I have looked for this topic, but I can not find it. After well over 10+ years with EJ, I have come to the conclusion that it is time for me to move on. The advisory program for me is disappointing. I don’t want to bash them, I just need to go in a different direction.
I have contacted both LPL and RJ, they obviously want me to go see them, and maybe I will, but I am curious
what you see as the difference between the two firms? Most of you have much more experience with them than I. LPL has allowed me to sign on their advisor web site, ir appears to have more depth of product and services than RJ , but I would like your input as RJ seems to be a very fine firm. What is the difference in payouts ? I haven’t seen the word ticket charges in a while, how much does this cost you each month?
If you were in my shoes what should I be looking for?
I am a few months into my due diligence with both of these companies and feel like I understand both very well at this point. They are both wonderful companies, neither would be a mistake. I am also currently with EJ and want to build a fee based business but our platforms are not anything close to our competitors. RJ and LPL are two top indies. I have found a few pros and cons with both, but nothing major. LPL has slightly better technology and a little higher total payout. RJ has better name recognition and higher average FA production (LPL hires almost any production level and RJFS has a $250k minimum). Both have great platforms and back office support (don’t believe the myths that come from wirehouses!). Both put their main focus on their clients, the advisor. EJ is a great company, none better for a newer advisor to start building a business. Veteran FA’s, however, are frustrated because we feel like we are still in preschool. The emphasis on recruiting and growth completely overshadow the emphasis on advisor support, research, technology, platform, etc. I am also a little tired of management taking all of the credit for our client satisfaction and competing for ownership of the client relationship. Good luck with your due diligence. Please share any additional insight that you may find.
advisor5, I started an extensive thread on this very subject over three years ago…I’ll see if I can find it and bump it back to the top. In the end, either firm will serve you well, although one will screw you on annuity commissions like Jones does. I’ll leave it to you to figure out which one that is…
[quote=FA17]I am a few months into my due diligence with both of these companies and feel like I understand both very well at this point. They are both wonderful companies, neither would be a mistake. I am also currently with EJ and want to build a fee based business but our platforms are not anything close to our competitors. RJ and LPL are two top indies. I have found a few pros and cons with both, but nothing major. LPL has slightly better technology and a little higher total payout. RJ has better name recognition and higher average FA production (LPL hires almost any production level and RJFS has a $250k minimum). Both have great platforms and back office support (don’t believe the myths that come from wirehouses!). [/quote]
A few quick thoughts for you FA17.
I agree LPL and RJ are two top indies, and are both generally strong firms that many would be/are happy with. But as ice mentioned, they are not the only options, and you might want to open your eyes to possibilities beyond simply the biggest or most well known two. If you don’t you at least are looking at two firms that would both represent a huge improvement over what you have known so far.
Name recognition (RJ vs. LPL) is also of questionable value for independents, as most choose to brand and sell THEIR firm (e.g. ABC Financial), not the B/D. That wasn’t an option with EDJ, but it will be if you go independent. Don’t weigh the name recognition issue too heavily.
Average FA production is pretty much a meaningless statistic. Who really cares what that is if the b/d provides the platform, service and support you want? If this is important to you there are many other firms you should be focused on. Don’t over-think this.
I left EDJ two years ago. I chose LPL because I felt they had less potential for conflicts. RJ has multiple channels of distribution.The reality is if you are a VA producer, LPL has the advantage. If you are a fee based advisor, I imagine its a tossup. But I have only worked for LPL. I will say that I have never been impressed with LPL's support. They have grown too fast to support the reps, buy aspirin for the headaches you will have in the future from shaking your head thousands of times in disgust! But according to those that know, our wholesalers, LPL is considered one of the best firms for independents.
FA17 well stated with appropriate respect to EDJ. Contrary to the general tenor of most EDJ bashing here, nobody has made me do anything like sell 30y bonds but thats about all I see in my muni inventory at any time. In searching for short-intermediate munis, after I bang my head on my desk a couple times I’ll call an ex-EDJ buddy at LPL and I’m so amazed at the number of chocies he has. Say he narrows his offerings to 10y or less, AA or better, quantity from $50k or more and he comes up with some 1200 offerings yet I have somehere between ZERO (usually) and three. Man do they successfully market from StL to the lemmings that “We have the best inventory and best pricing yada yada.” WRONG!Jones has DUMBED DOWN the workforce to a cookie cutter approach that any lowest common denominator 23 year old can hop out of college and do. For many veterans, this represents absolute regression awy from the good old days when you could... i.e. have your own seminar invitation or letter compliance approved etc etc etc. Another nail in the EDJ coffin for me was the recent 5 year plan where they state We MUST grow to 17,500 FAs by 2012. Oh, we must, huh? WHY? Read every word searching for the answer to why and you'll find circuitous logic of "We must grow so we can grow". Two important questions I constantly ask myself about EDJs growth and desire to literally conquer the globe (losing money after 15 years in Canada, 10 years in the UK etc etc etc) 1) HOW DOES THIS GROWTH BENEFIT MY LOCAL CLIENT ? 2) HOW DOES THIS HELP ME HELP MY CLIENT? ANSWER: It doesn't, and it doesn't. Furthermore, with regards to helping me help my client I believe it detracts from that. So that's my rant and here's my question... I'm outtahere too but seems like such a crappy time to move. I'd rather move when my clients aren't (legitimately and rightfully) freaked out about the markets and their investments. How soon will you move and what will you wait for? I've waited this long (wayyyyyyy too long. I'll be breaking my leg kicking myself in the butt that I didn't do this years ago!) so in the near future I'll be more on top of my relationships having come through or out of this present financial mess. WHAT ARE YOUR THOUGHTS ON TIMING AN IMMINENT MOVE TO INDY?
SmanFan, as I see it, the best time to make a change is when you have YOUR clients best interests in mind. Are the platforms, product choices, technology and support of another company an advantage to your clients? If so, I would think that any time is the best time to make a change because you are changing to better serve your clients needs. If I had the abilities that some of our competitors have, I would be working for my clients in this difficult market, rather than just restating the tiring Jones rhetoric. If you see no value to your clients in a move now, wait until you do. Good post!
Supermanfan,If you need more short or mid-term muni's, call the bond desk and have them send you a list that's available out there for them to grab. I've done this a dozen times, and they will get the same bonds your buddy sees on his inventory screen. Second, If you don't feel like you need to help grow the firm, don't help. There's nothing that says you MUST help. As for Jones dumbing down the workforce, I have found throughout the years that the more exotic the investment, the poorer the long term outcome. As for compliance approval, I also used to do my own invitations in the past, but now they require more streamlined invitations. This is because the industry as a whole is streamlining because of outside pressures, not just Jones. There is nothing wrong with leaving Jones. In many cases people should leave. But I'm trying to understand your issues, and it seems your opinions were formed from a lack of knowledge, not legitimate gripes. Advisor5, I have a couple issues with the advisory solutions platform, but I'm curious as to what your disappointments are?
1. For one it is nothing more than static asset allocation, not active.
2. Per the department there "will be much less rebalancing than the sales force thinks"
3. I just want a more open platform for my clients and move to a fee based business model, this is not going to do it for me. Heck, I am still amazed we don’t have Monte Carlo simulations at this point in time with Sunguard. How many years has it been?
As was stated above, it’s a great firm, especially if your new , but I too feel like I’m spoken to at a pre-school level. I have definitely had my eyes opened in looking at others research and market commentary throughout this time period.If anything its reinforced what I secretly always thought. We are more concerned about building more offices, than “really managing peoples money”. That’s fine, its just not helping my clients enough at this point, or I guess “their clients” now.
rankstocks, I know where your coming from, I’ve said much of the same for many years, but as one vet told me last week, “I’m not even sure I’m buying what I’m saying any more.” That kinda sums it up for me too.
I found it interesting that Weddle said the firm retains 60% of assets when an FA leaves. Have any of you found this to be remotely true? When you did leave what surprised you , both positively and negatively ?
Thanks for the feedback.
Regarding the statement from the vet about him not buying what he's saying anymore, where does personal liability factor in for us?I ask because I had a client call me in March and say that she was tired of her Lehman bond fluctuating in value so much and thought she should sell it. I gave her the company line about how we buy bonds for "consistent income" and that unless she needed the money, I'd recommend we hold it until maturity--which was supposed to be 08/2009. You all know how the story ends, and you can imagine how upset she was with me when I called to tell her she would no longer receive interest payments and probably not receive much, if any, of her principal back. Anyone else have a similar story? I realize clients have agreed to arbitration in lieu of lawsuits when opening an account, but are we sticking our necks out too far?
Don't dwell on it. If you placed less than 10% of investable networth in Lehman Bond, explained it was not insured and kept good contacts notes, you'll be okay. Ask EDJ's for any research paperwork on Lehman, from that time frame, to see what was being said by your employer to counter her wanting out of the bond.Did you file or notify EDJ's on this compaint?
Last time I checked, a client being upset isn’t a complaint.If it were, I'd currently have 400+ complaints to report.
Quick summary...I left EJ to go to RJ about 3 years ago. My take on it is that at LPL you are more "on your own" than RJ, but with RJ, you can be as on your own as you want to be to an extent. I would think RJ is a better fit if you like the EJ comfort, but just want more flexibility. If you want to create a whole new paradigm, then LPL may be a better fit.
For what it's worth, I end up with about 73% from RJ, mostly on advisory and trail business. The expense is in RJ's Asset Management cut on your advisory fees; technology charge, and E&O charge. It's not quite as high as I thought it would be, but at a slightly higher gross than I was at with Jones, I am already netting 41%. From here it will all increase my bottom line, pushing me above 41%.Additionally, the tax treatment would make the same 38% better anyway. Hope that helps.
Luvindy, are you with RJF or an employee with RJA? I ask because your payout at 41% seems very low to be in the independent channel.
Weddle is full of s**t. I listend to him and other area leaders spew that same BS for years and wondered if it was really true. It is not true, they are lying!I left with a couple other advisors last year. All three of us are at different stages in the business and not one of us that took less than 80 percent, probably closer to 85 percent now. I was really torn over this issue. The best I can tell you is, if you built the business and if you think they will come, they will. FYI, I too looked at LPL , FiNet and RJ very closely. I decided on RJ largely in part because of the solid brand name. We are all very happy with our decision.
[quote=FA17]Luvindy, are you with RJF or an employee with RJA? I ask because your payout at 41% seems very low to be in the independent channel.[/quote]
RJFS-I’m saying 73% “payout” after ticket charges and RJ fees, and 41% net of my own expenses. At my gross level, I will be at 45% and 50%+ very soon (whenever we actually can grow again) because all my expenses are fixed.
Paying over-ride right now…around 5% of my 73%. In other words without that I’d be at 46%. Good question.
How much expense are you covering for the office besides your 35%?Depending on how you look at it, I am covering about 33% of the expenses of the office in addition to my over-ride. I'd be interested how others do it with higher over-rides.
Depending on what all of those things actually cost, it sounds like all in all your deal is very similar to mine then. Either you pay a big over-ride and the “owner” pays all of the expenses, or you pay a small over-ride for liability only, and then pay all those expenses you’re getting as part of the deal. For us the math happens to be very similar.