it is silly how often we say "it's not about the money."  Sometimes, it is.  People move from wire to wire ALL the time.  If it were a disaster as often as people sometimes make it out to be, that movement would eventually cease.  Granted the numbers are probably better in the long run to go indy, but some people still like their A-shares-upfront-pop.
Feb 23, 2010 1:07 am

[quote=Spaceman Spiff]Typically, no it doesn’t.  When I get a check for bonus, LP, profit sharing, or even the trip (which I happily pay the taxes on) it is an immediate bump to my bank account with zero strings attached.  My guess would be that will the vast majority of upfront money there are strings attached.  Some of them production based, some of them time based.  How many times on this forum have we seen postings like “Forgivable Loan…Spent the money” from people who thought they would be incredibly happy with XYX firm, but two years into a 5 year term have spent the money and want to exit?  Dozens? 

  It's a tempting offer to take the money and run.  I'm just saying that money shouldn't be the major impetus for moving firms.  Should it be a consideration?  Absolutely.    As to your last comments about taxes - surely you aren't implying that the upfront checks from transition packages aren't taxable income are you?  If they're not I'm going to make a mint jumping from firm to firm.  [/quote]   Isn't LP, Bonuses and Trips based on your production??? So your issue is the these items at Jones are for past performance vs CHECKS are for future performance? Isn't 500K upfront spent or invested wisely better than 10 years of $50K checks(inflation, time value of money etc..)..   PS I like Spiff because he makes rational arguments as opposed to most people who defend EDJ..
Feb 23, 2010 2:30 am

In defense of the “big check”.  Especially lately, it is justifiable, even for those that would have otherwise been happy, in order to recover lost deferred comp, deferred stock awards, all that Merrill stock that tanked, etc.

  Now, some (especially at Merrill) were stupid and put tons of their dough into Merrill stock.  I know one guy that had ALL of his 401K in it.  He lost like $9mm (of the $10mm he had).  That is GONE.  NEVER to be recovered.  It's not a stock that just flexed down then came back.  It simply evaporated and was replaced by equal parts BAC.  Good luck making a 10-bagger on that!   So what did he do?  Went to MSSB (MS at the time) and took a "Big Check".  Didn't replace it ALL.  But it helped.
Feb 23, 2010 3:35 am

[quote=AGEMAN]I have a meeting next week with someone from Jones and was wondering if any former Jones people could give me some insight into things that are lacking there that may be important to point out?

Several things I see: 1.  Lack of access to HNW prospects.  2.  Lack of ability to build an annuitized book as easily as at other firms due to a lack of large fee based platform and their C share policy.   Positives to overcome: 1.  Having an assistant all to yourself. 2.  Good press   Any other points to consider??[/quote]    I wouldn't recommend trying to "point out" things that are ridiculously false.  Unless he/she is a total idiot, they will see right through you.  If they are a total idiot I wouldn't think you would want them.  How will you sell them on: Lack of access to HNW prospects?  Prospects are prospects.  Access=Phone, Face to Face, Seminars, Networking, Referrals, and Marketing.  They will magically get rich CLIENTS by switching?  How is that working out for you?   Lack of ability to Annuitize as easily due to lack of a Large Fee Based Program?  What?  Get real.  So you are saying those HNW prospects become HNW clients because you tell them you have a "Large Fee Based Program"?  Let me guess....They all say, "Well since you have a large fee based platform I will do it.  If you had a medium or even a medium-large fee based program I would have said hell no!" I am over 80% "annuitized".  It was easy.   
Feb 23, 2010 3:40 am

[quote=ytrewq][quote=AGEMAN]I have a meeting next week with someone from Jones and was wondering if any former Jones people could give me some insight into things that are lacking there that may be important to point out?

Several things I see: 1.  Lack of access to HNW prospects.  2.  Lack of ability to build an annuitized book as easily as at other firms due to a lack of large fee based platform and their C share policy.   Positives to overcome: 1.  Having an assistant all to yourself. 2.  Good press   Any other points to consider??[/quote]    I wouldn't recommend trying to "point out" things that are ridiculously false.  Unless he/she is a total idiot, they will see right through you.  If they are a total idiot I wouldn't think you would want them.  How will you sell them on: Lack of access to HNW prospects?  Prospects are prospects.  Access=Phone, Face to Face, Seminars, Networking, Referrals, and Marketing.  They will magically get rich CLIENTS by switching?  How is that working out for you?   Lack of ability to Annuitize as easily due to lack of a Large Fee Based Program?  What?  Get real.  So you are saying those HNW prospects become HNW clients because you tell them you have a "Large Fee Based Program"?  Let me guess....They all say, "Well since you have a large fee based platform I will do it.  If you had a medium or even a medium-large fee based program I would have said hell no!" I am over 80% "annuitized".  It was easy.   [/quote]

If everybody at Jones were like ytrewq, I would have stayed.
Feb 23, 2010 4:17 am

[quote=AGEMAN][quote=BioFreeze] [quote=AGEMAN]I have a meeting next week with someone from Jones and was wondering if any former Jones people could give me some insight into things that are lacking there that may be important to point out?

Several things I see: 1.  Lack of access to HNW prospects.  2.  Lack of ability to build an annuitized book as easily as at other firms due to a lack of large fee based platform and their C share policy.   Positives to overcome: 1.  Having an assistant all to yourself. 2.  Good press   Any other points to consider??[/quote]


Broker fails and becomes a recruiter - happens all the time.
[/quote] I'm not a recruiter FYI.....[/quote]

You guys really like each other, don't ya?
Feb 23, 2010 2:56 pm

[quote=chief123][quote=Spaceman Spiff]Typically, no it doesn’t.  When I get a check for bonus, LP, profit sharing, or even the trip (which I happily pay the taxes on) it is an immediate bump to my bank account with zero strings attached.  My guess would be that will the vast majority of upfront money there are strings attached.  Some of them production based, some of them time based.  How many times on this forum have we seen postings like “Forgivable Loan…Spent the money” from people who thought they would be incredibly happy with XYX firm, but two years into a 5 year term have spent the money and want to exit?  Dozens? 

  It's a tempting offer to take the money and run.  I'm just saying that money shouldn't be the major impetus for moving firms.  Should it be a consideration?  Absolutely.    As to your last comments about taxes - surely you aren't implying that the upfront checks from transition packages aren't taxable income are you?  If they're not I'm going to make a mint jumping from firm to firm.  [/quote]   Isn't LP, Bonuses and Trips based on your production??? So your issue is the these items at Jones are for past performance vs CHECKS are for future performance? Isn't 500K upfront spent or invested wisely better than 10 years of $50K checks(inflation, time value of money etc..)..   PS I like Spiff because he makes rational arguments as opposed to most people who defend EDJ..[/quote]   Yes, I'd rather have $500K right now so I can invest it wisely for the next 10 years rather than $50K a year.  I know what you're saying.  My point was that with Jones once you get the checks, which are past production based, they are yours to spend or save as you choose.  You could get a really big bonus check from Jones today and head out the door to go indy tomorrow with no strings attached.  Not so with the upfront forgivable loans.  You tell me that you'll give me $500K, but if I leave the firm in year 5 I've got to pay back $250K, then I'm going to feel pretty stuck.    The Jones transition package doesn't even come close to comparing to the 100% or more of T12 packages that are out there.  However, it's not a forgivable loan either.  For instance - Let's say you've got $50MM AUM and you bring it all over to Jones (or leave some behind but pick up some new assets to replace what you lost) during the first 6 month bonus period.  Jones will write you a check for $100K, deposit it in your bank account and say job well done.  You could walk the next day and Jones would tell you that you don't have to pay back a dime of that bonus money.  That's what I'm talking about with zero strings attached at Jones.    I don't think the forgivable loans are bad, I just think way to many guys see the big $$'s and jump before they really think about what they're doing. 
Feb 23, 2010 3:00 pm
iceco1d:


I think “lack of access to HNW prospects” was a bad way to put it.  Perhaps it would have been better to say, “access to fewer tools to service HNW prospects.”  And then, talking options, non-traded reits, blah, blah, blah however he wants to spin it.

Now, as for the fee-based program, again the “size” doesn’t matter.  But the breadth, does.  I’m green with envy myself, of the fee-based platforms the wires have.  Take almost any security you want to buy; from CDs, ETFs, Funds, CEFs, UITs, Stocks, Bonds, Options, you name it, and wrap it!  My god, that’s AWESOME. 

Now, if I were recruiting away from a wire, TO EDJ, I’d be talking about no bad news, partnership vs corporation, no one breathing down your neck at the branch, LP, no ticket charges, no minimum household size, trips, etc.

  Someone's been reading our website - www.edwardjonesopportunity.com.   Ice, do I need to send you a recruiting kit?  I need a hire for the next div trip. 
Feb 23, 2010 4:50 pm

But you clicked on it, didn’t you.  It’s OK.  You can admit it.  They’ll forgive you. 

Feb 24, 2010 12:06 am

Moraen.  Thanks for the compliment.  I appreciate it.  IMHO your observations have been fair and balanced.  If I started drinking too much Kool Aid send me a PM and get me back in line.

  Ice.  Forget Spiffs Div Trip category.  I need a Goodknight that will work the accounts I give them.  With your business model I know you aren't afraid of work.  You've got first dibs even though I know I couldn't convince you to come to "the dark side".
Feb 24, 2010 2:59 pm
I think you just described the book I inherited many years ago.    OK, how about this, I get the hire for my trip, but YTREWQ gets the GKN.  He gets the better end of the deal because I just end up having to pay taxes on the trip, but he gets ice to pick up the tab on the lion's share of his office expenses for the next 18 months.   Ice - tell him no deal unless he throws in about $10Mil in Advisory Solutions clients.