Why do they stay at Jones?

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newtojones99999's picture
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Why do seg 3, 4, 5 FAs stay at Jones if the payout is so much higher as an indie?

Moraen's picture
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Kool-aid

BerkshireBull's picture
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Easy life.  The company feeds them pretty well letting them have the good accounts of failed brokers as well as being able to keep the 20% of sucker clients from any other broker in their area who does leave to go independent.  I'm guessing there's a lot of status with management constantly pimping their "stars" egos letting them speak at meetings and all the lesser brokers looking up to them.

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B24
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newtojones99999 wrote:Why do seg 3, 4, 5 FAs stay at Jones if the payout is so much higher as an indie?

 
There's like 100,000 FA's at wirehouses right now, with another 50 or 60,000 at regionals.  Do you really think ALL of them want to own a business?  I don't know why people keep beating this dead horse.  I know several guys in my town with decades at the wires.  They basically have said "I'm 55, I make 250K per year, work 30 hours a week, get a nice contribution to my 401K, my benefits are all there - why would I want to distrupt all that to make, what, 300K? 350K?  Then I have to own a business, front the money, hire people, transfer my clients.  No thanks.
 
Believe it or not, some people are happy just making 250K working semi-full-time, and letting someone else worry about the business.  One of my good friends at Jones makes about 225K per year working 3 days per week.  And when he's there, he's barely working.  Not a bad life. 

troll's picture
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The same reason a woman bails her boyfriend out of jail only hours after he beat the sh*t out of her... true love!

noggin's picture
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newtojones99999 wrote:Why do seg 3, 4, 5 FAs stay at Jones if the payout is so much higher as an indie?
 
Most of the Seg 3 and 4 people that I used to work at Jones have no safety net to fall back because the market has done it's thing over the last 14-16 months. If you have no safety net at all then it will be very difficult to move anywhere. Add that to the concept that many are afraid to make a change and you have some reasons why not to do it. I would hasten to say that the ones that do are primarily in regions that do not have the best RL's. The less communication that you have in your region the more reason you have to be independent. Just my two cents worth....

henryhill's picture
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I am a segment 5 at EDJ.  Yes I could make more money going independent but my answer is so what.  I am very content, win two trips, make more than I can spend now.  Is upsetting the applecart really worth an extra 15-20% of pay.  To me, no.

rankstocks's picture
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There are several reasons why 4's and 5's wouldn't move. 
1.  The median independent GROSSES less than 100k.  Take a look at RayJay or LPL, around 1/2 don't even kick their production above 100k in a YEAR.
2.  It takes about 400k gross to even break even in an independent setting.  OnWallStreet had a great article on the break-even point to moving Indy last year, and most seg 3's and 4's couldn't make the move more profitable.
3.  Name recognition.  I've gotten several big accounts simply because of the name recognition.  Who's ever heard of "Nimrod Wealth Management".
4.  As mentioned above....being content.
5.  Often  being independent has the stigma of lax compliance and supervision....Dennis Hercula anyone?
6.  Many independents work out of their home or even at a bank.  Do you really think that would be a step up?
7.  Several independents in my town work part time.   That image bleeds over to those that have chosen the profession as a career.
8.  I've got a buddy in an independent office working with 5 brokers and 1 assistant.  It keeps costs down, but he ends up doing all his own paperwork (no wonder his production is light).

deekay's picture
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rankstocks wrote:
There are several reasons why 4's and 5's wouldn't move. 
1.  The median independent GROSSES less than 100k.  Take a look at RayJay or LPL, around 1/2 don't even kick their production above 100k in a YEAR.
 
What does the average Segment 4 or 5 rep gross?  I'm going to guess Seg 4's and 5's gross waaaay more than $100k.
 
Strike One.
 
2.  It takes about 400k gross to even break even in an independent setting.  OnWallStreet had a great article on the break-even point to moving Indy last year, and most seg 3's and 4's couldn't make the move more profitable.
 
So, now we're talking Seg 3's and 4's?  Which one is it, Rank?  You mean to tell me someone couldn't at least break even with an 80% payout on, say, $300k?  If that's what you're telling me, you must be the worst business owner in creation. 
 
3.  Name recognition.  I've gotten several big accounts simply because of the name recognition.  Who's ever heard of "Nimrod Wealth Management".
 
And from what I can tell, there are a lot of clients who move away from the name recognition of a national firm because of their recent *ahem* irregularities.
 
4.  As mentioned above....being content.
 
This one I can understand.  Between trips, LP/GP offerings, etc., it's easy to see why someone grossing $500k+ would be reluctant to turn their world upside down to move on their own.  Some reps have different motivations.
 
5.  Often  being independent has the stigma of lax compliance and supervision....Dennis Hercula anyone?
 
Because no Edward Jones rep has ever run afoul of regulators. 
 
6.  Many independents work out of their home or even at a bank.  Do you really think that would be a step up?
 
Many Ed Jones offices are smack dab between the dry cleaner's shop and a Chinese food restaurant.  Not exactly a step-up either.
 
7.  Several independents in my town work part time.   That image bleeds over to those that have chosen the profession as a career.
 
I know advisors who make seven figures and work 20-30 hours a week.  Does that make them any less of an advisor?  sh*t, that's what I strive for.
 
8.  I've got a buddy in an independent office working with 5 brokers and 1 assistant.  It keeps costs down, but he ends up doing all his own paperwork (no wonder his production is light).
 
Sounds like he willingly took a role as a branch manager.  Different strokes for different folks.
 
Fact is, I don't even have a dog in this hunt and I can't believe the arrogance and ignorance that you just spewed.  If you don't want to go indy, that's your choice.  Just understand you really have no clue what you're talking about.

deekay's picture
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Great minds think alike, Ice.  Too bad I don't have your fast typing skills.

HymanRoth's picture
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rankstocks wrote:  Who's ever heard of "Nimrod Wealth Management".Anyone dumb enough to pick "Nimrod Wealth Management" as their local business name shouldn't be going indy....they deserve to have low production....

newtojones99999's picture
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It takes 300k to break even as an indie? That seems odd...
So the threads about going indie at 200k or the RIA with 6mm are BS?

Piker Patrol's picture
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iceco1d wrote:newtojones99999 wrote:
It takes 300k to break even as an indie? That seems odd...
So the threads about going indie at 200k or the RIA with 6mm are BS?
 
Not saying you can't GO INDY, or GO RIA doing less than 250K.  Saying the break even point is around there (i.e. if you do 200K, you'd make more money @ EDJ, if you do 350K, you'd probably make more money Indy...somewhere in between, you make roughly the same amount of money).Ice, you're off babe. An indy doing 200k isn't going to have a $100,000 nut to cover.

voltmoie's picture
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I'm a bit uncomfortable with Piker calling Ice "babe"  ... Guys?People get complacent. They are making more money than they ever thought possible and run their own little kingdom.  They get a few trips, some LP, and an ugly assistant.  Kings of the castle.  I could never stay at Jones forever because I'd like sell or give my son a business at some point -- but I do understand the draw and the hooks they put into you. 

anonjones's picture
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Joined: 2009-02-03

Volt, well spoken. Without bashing, I understand your point of view and commend your foresight. I first handedly watched a HUGE jones producer retire, get squat, and then the RL give the guy he chose as a successor crap because in my OPINION, he had ideas for who could 'better' manage the book.
Point being, at jones they consider the book THEIRS, the clients, THEIRS, and the relationship THEIRS.
I personally love to see them proven wrong time and time again.
My humble POV

henryhill's picture
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Joined: 2007-08-23

In my region I have seen three big hitters retire and give their book to their son.  EDJ is much better about transition than in years past.

Moraen's picture
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rankstocks wrote: There are several reasons why 4's and 5's wouldn't move. 
1.  The median independent GROSSES less than 100k.  Take a look at RayJay or LPL, around 1/2 don't even kick their production above 100k in a YEAR.

What does the median EDJ gross? Plus, this isn't comparing apples to apples as someone stated already. Seg 3, 4 or 5. $225 or greater.

2.  It takes about 400k gross to even break even in an independent setting.  OnWallStreet had a great article on the break-even point to moving Indy last year, and most seg 3's and 4's couldn't make the move more profitable.

Is this something the HO is feeding you? I remember hearing this from my RL among others. A Seg 3 could easily make the move, provided they are being frugal.

3.  Name recognition.  I've gotten several big accounts simply because of the name recognition.  Who's ever heard of "Nimrod Wealth Management".

I agree with this one. "Edwards and Jones" has a decent reputation in my community. However, the individual brokers often do not.

4.  As mentioned above....being content.

I see how some people can be content, but the true business owner mentality, the one Jones gets you to strive for, doesn't make people content.

5.  Often  being independent has the stigma of lax compliance and supervision....Dennis Hercula anyone?

I could name five compliance nightmares right now for Jones.

6.  Many independents work out of their home or even at a bank.  Do you really think that would be a step up?

Indy's doing Seg 3, 4 or 5 numbers. Puh-lease.

7.  Several independents in my town work part time.   That image bleeds over to those that have chosen the profession as a career.

CPAs and other types of professionals? Sure. But there are also people who dedicate their lives to building a business that lasts and will carve out a niche in the financial world.

8.  I've got a buddy in an independent office working with 5 brokers and 1 assistant.  It keeps costs down, but he ends up doing all his own paperwork (no wonder his production is light).

I've got a buddy in an EDJ office who has a full-time BOA, but his production is light because he can't offer some solutions that the client needs.

Really, I thought we settled the Indy vs. EDJ debate. Different strokes for different folks. The guy asked a question. The people who have left from those segments should answer why they left, and the people who have stayed should answer why they have stayed.

Someone producing $500k is much better off financially at Indy. But it's possible, that someone producing $500k at EDJ is satisfied with the $200k they make.

I did a thread a while back that showed tremendous expenses as an Indy. Paying the assistant $70k, for instance ( a lot more than BOA's make, btw). It was just over a 100k and that was exaggerating a lot of expenses. Really, you can have a reasonable assistant, good real estate for considerably less than 60% of gross production or 50% or even 40 or 30%.

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Moraen wrote: rankstocks wrote: There are several reasons why 4's and 5's wouldn't move. 
1.  The median independent GROSSES less than 100k.  Take a look at RayJay or LPL, around 1/2 don't even kick their production above 100k in a YEAR.

What does the median EDJ gross? Plus, this isn't comparing apples to apples as someone stated already. Seg 3, 4 or 5. $225 or greater.

2.  It takes about 400k gross to even break even in an independent setting.  OnWallStreet had a great article on the break-even point to moving Indy last year, and most seg 3's and 4's couldn't make the move more profitable.

Is this something the HO is feeding you? I remember hearing this from my RL among others. A Seg 3 could easily make the move, provided they are being frugal.

3.  Name recognition.  I've gotten several big accounts simply because of the name recognition.  Who's ever heard of "Nimrod Wealth Management".

I agree with this one. "Edwards and Jones" has a decent reputation in my community. However, the individual brokers often do not.

4.  As mentioned above....being content.

I see how some people can be content, but the true business owner mentality, the one Jones gets you to strive for, doesn't make people content.

5.  Often  being independent has the stigma of lax compliance and supervision....Dennis Hercula anyone?

I could name five compliance nightmares right now for Jones.

6.  Many independents work out of their home or even at a bank.  Do you really think that would be a step up?

Indy's doing Seg 3, 4 or 5 numbers. Puh-lease.

7.  Several independents in my town work part time.   That image bleeds over to those that have chosen the profession as a career.

CPAs and other types of professionals? Sure. But there are also people who dedicate their lives to building a business that lasts and will carve out a niche in the financial world.

8.  I've got a buddy in an independent office working with 5 brokers and 1 assistant.  It keeps costs down, but he ends up doing all his own paperwork (no wonder his production is light).

I've got a buddy in an EDJ office who has a full-time BOA, but his production is light because he can't offer some solutions that the client needs.

Really, I thought we settled the Indy vs. EDJ debate. Different strokes for different folks. The guy asked a question. The people who have left from those segments should answer why they left, and the people who have stayed should answer why they have stayed.

Someone producing $500k is much better off financially at Indy. But it's possible, that someone producing $500k at EDJ is satisfied with the $200k they make.

I did a thread a while back that showed tremendous expenses as an Indy. Paying the assistant $70k, for instance ( a lot more than BOA's make, btw). It was just over a 100k and that was exaggerating a lot of expenses. Really, you can have a reasonable assistant, good real estate for considerably less than 60% of gross production or 50% or even 40 or 30%.

Moraen, I would like to read your old thread that you are referring to.
How can I find it?

LockEDJ's picture
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newtojones99999 wrote:
It takes 300k to break even as an indie? That seems odd...
So the threads about going indie at 200k or the RIA with 6mm are BS?
 
I'm with you. 90% payouts aren't impossible to find.
 
Do the math. At $7K, you clear 6300. With an executive suite, office expense is $400. Add another $400 for ad, mail. Another $400 for incidentals. $800 for technology (could be a lot less) and E/O/fees to bd. You've got $4300. Transaction fees eat up $350 - $400.
 
If you stay at EJ, you've got $2800. Your net income just went up 40%. NB: if you "need" a sales assistant at $7K, you're flat lazy.
 
And all of that means you're still selling the same mix you are at Jones. Sell insurance, or annuities and make real money. It's not easy, but success isn't assured at Jones either.
 
The fact is, the Seg 3/4/5 guys gotta have that BOA, that nicer, bigger office. At 36 months, you're clients don't have a vested interest in the ugly assistant or your cushy chairs, and nice furniture. So their break even is in a different league.
 

Squash1's picture
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LockEDJ wrote:newtojones99999 wrote:
It takes 300k to break even as an indie? That seems odd...
So the threads about going indie at 200k or the RIA with 6mm are BS?
 
I'm with you. 90% payouts aren't impossible to find.
 
Do the math. At $7K, you clear 6300. With an executive suite, office expense is $400. Add another $400 for ad, mail. Another $400 for incidentals. $800 for technology (could be a lot less) and E/O/fees to bd. You've got $4300. Transaction fees eat up $350 - $400.
 
If you stay at EJ, you've got $2800. Your net income just went up 40%. NB: if you "need" a sales assistant at $7K, you're flat lazy.
 
And all of that means you're still selling the same mix you are at Jones. Sell insurance, or annuities and make real money. It's not easy, but success isn't assured at Jones either.
 
The fact is, the Seg 3/4/5 guys gotta have that BOA, that nicer, bigger office. At 36 months, you're clients don't have a vested interest in the ugly assistant or your cushy chairs, and nice furniture. So their break even is in a different league.
 
 
I agree.. numbers are high but it depends on where you are. $800 for tech and $400 for incidentals is huge.. Also $350-400 in transactions charges seems inflated.

noggin's picture
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My net is 72% after costs as an indy.....

bspears's picture
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My net would be 70+, but I just put through 5k in custom closets and had the interior of our house repainted, thanks to an annuity sale.  Hope my CPA doesn't question the expenses... Ahh the life of an Indy.  All I know is I have way more money now, doing virtually the same in production, than I ever did at Jones. Hands down.

Weddle Me's picture
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Why do people stay at Edward Jones?  It's simple, we are #1!  We treat our brokers well.  We take care of our clients? The real question is why in the hell would you actually leave?  So you can get your house painted?  LOLOLOLOL

Moraen's picture
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Weddle Me wrote: Why do people stay at Edward Jones?  It's simple, we are #1!  We treat our brokers well.  We take care of our clients? The real question is why in the hell would you actually leave?  So you can get your house painted?  LOLOLOLOL

Did you not just read that Spears makes double on the exact same production?

And you still didn't stay at a holiday inn last night. Liar.

LockEDJ's picture
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Weddle Me wrote: Why do people stay at Edward Jones?  It's simple, we are #1!  We treat our brokers well.  We take care of our clients? The real question is why in the hell would you actually leave?  So you can get your house painted?  LOLOLOLOL

Just curious. Where is your branch? How long have you been with them?

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