How do you sell crappy bonds?

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navet's picture
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Joined: 2010-02-25

OK. This topic is a little tongue in cheek. But right now(and for some time) the jones inventory has been lousy. I tried to ask this question at our regional meeting(in a more acceptable manner) and got nothing. I don't see how we can solicit business using bonds at a premium price with small payouts. BG, are you around? You have had some great advice. How do you sell todays bonds to current clients who need income? And more importantly, how do you solicit prospects by phone with our current bond inventory?

Preacher's picture
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Joined: 2010-06-01

Plenty of good bonds to sell.  Man up and stop whining.  I sold the hell out of a 18yr AA 5% tax free today selling at par (only to new clients) why didn't you?

navet's picture
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Joined: 2010-02-25

Preacher, if you work at jones, you are full of BS. The best bonds we have today are 2017 CA  muni A at 3.9%, taxable A Citi 2037 at 5.9%. I haven't seen a 5% 18yr tax free in weeks.

Spaceman Spiff's picture
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Joined: 2006-08-08

No, he's not.  It's a bond from IL.  5.05 coupon @ par.  Matures 8/1/2028.  Still $1.5 mil in inventory, so you can call on that tomorrow. 

navet's picture
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Joined: 2010-02-25

Thanks Spiff. I just found it. I don't know how I missed it earlier. I do a search at least a couple times a day.

loneMADman's picture
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Joined: 2010-05-10

I hope your clients are happy to park their money for the next 18 years at 5%.  Interest rate risk alone on long-term bonds are scary enough to drive me away.

iceco1d's picture
iceco1d (not verified)

LOL @ Bond Inventory. 

N.D.'s picture
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Joined: 2009-07-14

Just call on the first one that pops up on the screen. if they don't like it tell them to come in so you can show them your other ideas since good rates are so few and far between.

BondGuy's picture
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navet wrote:OK. This topic is a little tongue in cheek. But right now(and for some time) the jones inventory has been lousy. I tried to ask this question at our regional meeting(in a more acceptable manner) and got nothing. I don't see how we can solicit business using bonds at a premium price with small payouts. BG, are you around? You have had some great advice. How do you sell todays bonds to current clients who need income? And more importantly, how do you solicit prospects by phone with our current bond inventory?Benefits of premium paper:1. Higher rate of cash flow. This is a biggie for income buyers.2. Higher rate of return when compared to equal risk/maturity discount or par bonds.3. Less volatile. The higher coupon gives some level of protection against increasing int rates. For those worried about rates going up, you should be all over premium bonds. 4. Investor gets premium back in the form of cash flow.Here's an example:XYZ G.O  NR/AAA 5.50% coupon maturing 6/01/19 w/$15.00 priced 106.144, ytm 4.65%Buy 100 bonds costs $106,144.00 plus AI. That 106k buys the client $5500 in tax free income every year.A comparable investment would be to find a 4.65% bond at par. Buying 105 of those bonds for $105,000 gives the client a yearly income of $4882.50. Even if you could invest dollar for dollar the full 106k, the premium client comes out way ahead. In this example the client is getting a 12% income boost just for buying the premium. And, by the way, the XYZ bond used in this example is a real bond from my inventory today. Let clients know that premium bonds are for sophisicated income buyers. Tell'em " Most people, as well as most advisors, are afraid of them because they don't understand them. We're smarter than that. my job is to deliver the highest income i can to you within your stated risk tolerence. Premium paper is one of the best ways to do that." Focus on cash flow.As for the crappy sales credits, most firms have a collar within which the SC can be moved up or down. Don't go crazy, but for an investment to work it's got to work for not only the client, but the firm, and you as well. In my example i'm fine with a $15 SC for a 9 year hold, but as we get into long term, usually, I won't work for less than 2 points. If the numbers don't work for the client with two points cranked in, well it doesn't work for me either - move on find another piece.  

navet's picture
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Joined: 2010-02-25

The issue is that I'm calling about products that I wouldn't buy myself. I'm calling in order to bring in business, for my own benefit. I know we BS ourselves that it's really about the client. But how much have we helped the client over the last 10 years. We produce or we're gone. The conflict of interest is becoming overpowering. Now, if you can show me the error of my ways, please do so. But I'm in a grump about this industry, particularly after our bullshit regional meeting, and I'm having second, third and twelfth thoughts about the value we provide.

Spaceman Spiff's picture
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Joined: 2006-08-08

Where is the conflict of interest in selling bonds?  Are you thinking that Jones is getting some kind of revenue sharing stream from the bonds in our inventory?  I think your comments about how much we have helped the clients over the last 10 years are a little, no, a lot short sighted.  Helping the client isn't always about investment returns or investor returns.  If you don't understand that, then you are absolutely in the wrong business.  Why wouldn't you buy that bond I showed you yesterday?  Is it the 18 year maturity?  The rating?  The issuer?  The call features?  I get the impression you're starting to live in some sort of investing fantasy world.  If you're expecting some sort of investing Panacea, then you're going to be looking for a long, long time.  BG gave one of the best, and simplest, explanations of why a client should be looking at premium bonds instead of discount bonds, and you start blabbing about conflicts of interest.   BG - Well done.  I remember Jones putting big piece out a few years ago on why we put premium bonds in our inventory.  They didn't do half as good a job as you did, and they wasted a lot more time and energy. 

navet's picture
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Joined: 2010-02-25

BondGuy wrote:navet wrote:OK. This topic is a little tongue in cheek. But right now(and for some time) the jones inventory has been lousy. I tried to ask this question at our regional meeting(in a more acceptable manner) and got nothing. I don't see how we can solicit business using bonds at a premium price with small payouts. BG, are you around? You have had some great advice. How do you sell todays bonds to current clients who need income? And more importantly, how do you solicit prospects by phone with our current bond inventory?Benefits of premium paper:1. Higher rate of cash flow. This is a biggie for income buyers.2. Higher rate of return when compared to equal risk/maturity discount or par bonds.3. Less volatile. The higher coupon gives some level of protection against increasing int rates. For those worried about rates going up, you should be all over premium bonds. 4. Investor gets premium back in the form of cash flow.Here's an example:XYZ G.O  NR/AAA 5.50% coupon maturing 6/01/19 w/$15.00 priced 106.144, ytm 4.65%Buy 100 bonds costs $106,144.00 plus AI. That 106k buys the client $5500 in tax free income every year.A comparable investment would be to find a 4.65% bond at par. Buying 105 of those bonds for $105,000 gives the client a yearly income of $4882.50. Even if you could invest dollar for dollar the full 106k, the premium client comes out way ahead. In this example the client is getting a 12% income boost just for buying the premium. And, by the way, the XYZ bond used in this example is a real bond from my inventory today. Let clients know that premium bonds are for sophisicated income buyers. Tell'em " Most people, as well as most advisors, are afraid of them because they don't understand them. We're smarter than that. my job is to deliver the highest income i can to you within your stated risk tolerence. Premium paper is one of the best ways to do that." Focus on cash flow.As for the crappy sales credits, most firms have a collar within which the SC can be moved up or down. Don't go crazy, but for an investment to work it's got to work for not only the client, but the firm, and you as well. In my example i'm fine with a $15 SC for a 9 year hold, but as we get into long term, usually, I won't work for less than 2 points. If the numbers don't work for the client with two points cranked in, well it doesn't work for me either - move on find another piece.  Thanks BG. I've learned more from you about bonds than I have in all my jones training. You do money management. We gather assets. 

N.D.'s picture
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Spaceman Spiff wrote:Where is the conflict of interest in selling bonds?  Are you thinking that Jones is getting some kind of revenue sharing stream from the bonds in our inventory? Yes. They all do. Bonds are marked up as they are put in inventories. Navet - Bonds are used to start conversations or solve a need. If you do not know the client's need, it is irrelevant what the bond is you are calling about.

navet's picture
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Joined: 2010-02-25

I hear you ND. And I like the discourse that BG gave. Yet I have some issues with our methods. I call with the Oppenh./Rochester Nat'l muni fund. And it does get some response with it's 7.2% tax free payout. But it's a 1 star fund. Am I resorting to bait and switch methods to bring in assets? I don't mean to question all of your motives. But with this market, finding something to draw some exitement is difficult. And I find myself questioning the ethics.

N.D.'s picture
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Joined: 2009-07-14

I don't know what else to tell you Navet. We have a great muni fund for my state and it basically sells itself. I wouldn't pitch anything else cold. Keep looking and you will find something that will work for you. Maybe look at ETFs that seek out dividends like SDY or DVY. Only you know what will work for you and your clients. We can give examples all day and there is nothing wrong with pitching the wrong item at first because guess what? Until the client opens their mouth to you, every product is wrong!

Gaddock's picture
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Joined: 2007-02-23

navet wrote:The issue is that I'm calling about products that I wouldn't buy myself. I'm calling in order to bring in business, for my own benefit. I know we BS ourselves that it's really about the client. Wow! Sorry to be blunt ... I never sell ANYTHING I would not put in my Mothers account. It's not at all about the money for me at this point, I LOVE MY PRACTICE. I never bullshit myself and ALWAYS do my very best job for my clients.You need to move on or get your head back in the right place. 

TheNextLevel's picture
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Joined: 2010-04-27

BondGuy wrote:navet wrote:OK. This topic is a little tongue in cheek. But right now(and for some time) the jones inventory has been lousy. I tried to ask this question at our regional meeting(in a more acceptable manner) and got nothing. I don't see how we can solicit business using bonds at a premium price with small payouts. BG, are you around? You have had some great advice. How do you sell todays bonds to current clients who need income? And more importantly, how do you solicit prospects by phone with our current bond inventory?Benefits of premium paper:1. Higher rate of cash flow. This is a biggie for income buyers.2. Higher rate of return when compared to equal risk/maturity discount or par bonds.3. Less volatile. The higher coupon gives some level of protection against increasing int rates. For those worried about rates going up, you should be all over premium bonds. 4. Investor gets premium back in the form of cash flow.Here's an example:XYZ G.O  NR/AAA 5.50% coupon maturing 6/01/19 w/$15.00 priced 106.144, ytm 4.65%Buy 100 bonds costs $106,144.00 plus AI. That 106k buys the client $5500 in tax free income every year.A comparable investment would be to find a 4.65% bond at par. Buying 105 of those bonds for $105,000 gives the client a yearly income of $4882.50. Even if you could invest dollar for dollar the full 106k, the premium client comes out way ahead. In this example the client is getting a 12% income boost just for buying the premium. And, by the way, the XYZ bond used in this example is a real bond from my inventory today. Let clients know that premium bonds are for sophisicated income buyers. Tell'em " Most people, as well as most advisors, are afraid of them because they don't understand them. We're smarter than that. my job is to deliver the highest income i can to you within your stated risk tolerence. Premium paper is one of the best ways to do that." Focus on cash flow.As for the crappy sales credits, most firms have a collar within which the SC can be moved up or down. Don't go crazy, but for an investment to work it's got to work for not only the client, but the firm, and you as well. In my example i'm fine with a $15 SC for a 9 year hold, but as we get into long term, usually, I won't work for less than 2 points. If the numbers don't work for the client with two points cranked in, well it doesn't work for me either - move on find another piece.  Cushion Bonds. 

I am legend's picture
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Joined: 2010-03-04

just be careful about calls on premium bonds

4$$$'s picture
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pitch the YTC, walk them thru it.

iceco1d's picture
iceco1d (not verified)

navet wrote:I hear you ND. And I like the discourse that BG gave. Yet I have some issues with our methods. I call with the Oppenh./Rochester Nat'l muni fund. And it does get some response with it's 7.2% tax free payout. But it's a 1 star fund. Am I resorting to bait and switch methods to bring in assets? I don't mean to question all of your motives. But with this market, finding something to draw some exitement is difficult. And I find myself questioning the ethics.Navet,Are you questioning the merits of the fund because of its star rating?  Serious question. 

navet's picture
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Ice, yes, the 1 star rating concerns me. Now, I've been investing for over 30 years, but have been an FA for just over 2 years. I'm not too crazy about premium bonds, yet BG gives a compelling argument. If there is a hidden benefit to a 1 star rating, I would like to know what that is. Thanks

iceco1d's picture
iceco1d (not verified)

Navet,The 1 Star rating means nothing.  It's simply where that fund placed relative to a broad group of its peers (that may, nor may not, have had the same identical objective) in the PAST.If I recall, the Oppy tax-free fund you are talking about USED to be a 5 star fund, and in fact, was the #1 fund int he category for many years.  The problem is, their goal of seeking MAXIMUM INCOME put them in the worst possible place during the 08 credit crunch, and the fund had an equity-like drawdown.  The managers were reaching for income big time (because income was their stated objected).  Max income comes from lower quality, longer maturity, sometimes unrated issues (i.e. those hit hardest during 08).You are buying that fund for INCOME, not for total return in an asset allocation fund.  (and I believe the dividend stayed the saame throughout the credit crunch on most of those oppy muni funds).All that aside, did you know that it is almost a statistical certainty that a fund that CURRENTLY has a 5 star rating, will underperform it's peers over the next 10 years?  2 Reasons:  It's highly likely that fund outperformed it's peers based on luck and not skill.  Secondly, a lot of advisors and DIY put misguided faith in the star rating, and the funds suffer from asset-bloat in the coming years (and they'll be forced to buy assets the managers really don't want, in order to accomodate new investors).  Star ratings are next to useless.  You should come up with a new way to pick funds.Now, if you are concerned about principle fluctuation in that fund, for willy-nilly investors, you may have a valid point.  But if you are cold calling people looking for tax-free income, you should have no problems.  Good luck (in a hurry, but happy to chat more about this if you like).   

BondGuy's picture
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Joined: 2006-09-21

Ice, I couldn't have said it better myself. The ORNAX fund isn't for everybody, but it certainly is an attention getter to get a conversation going. Which is why it's a good product for cold calling. Fact finding will determine suitability. By that time in the process you've got a conversation going and can move on from there. Whether or not the ORNAX fund is purchased, you've got a prospect and most likely a client. That you didn't shove the prospect into a non suitable investment builds the trust, and gives you credibility. Navet, on the Star ratings - MorningStar loves people like you. But something to consider; a five star fund has only one way to go, and it's not up.As Ice pointed out the ORNAX fund was a five star fund and for years the number one fund fund in its cat. In 2008 shortly before the fall, it was a four star fund. Guess what? All those stars didn't save it from  getting hit big time. A lot of unhappy star buyers in that one! Interestingly, the fund's non accrual rate or defaulted bond rate during it's five star period was about 5%. During the meltdown the rate was only 2%. It's climbed some since, but is still under 5%. Gee, higher return today with a lower default rate? I don't get it, what's with the lower Morningstar rating? Hmmm?Buying a MF is no different than buying a money manager or for that matter anything else. It's about understanding what they do, how they do it, and why they do it. It's people and process. You shouldn't use any investment you don't understand. And clearly, you don't understand ORNAX.Taking a deeper look at ORNAX requires talking with the managers and wholesalers. It's about understanding their philosophy. Which during the meltdown was, there is nothing wrong with us, it's the world that has gone crazy. And that's true. Also a point to be made is that with ORNAX  the scary part is their chosen marketplace, not the management of the fund. Digging deeper you find that they are an income fund. They aren't playing to the asset allocation crowd. Thus, they do everything they can to maintain and protect that income. Where, during the meltdown many other muni managers were out to save their own asses by selling high income bonds, shortening maturities,  and sacrificing income, ORNAX sat on it's hands. The result is that they are exactly the same fund today that they were before the meltdown. Their actions in the face of absolute bedlam is commendable. They are exactly what i want in a manager. I want a manager who does what i hire him to do. In this case, that's to give me a high tax free income. Unfortunately, in this case, the market that manager operates within turned to shit. OK, not good! But if i want my clients out, that's my call not the manager's.  If the manager goes off the reservation making wholesale changes i no longer have good info on which to base a decision. That's beyond style drift. It's an absolute no-no!! You will never have that problem with ORNAX. They do what they say they are going to do.The only decision to be made with ORNAX is can you live in the low rated-unrated world in which they operate? And, BTW, they did lower the dividend in March or so of 2009. The fund was experiencing heavy INFLOWS and could no longer maintain its dividend because market conditions made it impossible to find enough bonds to satisfy demand. Apparently, not everyone bases  buy decisions on star ratings.

navet's picture
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Joined: 2010-02-25

Thanks BG. This is information I never get at Jones. I appreciate the time you've taken to answer my questions.

loneMADman's picture
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BondGuy,You know WAY more about bonds than I do, but it's not hard to figure out the 1-star Morningstar rating.  Over the past 3 years it has had much worse performance with higher volatility than its peers.  Of course, it did great before that, but one thing buyers in this category value I think, are predictable returns and income.  ORNAX fails in that regard.  That doesn't necessarily make it a bad fund or inappropriate investment, but it's something to be accounted for. 

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BondGuy,Almost forgot.  Can you explain to me why inflows and lack of investment opportunities would lead to a fund lowering its dividend?  Are you saying they parked the money in cash and that's why yield went down?  If they did that, did they really do what you would expect a muni fund manager to do?Thanks in advance for the education...

BondGuy's picture
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lMm, investors in this catogory are looking for high income. Volatilitiy comes with the territory. Predictablity of returns requires a tradeoff to shorter maturity paper.Because the market for spread bonds was still operating in a locked mode well into 2009 the managers couldn't find paper to in which to invest. Yet, with positive net inflows there  were more mouths to feed, so to speak. More dividend paying shares were being created everyday.. Something had to give. 

BondGuy's picture
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One more point on ORNAX. Investors in this fund aren't looking to meet a certain performance goal. Having an investment that's top of it's class in performance is comforting. However, if most or all of that performance comes from gains it does the income buyer little good. This fund is all about one thing; Income! That's it, period! In that way it differs little from a muni bond itself. That the bond goes up and down in value with the market/economic cycle is of little concern to the holder. It's all about the coupon payment. There will be times during that cycle that the bond may be top of the class, other times, bottom. So what! As long as it pays that coupon. And, as well all know, performance is a game. A game you can't win, which is why you never recco based on performance.  This is the difference in the way this fund is managed. While almost everyone of it's peers is playing to the quarterly report, these guys are only after one thing; Income. And they are good at it! But, looking nice and shiny for the quarterly comparos? Not what these guys are about. And they could care less. Navet, you're right, this insight isn't available at Jones. Nor is it available anywhere else. Remember what i said about understanding the investment? My insight comes from doing just that. You can do the same. Find an investemnt and apply this standard: Say to client "If there is any question you can ask me about this investment that i can't answer, i won't put it in your portfolio." To do that, start by reading the prospectus. Then interview wholesalers and managers. This ain't rocket science. It just takes an honest effort to understand what you are doing. The more you understand the more confidence you will gain.

Spaceman Spiff's picture
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navet wrote:Thanks BG. This is information I never get at Jones. I appreciate the time you've taken to answer my questions.Funny, I got that info directly from my Oppy wholesaler.  So, you're blaming Jones for your inability to ask your wholesaler questions?  That's just lame.   

Spaceman Spiff's picture
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N.D. wrote:Spaceman Spiff wrote:Where is the conflict of interest in selling bonds?  Are you thinking that Jones is getting some kind of revenue sharing stream from the bonds in our inventory? Yes. They all do. Bonds are marked up as they are put in inventories. I guessing that's not what he was talking about.  Selling someone a bond that has a mark up isn't a conflict of interest.  I like how you stopped your highlighting at "revenue" and didn't include "sharing stream."  That worked out well for you.  I'd still like to hear Navet explain the conflict of interest he has with selling a bond out of the Jones inventory. 

loneMADman's picture
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BondGuy, as usual you make some good points.  ORNAX certainly seems a suitable investment despite its 1-star rating for those wanting steady tax-exempt income.

navet's picture
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Joined: 2010-02-25

The conflict of interest I was talking about before is the conflict caused by our transactional business. We are on the phone soliciting business out of necessity in order to earn an income. Not necessarily because "we have a great investment and if you have the money you should buy some today". At virtually every training meeting and phone session I have attended, we were given some bond or stock to sell, that most of us didn't care about. If you have good fee based income coming in, would you be on the phone trying to sell what newbies through seg 2 are selling? I doubt it. We have an overbought bond market and a volitile stock market. yet, the necessity to earn a living has us soliciting business. And judging by how poorly our clients portfolios have done over the last 10 years, I have to question our motives and our practices.

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OK, so the stock market is volatile, so we shouldn't be selling stocks (volatility usually means opportunity for teh intelligent investor).  And the bond market is overbought so we shouldn't be selling bonds (CDs at .2% are OBVIOUSLY better for the client).  And the 7% BAB that I was calling some of my best clients this morning isn't in their best interest because I have bills to pay and need to earn a living.  Does that just about sum up your existence at EDJ right now?  No wonder you're on here all the time complaining about EDJ."And judging by how poorly our clients portfolios have done over the last 10 years" - You using this comment makes me chuckle.  I thought you were a noob at EDJ.  How do you know how well our clients portfolios have done over the last 10 years?  Even in the much maligned CAIBX "our clients" would have averaged over 6%.  ITHAX is up over 3%.   ABNDX is up 5.25%  Now, I realize that's not the roaring 90's numbers, but it's a heck of a lot better than under your mattress.  And those are just three well know funds here at Jones.  I'm positive I can find better ones. Just so you know, the market has ZERO to do with you running your business and having to make transactions or collect fees.  It just happens that right now the market is down.  I could make a very valid argument that in 2007 you shouldn't have been calling on stocks and bonds either.  The market was obviously way too high and there were too many bonds at risk of default.  Those are called excuses.  They're the manifestation of call reluctance.  People NEED us right now.  If you can't see that, then you're making the correct choice by sending out your resume to companies outside this industry.  

navet's picture
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The kool-ade is running pretty thick. "People need us"??? From what I've seen at jones, most people don't get what they are paying for. And you never mentioned the potential conflic of interest between your own financial needs and your clients investment needs. My experience at jones indicates that the bill collector trumps client needs through seg4.

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hahahahah yep any service job that pays you based on performance is a conflict of interest.  hair stylist: need a haircut? i think you do. here let me cut your hair navet: NO WAIT THATS A CONFLICT OF INTEREST YOU DONT NEED A HAIRCUT YET.  broker: still buying CD's at 1%? how about earning 7% with that very same money and actually beat inflation while paying less taxes.navet: NO WAIT THATS  A CONFLICT OF INTEREST THEY'RE GETTING PAID FOR SELLING BONDS KEEP YOUR 1% CD ITS FDIC INSURED  yep, they don't need us. we're crooks. we should work for free. DIY'ing your retirement is the way to go.  wow just quit already

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navet wrote:The conflict of interest I was talking about before is the conflict caused by our transactional business. We are on the phone soliciting business out of necessity in order to earn an income. Not necessarily because "we have a great investment and if you have the money you should buy some today". At virtually every training meeting and phone session I have attended, we were given some bond or stock to sell, that most of us didn't care about. If you have good fee based income coming in, would you be on the phone trying to sell what newbies through seg 2 are selling? I doubt it. We have an overbought bond market and a volitile stock market. yet, the necessity to earn a living has us soliciting business. And judging by how poorly our clients portfolios have done over the last 10 years, I have to question our motives and our practices. this post is golden

navet's picture
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Joined: 2010-02-25

still trying to "get hard" junior? Tell you what, work a little harder on analogies. You are young, stupid and don't have a pot to piss in or one to throw it out of. But people do depend on the "wisdom" of their FA, and have a right to understand the potential conflict of interest. Now if you are trying to tell me that a new seg 1 or 2 who's trying to make his rent, doesn't have this on his mind when he's making his recommendation, then you are truly full of, well, we all know what. In this business we start our desperately grasping for any assets we can find. And more than a few senior FA's have been known to churn, and I don't mean butter.

gethardgetraw's picture
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My dentist goes in to work every day to earn $___ after every cavity filled to pay his mortage CONFLICT OF INTERESTMy lawyer goes in to work every day to earn ___% of each settlement to pay his car payment CONFLICT OF INTEREST___ goes in to work every day to earn ___ to pay ___ CONFLICT OF INTEREST NONE OF THESE PEOPLE REALLY CARE ABOUT THE SERVICES OR PRODUCTS THEY'RE OFFERING!!! THEY JUST WANT TO MAKE $$$$$!!! Navet, you're a tool

gethardgetraw's picture
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Isn't Navet sitting on a large pile of cash? Wouldn't this negate the conflict of interest he claims exists due to worrying about paying for living expenses? Navet is making excuses for being too old and too dumb to make it in this industry. He hasn't put in the time nor the effort to understand a) what he's selling and b) the benefits of what he's selling. Case in point: Navet thinks premium bonds are crappy bonds. News flash: premium bonds pay more income and are less volatile to interest rate movements.  Navet, you're a tool

navet's picture
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Lawyers chasing ambulances, dentists replacing good fillings. Thanks for making my point SOFTY.

navet's picture
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gethardgetraw wrote:Navet is more ethical and responsible than all of us combined. Due to the large sum of money he's currently sitting on, Navet lacks any sort of conflict of interest seeing that he doesn't have to worry about putting food on the table and can therefore offer his clients what's best for their individual needs. Navet, you're a tool SOFTY, you made my point again. Do you try to be this stupid, or does it just come naturally?

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One of his very first posts on these forums, making a great first impression: navet wrote: Me, a self indulgent whiner? You're the pussy who needs medication in order to handle the terrible stress of having a large book handed to you. What a fiasco, guaranteed income! It's so hard to make that money! I'll bet you were the kid who's mantra was, It's just not fair! The sad thing is that Jones rewards losers like you.Sadder still, they use you as some kind of example. On products he deems investment-worthy, although he can't sell anything due to the CONFLICT OF INTEREST :navet wrote: ... Advisory Solutions provides a level of diversity at a reasonable price. I have a wealthy client primarily in AF's. I would like to switch him to Adv Sol, or better yet to the MAP when they revamp it. It will give us the flexibility to use "best in class", low expense funds in a reasonably priced platform... 1% to 1.5% is a very reasonable amount to pay for that level of service. And having our managers manage other groups of funds adds a level of safety much needed in this post-Madoff time. On his sales' success: navet wrote: ... People don't buy company, they buy a good product... If you believe in and like the product you're selling, then the close is natural.... Needless to say, I close a lot of VA's. And my favorite:navet wrote: Just what I would be looking for. Some 20 something who doesn't know sh-t, calling me wasting my time. Go somewhere for 10 years and get some experience junior. The only money you're going to get is a few "I feel soory for the little prick" dollars. navet wrote:Experience talks and bulls--t walks. 20 somethings have NO BUSINESS in THIS BUSINESS!!! Go and learn a little about life juniors. If your daddy couldn't afford to pay for your college, and he's an FA, then he is too big a loser to learn from. Detach from the tit, and get on with your life.  navet wrote: If you are all of 21-22 yrs old, then go somewhere and get some experience. Who in their right mind is going to trust their life savings to some kid fresh out of college? Join the Navy Supply Corps. See the world and get some responsibility. What kind of pussy gets a job with his daddy? Grow up junior. navet wrote: When you meet with enough people junior, you become expert at recognizing bulls--t. Go back to your videogames. I hear your moms making mac'n'cheese tonight navet wrote: (Navet referring to himself) ... these knees wouldn't allow me to door to door even if I was willing... this obviously not the place for me... it works for younger people...  

gethardgetraw's picture
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Joined: 2009-10-22

Just found even more recent, classless Navet (the self-proclaimed millionaire) posts:http://forums.registeredrep.com/forums/rr-newbie-members/fa-transition-law-school

gethardgetraw's picture
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Joined: 2009-10-22

You're done for around here, Navet.No one likes you. You really are a giant tool, who since day 1 has contributed absolutely nothing constructive to these forums. Nothing but criticism, negativity, and endless complaints about how this industry is apparently flawed.

N.D.'s picture
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Joined: 2009-07-14

dayum navet GHGR must be another one of those Glen Beck racist gun toting Bible beating Nascar watching hunting fishing GW big oil dirty coal anti-gay rights sumbiatches you are sooo sick of huh?Either way he pretty much just handed you your ass!!! You should probably just leave quietly like Mike Gegelman didn't do before someone totally humiliates you.

navet's picture
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Joined: 2010-02-25

Must hit close to home, huh ND. Lets see ND, Notre Dame? Hardly. probably North Dakota, where cousins get married. Thump that bible preacher. Now softy. Just promise me you won't tell your mommie I've been picking on you. Listen. if you're gay, then deal with it. No male pays that much attention to another male without being gay. But really, "noone here likes me"??? Are you shi--ing me? Are you in junior high? Tell me junior, do you think anyone in this industry gives a sh-t about you? You obviously have low self esteem, so I'll let it go for now. Anyway, you bore me.

iceco1d's picture
iceco1d (not verified)

Navet,I sense you're struggling with your career choice at
this point, and the choice may very well be that you should find a new
industry.  But maybe I can help you reconcile something?You are
absolutely right that there are huge conflicts of interest in this
business - and there always will be.  The ONLY person that can decide
whether you run an ethical show, or a dishonest show, is you.You
question the merits of cold calling on a product, such as a bond or a
stock.  The first thing you should realize is that you aren't ACTUALLY
trying to sell what you are calling about (although, some people do). 
You just want the product you call with to get people interested in
MEETING YOU.  Once you get some face time, if the bond you
called them about originally isn't appropriate...tell them!  "Mr.
Prospect, I really don't think that XYZ Bond is right for you, but if
you're open to another idea or two, I'd be happy to run a more
appropriate alternative by you?"  Blah, blah, blah.  A prospect is
going to respect you for NOT selling them something they really don't
need, and most likely LET YOU sell them something else.  So
don't think that just because you're pitching a product on the phone,
that you have to actually sell it.  You're looking for contacts and
appointments, not necessarily $10,000 bond sales.  And if that still
makes you uncomfortable, DON'T pitch product on the phone - pitch
appointments.  As far as what you CAN sell clients..-You
think the stock market is too volatile right now to buy (I disagree,
but this is about you)...so sell all of your equity wrapped inside of a
VA with a GMAB rider.  Your clients will be GUARANTEED to get their
money back if the market is truly ready to sh!t the bed.  -Clients
need some growth, not just their money back?  Sell them their equity in
a VA with a GMIB rider, that will give them 6%+ per year on their
income base, combined with income for life (or spousal income for life,
if they need it).-Bond market "overbought?"  Alright, ADVISE
your clients about how to shortern the duration of the fixed income
piece of their portfolio.  Take a look at high yield.  Or GNMAs.  Or
BABs.  Or all of them.  Show them how to protect their fixed income in
a low interest rate market where you suspect a bubble in Treasuries. 
THEY DON'T KNOW THIS STUFF ON THEIR OWN!-Surely, many of your clients and prospects have CDs yielding < 1.5%.  Show them how they can take advantage of fixed annuities and get a better rate (replacing CDs with Fixed Annuities could be a great cold call campaign also).-Do any of your clients have mutual funds in a taxable account, when the client (and spouse) are NOT utilizing their Roth IRA limits?  You could do them WONDERS just by getting them to move their funds into a Roth (even if it's the same funds).-How about life insurance?  Do your clients and prospects have enough term insurance to cover their mortgage and other debt, as well as replace their spouses income (for life) if one of them died?  I bet a lot of them need more.  -How will your clients pay their final expenses?  Certainly term isn't the only answer, as most people don't have the discipline to implement a BTID strategy.  I personally think most people could benefit a great deal from $50 - $100K in GUL, and can easily pay it up by age 40 or 50.  It's relatively inexpensive, and it's permanent (unless they break a world record for age).-Do ANY of your clients carry their own disability insurance?  I know hardly any of mine do, and it's something I should either partner with a pro on, or get more versed on it myself.  It's so cheap, but yet could completely save a household so much headache and pain.-How about long term care insurance?  Even the Suze Orman's of the world think it's a must-have (I think?).  But even the states are sponsoring "partnership" programs to help motivate their residents to buy LTCi.  What a great product!  And what a HUGE market to sell it to!  Become a LTCi pro.  You can make a nice buck to get you over your hurdles, do your clients a service with your state's blessing!How about 529 plans?  Do you know they can be used to remove money from a grandparent's estate, but it leaves the grandparent (or parent) in control of the money if they needed it (but it's doubtful they would need it, since they have estate tax issues, they probably have several million in net worth).  How about pension maximization and target teachers and state employees?  Pension max frequently works out better for the client (if they are healthy and not really old), so you get a nice insurance sale (that by virtue of having it, makes YOU, AND the CLIENT more money than leaving the spousal protection to the state).  The insurance bolsters your up front commission to get you over your hurdles, and you can invest the pension rollover + 403B or 457 money however YOU think is the most ethical (whether it's commission mutual funds, advisory solutions, variable annuities, or individual stocks or bonds, or you can sit on the money in brokered CDs and/or fixed annuities). The point is, you can run your practice HOWEVER you want, and you can do it ehtically and help a lot of people.  To do so, you need to meet enough people, and have enough arrows in your quiver, that you can help them no matter what you think about the economy.Good luck. 

Spaceman Spiff's picture
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Joined: 2006-08-08

Sorry ice, that was a great post, but you're casting pearls before swine.  See, the problem is you get paid for all of those products.  And in navet's mind, that creates a conflict of interest.  Evidently the only way for us to work in this industry without any conflict of interests is to have a salary.  That way we know that we're going to be able to write that check for our country club dues every month and we don't have to be conflicted about what we do with out client's portfolios.  navet - with your vast experience in the brokerage industry of what, months, tell me how you would set up your business to give people the financial advice they need, but without all of those pesky conflicts that you perceive as a problem at EDJ.   

BondGuy's picture
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Joined: 2006-09-21

Ice, well said! Great post!

navet's picture
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Joined: 2010-02-25

Thanks ICE. The problem is at Jones I am surrounded by Spiff's and not you or BG. My reason for posting the comments I do is that this is an annonomous site and I can ask these questions and get great feedback without alienating the people I work with. I realize that these questions are often pointed and negative. But I've been in sales for over thirty years and I like to have my head straight before I sit down with a customer. I've had great success with VA's for boomers. I've gotten away from American A shares. In fact BG, I sold some Oppenheimer last night, thanks for the info. Anyway, as long as I'm in this business(probably not too much longer) I will continue to post my questions here, even if(like Softy says) nobody likes me...ouch...hahahahaha....

iceco1d's picture
iceco1d (not verified)

You guys miss me...admit it. 

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