Attention Indies: New Branch Rules

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Anonymous's picture
Anonymous

NOW IN EFFECT.  MAKE SURE YOU ARE AWARE OF THE NEW DEFINITION OF A BRANCH OFFICE.
NASD will announce the effective date of the amended definition and<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
interpretive material in a Notice to Members to be published shortly.
3010 Supervision
(g) Definitions
(2) (A) A ‘‘branch office’’ is any location where one or more associated persons of a
member regularly conducts the business of effecting any transactions in, or inducing or
attempting to induce the purchase or sale of any security, or is held out as such, excluding:
(i) Any location that is established solely for customer service and/or back office type
functions where no sales activities are conducted and that is not held out to the public as a
branch office;
(ii) Any location that is the associated person’s primary residence; provided that:
a. Only one associated person, or multiple associated persons, who reside at
that location and are members of the same immediate family, conduct business at the
location;
b. The location is not held out to the public as an office and the associated
person does not meet with customers at the location;
c. Neither customer funds nor securities are handled at that location;
d. The associated person is assigned to a designated branch office, and such
designated branch office is reflected on all business cards, stationery, advertisements
and other communications to the public by such associated person;
e. The associated person’s correspondence and communications with the
public are subject to the firm’s supervision in accordance with Rule 3010;
f. Electronic communications (e.g., e-mail) are made through the member’s
electronic system;
g. All orders are entered through the designated branch office or an electronic
system established by the member that is reviewable at the branch office;
h. Written supervisory procedures pertaining to supervision of sales activities
conducted at the residence are maintained by the member; and
i. A list of the residence locations is maintained by the member;
(iii) Any location, other than a primary residence, that is used for securities business
for less than 30 business days in any one calendar year, provided the member complies
with the provisions of paragraph (A)(2)(ii)a. through h. above;
(iv) Any office of convenience, where associated persons occasionally and
exclusively by appointment meet with customers, which is not held out to the public as an
office;*
(v) Any location that is used primarily to engage in non-securities activities and from
which the associated person(s) effects no more than 25 securities transactions in any one
calendar year; provided that any advertisement or sales literature identifying such
location also sets forth the address and telephone number of the location from which the
associated person(s) conducting business at the non-branch locations are directly
supervised;
(vi) The Floor of a registered national securities exchange where a member conducts
a direct access business with public customers; or
(vii) A temporary location established in response to the implementation of a business
continuity plan.
(B) Notwithstanding the exclusions provided in paragraph (2)(A), any location that is
responsible for supervising the activities of persons associated with the member at one or more
non-branch locations of the member is considered to be a branch office.
(C) The term ‘‘business day’’ as used in Rule 3010(g)(2)(A) shall not include any partial
business day provided that the associated person spends at least four hours on such business day
at his or her designated branch office during the hours that such office is normally open for
business.
____________
* Where such office of convenience is located on bank premises, signage necessary to comply
with applicable federal and state laws, rules and regulations and applicable rules and regulations
of the NYSE, other self-regulatory organizations, and securities and banking regulators may be
displayed and shall not be deemed “holding out” for purposes of this section.
* * * * *
IM–3010–1. Standards for Reasonable Review
In fulfilling its obligations pursuant to Rule 3010(c), each member must conduct a
review, at least annually, of the businesses in which it engages, which review must be reasonably
designed to assist in detecting and preventing violations of and achieving compliance with
applicable securities laws and regulations and with NASD Rules. Each member shall establish
and maintain supervisory procedures that must take into consideration, among other things, the
firm’s size, organizational structure, scope of business activities, number and location of offices,
the nature and complexity of products and services offered, the volume of business done, the
number of associated persons assigned to a location, whether a location has a principal on-site,
whether the office is a non-branch location, the disciplinary history of registered representatives
or associated persons, etc. The procedures established and the reviews conducted must provide
that the quality of supervision at remote offices is sufficient to assure compliance with applicable
securities laws and regulations and with NASD Rules. With respect to a non-branch location
where a registered representative engages in securities activities, a member must be especially
diligent in establishing procedures and conducting reasonable reviews. Based on the factors
outlined above, members may need to impose reasonably designed supervisory procedures for
certain locations and/or may need to provide for more frequent reviews of certain locations.
* * * * *
 

Player's picture
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So what does this mean in plain language?

Beagle's picture
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I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.

dashampersand's picture
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Amen, Brother Beagle.

moneyadvisor's picture
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Beagle wrote:I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.
Exactly my thoughts!!

Player's picture
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Could the one person office be obsolete soon............?  

BigPayDay's picture
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Beagle wrote: I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.

Beagle,

Jones has a series 24, principal over see each branch.

They are not compensated based on the commissions of the branch, as branch managers are.

Each and every trade that is entered is checked by a software program against the client's net worth and investment objectives.

Jones' arbitration case rate has been the lowest in the industry for decades.

Jones' system may be the model going forward.

BPD
______________________________________
The grass is still GREENER where you water it!

The Truth's picture
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Jones compliance system is a joke and you know it.  Don't even try to bring that crap in here.  What is the churn rate on funds transferred in?  Go and find that out and then tell me how great your compliance system is.

BigPayDay's picture
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False,

Would you disagree that Jones has the lowest arbitration case rate in the industry?

BPD

troll's picture
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BigPayDay wrote:False, Would you disagree that Jones has the lowest arbitration case rate in the industry? BPD
Do you have some supporting evidence for this?

BigPayDay's picture
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MB,

Most recent info I could find:

http://www.weissratings.com/News/Broker/20020514broker.htm

Have you been able to find anything more updated?

BPD

P.S. Sorry you have to copy and paste the url.

troll's picture
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BigPayDay wrote:MB, Most recent info I could find: http://www.weissratings.com/News/Broker/20020514broker.htm Have you been able to find anything more updated? BPD P.S. Sorry you have to copy and paste the url.
Thanks for the link. It's interesting, but even if you assume that Weiss is reliable, the data all comes from before Jones got itself in the regulatory bind over mutual funds, doesn't it?

BigPayDay's picture
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MB,

I was discussing arbitration case rate, not NASD / SEC fines paid for by the firm.

The settlement would not negatively impact Jones arbitration case rate.

I beleive the Weiss data comes from the SIA, so it should be very reliable.

Do you have more recent information than this?

BPD

troll's picture
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BigPayDay wrote:MB, I was discussing arbitration case rate, not NASD / SEC fines paid for by the firm. The settlement would not negatively impact Jones arbitration case rate. I beleive the Weiss data comes from the SIA, so it should be very reliable. Do you have more recent information than this? BPD
We're assuming that Weiss did a responsible job reading the SIA info and categorizing it. That's yet to be established.
I wouldn't be so sure that there won't be arbitration impacts from clients getting p@#$%d off when they find out they were steered to specific fund families because it benefitted the broker and his firm. There's a whole can of worms that have been opened there, and at the very least, Jone's "we do what's right for the customer" meme is dead, dead, dead.

BigPayDay's picture
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MB,

The settlement was a year ago. In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated. Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. You keep dreaming.

BPD

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BigPayDay wrote:MB, The settlement was a year ago. In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated. Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. You keep dreaming. BPD
BigPayDay
Yes, we are all California dreaming these days............
As for JD Power award, did they ask the question:
If you found out your Broker and or Firm was compensated more to sell particular Funds to you and did not disclose this helped them win trips, and they were fined by the sec 75 million Dollars aand their Managing General Partner avoided going to jail and nailed for Fraud by paying 3 million Dollars in fines, but had to leave the Firm, how high would you rate this Firm?
What if you were told the name of this Firm is Edward Jones, how high would you rate them?
BFD, do they ask these questions, NO........... 

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candy bar with lots of nuts,
"most recent" info you posted was from 2002 based on info filed between 1997 and 2001?  Although a very reliable organization Weiss is best known for it's insurance company ratings.
Please try again with more "current" info.

BigPayDay's picture
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Eddjones 654,

Do you have more recent info on abitration case rates per firm?

BPD

compliancejerk's picture
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bpd,
Perhaps my reading comprehension is as bad yours but I'm pretty sure eddjones654 asked YOU to provide more recent stats.

BigPayDay's picture
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CJ,

If I had them I would. You're the compliance guy, you should know.

BPD

compliancejerk's picture
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BigPayDay wrote:MB, The settlement was a year ago. In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated. Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. You keep dreaming. BPD
You and the other GPs really have lost track of what occurs in the field.  The realtionship is NOT with EJ and the client but between the client and the IR.  Hence the ability for the likes of Zacko and myself to leave and take upwards of 86% of the assets (the others we either left or they didn't want to come along)
Also first you use dated ratings that incorporated data from 1997 to 2001 then you say it isn't accurate to use info from your firm's settlement from last year.  Just because "you don't think" the settlement won't have any bearing on your firm's realtionship with its clients is another example of a GP's arrogance.  Just like when Hill claimed it's clients don't read The WSJ.  You guys don't understand that the realtionship that EJ really needs to work on is the one between the IRs and the "up-line" just like at any other wire-house.  If it doesn't work for the IRs then they will vote with their feet.

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BigPayDay wrote:MB, The settlement was a year ago. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

And thus isn't reflected in the arbitration numbers you mentioned.
BigPayDay wrote:In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated.

You'd "like" to have your investment advisor steer you to certain investments because he and his firm get paid more on them? You'd "like" to have your advisor offer you a very limited range of services because his firm only has a limited range of services? Really?
Say, did you happen to see where KIA placed on a recent JD Powers survey? Care to own a Kia?
BigPayDay wrote:
Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. BPD
You may be right, but I wouldn’t brag about arbitration numbers until they include the big hickey Jones took and clients learning about it. The whole point of mentioning the arbitration numbers is some sort of claim to a higher level of ethical behavior than the rest of the pack and the SEC fine should have disabused you (and many Jones customers) of that fantasy.
 
BTW, my theory is that Jones does well on JD Powers type surveys because they deal with the least sophisticated investors on the street. They simply don’t know what’s been done to them and they don’t  mind how dated Jones’ technology is. 
 
 

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Mike B,

I assume you are a former Jones guy who left and is now in some way trying to get back at Jones for all of the harm they did to you when you were here. If this assumption is wrong and you were not at Jones before then what is your beef? If we have only uninformed, uneducated, low net worth clients why are you concerned about us?

Check out an SAI (You do know what an SAI is, right?)from American Funds and you will see that Edward Jones is one of many firms (something like 50 or so firms are listed) that do revenue sharing with them. Take a look and YOUR firm is probably on there to. The difference is YOUR firm does not share that revenue sharing with YOU, Jones does.

What is the industry average hold time for a mutual fund and what is Jones'? Try 4 years verses over 12 years at Jones. Clients hold their funds longer with Jones than ANY other firm. You know and I know, it is not the timing of the market that counts, but the time that you spend in the market and if we can get a client to hold a high quality diversified group of mutual funds for an average of 12 years, they are a client for life. Period. This is why Edward Jones does so well in the JD Power surveys.

BPD

P.S. As far as the settlement goes it will not impact our abritration case rate. Do you know what an arbitration is? How would a settlement impact it? It wouldn't.

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bpd a.k.a. candy bar with nuts
Spoken like a true kool-aid "mainliner".
Why do you "darkersiders" think EJ clients hold their mutual funds so long .... could it be that once they invest they loose their IRs so frequently that it takes the investor 12 years to figure out who to speak with, by that time the account is usually transferred to some GPs "green" (in otherways than what EJ think)  relative.
Things have changed drastically in the past two decades and one really can't depend on passive investing for "all" of your investing.
Yes your clients are unsophisticated, and it would cost your firm TOO much much money to even offer something as simple as options (your FSDs would have to become Series 3 licensed and "pre-approve" some trades.  Not to mention the compensation to them.  Let's not forget the higher standards for the margin clerks etc etc.)
There is a corrolation between your unsophisticated investor and how easily they are convinced to hold their mutual funds for 12 years. Who wins in the long run ..... the client (maybe maybe not), the IR (if he/she stays 12 years then a very small share of revenue sharing), the GPs (you bet!!! they get the biggest cut of revenue sharing each and every year for the amount the firm holds at those firms)
You silly old fart you still don't get it! "Clients for life" follow the broker NOT THE DEALER hence the good ratings from JD Powers.
if you don't nuture the boker/dealer realtionship properly you see alot of IRs leave your "do what's best for the client" firm. 
 
Block stems tide by adding pros
By Brooke Southall
November 28, 2005
SAN FRANCISCO - H&R Block Inc.'s long-beleaguered brokerage division may have turned the corner. On the strength of skyrocketing referrals from tax offices and a resolve to insist on high production from its financial advisers, the Kansas City, Mo.-based tax giant finally realized positive cash flow in the first half of its current fiscal year.
Though Block showed a loss of $7.9 million during the six months ended Oct. 31, it was only after subtracting a $9.2 million non-cash expense for amortization. Since Block bought Detroit-based Olde Discount Corp. in 1999 for $625 million, it has sustained more than $330 million in losses from that division.But that lengthy famine is giving way to optimism."We couldn't be more pleased," said Joan Cohen, president of the adviser division of Block. "There's a good feeling in our organization right now."Part of that euphoria stems from Block's success in hiring 141 experienced brokers during the past six months. Most of them have personal track records of producing annual commission revenue of $200,000 or more at their former employers, according to the company.Referral programBlock's ability to recruit better brokers relates directly to its improving capacity for delivering on the dream of skimming investment referrals from the employees who prepare 19.1 million tax returns a year, according to an executive and advisers at the company.There's much skimming to do. Block expects to have about 700 company-owned and franchise offices in the coming tax season and an additional 300 kiosks in locations for Wal-Mart Stores Inc. of Bentonville, Ark., Sears Holding Corp. of Hoffman Estates, Ill., and other retailers.It also expects that its force of "partners" - tax preparers who sign up to deliver leads in return for a fee - to leap from 5,000 this year to closer to 10,000 in 2006, Ms. Cohen said.The 5,000 partners already on board generated 8,000 funded accounts with assets of $363 million during the six months ended Oct. 31. During that time, these newest accounts generated revenue of $5.6 million, a 57% improvement from revenues in the period a year ago.The growth in cross-referrals is coming because tax preparers have greater faith in their company's brokers than before, Ms. Cohen said.But lucrative incentives don't hurt matters, she allowed.Block pays an unlicensed tax preparer $20 or $25 for a funded referral.But to tax preparers with the proper securities licenses, it antes up 25% of the gross commission revenue generated by the account in perpetuity. This is an eye-popping deal that has the potential to drive massive numbers of referrals, according to Charles "Chip" Roame, managing principal of Tiburon (Calif.) Strategic Advisors LLC."That [25%] is a huge share," he said. "I'd refer every one of my clients over. The only reason I wouldn't is because I'm afraid of losing my client [due to the adviser's incompetence]. But I'm doing the guy's taxes for 99 bucks, so one mutual fund commission of $400 and I make that."A reasonable comparison is to look at what officers get at banks for making similar referrals, Mr. Roame added. It's likely to be closer to 5% than 25%, he said.Attracted by modelThis fertile ground of referrals attracted David Floeh, who had been among St. Louis-based Edward D. Jones & Co. LP's top 3% of producers, with annual revenues of $550,000."I saw a ground-floor opportunity for capitalizing on their strong market share in tax preparation," he said."It took a lot to uproot myself from a fairly comfortable existence [at Edward Jones], but I didn't see that [referral] model anywhere else," Mr. Floeh added.In fact, H&R Block advisers are - to some extent - drowning in an embarrassment of referral riches. The company's tax preparers passed on 105,000 referrals as of April 30. Block considers a lead a referral when a tax preparer passes on the name of a client to a specific financial adviser. These prospects get calls within a couple days of the referral.But Block generated an additional 800,000 indirect leads, which were cases of tax clients indicating on their tax return that they would like to speak to a financial adviser."With 1,000 advisers, that's more than we could handle," Ms. Cohen said.But she added that her company is no longer interested in hiring advisers simply for the sake of increasing capacity.Block hired 141 advisers, but its total increased only to 995 from 985 because the company is weeding out low producersAnd H&R Block no longer is content to be a safety net for wirehouse rejects."We're looking for someone running toward us and not away from someone else," Ms. Cohen said. "We turned away far more [Morgan Stanley castoffs] than we hired" after the New York-based wirehouse recently dispensed with 1,000 of its lower-producing advisers.That's smart business, Mr. Roame said. "They're getting smarter about what makes a good H&R broker," he said. "Ameriprise [Financial Inc. of Minneapolis] or Edward Jones guys would be more synergistic with the H&R model."Indeed, Mr. Floeh said he chose H&R Block for that reason."Edward Jones is a kind of mom and pop," he said. "The referrals come from the same kind of thing at H&R Block."

Beagle's picture
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Irregardless of whether Jones has a great arbitration track record, I
still wonder why the NASD allows them to run branch offices without a
Series 24 principal in each branch office or at least visiting the
office at least weekly.  With all the petty regulations, this
seems like a no-brainer to me.  We are a small firm with one
office and are REQUIRED to have two principals.  Yet a new advisor
without a track record is allowed to set up shop and run his business
without the immediate contact of a principal?  Seems silly on the
NASDs part.

I'm sure Jones has a good record.  This doesn't mean they should be allowed to skirt the rules.

compliancejerk's picture
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Beagle,
All locations with less than three registered individuals are classified as "sub-branches".  All Field Supervision Directors (FSDs) are Series 7, 8 (or 9/10) and 63 licensed.
EJ is complaining about the new requirements. (hence the topic of this post)

babbling looney's picture
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Block pays an unlicensed tax preparer $20 or $25 for a funded referral.
I thought that was illegal.  The paying for a funded referral part.  It was my understanding, years ago when in a bank platform, that we could pay unlicensed people nominal amounts for referrals but that they couldn't be predicated on funding or a specific dollar amount invested.

The Truth's picture
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Calling all former Jones brokers.  BPD likes to talk about the hold time for funds.  What did you do when Oppenheimer, Franklin, Calamos, etc, funds were transferred into your office?  Sold them.  Darn straight and they went to preferred funds?  You bet!  What was the HOLD time on these funds?  Does Jones keep these stats?

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False,

13 years in a row.

Jones is #1 again in Registered Rep Magazine.

Read it and weep.

Have you sold any A share annuites lately? Oh that's right your firm doesn't believe in annuities.

Give it up.

BPD

troll's picture
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BigPayDay wrote:Mike B, I assume you are a former Jones guy who left and is now in some way trying to get back at Jones for all of the harm they did to you when you were here. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Not even close. In fact, the closest I've been to a Jones office is the dry cleaner next door. OTOH, I can read and have read for years the "We care more" Jones propaganda and know the Amway trip REAL nature of Jones.
BigPayDay wrote:Check out an SAI (You do know what an SAI is, right?)from American Funds and you will see that Edward Jones is one of many firms (something like 50 or so firms are listed) that do revenue sharing with them.

Nice change of subject. The issue never was how many firms do revenue sharing, it’s how did Jones manage to get so concentrated into a handful of funds. Of course, we all know ho, Jones paid (in various ways) brokers more to sell some funds than others.
BigPayDay wrote:Take a look and YOUR firm is probably on there to. The difference is YOUR firm does not share that revenue sharing with YOU, Jones does.

That’s a cute way of describing a system that puts incentives in place to get brokers to sell more of the funds that pay the company more. Too bad the regulators laughed in your faces on that one.
BigPayDay wrote:What is the industry average hold time for a mutual fund and what is Jones'? Try 4 years verses over 12 years at Jones. Clients hold their funds longer with Jones than ANY other firm.

I couldn’t care less what the hold time is, much less do I care that the number’s skewed at Jones because they dabble with tiny accounts, bang ‘em into the fund falimy they rewarded the most to sell and never look at the account again.
BigPayDay wrote:You know and I know, it is not the timing of the market that counts, but the time that you spend in the market…

What is it you figure, everyone else in the business is market timing with clients? Please don’t give me the “time in the market” speech as if there’s something going on with the average Jones account than selling what you’re paid most to sell and figuring that 3 or 4 American Funds equals real diversification.
BigPayDay wrote:
This is why Edward Jones does so well in the JD Power surveys.

You do well in JD Powers surveys fr two reasons; you’re marketed that bogus “we’re more ethical and care more” stuff well AND because, like Kia, you sell to the unsophisticated. BigPayDay wrote:P.S. As far as the settlement goes it will not impact our abritration case rate. Do you know what an arbitration is? How would a settlement impact it? It wouldn't.
No, what’s an arbitration? Golly, it is big? Will my friends all have them soon?
Be serious BPD (interesting name, btw, for a guy working at a firm that looks out for clients first) when your customers find out how they’ve been had, (and they have been)  and have the chance to get back at you by filing complaint that leads to arbitration, they will. Ask anyone working at a firm that’s been similarly caught out.
 You know, you seem like a reasonable enough guy. I can only assume the big payday that Amway, er, Jones is paying you has cluded your judgement about what they really are.
 
 
 
 
 
 

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MikeButler,

Oh great Mike Butler with all your knowledge and platforms. Here's a scenario:

50 year old male. Married to 50 year old female. No kids. 28% tax bracket. Retiring at 65. Maxing out 401k. Not eligible for Roth IRA. House is paid for. Goal is to set aside money for income in retirement. Received inheritance of $250k. What would you recommend? Assume that all existing monies invested is properly diversified. Risk level is moderate. Investor does not like paying taxes.

I'm curious what you would recommend. Come on put your investment knowledge and your fancy smancy platforms where your mouth is.

BPD

rightway's picture
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BigPayDay wrote:False,

13 years in a row.

Jones is #1 again in Registered Rep Magazine.

Read it and weep.

Have you sold any A share annuites lately? Oh that's right your firm doesn't believe in annuities.

Give it up.

BPD

The annuities change so fast with the living riders and whatever else
they can come up with to address the wave of income desiring baby
boomers.  To that end, paying an upfront load for lower internal
expenses may not make as much sense...they are not mutual funds. 
The flexibility to change your portfolio without the burden of knowing
you shelled out 5% 2 years ago does have some value.  Just think
about the annuities a few years back comparred to today.

csmelnix's picture
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BPD - the home ofc hack for edjones.  You kill me w/ the annuity comment.  Apparently jones isn't too fond of them either as each new application needs to be approved by a dedicated compliance dept. at jones now.  You advisors outside of jones, ask your annuity wholesalers that call on jones IRs have to say about some of the new policies at jones and annuity apps.  Is it wrong BPD by the way if a b/d doesn't believe in particular products?  After all jones certainly has their share that they don't believe in.
And on the old A share annuity deal, do the jones clients realize that the principal guarantees they get on them are minus the loads they pay? 
great scenario too bozo - it shows what dept you prostitute yourself in w/ that firm.  Why not take it a step further.  At jones will the advisor do a financial plan for the prospect?  Will he do a detailed asset allocation analysis and compare risk adjusted returns to equivalent benchmarks? 
NO - they'll print out the simple pyramid allocation models according to the general risk categories the client was labeled in.  Never mind whether they're on track to meet their objectives or not, oh that's right - your technology doesn't even give the advisors the capability to list objectives and to build plans and the other things I mentioned above.  BPD, realize that it's a quack operation and because its advisors rate themselves high, doesn't mean they are doing what's best.  I learned more in 5 day conference at LPL than I did after my entire 5 years at Jones when it comes to providing real guidance and advice to clients.  I know roughly 30 other advisors that are here at LPL that came from jones and not one would say anything different. 
BPD - brainwashed, poor dummy!

BigPayDay's picture
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csmelnix,
So can your great firm buy an annuity with out a paper application?

csmelnix's picture
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You bet - can do electronic apps all day long.  Why don't you try and answer the real questions I posed home office boy. 

BigPayDay's picture
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Ok, Ok, I give.

You know what firm I work for. What firm do you clear through or are affiliated with?

This will help me do a fair comparison of our firms and answer the questions you have posed above.

csmelnix's picture
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Already stated LPL don't even ask who do we clear through, as that will show your ignorance.

BigPayDay's picture
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csmelnix wrote: BPD - the home ofc hack for edjones.  You kill me w/ the annuity comment.  Apparently jones isn't too fond of them either as each new application needs to be approved by a dedicated compliance dept. at jones now.  You advisors outside of jones, ask your annuity wholesalers that call on jones IRs have to say about some of the new policies at jones and annuity apps.  Is it wrong BPD by the way if a b/d doesn't believe in particular products?  After all jones certainly has their share that they don't believe in.
And on the old A share annuity deal, do the jones clients realize that the principal guarantees they get on them are minus the loads they pay? 
great scenario too bozo - it shows what dept you prostitute yourself in w/ that firm.  Why not take it a step further.  At jones will the advisor do a financial plan for the prospect?  Will he do a detailed asset allocation analysis and compare risk adjusted returns to equivalent benchmarks? 
NO - they'll print out the simple pyramid allocation models according to the general risk categories the client was labeled in.  Never mind whether they're on track to meet their objectives or not, oh that's right - your technology doesn't even give the advisors the capability to list objectives and to build plans and the other things I mentioned above.  BPD, realize that it's a quack operation and because its advisors rate themselves high, doesn't mean they are doing what's best.  I learned more in 5 day conference at LPL than I did after my entire 5 years at Jones when it comes to providing real guidance and advice to clients.  I know roughly 30 other advisors that are here at LPL that came from jones and not one would say anything different. 
BPD - brainwashed, poor dummy!

csmelnix,

Fair questions. I will try and answer.

No I don't work in the home office.

As far as annuities go take a look at the following link which is a "white Paper" from the SEC and NASD regarding annuity compliance:

http://www.sec.gov/news/studies/secnasdvip.pdf

This memo came out in June 2004. In response to the directives in this memo most firms have begun the process of reviewing their internal policies, administrative processes, and training programs, along with their interanl auditing and monitoring to ensure they confirm to the "baseline sound practices" in the memo. Jones is staying ahead of the curb with both their A shares and special compliance officers that will oversee ALL annuity orders.

As far as the principal guarantees on A share annuities your statement is not correct. Take a look. Pages 27 - 43:

http://www.hartfordinvestor.com/common/prospectus/individual _annuities/p_ldrs_edge_hli.pdf

As far as financial plans go. Yes we have financial planning software. Be careful here. See the following intersting info on the Merril Lynch rule:

http://www.sec.gov/rules/proposed/34-50980.htm

Yes we have Mornistar Principia that will do detailed asset allocation analysis and compare risk adjusted returns verses equivalent benchmarks.

You seem to be very vindictive towards Edward Jones. What did they do to you that makes you this way?

BPD

rightway's picture
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Joined: 2004-12-02

I have seen the Jones Planning Software...mmmmmm nevermind.  As
far as Morningstar goes, have you ever comparred their data to
Lipper?  Why is it so different and who is right?  When you
do a position detail on the funds in Morningstr the data is routinely
4-6 months delayed, so am I to assume the size and style data is the
same?  

BigPayDay's picture
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Joined: 2005-01-10

RW,

No I have not compared the data from Lipper to Morningstar. I don't have the time nor am I willing to make time. All these systems have pros and cons.

I especially like the ability of showing an existing portfolio in Principia verses a proposed one. Very powerful.

csmelnix's picture
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Joined: 2005-06-01

BPD,
Your attempts to explain are the reasons I despise Jones so much.  Jones employees like yourself who believe everything the firm does is for the clients and its advisors and all that jones does is the best and all that it doesn't do is the best as well.  Your annuity comments are a joke - the difference between jones' reaction and most other b/d firms is that jones goes out and builds systems in place to curb or discourage writing that business by having to review each and every contract and by hiring a separate compliance team who's sole purpose is to review those contracts.  As far as the death benefit - YOU ARE INCORRECT, a share contract value is minus sales charge. 
Your financial planning comments again show your ignorance about this field.  What jones has is not even close to real planning.  Tell me, can you gather a clients goals, investments/objectives and at any given time, determine how effective a clients portfolio is achieving the objectives?  It has nothing to do with the merrill lynch rule; if you had any knowledge of this field outside of the home ofc you would realize it. 
Cookie cutters!
you are right though, I am very vindictive toward Jones, I have personal reasons for it as most who left do and I also have friends who left that were treated like hell by them.  If you truly are in production, and I really doubt that you are, you ought to just pull your head out of the ground and look at some of the top indy firms, YOU MAY ACTUALLY LEARN SOMEHTING ABOUT THIS FIELD.

troll's picture
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Joined: 2004-11-29

BigPayDay wrote:MikeButler, Oh great Mike Butler with all your knowledge and platforms. Here's a scenario: 50 year old male. Married to 50 year old female. No kids. 28% tax bracket. Retiring at 65. Maxing out 401k. Not eligible for Roth IRA. House is paid for. Goal is to set aside money for income in retirement. Received inheritance of $250k. What would you recommend? Assume that all existing monies invested is properly diversified. Risk level is moderate. Investor does not like paying taxes. I'm curious what you would recommend. Come on put your investment knowledge and your fancy smancy platforms where your mouth is. BPD
 
What's their 401k and total IRA balances (what makes them sure they CAN retire in 15 years?)? Do they have 6 months of cash/short term assets set aside? Do they have any non-qualified investments? With mortgage money as cheap as it is, why is the house paid off? Do they have a standing HELOC in place?
I know you thought you'd designed a question where the only answer is bang them into an annuity so that you could leap up and scream what a dandy thing Jones' A share annuity is....

The Truth's picture
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Joined: 2004-12-01

The A share annuity was simply designed to counter the argument why Jones brokers dump dollar after dollar in annuities inside of IRA accounts.  It really is that simple.  Don't let those GPs fool you Webster.

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