EDJ Adv Solutions and Chase Strategic Portfolio

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wsubob's picture
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Hey all,Had client walk in today and plop down a printed proposal for a Chase Strategic Portfolio account recommended to him by the friendly advisor at his bank.  This may have already been discussed, but this platform is _identical_ in every way to the Edward Jones advisory solutions proposals.  Both firms are using the exact same backend software/provider.The fee was a little higher, 50MM minimum like EDJ just moved to, and the funds were different.  As you might expect the majority of funds were JPMorgan.That's all.  Just thought those at both firms might like to know you're working with the same thing.Cheers!

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Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform.

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LockEDJ wrote:Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform.

I thought most places bill monthly in arrears. 

chief123's picture
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I thought everyone billed in advance

Moraen's picture
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chief123 wrote:I thought everyone billed in advancewell, what the hell do I know? 

LockEDJ's picture
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LOL.
Yeah, pretty much everything else I've seen is quarterly in advance (which, by the way, is something we're drilled on at Jones - it's supposed to be one of our competitive advantages [ducks]).

Moraen's picture
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I bill in arrears.  Quarterly.  They also get a detailed statement of what they are paying me and for what.

SometimesNowhere's picture
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wsubob wrote:Hey all,Had client walk in today and plop down a printed proposal for a Chase Strategic Portfolio account recommended to him by the friendly advisor at his bank.  This may have already been discussed, but this platform is _identical_ in every way to the Edward Jones advisory solutions proposals.  Both firms are using the exact same backend software/provider.The fee was a little higher, 50MM minimum like EDJ just moved to, and the funds were different.  As you might expect the majority of funds were JPMorgan.That's all.  Just thought those at both firms might like to know you're working with the same thing.Cheers!
 
Was Ron upset that you were stealing his clients?

Anonymous's picture
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doubt it
 
it was too big of a client for Ron

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Moraen wrote: LockEDJ wrote:Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform. I thought most places bill monthly in arrears. 

 
In the RIA world, doesn't it have regulatory implications if you bill in advance vs in arrears?  And even moreso if you bill more than 6 months in advance?
 
Maybe that was just my state and not the SEC, but if you bill in advance you have extra reporting requirements, etc.
 
Most big firms probably don't care, so they bill in advance and take advantage of holding the money.  Smaller RIA firms probably don't care, so they bill in arrears to save the hassle.
 
I could be totally wrong on this...

Ron 14's picture
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wsubob wrote:Hey all,Had client walk in today and plop down a printed proposal for a Chase Strategic Portfolio account recommended to him by the friendly advisor at his bank.  This may have already been discussed, but this platform is _identical_ in every way to the Edward Jones advisory solutions proposals.  Both firms are using the exact same backend software/provider.The fee was a little higher, 50MM minimum like EDJ just moved to, and the funds were different.  As you might expect the majority of funds were JPMorgan.That's all.  Just thought those at both firms might like to know you're working with the same thing.Cheers!

 
I have worked at both places and the funds being used are completely different, so who really cares if the software printout looks the same. Most advisors use Morningstar XRay to look at portfolio's. Is that a problem also ?
 
As you said, CSP uses a number of JPMorgan funds (which are average to below average) and I don't recall EDJ using any, maybe Core Bond. I don't use the CSP at all because it completely handcuffs the advisor from any input after the initial model selection. We have other managed accounts that have a wider variety of options and flexibility than CSP. But as mlgone said, I stick with $100 DCA accounts into Roths and refer the big dogs to other firms.
 
The fee under 250k is 1.6% and CSP is nothing more than a glorified Asset Allocation fund. You could put the client in a JPM asset allocation fund, get the same return, and save them .6% using a C Share.

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just a little morning humor to get you going

noggin's picture
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I was under the impression that Advisory Solutions was doing fee based "the Jones Way" and that no one else would do it the way that Jones would do it.

Moraen's picture
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iceco1d wrote:Moraen wrote: LockEDJ wrote:Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform. I thought most places bill monthly in arrears. 

 
In the RIA world, doesn't it have regulatory implications if you bill in advance vs in arrears?  And even moreso if you bill more than 6 months in advance?
 
Maybe that was just my state and not the SEC, but if you bill in advance you have extra reporting requirements, etc.
 
Most big firms probably don't care, so they bill in advance and take advantage of holding the money.  Smaller RIA firms probably don't care, so they bill in arrears to save the hassle.
 
I could be totally wrong on this...You are correct about the regulatory implications.  And what you say makes sense about the bigger firms holding onto the money.

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noggin wrote:I was under the impression that Advisory Solutions was doing fee based "the Jones Way" and that no one else would do it the way that Jones would do it.
 

Using the same proposal software doesn't equal doing it the same way as someone else.  10 years ago, had someone even thought about something like Advisory Solutions, Jones would have spent more time writing the programming themselves and delayed the implementation for a long time.  Today, they buy software and customize it. 
 
I have yet to find anyone that bills monthly in arrears.  Of course I've never tried to steal any of Moraen's clients...yet.
 
You corner a Jones GP about Advisory and ask what really makes it different than anyone else and they'll always default to the billing and maybe the rebalancing.  I've never been able to get a good answer from anyone how that works other places.  So, I just choose not to tell people that it's an incredibly unique process.  It's a better process than what I can do on my own, but certainly not incredibly unique. 

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We use PNC Financial for our wrap program, just like plenty of other institutions.  Now, our "wrap" program is not too much unlike other "wrap" programs.  Many people at Jones get this confused with the other managed money programs at other firms.  Yes, we bill in arrears (plenty of others do this), yes, we re-balance dynamically (plenty of others do this), and yes, we have a very good process for evaluating funds for the program (and again, plenty of others do this).
 
It is a nice "total" package of features, but is not as unique as Jones likes to tell us. 

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Spaceman Spiff wrote:
 
I have yet to find anyone that bills monthly in arrears.  Of course I've never tried to steal any of Moraen's clients...yet.
 Well, get on it.  I still have some accounts under $50k that need to go!

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You send me the names, and I'll warm up the ACAT machine!  We'll call it a Goodknight from afar. 

SometimesNowhere's picture
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Moraen wrote: Spaceman Spiff wrote:

 
I have yet to find anyone that bills monthly in arrears.  Of course I've never tried to steal any of Moraen's clients...yet.
 Well, get on it.  I still have some accounts under $50k that need to go!
 

 
I got dibs on all the CD buyers!

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Moraen wrote: iceco1d wrote:Moraen wrote: LockEDJ wrote:Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform. I thought most places bill monthly in arrears. 

 
In the RIA world, doesn't it have regulatory implications if you bill in advance vs in arrears?  And even moreso if you bill more than 6 months in advance?
 
Maybe that was just my state and not the SEC, but if you bill in advance you have extra reporting requirements, etc.
 
Most big firms probably don't care, so they bill in advance and take advantage of holding the money.  Smaller RIA firms probably don't care, so they bill in arrears to save the hassle.
 
I could be totally wrong on this...You are correct about the regulatory implications.  And what you say makes sense about the bigger firms holding onto the money.

Its not when you bill, but what you bill for that has the regulatory Implications. When Filling form ADV the RIA has to select what they are charging a fee for. Most firms charge up front so they have the money to use towards operations.

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OntheEdge wrote:Moraen wrote: iceco1d wrote:Moraen wrote: LockEDJ wrote:Both bill monthly in arrears? I hadn't found that in any other fee-based solution. Neither had I found the option to use one of four different pre-selected portfolio's within a risk-tolerance platform plus an open-ended, advisor-driven platform. I thought most places bill monthly in arrears. 

 
In the RIA world, doesn't it have regulatory implications if you bill in advance vs in arrears?  And even moreso if you bill more than 6 months in advance?
 
Maybe that was just my state and not the SEC, but if you bill in advance you have extra reporting requirements, etc.
 
Most big firms probably don't care, so they bill in advance and take advantage of holding the money.  Smaller RIA firms probably don't care, so they bill in arrears to save the hassle.
 
I could be totally wrong on this...You are correct about the regulatory implications.  And what you say makes sense about the bigger firms holding onto the money.

Its not when you bill, but what you bill for that has the regulatory Implications. When Filling form ADV the RIA has to select what they are charging a fee for. Most firms charge up front so they have the money to use towards operations.There is a place on the ADV.  If you are billing in advance, you cannot bill more than 6 months in advance if it will be more than $500. 

HAcoreRD's picture
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You can bill six months in advance over $500.  Just in doing so you are required to send an accounted balance sheet to the State Securities Administrator for review.

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1:  Noggin.  Every time I start to forget you are an idiot you set me straight.
 
2:  B24.  Don't want to pick a fight here but you keep referring to our "wrap" program.  Am I sensing you are getting bitter with Jones or do you have a "different" definiton of "wrap"?
 
3:  I hear lots of complaints about many different advisory programs on this site.  Most of them revolve around not being able to select securities or do the rebalancing yourself.  I cannot even imagine having a decent amount of dollars or accounts in an advisory program and having enough time to do this yourself.  Frankly, I am starting to have problems timeblocking the required annual reviews much less monkeying with allocations.

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HAcoreRD wrote: You can bill six months in advance over $500.  Just in doing so you are required to send an accounted balance sheet to the State Securities Administrator for review.

my bad

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ytrewq wrote: 1:  Noggin.  Every time I start to forget you are an idiot you set me straight.
 
2:  B24.  Don't want to pick a fight here but you keep referring to our "wrap" program.  Am I sensing you are getting bitter with Jones or do you have a "different" definiton of "wrap"?
 
3:  I hear lots of complaints about many different advisory programs on this site.  Most of them revolve around not being able to select securities or do the rebalancing yourself.  I cannot even imagine having a decent amount of dollars or accounts in an advisory program and having enough time to do this yourself.  Frankly, I am starting to have problems timeblocking the required annual reviews much less monkeying with allocations.

No, I actually think the program is pretty good. But it pretty much fits the textbook definition of what the rest of the industry calls a mutual fund wrap program (as opposed to an SMA, a UMA, etc.). Case in point, PNC Financial, who is the back office provider for our program, lists it as their mutual fund wrap program. I don't think "wrap" is such a bad word, it just describes what the program is (outside our Jones bubble).
My only two challenges with the program are the investment theory (I don't necessarily like style-box investing) and the lack of flexibility. I prefer more of a core-satellite approach. I would also like to be able to use "global allocation"-type funds (i.e. First Eagle Global, Capital Income Builder, Blackrock Global, IVY Asset Strategy, etc.). And I wish there were more flexibility with allocations.   For example, because certain investments fall under Jones' definition of "aggressive", you can only use them with a more aggressive portfolio. That might be talking in circles, but commodities are a good example. I don't want to argue the merits of that asset class, but if I want to allocate 5% to that class, and 5% to small cap growth, I can't in certain allocations. I just find myself getting hamstrung sometimes. I realize some advisors (as you mentioned above) don't want to be bothered with certain aspects of investment management, but there are others that place more emphasis on it. Either way, Jones is seriously limiting our flexibility within the program. Despite that, I honestly think it's a good program for what it intends to accomplish. It has a lot of good features, and will prevent FA's from getting lazy (well they can still be lazy, but the rebalancing and required reviews are there).

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One other thing, ytrewq....I know you take issue with what some people say about investment management at Jones, but I know some huge producers that do primarily SMA business, and then others that make 50 calls a day and sell strictly individual stocks and bonds (which I would personally HATE doing). Remember, Jones preaches that you can run whatever type of business you want....

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B24 wrote:One other thing, ytrewq....I know you take issue with what some people say about investment management at Jones, but I know some huge producers that do primarily SMA business, and then others that make 50 calls a day and sell strictly individual stocks and bonds (which I would personally HATE doing). Remember, Jones preaches that you can run whatever type of business you want....
 
B24
In the Jones Advisory model can you have funds, ETF's and SMA's in one wrap account?

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B24 wrote:One other thing, ytrewq....I know you take issue with what some people say about investment management at Jones, but I know some huge producers that do primarily SMA business, and then others that make 50 calls a day and sell strictly individual stocks and bonds (which I would personally HATE doing). Remember, Jones preaches that you can run whatever type of business you want....
 
I am not sure exactly what you mean by "I take issue..people say about investment management at Jones".  I am not disagreeing, I just am not sure what you mean.
I generally agree with you.  Jones says (I think using the word PREACHES is a bit inflammatory but ok) do what you want as long as it is legal, ethical and profitable.  In theory, more flexibility is good.  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  Also, and I am sure you would agree, the vast majority of FAs would cause more harm than good.  As much as FAs are egomaniacs it is unlikely they are "better" than a dedicated team of analysts.  On a final note.  As you are probably aware, AS is going to continue to evolve.  More options, more models, more FA control, and over time a UMA platform.  That is if I understand the definition of a  UMA.  
 
All I wanted for Christmas was a 2010 that was better than 2009.  In hindsight, 2009 turned out to be a pretty darn good year.

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LA Broker wrote:B24 wrote:One other thing, ytrewq....I know you take issue with what some people say about investment management at Jones, but I know some huge producers that do primarily SMA business, and then others that make 50 calls a day and sell strictly individual stocks and bonds (which I would personally HATE doing). Remember, Jones preaches that you can run whatever type of business you want....
 
B24
In the Jones Advisory model can you have funds, ETF's and SMA's in one wrap account?
 
No, we have a separate SMA platform.  But you can use ETFs and funds in our Advisory model.

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ytrewq wrote:B24 wrote:One other thing, ytrewq....I know you take issue with what some people say about investment management at Jones, but I know some huge producers that do primarily SMA business, and then others that make 50 calls a day and sell strictly individual stocks and bonds (which I would personally HATE doing). Remember, Jones preaches that you can run whatever type of business you want....
 
I am not sure exactly what you mean by "I take issue..people say about investment management at Jones".  I am not disagreeing, I just am not sure what you mean.
I generally agree with you.  Jones says (I think using the word PREACHES is a bit inflammatory but ok) do what you want as long as it is legal, ethical and profitable.  In theory, more flexibility is good.  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  Also, and I am sure you would agree, the vast majority of FAs would cause more harm than good.  As much as FAs are egomaniacs it is unlikely they are "better" than a dedicated team of analysts.  On a final note.  As you are probably aware, AS is going to continue to evolve.  More options, more models, more FA control, and over time a UMA platform.  That is if I understand the definition of a  UMA.  
 
All I wanted for Christmas was a 2010 that was better than 2009.  In hindsight, 2009 turned out to be a pretty darn good year.
 
Y, I agree with you.  Most FA's at Jones are not really qualified to run their own portfolios.  However, let's not forget that probably 95% of the assets are NOT in managed accounts, and are left to the discretion of the FA (and client).  I have seen some pretty bonehead A share/stock/bond portfolios at Jones offices.  I think it would be wise to have to "graduate" into using certain programs (like is required at some other firms).  Jones does a good job of ferreting out good funds, I just don't necessarily agree with the style-box, buy-and-hold through anything strategy they employ.  In fact, some of my worst performing portfolios the past 3 years are my classic American Funds portfolios.  My best are my multi-family C share portfolios.  Now, I am not claiming to be an analyst, but a lot of what I do is common sense.  Do you know how many FA's at Jones thought Bond Fund of America was a good core bond fund?  Most of them don't know the difference between corporate bonds and govies.  And Apparently Jones didn't either.  So what happened?  Bond Fund was one of the worst performing bond funds in the entire category, Jones then removes it AFTER they meltdown, and then American Funds changes strategy and makes it a more Treasury-focused fund!  Just in time for the Treasury Bubble!!! WTF?!  I am just happy I pay attention to what's going on around me, and don't trust Jones implicitly.
 

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ytrewq wrote:1:  Noggin.  Every time I start to forget you are an idiot you set me straight.
 
2:  B24.  Don't want to pick a fight here but you keep referring to our "wrap" program.  Am I sensing you are getting bitter with Jones or do you have a "different" definiton of "wrap"?
 
3:  I hear lots of complaints about many different advisory programs on this site.  Most of them revolve around not being able to select securities or do the rebalancing yourself.  I cannot even imagine having a decent amount of dollars or accounts in an advisory program and having enough time to do this yourself.  Frankly, I am starting to have problems timeblocking the required annual reviews much less monkeying with allocations.
Coming from you I will take that as a compliment.....
 
Everytime I see one of your posts, I am reminded of the culture that I left behind. It is the culture that says our way is right without even discussing what the other ways are......

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ytrewq wrote:...  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  ...
Would you mind amplifying this?

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YTREWQ is correct that AS is going to evolve.  I was at a meeting recently that included the GP in charge of AS.  He said they're already talking about a UMA type of program.  He didn't give us a time frame for implementation, but I can't help but think that with the success of AS, that they aren't seriously looking at being able to put even more investments under the fee based umbrella.  And doing it as quickly as possible.  I would imagine in the next 4-5 years we'll have the ability to run a fee based account that includes pretty much everything we can sell.  The only hesitation the GP had was when someone asked him about indidvidual bonds. 

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LockEDJ wrote:ytrewq wrote:...  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  ...
Would you mind amplifying this?
 

I think what he means is that too many new FAs spend a ton of time worrying about which funds to buy, or whether UITs are better than funds, or whether 15% or 20% international is the optimum amount of international exposure.  They spend hours "designing" a portfolio for a prospect.  And they customize it for every single new prospect.  I've been guilty of that, so I know what he's talking about.  I would spend hours on a $100k portfolio to get it just right before I showed it to a prospect.  Those were hours I should have been spending creating new relationships or fostering existing ones.  Instead I was staring at my computer.

newnew's picture
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like we are right now

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Haha.  I like that one better than HIS collection.

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LockEDJ wrote:ytrewq wrote:...  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  ...
Would you mind amplifying this?
 
In practice many FAs fail because they are "optimizing portfolios" instead of building their business
 
There.  It is now amplified.  In all serious, did you mean explain what I meant or stress it even more?  serious=seriousness.
 
B24.  I wholeheartedly agree with the ABNDX example.  I search for the positive.  Jones took a position this time.  Late but atleast they took a position.  Times they are a changing.  Noggin, my dig was meant with nothing but love.  I am a changed man.  Well, not that changed.

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ytrewq is NOT a new man!  He is sooooooo mean!Hey, my time at Jones was limited.  But the time I did spend there, they made horrible investment decisions.  It is possible that I'm only remembering the bad stuff, but I seriously can't think of a single good call Alan & Co. made.

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Spaceman Spiff wrote: LockEDJ wrote:ytrewq wrote:...  In practice many FAs fail because they are "optimizing portfolios" instead of building their business.  ...
Would you mind amplifying this?
 

I think what he means is that too many new FAs spend a ton of time worrying about which funds to buy, or whether UITs are better than funds, or whether 15% or 20% international is the optimum amount of international exposure.  They spend hours "designing" a portfolio for a prospect.  And they customize it for every single new prospect.  I've been guilty of that, so I know what he's talking about.  I would spend hours on a $100k portfolio to get it just right before I showed it to a prospect.  Those were hours I should have been spending creating new relationships or fostering existing ones.  Instead I was staring at my computer.

your such a dope

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Moraen wrote:ytrewq is NOT a new man!  He is sooooooo mean!Hey, my time at Jones was limited.  But the time I did spend there, they made horrible investment decisions.  It is possible that I'm only remembering the bad stuff, but I seriously can't think of a single good call Alan & Co. made.

 
OK Moraen.  You gotta make me call you out too?  I am trying so hard to play well with others in this new year.
 
Jones made "horrible" investment decisions?  Asking my first (and ex) wife to marry me was a horrible decision.  Not bad or misguided.  Horrible.  Jones has made some bad decisions but not "horrible".  Atleast not compared to my "horrible" decisions.
 
To change the topic a small bit, I would like to become much more of an Advisor and less of a Broker.  I would really like to know about the Advisory business's FAs here have built.  How large they are, how they built it, and how long it took.  Moraen, as an RIA (or IAR), how big is your fee based book and how did you build it?  I understand if you (or anyone else) doesn't want to post actual numbers but I would like to hear your best ideas and steal them. 
 
Maybe a seperate thread were we all played Rodney King and got along?
 

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ytrewq wrote:Moraen wrote:ytrewq is NOT a new man!  He is sooooooo mean!Hey, my time at Jones was limited.  But the time I did spend there, they made horrible investment decisions.  It is possible that I'm only remembering the bad stuff, but I seriously can't think of a single good call Alan & Co. made.

 
OK Moraen.  You gotta make me call you out too?  I am trying so hard to play well with others in this new year.
 
Jones made "horrible" investment decisions?  Asking my first (and ex) wife to marry me was a horrible decision.  Not bad or misguided.  Horrible.  Jones has made some bad decisions but not "horrible".  Atleast not compared to my "horrible" decisions.
 
To change the topic a small bit, I would like to become much more of an Advisor and less of a Broker.  I would really like to know about the Advisory business's FAs here have built.  How large they are, how they built it, and how long it took.  Moraen, as an RIA (or IAR), how big is your fee based book and how did you build it?  I understand if you (or anyone else) doesn't want to post actual numbers but I would like to hear your best ideas and steal them. 
 
Maybe a seperate thread were we all played Rodney King and got along?
 Telling people to hang on to Lehman brother's bonds three days before they go bankrupt because they "absolutely have no liquidity issues, no matter what you stupid FA's think" (Mario DeRose at a meeting of my region) was pretty horrible.  The rest were probably misguided I will concede.I'll PM you my actual AUM, versus firm AUM and then also my cut.  I've also been working some different things going on that are not necessarily "typical" financial advising stuff.  I'll key you in on that too in a PM. 

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He called us stupid?  Them thars fightin' words.  I thought you were long gone from Jones by the time Lehman went under?  PM in a bit.

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Moraen wrote:ytrewq is NOT a new man!  He is sooooooo mean!Hey, my time at Jones was limited.  But the time I did spend there, they made horrible investment decisions.  It is possible that I'm only remembering the bad stuff, but I seriously can't think of a single good call Alan & Co. made.
 
This is something I just don't understand. Jones isn't trying to make "calls" on the market.  It is obvious before you even arrive in St. Louis that Jones isn't trying to train you to make "calls" on the market. They clearly preach a long term investment philosophy. You actually think they are going to send out a wire, "ALL FA's WHO HAVE LEHMAN BONDS IN THEIR BOOK MUST SELL THEM AT THE MARKET PRICE TODAY, THESE THINGS ARE GOING TO ZERO." Come on. That is a ridiculous expectation for any firm. Any advisor or firm who thinks they can consistently get in front of events like that is lying to themselves and their clients.
 

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Ron 14 wrote:Moraen wrote:ytrewq is NOT a new man!  He is sooooooo mean!Hey, my time at Jones was limited.  But the time I did spend there, they made horrible investment decisions.  It is possible that I'm only remembering the bad stuff, but I seriously can't think of a single good call Alan & Co. made.
 
This is something I just don't understand. Jones isn't trying to make "calls" on the market.  It is obvious before you even arrive in St. Louis that Jones isn't trying to train you to make "calls" on the market. They clearly preach a long term investment philosophy. You actually think they are going to send out a wire, "ALL FA's WHO HAVE LEHMAN BONDS IN THEIR BOOK MUST SELL THEM AT THE MARKET PRICE TODAY, THESE THINGS ARE GOING TO ZERO." Come on. That is a ridiculous expectation for any firm. Any advisor or firm who thinks they can consistently get in front of events like that is lying to themselves and their clients.When FAs are genuinely concerned and ask a direct question, they don't expect a lie.  I never could stomach my commanders lying in the military and I don't expect it now.I guess that's why I'm on my own.No, I haven't been gone from Jones long.  Long enough that most of the bitterness of my unique experience has faded (talk about a peace offering!).  I actually left the next week (haha!).  The exit had been a year in the making.Ron - I do realize that if Jones sent out wires like that it could potentially move the market.  But you expect our fixed income expert to have a little more insight.  But now I'm my own fixed income expert, and have no one to blame but myself when things go wrong
 

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So you think he knew Lehman was going under and lied to your face ? Why would he do that ? Or is it possible that he missed it like many other bond analysts ? Every damn mutual fund in the world owned BofA and Citi, should you never use their funds again ?
 
There are times I love to rip Jones also, dont get me wrong. I just think this shot is misdirected and unfair.

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Ron 14 wrote:So you think he knew Lehman was going under and lied to your face ? Why would he do that ? Or is it possible that he missed it like many other bond analysts ? Every damn mutual fund in the world owned BofA and Citi, should you never use their funds again ?
 
There are times I love to rip Jones also, dont get me wrong. I just think this shot is misdirected and unfair. I sold out of all of my financial stock positions before they began to lose too much.  Lehman should have been fairly obvious to anybody looking at their books.  There was no confidence in them.  They couldn't make their debt payments.  It should have come as no surprise to anybody who watches the markets.Or here's a better one.  A company with $19 billion in cash at the time, been around for well past the 20 year mark, YOY increased profits, and they place a buy recommendation on it after it has appreciated 500%.  Not a horrible call, but not a smart one.  Especially when you tell one of your FAs that "you better get the client to sign an acknowledgement letter before yous sell them a stock like that again".  And no, I will not use actively managed mutual funds EVER AGAIN.

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Well if you were able to sell out of all of your financials before they lost and you were absolutely confident in their decline a few strategic put purchases would have made you a few 100k. If you have this type of consistent ability you don't need to advise clients on anything, you can trade for yourself for more money and less hassle.

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I should probably clarify what I said earlier, as it sort of started a little battle.....I did not suggest that Jones was making "bad calls", so to speak. What I meant was, I don't want to have to live by all of their decisions, a good example being their asset allocation methodology. I believe they are too aggressive (yes, you heard me right). I do not believe a 55 year-old with a moderate risk tolerance should be balanced towards growth. I have a specific methodology for how I allocate investments for those approaching retirement, and I am FAR more conservative than Jones. However, I have to "jockey" the system (lie, for all intents and purposes), in order to get a more conservative allocation in Advisory Solutions. Usually it involves scaling down the client's risk tolerance (clients don't know their risk tolerance anyway, but that's another discussion).
I realize Jones follows the standard FPA process for allocations, risk tolerance, etc. which is great for protecting their liability, but I believe there are situations to dial back the risk, and they are just so pro-equity all the time, that I have a hard time with it.

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Yeah this discussion is about to turn into a predicting vs planning argument and I have no interest in participating in that.

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Ron 14 wrote:Well if you were able to sell out of all of your financials before they lost and you were absolutely confident in their decline a few strategic put purchases would have made you a few 100k. If you have this type of consistent ability you don't need to advise clients on anything, you can trade for yourself for more money and less hassle. No.  Lost a little bit.  Got back in on the way up.  Not precise, but really all you need to do is look at the financial statements.  It is certainly better than hanging on until the stock reaches $7 a share and then putting a sell on it.  That is irresponsible and why people are so fed up with our industry.  This recession created huge opportunities.  I'm sorry, but sometimes the talking heads are right, probably because they read the statements.I don't "predict" anything.  I adjust my models based on any new information.  I have certain criteria for valuation.  DeRose SHOULD have known better.EDIT:  Feel free to get back on topic.  Ron and I have had this out too many times.  It just makes him not like me.Personally, I think AS is a good program, and will be extremely helpful to Jones clients as it continues to evolve.  I think it is a tremendous asset gathering tool, if used correctly.I don't know anything about the Chase Strategic Portfolio, but if they are similar, then it's also a good program.

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