Diversification trips
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As far as i’m concerned, what’s wrong with taking 2 Jones trips a year and learning a bit while you are there from big producers and such. If you’re earning trips, you have enough cash to take a few trips of your own too. Best of both worlds in my opinion. I’ve been to Hawaii, Branson, Stowe, VT, Vegas (all paid for by me), and now going on a Div Trip, all in a year. Don’t make a sh*t to me to sit through 2 meetings and meet a few top producers. Hell I sat through a timeshare meeting to get a free $200 Luau in Hawaii, and arguing with the salesmen was worth it!
You haven't even been on one yet and are already making judgements about how great they are?
[quote=B24][quote=Spaceman Spiff]Sounds like a great deal. Executive team building trips. Umm…OK. You’re CPA signs off on that does he? But then GAAP is filled with all kinds of grey areas.
You apartment in Australia sounds like a lot of the timeshare places I've been here in the states. Minus the swim up bars. Heck, you can go to Branson, MO and get a two bedroom apartment with king beds, golf course view, jacuzzi tub, tennis courts, swimming pools, etc. I'm not trying to downplay your vacations. I'm trying to get the other folks who read this stuff to see that the Jones trips aren't the bad, worthless, expensive trips that a lot of you try to make them appear to be. Anyone who travels a lot learns how to get good deals on travel. You obviously travel enough to have learned some tricks. [/quote] Spiff, just a little tax/GAAP 101. First off, GAAP doesn't matter in this case, tax law does. Two different animals. You can expense anything you want for P&L purposes, doesn't mean tax law allows it. Secondly, you ever wonder why brokerage firms like to incur all the expense of your office, rather than allow you to pay it out of pocket and make you a 1099 employee? Taxes! Third - Jones gets to expense the cost of the Div trips, just like an indy expenses theirs. Why is it right for Jones, but not for an indy rep? Because Genworth comes and talks about long-term care? Sorry to say, on the Div Trips, I fall in the Indy camp. Unless you are a real big producer and money's not really an object, the Div Trips are just way too expensive after taxes. Plus, personally, I would be able to do the trips I like for a LOT less than Maritz. Think of it this way....you use AFTER TAX money to pay your expenses (a few thousand $$ if you have kids), then get TAXED on the value of the INFLATED trip cost (someone is paying for Maritz and that big steak dinner your kids didn't eat).[/quote] First, I don't remember enough of my accounting classes to be anywhere close to fluent in accounting linge. My apologies for using the wrong terminology. Second, Jones only gets to expense the part of the trip that they pay for. Genworth or John Hanc*** or whoever gets to expense the other part. I understand the tax benefits to the firm. Third, this one is my opinion, not anything I've ever heard anyone from the firm talk about. I've heard more than one indy advisor talk about all the things they get to expense through their businesses. Some of it, like Morean's vacations, sorry Executive Team Building trips make me shake my head and kind of chuckle. I don't have a problem with anyone writing off legitimate business expenses. But to write off your vacation because you take your wife who happens to be a part of your staff is pushing it in my opinion. Jones gets to write off those trips because they set them up as a production bonus. Not unlike the bonuses they pay the new FAs. I think there's a big difference between a firm sponsored trip and my personal vacation to Disney World.[quote=bspears] Wow…1 trick pony. Maybe B24 could help you with your math skills once again. Are they really 5 star resorts or its just what the glossy catalog says? Maybe they’re 3 star resorts, but are marketed as 5 star. Have you ever been to a 5 star resort before slamming your clients into categories to win a “trip” to one of these exclusive reorts, only open to EDJ’s?
You jonesers are so brainwashed into thinking everything you have is the best, when in reality you don't have a clue of what is the best. [/quote] You really are an idiot aren't you? Slamming my clients into categories? Exclusive resorts only open to EDJ's? I'm guessing from your last sentence that you have discovered what is the best and it's anything that EDJ isn't involved in? Did you ever go on a Div Trip? The categories I normally fill are growth, growth and income, taxable income, and insurance. What part of that is slamming my clients into categories? I did fill non taxable income this time too. Maybe that's the slamming you're talking about. I forced my clients into tax free bonds. As far as I know, if you wanted to treat your wife to a resort better than you might be able to find in someplace like Podunk, IN you can book a room at any of the hotels Jones uses for the Div trips. If you want to go to Borneo you can book it at Shangri-La's Tanjung Aru Resort. Or if your passport has been confiscated for some reason and you need to stay in the continental US you could try Fairmont, Washington D.C. Those are just a couple of the nineteen different destinations Jones has booked recently. I'm sure Mrs. Spears would be thrilled to go to any of those places. You should look into it.I see both sides to the argument and what I will say is pretty simple. The taxation is pretty rough at Jones on the trips, it simply does not work in favor of the FA, it works in the firm’s favor. After a couple of trips, the shine was off of the trips for me. I personally didn’t enjoy yet another meeting to stand up and tell when my can sell date was, where I was from and my name. It was interesting to sit next to a big producer at a dinner and pick their brain but what I discovered after a while is that they had been in the business 20 years or more or inherited a ton of assets. My wife and I counted on the 3 Div trips that we took and no one was on any of the trips that started on or after I did unless they inherited a ton of assets. I do count it a honor to have visited France, Portugal and China on trips but when you weigh the facts out you discover that the trips are used as a tool to govern behavior.
There was a certain aura of entitlement that I saw especially from those that inherited assets. To be sure this was a minority but it was strange none the less. This certainly makes the trips less enjoyable than they certainly deserve to be. My favorite was in China when we were back in the hotel after a shopping excursion, someone was talking about buying rolex watches on the street. I bought 3 for 5 bucks or so...one of the people on the trip who had inherited I think 40M or so had to show us his REAL rolex and talk about how much he paid for it. We all thought it was pretty funny especially when he couldn't point out any differences in the watches.......[quote=Spaceman Spiff][quote=B24][quote=Spaceman Spiff]Sounds like a great deal. Executive team building trips. Umm…OK. You’re CPA signs off on that does he? But then GAAP is filled with all kinds of grey areas.
You apartment in Australia sounds like a lot of the timeshare places I've been here in the states. Minus the swim up bars. Heck, you can go to Branson, MO and get a two bedroom apartment with king beds, golf course view, jacuzzi tub, tennis courts, swimming pools, etc. I'm not trying to downplay your vacations. I'm trying to get the other folks who read this stuff to see that the Jones trips aren't the bad, worthless, expensive trips that a lot of you try to make them appear to be. Anyone who travels a lot learns how to get good deals on travel. You obviously travel enough to have learned some tricks. [/quote] Spiff, just a little tax/GAAP 101. First off, GAAP doesn't matter in this case, tax law does. Two different animals. You can expense anything you want for P&L purposes, doesn't mean tax law allows it. Secondly, you ever wonder why brokerage firms like to incur all the expense of your office, rather than allow you to pay it out of pocket and make you a 1099 employee? Taxes! Third - Jones gets to expense the cost of the Div trips, just like an indy expenses theirs. Why is it right for Jones, but not for an indy rep? Because Genworth comes and talks about long-term care? Sorry to say, on the Div Trips, I fall in the Indy camp. Unless you are a real big producer and money's not really an object, the Div Trips are just way too expensive after taxes. Plus, personally, I would be able to do the trips I like for a LOT less than Maritz. Think of it this way....you use AFTER TAX money to pay your expenses (a few thousand $$ if you have kids), then get TAXED on the value of the INFLATED trip cost (someone is paying for Maritz and that big steak dinner your kids didn't eat).[/quote] First, I don't remember enough of my accounting classes to be anywhere close to fluent in accounting linge. My apologies for using the wrong terminology. Second, Jones only gets to expense the part of the trip that they pay for. Genworth or John Hanc*** or whoever gets to expense the other part. I understand the tax benefits to the firm. Third, this one is my opinion, not anything I've ever heard anyone from the firm talk about. I've heard more than one indy advisor talk about all the things they get to expense through their businesses. Some of it, like Morean's vacations, sorry Executive Team Building trips make me shake my head and kind of chuckle. I don't have a problem with anyone writing off legitimate business expenses. But to write off your vacation because you take your wife who happens to be a part of your staff is pushing it in my opinion. Jones gets to write off those trips because they set them up as a production bonus. Not unlike the bonuses they pay the new FAs. I think there's a big difference between a firm sponsored trip and my personal vacation to Disney World. [/quote] We are all entitled to our opinions. Virtually everyone I know that's been on them love them. Never heard a single complaint (outside this board). Personally, the trips were the one thing I didn't like about Jones, even before starting here. I just don't like the idea of incentive trips. I think it sends a bad message to clients. It sends the message that your advisor is a salesman, incented to sell as much to you as possible. I am good friends with an ADP rep. He just won his first incent trip at ADP. He is a salesman. It's not that I look down at salespeople, it's that the concept of being a salesperson in the investment advice business seems inherently wrong. And there is no two ways around it, the Div Trips are sales incentive trips. We can call them whatever we want. You sell more, you go on trip. I just don't like that. But there's really no way around it.How could the taxation work in the favor of the FA? Unless there weren't any taxes, I'm not sure I understand how the taxation could possibly be a benefit to the FA. You're going to have to educate me on that one.
A tool to govern behavior? What kind of behavior do you think they're trying to govern? Put your client's assets in a well diversified portfolio? Don't sell all growth stocks? You're going to have to explain that one too.[quote=Spaceman Spiff]
...Third, this one is my opinion, not anything I've ever heard anyone from the firm talk about. I've heard more than one indy advisor talk about all the things they get to expense through their businesses. Some of it, like Morean's vacations, sorry Executive Team Building trips make me shake my head and kind of chuckle. I don't have a problem with anyone writing off legitimate business expenses. But to write off your vacation because you take your wife who happens to be a part of your staff is pushing it in my opinion. Jones gets to write off those trips because they set them up as a production bonus. Not unlike the bonuses they pay the new FAs. I think there's a big difference between a firm sponsored trip and my personal vacation to Disney World. [/quote] WTF? Really??? You work for a firm, Morean works for a firm. Both firms send their employees on a trip. You get to own a part of your firm; Morean gets to own all of his. How is that any different? You benefit - albeit indirectly as a partner - from the positive tax consequences of how Jones handles the trips. Morean benefits wholly from the tax implications of his trip and well he should, as he has taken on the risk. That his employee is his wife ... well, I would have loved to be able to hire my son to work with me. Wouldn't you like something like that? If that was the case, would you be so against sharing the team-building exercises with another FA? And above all, what gives you the right to judge sight unseen what his wife does for his firm??? I can dig defending the Jones trips, even never having been on one - they seem pretty neat. But I think you're a little far afield and letting your emotions get the better of you on this one, Space. JMO.[quote=Spaceman Spiff] [quote=B24][quote=Spaceman Spiff]Sounds like a great deal. Executive team building trips. Umm…OK. You’re CPA signs off on that does he? But then GAAP is filled with all kinds of grey areas.
You apartment in Australia sounds like a lot of the timeshare places I’ve been here in the states. Minus the swim up bars. Heck, you can go to Branson, MO and get a two bedroom apartment with king beds, golf course view, jacuzzi tub, tennis courts, swimming pools, etc.
I’m not trying to downplay your vacations. I’m trying to get the other folks who read this stuff to see that the Jones trips aren’t the bad, worthless, expensive trips that a lot of you try to make them appear to be. Anyone who travels a lot learns how to get good deals on travel. You obviously travel enough to have learned some tricks.
[/quote]
Spiff, just a little tax/GAAP 101. First off, GAAP doesn’t matter in this case, tax law does. Two different animals. You can expense anything you want for P&L purposes, doesn’t mean tax law allows it.
Secondly, you ever wonder why brokerage firms like to incur all the expense of your office, rather than allow you to pay it out of pocket and make you a 1099 employee? Taxes!
Third - Jones gets to expense the cost of the Div trips, just like an indy expenses theirs. Why is it right for Jones, but not for an indy rep? Because Genworth comes and talks about long-term care?
Sorry to say, on the Div Trips, I fall in the Indy camp. Unless you are a real big producer and money’s not really an object, the Div Trips are just way too expensive after taxes. Plus, personally, I would be able to do the trips I like for a LOT less than Maritz.
Think of it this way…you use AFTER TAX money to pay your expenses (a few thousand $$ if you have kids), then get TAXED on the value of the INFLATED trip cost (someone is paying for Maritz and that big steak dinner your kids didn’t eat).[/quote]
First, I don’t remember enough of my accounting classes to be anywhere close to fluent in accounting linge. My apologies for using the wrong terminology.
Second, Jones only gets to expense the part of the trip that they pay for. Genworth or John Hanc*** or whoever gets to expense the other part. I understand the tax benefits to the firm.
Third, this one is my opinion, not anything I’ve ever heard anyone from the firm talk about. I’ve heard more than one indy advisor talk about all the things they get to expense through their businesses. Some of it, like Morean’s vacations, sorry Executive Team Building trips make me shake my head and kind of chuckle. I don’t have a problem with anyone writing off legitimate business expenses. But to write off your vacation because you take your wife who happens to be a part of your staff is pushing it in my opinion. Jones gets to write off those trips because they set them up as a production bonus. Not unlike the bonuses they pay the new FAs. I think there’s a big difference between a firm sponsored trip and my personal vacation to Disney World.
[/quote]
It’s called an executive perk. Companies do it all the time. Jones does it all of the time. Why do the GP’s get to go on Div trips?
Spiffy is drunk on koolaid. He’s the real idiot. Giving up 64% to rub elbows with people who he wants to be, but those people are fakes. Most of the non 20 year vets INHERITED assets or took over large offices. Are you to stupid to see the brains you want to pick are no more educated in building an office than you are. Why is it so obvious, even to someone’s wife, that Jones is a pig with lipstick.
IF you want to rub elbows with people who have built great businesses, look up the top 20 advisors at Raymond James, LPL or Common Wealth. I'm sure they would be able to teach you more than doorknocking or calling 25 people a day with the best 30 year bond in inventory.Also, for the record - my wife is no mere employee. My business would not be a success if it was not for her. I have zero doubt of that. She contributes likely a lot more than I do.
I have fond memories of my diversification trip. Midway through our first meeting I stepped out to take a leak. As I am washing my hands I see behind me, through the angle of the mirror, the RL and a newbie who got a 40mil goodknight walk into the same stall with the newbie carrying a brown paper bag. I thought they were going in to clean something up, but as I walked towards the door I only saw the paper bag and the newbie’s feet positioned like he was taking a deuce. I then realized why “servicing” clients was the theme of the meeting or should I say meating.
My emotions aren’t getting the better of me here. I have an opinion that, apparantly, is counter to what everyone else’s is.
I never made any comments about his wife. I could go back and edit my post to read team instead of staff, but it would be a waste of time. I meant nothing negative by the word staff. I'm sure the IRS doesn't have any problems at all with the way Morean reports his team building excercises on his taxes. Carry on Morean.[quote=B24]1. The ability to work as a 1099 employee and be able to write off expenses, not just deduct them subject the floor.
2. Behavior - misnomer - it's really to tie people to Jones. I know some guys that say they would NEVER leave Jones, specifically because of the trips. Weird, but true. Also it DOES force people into the Jones "investment box". Not that diversification is bad, but what if you don't want to do any insurance, you don't want to hire new FA's, and you don't like the idea of pushing credit cards? No trip for you! OK, you CAN get it, but sometimes you may not do enough tax-free income. Guess what? Someone's getting a muni! I just don't like it. If I just want to be an equity guy, and do nothing else, then that's what I want to do. Or what if I just want to be a "Bond Guy"? It's B.S. Remember, legal, ethical, profitable? Well, that "5th pillar" of compensation only applies to people that do muni's, or open credit cards, or get a "qualified hire". [/quote] B24- You get it. Thanks a much better explanation than I could do.B24, before you tread to far off path and being tagged as a “rogue” loser, I suggest you look up some of the old fireside chats from Bachmann and Hill. Get a couple of those watched and you will be back in the fold before you know it.
[quote=Spaceman Spiff] My emotions aren’t getting the better of me here. I have an opinion that, apparantly, is counter to what everyone else’s is.
I never made any comments about his wife. I could go back and edit my post to read team instead of staff, but it would be a waste of time. I meant nothing negative by the word staff.
I’m sure the IRS doesn’t have any problems at all with the way Morean reports his team building excercises on his taxes. Carry on Morean. [/quote]
I didn’t think you were being negative. I personally just thought we were all having a healthy debate.
I think the fact that just because our professional lives spill over into our personal lives doesn’t mean that climbing a mountain together or scuba diving or even spa treatments doesn’t help us work better together. Professionally and privately.
[quote=bspears]Spiffy is drunk on koolaid. He’s the real idiot. Giving up 64% to rub elbows with people who he wants to be, but those people are fakes. Most of the non 20 year vets INHERITED assets or took over large offices. Are you to stupid to see the brains you want to pick are no more educated in building an office than you are. Why is it so obvious, even to someone’s wife, that Jones is a pig with lipstick.
IF you want to rub elbows with people who have built great businesses, look up the top 20 advisors at Raymond James, LPL or Common Wealth. I'm sure they would be able to teach you more than doorknocking or calling 25 people a day with the best 30 year bond in inventory. [/quote] Yes, yes, I'm sure the big guys at the indy firms never inherited books from the exiting advisors in their wirehouse days then took them with them when they went indy. I'm sure they never bought someone's book. I'm sure they never absorbed someone else assets into their book when they brought them onto the team and then kept them when that advisor left. EDJ is the ONLY place in the industry where advisors take over books. The advisor at Jones who takes over a big enough book to make a substantial difference in the long run is rare. People take over $5MM -$10MM books all the time. But you can starve while trying to take over that branch. You're certainly not going to be winning any Div Trips because of taking over a branch like that. You could double that and you're still not even close to being able to win the trips repeatedly just based on the branch's assets. You and your wife can see whatever you choose to see when looking around on those trips. Personally, I never take the time to get to know everyone on the trips well enough to know how they built their offices. I'm sure there are some guys who's daddy gave them a big book or they took over for a retiring Jones FA. But for every one of those I'll bet there are ten who just simply worked their butt off to get to where they are and are just simply reaping the rewards. As for the big guys at the indy firms, all of us would learn a thing or two from them if we could rub elbows with them. That $2 million producer I mentioned before. New/New 20 years ago. Managed something like $350MM. You don't inherit a book like that.[quote=Moraen] [quote=Spaceman Spiff] My emotions aren’t getting the better of me here. I have an opinion that, apparantly, is counter to what everyone else’s is.
I never made any comments about his wife. I could go back and edit my post to read team instead of staff, but it would be a waste of time. I meant nothing negative by the word staff.
I'm sure the IRS doesn't have any problems at all with the way Morean reports his team building excercises on his taxes. Carry on Morean. [/quote]
I didn't think you were being negative. I personally just thought we were all having a healthy debate.
I think the fact that just because our professional lives spill over into our personal lives doesn't mean that climbing a mountain together or scuba diving or even spa treatments doesn't help us work better together. Professionally and privately.
[/quote] Some folks confuse my "debating" with me being negative or bashing you. Evidently around here we can't have a civil discussion with differing opinions without everyone getting their panties in a wad.
[quote=B24]1. The ability to work as a 1099 employee and be able to write off expenses, not just deduct them subject the floor.
2. Behavior - misnomer - it's really to tie people to Jones. I know some guys that say they would NEVER leave Jones, specifically because of the trips. Weird, but true. Also it DOES force people into the Jones "investment box". Not that diversification is bad, but what if you don't want to do any insurance, you don't want to hire new FA's, and you don't like the idea of pushing credit cards? No trip for you! OK, you CAN get it, but sometimes you may not do enough tax-free income. Guess what? Someone's getting a muni! I just don't like it. If I just want to be an equity guy, and do nothing else, then that's what I want to do. Or what if I just want to be a "Bond Guy"? It's B.S. Remember, legal, ethical, profitable? Well, that "5th pillar" of compensation only applies to people that do muni's, or open credit cards, or get a "qualified hire". [/quote] I understand the tax benefits that the indy guys have. I'd have the same issue if my CPA was writing off his trips to Grand Cayman with his wife/part time secretary every year. I heard Bachmann answer a question about the trips and the categories. The person asking was basically saying the same as you. Bachmann said that the reason they call it a Diversification Trip is specifically reward advisors for building well diversified portfolios. He said he knew that there were Seg 4 IRs who weren't winning the trips because they were just selling stocks or just selling bonds. He said that was fine, it was their business to run, but the trips would always be about diversification, not just production. I would say those types of offices are incredibly rare.Yeah you LPL & indy people may go on nice trips, but there’s ONE trip in the latest Div Trip book all of your money CAN’T buy — a trip to the home office in St. Louis! It includes a tour of the home office! And a trip to Ted’s farm for lunch!
And yes, I'm serious. This trip has got to be for those folks who have a picture of Teddy hanging on their wall at home. And for the record, I don't think trips with 60 Jones brokers is much fun, either. That's why I cash mine out.