The Mutual Fund Store

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Spaceman Spiff's picture
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I've been running into this place a lot recently.  I'm amazed that people will listen to some guy they've never met in person and let him decide what they're going to invest in. 
 
Does anyone know how their system works?  What I envision is Adam Bold sitting down at his computer looking at funds, then telling his advisors what their portfolios are going to be.  The schmucks at the local Mutual Fund Store answers the phone during the call in show, sets appts, then signs people up.  He probably doesn't have a clue why or how the portfolios are set up, he just knows how to push the right buttons on the keyboard.  From what I've gathered, service is awful.  Fees are average.  Performance is blah. 
 
Does anyone out there know any more about this place than I've been able to gather?  Any skeletons in the closet?  It's never small money that I see there.  Usually $250K+ portfolios.   

HymanRoth's picture
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Joined: 2008-08-25

Don't know any skeletons.  Bold pushes the whole angle over and over that his folks aren't paid a commission, just "a small fee", and talks constantly about their asset allocation process.  Maybe that's why they draw bigger accounts.

rankstocks's picture
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Joined: 2005-02-10

Adam Holt is a joke.  I was listening to him a couple months ago when he said Edward Jones advisors had used Lehman Brother bonds to leverage client portfolios and then use the proceeds to fund risky mortgage backed paper (what?).  In the very next call he took,  he thought stable value funds were made up of 2-week treasury bills.  Idiot.
 
Here's his pitch....stocks bad, bonds bad, CD's bad, load mutual funds bad, UIT's bad, everything except his advisory platform bad.  What's even funnier?  The mutual fund store closest to my office was taken over by an Edward Jones broker that failed within 6 months.  What a joke.

anonymous's picture
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Joined: 2005-09-29

I've never heard his show.  His advice may be a joke, but as a business person, he's probably first rate.  If I'm not mistaken, he's Schwab's #1 RIA.

B24's picture
B24
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I know absolutely zero about the MF Store.  I don't think they have offices near me, and they definitely don't advertise.  But I looked at their fund list.  I have to say they have some damn good funds in their arsenal (they also have some dogs like Magellan).  I don't know how they operate in terms of fees, advice, etc.  But if they are coming up with well-balanced portfolios from the list that I saw (link attached), it's not the worst thing someone could do.  And it would be tough to talk down a portfolio consisting of these funds.  I'll be honest - it's far better than the crap I see coming in from some wirehouses and indies around here, and better than what a lot of Jones advisors do (I'm not poo-pooing us or the wires or indies - I'm just saying that their fund list is pretty impressive).  JMHO.
 
http://www.mutualfundshow.com/funds/index.asp
 
Oh, and he uses both load and no-load families, so I don't think he claims that load funds per se are bad, just PAYING a load is bad (of course, I've never even heard him speak).

Squash1's picture
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Joined: 2008-11-19

Can we get his name right, Adam Bold(not defending) got this from his website

Fee-based: Because we receive a quarterly fee based upon the assets we manage for a client, our advisors are motivated to monitor the portfolio on an ongoing basis. Furthermore, our advisors are bound by their fiduciary responsibility to keep their clients’ interest first.
 
Serve the everyday American: Our clients open investment accounts with as little as $50,000 and have access to thousands of no-load and load-waived mutual funds. This allows us to manage money for the typical mutual fund investor.
 
He is just a RIA, probably charges 1% or higher, and now he is talking about franchise opportunities(nice jargon, wrong industry) where you can go work for him in one of the stores.
 
I have never run into anyone who uses these people

Morphius's picture
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Joined: 2007-07-21

It may be tempting to write him off as a joke or "just an RIA," but he has more than $4 billion in AUM.  Whether or not you agree with his fund picks or his take on the underlying securities in a given fund, he's certainly running a successful business.  Do the math: if he averaged only 1% on AUM he is generating more than $40 million gross.  And that doesn't even include the franchise fee revenues.   If there's a joke involved here, I think he's the one that's doing the laughing ... all the way to the proverbial bank.

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

B24 - Thanks for the quick link.  I would have eventually found it, but you saved me some time. 
 
I've spent some time on his website and figured out that rank is exactly right.  He doesn't like annuities, individual stocks, UITs, ETFs, strategic allocation funds, SMAs, and pretty much everything else except his particular way of investing.  He actually told some caller that unless you have $5,000,000 to $10,000,000 that you shouldn't own ANY individual stocks. If you click on the link that B24 put up, look for the investment topics link and then find the one that says market bottom.  This idiot actually put out there on the public airwaves that the market had reached the bottom.  IN MARCH!!!    
 
The guy is a marketing genius.  Tell everyone that all advisors, except him, are money hungry, commission driven beasts that only sell you what they can make the most on.  Say it over and over again on the radio and eventually people will believe it.  They will then call your local branch and move money to you because you are the genius on the radio. 
 
OK, so how would you guys go after prospects that currently work with this bozo?  You're certainly not going to win them over by telling them how big an idiot this guy is.  They'll just figure you're a money hungry broker who's looking out for #1.  I've got three prospects that have money with this guy right now.  Total is about $1.3MM.  Those would be nice assets to get in here in January. 

Squash1's picture
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Joined: 2008-11-19

I think you could do three things. And all of these depend on the portfolio and how you want to look..
 
A. Worst case scenario(IMO) compete with him on the fee(ie they charge 1.5 you go 1.00). But then i think that might get you into a bigger problem(on an ongoing basis)
 
B. Show a client a portfolio of the investments they own, and if they started investing in 98 2001,2002 and show them how much money they would have today(I am guessing equal to or less than what they put in) and then explain the idea of a VA and the income guarantees/death benefit.
 
C. Warren Buffet owns stocks, why can't they.  After all mutual funds are just stocks.
 
D. I would go with alternative assets here, but since you are with EDJ, kind of out of the question.
 
E. Somehow relate that your EDJ office is more personable and client focused, then the big bad Mutual Fund Store(too many clients, turnover of key personel, hold times etc..)
 
 

B24's picture
B24
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Well, I am assuming based on seeing their funds, that the investments are pretty good.  So I don't think you can use that angle.  But I am not sure how "tailored" their approach is to clients.  In other words, I don't think they do a lot of "planning".  So maybe their investments are OK, but they just need more planning, and possibly more investment solutions to address their specific needs (i.e. annuities, insurance, whatever).

The one other thing is to possibly get them on board by avoiding the advisory fee.  Maybe they are bothered by the fees they are paying.  You don't have to bash the fees, but maybe paying 2.5% once would be better than paying 1% every year (in their mind).  You just have to find their pain.

snaggletooth's picture
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Spaceman Spiff wrote:B24 - Thanks for the quick link.  I would have eventually found it, but you saved me some time. 
 
I've spent some time on his website and figured out that rank is exactly right.  He doesn't like annuities, individual stocks, UITs, ETFs, strategic allocation funds, SMAs, and pretty much everything else except his particular way of investing.  He actually told some caller that unless you have $5,000,000 to $10,000,000 that you shouldn't own ANY individual stocks. If you click on the link that B24 put up, look for the investment topics link and then find the one that says market bottom.  This idiot actually put out there on the public airwaves that the market had reached the bottom.  IN MARCH!!!    
 
The guy is a marketing genius.  Tell everyone that all advisors, except him, are money hungry, commission driven beasts that only sell you what they can make the most on.  Say it over and over again on the radio and eventually people will believe it.  They will then call your local branch and move money to you because you are the genius on the radio. 
 
OK, so how would you guys go after prospects that currently work with this bozo?  You're certainly not going to win them over by telling them how big an idiot this guy is.  They'll just figure you're a money hungry broker who's looking out for #1.  I've got three prospects that have money with this guy right now.  Total is about $1.3MM.  Those would be nice assets to get in here in January. 
 
Are his clients in his mutual fund plan only successful when the market goes up?  If so, I'd hate to be in that position with these markets.
 
Why don't you ask your prospects that?

Squash1's picture
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I would also focus on distribution phase(ie retirement if applicable) show them what happens when you start taking 3,4,5% a year and when the market crashes what that income turns into.
 
B24 is right, probably not a lot of focus on the planning over there. Asset allocation probably but not actual planning

theironhorse's picture
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i guess i would try to find out WHY they are talking to you in the first place, if they love this other "advisor" and agree with his philosophy.  there has to be something they don't like or they would not be listening to you in the first place, and use that info to your advantage.

Borker Boy's picture
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rankstocks wrote:Adam Holt is a joke.  I was listening to him a couple months ago when he said Edward Jones advisors had used Lehman Brother bonds to leverage client portfolios and then use the proceeds to fund risky mortgage backed paper (what?).  In the very next call he took,  he thought stable value funds were made up of 2-week treasury bills.  Idiot.
 
Here's his pitch....stocks bad, bonds bad, CD's bad, load mutual funds bad, UIT's bad, everything except his advisory platform bad.  What's even funnier?  The mutual fund store closest to my office was taken over by an Edward Jones broker that failed within 6 months.  What a joke.
 
Did he fail at Jones or the Mutual Fund Store?

bspears's picture
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Joined: 2006-11-08

I think this guy has a great niche.  We can find bad in anything out there, but this guy is a true entreprenuer.  Same as Fisher Investments and Ron Carson.  They develop a business model and push it, kinda like doorknocking all day.  Leave it up to a joneser (rankstocks) to bash the store, makes them feel better.  Its bread into the culture. 
So...Spiffy, what makes you think you can do these clients any good in this environment?  Is this to better their portfolio (they offer some great funds) or to better your gross for January?

Borker Boy's picture
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Spaceman Spiff wrote:I've been running into this place a lot recently.  I'm amazed that people will listen to some guy they've never met in person and let him decide what they're going to invest in. 
 
Does anyone know how their system works?  What I envision is Adam Bold sitting down at his computer looking at funds, then telling his advisors what their portfolios are going to be.  The schmucks at the local Mutual Fund Store answers the phone during the call in show, sets appts, then signs people up.  He probably doesn't have a clue why or how the portfolios are set up, he just knows how to push the right buttons on the keyboard.  From what I've gathered, service is awful.  Fees are average.  Performance is blah. 
 
Does anyone out there know any more about this place than I've been able to gather?  Any skeletons in the closet?  It's never small money that I see there.  Usually $250K+ portfolios.   
 
Have you listened to podcasts of the Mutual Fund Show? The guy's the Cramer of mutual funds.
 
I'd imagine he knows a tad bit more about how and why to construct a portfolio than you're giving him credit for. He puts his expertise on display every week on the radio, and apparently folks with a lot of money are buying what he's selling.
 
 

Squash1's picture
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So we should not prospect anyone until this market ends because we cannot help them?  I think that is a terrible statement. I think you can help people, by repositioning assets(reallocation) finding if they were in the right allocation to begin with.
 
Client xfering in $84K today(yeah kinda small), but they had $175K in dec 31, 2007. They are 62, and only 10% bonds/fixed income in the portfolio(and that was high yield funds), the rest equities(some bad stuff too, funds that closed, got renamed, some Jones preffered(just kidding... but not really)).
 
Had they been allocated properly or had the advisor kept a better eye on the investments they held, I would like to think, that their portfolio wouldn't been in shambles.
 
So we find out what their risk tolerance is combine that with age,assets and goals, and build a plan for the future..

bspears's picture
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Joined: 2006-11-08

Well dipshit..if you would have read SPiffs question..he was looking for an ANGLE to discredit Money Store. If it was all about basic allocation models, I think Spiff would have tried that already. 
WE all have accts (unless you've been prospecting for less than a year) where the portfolios are in terrible shape, especially from the last 2 months.  What you say in your thread is so f ing "duh" I can't control myself.  Your repositioning is a commission comment.  Like I said before, we can find bad in ANY portfolio.  I bet I could, within a very short time, find fault in several of YOUR portfolios Squash, but doesn't necessarily make you a bad advisor.  How long you been helpin people with their allocations...3 weeks?

jkl1v1n6's picture
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So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 

snaggletooth's picture
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I got it Spiff.
 
I cancelled all of my appointments today and didn't take any phone calls so that I could think about this for you.
 
Send your Mutual Fund Store prospects this book:  http://www.amazon.com/Great-Mutual-Fund-Trap-Investment/dp/0767910729/ref=sr_1_1?ie=UTF8&s=books&qid=1228955304&sr=1-1
 
 

Borker Boy's picture
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jkl1v1n6 wrote:
So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 
 
That's great advice, whateverthehellyournameis, but that ain't how this story's gonna end.
 
Those funds will be liquidated so fast it'll make your head swim--before they get to Jones, of course--and then the cash is going into Advisory Solutions or A shares.
 
Trust me on this one.

Indyone's picture
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Is it just me or does anyone else feel like "The Mutual Fund Store" is about the Kraft Macaroni and Cheesiest firm name you've ever heard?  Why not call yourself Fund-Mart Investment Management or Funds R Us?  Apparently, $40 billion dollar's worth of clients think it's just fine, but it sounds pretty gay to me.

Morphius's picture
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Indyone wrote:Is it just me or does anyone else feel like "The Mutual Fund Store" is about the Kraft Macaroni and Cheesiest firm name you've ever heard?  Why not call yourself Fund-Mart Investment Management or Funds R Us?  Apparently, $40 billion dollar's worth of clients think it's just fine, but it sounds pretty gay to me.That would only be about $4 B in AUM (if one can use the word "only" when speaking of $4 B), not $40 B.  Still a lot.And FWIW, I recall having the same reaction to the name when I first saw it.  I still don't like it, but you can't argue with the results he's achieved.  Walmart is a pretty goofy name too, when you think about it. 

jkl1v1n6's picture
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True enough Borker boy!

Spaceman Spiff's picture
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bspears wrote:
I think this guy has a great niche.  We can find bad in anything out there, but this guy is a true entreprenuer.  Same as Fisher Investments and Ron Carson.  They develop a business model and push it, kinda like doorknocking all day.  Leave it up to a joneser (rankstocks) to bash the store, makes them feel better.  Its bread into the culture. 
So...Spiffy, what makes you think you can do these clients any good in this environment?  Is this to better their portfolio (they offer some great funds) or to better your gross for January?
 
He does have a great marketing plan.  And it obviously works for him.  So as far as that goes he is a great businessman. 

 
As to rank's post, since I didn't hear that particular discussion on the radio I don't have the ability to say whether it's true or not.  But the couple of times I've caught the guy on the radio in the past, he's never gone out of his way to say anything nice about EDJ.  So, if that's what rank heard, then I would completely understand why he said what he did. 
 
I don't have much to complain about with these folks about the funds they own.  Some of them are funds I use (OIBAX, OPSIX) in my own portfolios.  Some of them are funds in our Advisory Solutions platform (OIBAX, MADVX, EXEYX).  Now, I do have issues with his asset allocation.  In the couple of portfolios I've seen, he only uses high yield and strategic income type bond funds.  No treasury or highly rated bonds to speak of.  He also tends to lean more to the aggressive side.  At least according to the Jones model and the people I've had meetings with.  Maybe that works great in good markets, but not so well in markets like this. 
 
So, what can I do to help them in this environment?  Well, one of the couples I suggested they take what money they have in the MFD Store and move it into a VA with an income rider.  In July.  The wife is on board, but the husband said he doesn't see the value.  And he can't see paying me a commission in a down market.  Now their account is down 40%.  But, Adam Bold doesn't believe in VAs, so there's no benefit to them. 
 
So, different investment strategies, actual planning, better service, and of course my smiling face are all things I think I can deliver to these people.  I've known that all along.  My purpose with this original post was to maybe learn something else that I can use.  Thanks for all of the great, and not so great, responses. 

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Borker Boy wrote:jkl1v1n6 wrote:
So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 
 
That's great advice, whateverthehellyournameis, but that ain't how this story's gonna end.
 
Those funds will be liquidated so fast it'll make your head swim--before they get to Jones, of course--and then the cash is going into Advisory Solutions or A shares.
 
Trust me on this one.
 
Borker, most likely, many of the funds are advisor-class shares and would have to be liquidated unless they were held in the advisory program at Jones.  Most load-waived and institutional share classes cannot be held outside of advisory platforms.  Not sure what share classes they use, but just a thought.  I know when I've brought some funds from other firms that were in advisory, I could not hold many of them.
 
Good attitude, by the way.

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Borker Boy wrote:jkl1v1n6 wrote:
So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 
 
That's great advice, whateverthehellyournameis, but that ain't how this story's gonna end.
 
Those funds will be liquidated so fast it'll make your head swim--before they get to Jones, of course--and then the cash is going into Advisory Solutions or A shares.
 
Trust me on this one.
 
And what would you do with it, oh wise one? 
 
B24 is right.  Some of them can't be held at Jones, so if I want those people as clients, and they want me as their advisor, they'll have to be liquidated before they come to Jones. 

bspears's picture
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Long story short....churn and burn baby!!!

Squash1's picture
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Your repositioning is a commission comment. - Bspears

 
I guess is I charged commission on everything like you do at Jones it would be. But it doesn't cost the client anything to reposition and find better investments, I am not making anymore money by repositioning the assets than I am by keeping their same assets.
 
Are you grumpy because all of the preferred funds crashed? And did so worse than if your clients had just purchase the index?

Spaceman Spiff's picture
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spears doesn't work for Jones anymore, so he doesn't charge people commissions to move money to him.   Evidently he works for free at LPL. 
Not to get this thread any more off track than it already is, but which index are your referring to?  And which preferred funds specifically are you referring to?  When you say "all of the preferred funds crashed" you're paiting with a pretty wide, and inaccurate, brush.  I'll give you an example.  In the growth and income category we have 18 preferred funds.  7 of them are down more than the S&P, Russell 1000, and the Morningstar Large value index as of the end of Nov.  I'm sure if I took the time to look the rest of them, I'd find the same thing.  So, saying that clients would have been better off buying the index is an inaccurate, and foolish, statement.  Perhaps you should clarify what you really meant to say.

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I can't find my damn list... But shooting in the dark, I would say 95% Putnam, 80% Van Kampen, 75% (Franklin, Goldman)
And by index not just the S&P 500, but add in every other index(it seems etfs are the cheapest way to go about this now).
 
I don't disagree that "some" actively managed funds have achieved better results, however most of those aren't on the Jones preferred list.  And it was more of a shot at Spears, for the "repositioning statements is for commissions" comment.
 
 

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Ice - I knew you'd throw your hat into this ring.  I've actually been giving some thought to the whole index vs active fund idea.  Seems that when you run our Advisory Solutions ETF/Index model against our fund based model for the last year (I know, short term, but I can't go back 5 years with historical data with the ETFs) the ETF platform outperforms.  By 5% to boot.  Makes a very happy managed money guy scratch his head.  And to bring this back to the MFS, if Mr. Bold thinks they're bad, I guess it's one way I can talk with these folks and offer them something different. 
 
And Squash's comment about all of the preferred funds being down more than "the index" is absolutely inaccurate and foolish. 
 
You, however, may be right.  I guess if I only work with .xx% of the people out there and let you have the rest of them I can just keep going about my business as usual.  

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Squash1 wrote:
I can't find my damn list... But shooting in the dark, I would say 95% Putnam, 80% Van Kampen, 75% (Franklin, Goldman)
And by index not just the S&P 500, but add in every other index(it seems etfs are the cheapest way to go about this now).
 
I don't disagree that "some" actively managed funds have achieved better results, however most of those aren't on the Jones preferred list.  And it was more of a shot at Spears, for the "repositioning statements is for commissions" comment.
 
 
 
Putnam - not a preferred fund any longer.  Jones just sent an email to all of us basically telling us to get out of Putnam. 
 
Goldman and Franklin - Wrong again.  Perhaps if you reverse your percentages you'd be more in line. 
 
Van Kampen - Maybe half of them are worse than their indexes right now.  I don't use them a lot anymore, so I don't follow them too much.  I just took a quick look at my chart. 
 
And I agree, ETFs are the cheapest way to go about this now.  Perhaps not the best (sorry ice, I'm not quite with you yet), but certainly the cheapest.  
 
 
 
 

jkl1v1n6's picture
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Spiff,
Didn't you answer your own question a little bit ago.  Nothing wrong with funds but your asset allocation isn't what you'd recommend.  There's your angle, then show them what you can do and why.  I don't know anything about Jones' Advisory platform but isn't it around 1.5%, that's not horrible for fees, unless that's before fund expenses, and my guess is you could show him how you could keep some of the funds that he's in.

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Sorry I don't get the updates anymore on the LIST, I have my list from 2 years ago.  Hey is Van Kampen Strategic Growth(or whatever fund it is now) still on the list..

Borker Boy's picture
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Spaceman Spiff wrote:Borker Boy wrote:jkl1v1n6 wrote:
So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 
 
That's great advice, whateverthehellyournameis, but that ain't how this story's gonna end.
 
Those funds will be liquidated so fast it'll make your head swim--before they get to Jones, of course--and then the cash is going into Advisory Solutions or A shares.
 
Trust me on this one.
 
And what would you do with it, oh wise one?
 
I realize you'll retort that "you don't work for free," but since they have access to as many funds (probably many more) as you do, why not do just a tad of pro bono work and give them a little advice on how you'd allocate them in what they already own? I know you're salivating at the idea of bringing over the assets, but could you advise someone to sell right now and still sleep at night?
 
Advisors are just as culpable in hurting investors' returns as DIYers are due to our constant hunt for something to liquidate and transfer. We preach buy and hold, but we're constantly looking for accounts to liquidate, transfer in and then reinvest. 
 
All for the sake of one more fat commission.
 
B24 is right.  Some of them can't be held at Jones, so if I want those people as clients, and they want me as their advisor, they'll have to be liquidated before they come to Jones. 
 
 

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Borker Boy wrote:Spaceman Spiff wrote:Borker Boy wrote:jkl1v1n6 wrote:
So you know they have an account at the mutual fund store.  Have you asked them why?  Based off of their answer try to come up with something brilliant.  Or you could just offer up that you can handle those same funds in the account that they have with you already.  See what they say.  That may or may not be a light bulb for the client.  Awful nice to know where those clients have 1.3mm for future reference. 
 
That's great advice, whateverthehellyournameis, but that ain't how this story's gonna end.
 
Those funds will be liquidated so fast it'll make your head swim--before they get to Jones, of course--and then the cash is going into Advisory Solutions or A shares.
 
Trust me on this one.
 
And what would you do with it, oh wise one?
 
I realize you'll retort that "you don't work for free," but since they have access to as many funds (probably many more) as you do, why not do just a tad of pro bono work and give them a little advice on how you'd allocate them in what they already own? I know you're salivating at the idea of bringing over the assets, but could you advise someone to sell right now and still sleep at night?  - Yes.  It's not like we're telling people to move money out their mutual funds and put it in cash for the rest of their lives.  Or moving to something that is at it's 52 week high.  It's a sell low, buy low process.  It's the same thing I'd do if the market weren't down 40% this year.  It's just like when I moved my checking account from Commerce Bank to US Bank.  My checkbook changed, but not the amount of cash I had.  If I were only looking at it from a commission standpoint, I'd tell them to leave it where it is and come back to me when it grows back to what it was before.  That way I'd get paid what I originally thought I was back in August. 
 
The other problem with that scenario and this particular thread is that the MFS uses some pretty obscure fund families that may only have one or two funds in their lineup.  Sure, if someone transfers in say, Pioneer, I could shuffle some things around that fund family and do the work for no cost.  But if it's FBR, who only has 10 funds total, and a bunch of them are niche funds, you're kind of stuck.  So, you do what you have to do.  Also, I don't want to look up one day after 5 and find that I've got 300 different funds out there that my clients own and I'm now responsible for tracking.  I just choose to run my business differently.     
 
Advisors are just as culpable in hurting investors' returns as DIYers are due to our constant hunt for something to liquidate and transfer. We preach buy and hold, but we're constantly looking for accounts to liquidate, transfer in and then reinvest. 
 
All for the sake of one more fat commission.
 
B24 is right.  Some of them can't be held at Jones, so if I want those people as clients, and they want me as their advisor, they'll have to be liquidated before they come to Jones. 
 
 
 
I'm continually amazed at what I perceive as anti broker statements.  Like the "one more fat commission" one.  Perhaps it's just anti-Jones.  But you really need to figure out who you want to work for or what industry you want to be in.  I can't imagine making a living doing what we do with thoughts like that floating through my head.   

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iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
Furthermore, do you see a problem with that?  Hell, what if you leave 90% of the portfolio where it is, but the client wants to come to you because you'll help them with X, Y, Z also...whats the problem there?  Maybe I'm missing something.
 
 
 
Without knowing what the MFS clients own, I can't comment as to whether they'll transfer.

But if 90% of the funds would transfer in kind, then that's obviously a totally different situation.
 
(And in the future, please refer to me as Oh Wise One.)
 

Borker Boy's picture
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I'm more anti-criminal than anything. Sorry I stepped on your toes.

bspears's picture
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I see this as ...SPiffy=Darth Vader and Borker=Luke Skywalker...

Spaceman Spiff's picture
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I guess that would make you Princess Lea. 

Spaceman Spiff's picture
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Borker Boy wrote:iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
Furthermore, do you see a problem with that?  Hell, what if you leave 90% of the portfolio where it is, but the client wants to come to you because you'll help them with X, Y, Z also...whats the problem there?  Maybe I'm missing something.
 
 
 
Without knowing what the MFS clients own, I can't comment as to whether they'll transfer.

But if 90% of the funds would transfer in kind, then that's obviously a totally different situation.
 
(And in the future, please refer to me as Oh Wise One.)
 
 
Here's what one of the clients owns:  MDDVX,UMBIX,FBRVX,KSCVX,WWNPX,LAALX,EXEYX,FMIEX,BHYSX,NEFZX,OIBAX,OPSIX
 
The bolded ones can't be held in firm name.  They represent 35% of the holdings.  In theory we could transfer the rest in-kind and petition the Advisory Solutions people to let us use them in place of a similar fund in the lineup.  I've not done that yet, so I don't know how open they are to that idea. 

buyandhold's picture
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iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
 
 
 
Only cash -- not funds -- can go into Advisory Solutions. And there's no tweaking, liquidating, rebalancing done by the FA. It's done by the Advisory Solutions committee.
 

henryhill's picture
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That is not exactly true.  The broker can do some tweaking in advisory solutions. We can replace a fund we don't like with one we do.  I believe only cash can go into advisory.

Borker Boy's picture
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buyandhold wrote:iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
 
 
 
Only cash -- not funds -- can go into Advisory Solutions. And there's no tweaking, liquidating, rebalancing done by the FA. It's done by the Advisory Solutions committee.
 
 
How convenient.

B24's picture
B24
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buyandhold wrote:iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
 
 
 
Only cash -- not funds -- can go into Advisory Solutions. And there's no tweaking, liquidating, rebalancing done by the FA. It's done by the Advisory Solutions committee.
 
 
Wrong again.  If there are funds held by the client elsewhere, that are part of our advisory program, we can bring them directly into the advisory account.  And if we choose to do a custom model (versus a Jones model), then you can do what you want with them. If you use the Jones model, they will auto-rebalance to whatever their asset allocation is.

B24's picture
B24
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Borker Boy wrote:buyandhold wrote:iceco1d wrote:Borker,
I must be missing something here.  Can't you guys transfer directly into your Advisory platform?  Then tweak what you want, liquidate, hold, rebalance, whatever it is that you want to recommend? 
 
 
 
 
Only cash -- not funds -- can go into Advisory Solutions. And there's no tweaking, liquidating, rebalancing done by the FA. It's done by the Advisory Solutions committee.
 
 
 
How convenient.
 
It doesn't matter whether you bring cash or securities into an advisory account.  You still get paid the same thing.  There's no incentive to either lquidate or not liquidate. 

Squash1's picture
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Joined: 2008-11-19

Why not focus on the ETF portfolio you offer and compare management fees to etf costs.

Borker Boy's picture
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Geez. Has anyone transferred funds "in kind" into Advisory Solutions? Noone seems to have a clue about the exact protocol.
 
I know there are a ton of old A shares going in, but that's a whole other animal.

jkl1v1n6's picture
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Do tell us about this whole other animal.  I'm curious.  After all of those years in A shares, why is it better for them now?  Not trying to be an a**, just want to hear how it is explained to the client. 

B24's picture
B24
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Jesus Borker. There's like 13,000 Jones FA's out there, and like 5 of them post on this board. WTF do you expect? Why don't you either jsut look it up or call STL and ask. It's pretty freakin simple. If the fund is one that is in the program, you can transfer it in. If not, you have to liquidate and move the cash in, then use the program funds.

ICE, we have a list of about 160 funds/ETF's. If you chose a custom portfolio, you can use whatever funds you want, but you have to stay within general allocation guidelines. Since they are trying to maintain this as a true Advisory/Asset Allocation program, they want to make sure that people are using a reasonable methodology to come up with their recommendations. It's supposed to be more than a wrap account with whatever you feel like putting in it. Right or wrong, it's brand new, and like most things they do, they are trying to maintain some control over it. I would love to be able to do it my own way, and use allocation funds (i.e. First Eagle, Blackrock,etc.) with satellite funds around it. However, they are currently focusing on pretty strict asset allocation . I think their biggest fear is liability for recommendations within an "advisory" platform. It's not perfect, but it's a great start. And the funds they have screened into the program are very good.
As far as the asset allocation, there is some flexibility. First, they have many different AA models. But the guidelines are pretty "high level" - X% in Growth, X% in G&I, X% in Income, etc. But within those categories, you can allocate (for example) to small cap, mid cap, large cap, int'l, domestic, Commodities, etc. based on your discretion. You also have maximums you can allocate to any one fund (like 40% I think?).
It's a better program than knuckleheads like Borker think.

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