Jones

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chaz's picture
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Joined: 2007-08-18

Alright, I've spent quite some time reading these posts (and the bantering) and I would like to ask the veterans to further explain something. I've used the search button, don't worry.
Regarding Jones: Please elaborate as to what you mean when you say don't drink the kool-aid. It's been said many times but I couldn't find specific examples.
I've only read very positive remarks concerning starting at Jones, and I feel that in my position it is the best place to start (I'm26- fresh out of 4 yrs military/ 4yrs school). With that said, my goal is to be independent some day after I establish my business.
What I would specifically like to know is things to look out for during my years there.
Please refrain from simply stating why Jones sucks unless you can give examples.  When I stop getting more out of Jones than Jones gets out of me, I know I'll be ready to move on.  Thanks in advance.

troll's picture
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Joined: 2004-11-29

chaz wrote:
Please refrain from simply stating why Jones sucks unless you can give examples.

You could more easily turn back the tides.  It's much easier to find a needle in a haystack than to find intelligent comments about Jones on this forum.

theironhorse's picture
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Joined: 2007-03-03

chaz-I have left Jones within the last 6 months and will give you my take on why people bash them so much.  they have a very standard investment philosophy, buy things with very long track records, stick a small number of what the call preferred fund companies, sell as many A shares as humanly possible, and do a good deal of bond business.  this is how I saw them.  they are (or were) not interested in fee based anything, as their veteran reps have been combating this for the better half of 10-15 years or so.  how can they sell against it under the premise that it is a horrible deal for the client, then try to add it to their practice.i think many of the jones reps who have been there forever, and are ver successful, have never been at another firm so their opinion is a little jaded.  jones helped make them successful, so why would anyone think it is bad.  I do believe their sales training is exceptional.  You will be taught from day 1 what is most important in this profession, prospecting.  They will beat it into you and rightly so 90% of your time is suppose to be spent talking to people.  On the product side, it is more up to you to reach out and ask questions.  Use wholesalers, mentors, other FA's.I think most people who truly want their own business sour on Jones after a short time due to the lack of freedom product wise, and low payout.  We (myself included) think we know enough at a certain point that essentially giving Jones 50-60% of our gross, for what they RETURN, is not making us happy anymore.Ideally, if I was starting new tomorrow, I'd look for an Indy firm trying to hire junior associates.  But if I wanted the sales training, Jones is not a bad place to start.  Just make sure you sell yourself and the relationship, not Jones-makes moving easier.

chaz's picture
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Joined: 2007-08-18

Datoo- I actually expected the first reply would be you and it woudn't have anything to do with what I posted.
theironhorse- thanks for the informed reply.  How do you pitch a c shares now after selling a shares at Jones? Why are c shares better for clients, in your approach? 

TheLostSoul's picture
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Joined: 2006-07-20

I think the kool aid joke is from the old Jim Jones cult that drank the kool aid and died many years ago. I would imagine a lot of reps would rather gather assets with the new approach to the business. Doing C shares and wrap accounts and Jones likes to stay with the old ways.

theironhorse's picture
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Joined: 2007-03-03

chaz-I never changed my philosophy.  I did alot of C shares.  A shares at certain breakpoints for clients already invested and looking to do more.  Right now I am doing alot of C shares making sure the client knows when we reach certain $ amounts we will convert to managed accounts.  That being said, I do not do much fund business.

Dust Bunny's picture
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Joined: 2007-05-07

Don't drink the kool aid and the jokes about kool aid are from the Jim Jones cult.  When people say don't drink the kool aid in conjunction with Edward Jones, they mean to keep your eyes wide open and don't believe everything that they tell you.  They will feed you information that is filtered to their own business model.  You know the old joke about being a mushroom....kept in the dark and fed sh*t.
Jones is a good place to start. They will give you some mediocre product training and do a good job in teaching you how to prospect and run your office.  What you need to do is to continually be learning on your own.  Read as many industry publications as you can.  Study for the Series 63, 66.  Take the CFP courses.  
Iron Horse is right.  Many at Jones after a few years feel cramped at the small product line and parochial attitudes from the main office.  There are a lot of guys and gals who are very happy there. Maybe you will be one...or maybe you will decide to move on after some time.   Moving from one firm to another is not easy and you will be surprised at the clients who you thought would come with you who won't and those that will.  

chaz's picture
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Joined: 2007-08-18

Thanks for the replies. I really appreciate them.
I understand completely not to listen to everything they preach. Considering they have a good training program, I want to have a level head on being able to decipher what is valueable information and what is better served left in the 1980's communication system.  Any suggestions as to how to weed out the kool-aid?
Thanks again.

Cowboy93's picture
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Joined: 2005-05-10

You'll be fine.  You sound like you won't believe the implication that EJ is the only firm where the FAs do what is right for their clients and there is nowhere else to be in this business.  The truth is that if you take care of your clients, they will take care of you in about 100 different places you could set up shop.  For a new person, the biggest challenge is getting people to LET you take care of them and not let the short term income potential influence your long term business building (ie taking care of the clients' long term best interest).  Take EJ's training and go with it, but don't incorporate the parts about your firm being the ONLY place to get good help.

chaz's picture
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Joined: 2007-08-18

Thanks again for the informative posts.  I hope I'm not asking the same questions that have been posted 1000 times.  I know  \Jones will have a lot of valueable advice but also a lot of bs. I'd like to be able to decipher the two without wondering if I'm being brainwashed or fed good advice.

RULiquid's picture
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Joined: 2007-07-16

 
You had wrote: "Ideally, if I was starting new tomorrow, I'd look for an Indy firm trying to hire junior associates"
 
I was wondering if you had any indy firms worth mentioning here. 
 
Thanks
 
 
theironhorse wrote:chaz-I have left Jones within the last 6 months and will give you my take on why people bash them so much.  they have a very standard investment philosophy, buy things with very long track records, stick a small number of what the call preferred fund companies, sell as many A shares as humanly possible, and do a good deal of bond business.  this is how I saw them.  they are (or were) not interested in fee based anything, as their veteran reps have been combating this for the better half of 10-15 years or so.  how can they sell against it under the premise that it is a horrible deal for the client, then try to add it to their practice.i think many of the jones reps who have been there forever, and are ver successful, have never been at another firm so their opinion is a little jaded.  jones helped make them successful, so why would anyone think it is bad.  I do believe their sales training is exceptional.  You will be taught from day 1 what is most important in this profession, prospecting.  They will beat it into you and rightly so 90% of your time is suppose to be spent talking to people.  On the product side, it is more up to you to reach out and ask questions.  Use wholesalers, mentors, other FA's.I think most people who truly want their own business sour on Jones after a short time due to the lack of freedom product wise, and low payout.  We (myself included) think we know enough at a certain point that essentially giving Jones 50-60% of our gross, for what they RETURN, is not making us happy anymore.Ideally, if I was starting new tomorrow, I'd look for an Indy firm trying to hire junior associates.  But if I wanted the sales training, Jones is not a bad place to start.  Just make sure you sell yourself and the relationship, not Jones-makes moving easier.

Borker Boy's picture
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Joined: 2006-12-09

I've been with Jones since December '05 and have been licensed since April '06. Regardless of what the has-beens say, Edward Jones is a fantastic investment firm--just look at client- and employee-satisfaction surveys from this year and years' past.
The bottom line is that this is an extremely tough business, and your first year will be completely over-whelming; then, to top things off, you'll lose your monthly salary, and it get's tougher.
I'm certainly not "out of the weeds" by any means, but I have zero complaints about my choice of firms. After 15 months of being licensed, I'm going to have another "Net $10,000" month.
I realize numerous guys on this forum do much better than that on a regular basis, but after living for many years on police officer income, that's a pretty darn good paycheck!
 

Edward Pwns's picture
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Joined: 2007-05-23

BB,
Congrats on posting Seg 4 numbers after 1.5 years.  That's an awesome success story.  Did your success come from doorknocking, seminars, a super goodknight, or networking?
Borker Boy wrote:
I've been with Jones since December '05 and have been licensed since April '06. Regardless of what the has-beens say, Edward Jones is a fantastic investment firm--just look at client- and employee-satisfaction surveys from this year and years' past.
The bottom line is that this is an extremely tough business, and your first year will be completely over-whelming; then, to top things off, you'll lose your monthly salary, and it get's tougher.
I'm certainly not "out of the weeds" by any means, but I have zero complaints about my choice of firms. After 15 months of being licensed, I'm going to have another "Net $10,000" month.
I realize numerous guys on this forum do much better than that on a regular basis, but after living for many years on police officer income, that's a pretty darn good paycheck!
 

spintofish's picture
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Joined: 2007-07-30

BB in addition to the question about how you've gotten your clients posed by Edward Pwns (EP) please tell us if you used a particular product, product mix, or messaging to get off to your fast start. I'm also with EP in being interested in the details but would also find it interesting to know if your practice has a high focus on business owners, did you hit a rich vein of HNW individuals, does it come through a high volume of individuals or a smaller number of larger investors?
Congrats on your success.

Borker Boy's picture
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Joined: 2006-12-09

I appreciate the props, but I wouldn't necessarily consider myself a success story. I took over a big office ($16 mil.) and know a lot of people in the area.
I'm a huge mutual fund fan, and that's what I've focused on building my business with. I've had success by opening a lot of accounts with average people rather than dealing with only a few rich folks.

Borker Boy's picture
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Joined: 2006-12-09

I've never understood the complaint about Jones only using the eight preferred fund companies and having a "limited number of products" available to the brokers/clients.
I spend every waking hour just trying to keep up with what we do offer, and I feel that our clients are much better served by having advisors who know the investments they offer very well, as opposed to knowing a little about a lot of things.
 

FreeFromJones's picture
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Joined: 2006-11-29

BB,
There you go again with the higher and mightier than thou attitude that anyone who has chosen to leave Jones is a "has-been". 
Chaz, this is one of the reasons that there are so many negatives about Jones on this board. 
BB, I left Jones 1 year ago and have had 5 10-net months, 2 20-net months and a 50-net month.  And, no, it wasn't because I don't do what's right for my clients, I continue to provide services to them just as I did at Jones.  I just don't have Jones haircutting everything I do.
Chaz, in BB's 10-net month (a much covetted experience at Jones, They even have a special award for your first time), he forgot to mention that the GPs kept $15,000 or more of his production.
BB, I don't really think that after 1 1/2 years of selling that you have an un-biased opinion to offer.  At about the 4-5 year point, if you still feel the same way about Jones then more power to you, but don't be so stupid to call those who have left Jones "has-beens" especially whe your lucky a$$ took over a $16 million dollar office.
Chaz, watch out for posters like BB.

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

At what point did he call anyone a has been? 
Nobody has an unbiased opinion to offer on this board.  You have an axe to grind since you left Jones.  Get off your high horse. 
BTW a $16 mil office doesn't get earn you seg 4 numbers.  Hard work does.  Don't downplay BB's numbers and work ethic.  To be 15 months in and having "another 10,000 net month" is great even with the office he took over.
BB - congrats on a great month.  The only question I have left for you is this:  Fiji, New Zealand, Paris, Hawaii, Amsterdam, Cancun, Captiva, Costa Rica, Bahamas, Tahoe, New York (a great trip I highly recommend it), Nuevo Vallarta, Rome, or St. Maarten?

FreeFromJones's picture
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Joined: 2006-11-29

Spiff, look straight up on this page.  The following is a quote from BB:
"I've been with Jones since December '05 and have been licensed since April '06. Regardless of what the has-beens say, Edward Jones is a fantastic investment firm--just look at client- and employee-satisfaction surveys from this year and years' past."
(emphasis mine)
I have no axe to grind, just don't earn less money than me and call me a has-been.  You know that's the same B.S. that easily flows from all newby's mouths.  It flowed from mine until I figured out just how insignificant most IRs/FAs are in the whole scheme.
Wow, Spiff, is EDJ the only company that offers trips for good producers?  NOT!!
 

bspears's picture
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Joined: 2006-11-08

Borker, you've got to be kidding.   You take over an office, which it probably took 2-3 years of hard work to build. You walk into it and move accts around, make some good commish doing it...and then want to come on here and say what a great company the cult is.  You need to come back here in 2-3 years, with 30 million under management and still doing seg 4 numbers, and maybe, just maybe, I'll not laugh at your posts.

now_indy's picture
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Joined: 2006-07-28

Borker,
I'm not trying to bash you, but a few months back you were thinking of going back into law enforcement.  Are you still on the fence about Jones? 

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

FreeFromJones wrote:
Spiff, look straight up on this page.  The following is a quote from BB:
"I've been with Jones since December '05 and have been licensed since April '06. Regardless of what the has-beens say, Edward Jones is a fantastic investment firm--just look at client- and employee-satisfaction surveys from this year and years' past."
(emphasis mine)
I have no axe to grind, just don't earn less money than me and call me a has-been.  You know that's the same B.S. that easily flows from all newby's mouths.  It flowed from mine until I figured out just how insignificant most IRs/FAs are in the whole scheme.
Wow, Spiff, is EDJ the only company that offers trips for good producers?  NOT!!
 

Sorry, my bad on the has been comment.  I apologize.  Poor reading comprehension on a Monday.  BB - try not to bruise their fragile egos in the future.  Also, your $16 mil wouldn't really qualify as big.  Decent, yes.  Not big.  The guy who recenlty took over the $110 mil office was big.  
No, I realize Jones isn't the only company to offer trips.  However, as far as I know they are the only ones who have as many FAs who qualify.    And it's not a first come, first served.  You qualify, you win. 

FreeFromJones's picture
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Joined: 2006-11-29

Spiff,
That's OK, I'll forgive you this time.  Yes, my ego was bruised. It seemed rather harsh since I thought you were the one Jones guy here that I can tolerate and actually expect an intelligent thought through response from.
We still want you to play in our sand box.

Edward Pwns's picture
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Joined: 2007-05-23

Not making enough to eat 2 months ago and now posting Seg 4 numbers.  Nice turnaround. 
now_indy wrote:
Borker,
I'm not trying to bash you, but a few months back you were thinking of going back into law enforcement.  Are you still on the fence about Jones? 

Borker Boy's picture
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Joined: 2006-12-09

Edward Pwns wrote:
Not making enough to eat 2 months ago and now posting Seg 4 numbers.  Nice turnaround. 

I agree. Thanks.
now_indy wrote:
Borker,
I'm not trying to bash you, but a few months back you were thinking of going back into law enforcement.  Are you still on the fence about Jones? 

I was never "on the fence about Jones." Just on the fence as to whether I wanted to continue working in a field that's so pervaded by criminals.
I've come to the realization, though, that those guys just make me look even better.

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

Are you referring to the criminals on the law enforcement side or the investing side?

Borker Boy's picture
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Joined: 2006-12-09

Spaceman Spiff wrote:
The only question I have left for you is this:  Fiji, New Zealand, Paris, Hawaii, Amsterdam, Cancun, Captiva, Costa Rica, Bahamas, Tahoe, New York (a great trip I highly recommend it), Nuevo Vallarta, Rome, or St. Maarten?

I went on the New York trip last December (Wow!), and I had to bank my most recent trip, but I'm looking hard at Paris for the '08, Prog. I group.
Also, I was referring to the criminals in the "investing business"--specifically those filthy bonus annuity salesmen. (However, I honestly doubt anyone who frequents this board is involved with raping people with those abominable products.)
In hindsight, I've realized that the people I used to put handcuffs on were much more respectable than the creeps I encounter who are selling that pie.
 

IndyEDJ's picture
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Joined: 2006-12-13

Borker Boy wrote:
I've never understood the complaint about Jones only using the eight preferred fund companies and having a "limited number of products" available to the brokers/clients.

You need to ask yourself, who chooses those eight.  Most of us who have been in the business a tad longer than you can look at the Alphas and Betas in constructing a portfolio and choose for ourself.
IndyEDJ

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

And...if you look at the alphas and betas of those fund managers in the Jones preferred list, they are really good.  I presented a portfolio to a prospect recently using Goldman, American, and Hartford that had a 5 year beta of .63 and an alpha of 4.63.  The S&P outperformed on 1 yr, but mine was better 3 months, 3, 5, and 10 yr.  It's not about where you get the ingredients, it's how you mix them that counts.

bspears's picture
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Joined: 2006-11-08

Spiff, did you tell the client about the revenue sharing?

advisor28's picture
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Joined: 2007-06-04

Spiff,
Congrats..now all you have to do is find 1,000 more rollovers like that one and you can have a self sustaining business for a while atleast until it is time to try and review all of your accounts properly and utilize all of the planning tools you have at you fingertips.

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

If I had a book worth $375 million I certainly could use all the planning tools I have at my fingertips.  Of course you folks would tell me at about $50 million I need to jump to LPL and "own my book" or something like that.  At $375 million I'll hire spears to do the grunt work for me.  Shoot, spears, maybe at $50 million I'll do a GKN 2 for you.
Yes, I told him about the revenue sharing.  Surprisingly, when they see good performance numbers the revenue sharing isn't an issue.  Hmm...go figure.  

bspears's picture
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Joined: 2006-11-08

HAH, Another 500k transfer from your beloved green yesterday....Good luck on getting to 375 million or is it 37.5 mil?  The less time I spend here, the more transfers I get...hmmm.  Last post of the day for me.

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

Must be kind of frustrating to be rejoicing about getting your old clients to come work with you again. 

vbrainy's picture
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Joined: 2006-07-26

You must be too young to remember Jim Jones and Koolaid.  Horrible.
Anyway, EDJ micro manages you.  They tell you how to prospect (coldwalking) and you don't own your book.  What more needs to be said?  Oh, they don't do fee based business.

Borker Boy's picture
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Joined: 2006-12-09

vbrainy wrote:
You must be too young to remember Jim Jones and Koolaid.  Horrible.
Anyway, EDJ micro manages you.  They tell you how to prospect (coldwalking) and you don't own your book.  What more needs to be said?  Oh, they don't do fee based business.

Although it appears Jones will soon join in the fee-based feeding-frenzy, I'm less than convinced that this model is better for the "average" investor than an upfront commission and subsequent low annual expense.
I asserted my opinion on this issue in an earlier post, and I remain skeptical and unconvinced.

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

vbrainy wrote:
You must be too young to remember Jim Jones and Koolaid.  Horrible.
Anyway, EDJ micro manages you.  They tell you how to prospect (coldwalking) and you don't own your book.  What more needs to be said?  Oh, they don't do fee based business.

Wrong, wrong, wrong.  If anything Jones gives you the rope and let's you hang yourself.  They teach you to doorknock, but as long as you're getting people to invest with you, they don't care where the people come from.  I know very successful FAs who have never once knocked on a door.  You don't own your book anywhere other than at an Indy shop either.  We do fee based business for the right kind of clients.  What we don't do is slap everyone who comes through the doors into a fee based account just because that's the way we like it. 
There's no arguing with the numbers on a buy and hold portfolio of A shares vs. fee based.  The A shares are the most cost effective way to go for the average buy and hold client.  However, I believe people should have some choices as to how they pay me.  I will welcome and utilize the fee based platform when it comes out (unless it sucks).  But I will also show people A shares and give them the freedom to choose.  Just one more way Jones will prove they are better than everyone else.  

Borker Boy's picture
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Joined: 2006-12-09

Spaceman Spiff wrote:
There's no arguing with the numbers on a buy and hold portfolio of A shares vs. fee based.  The A shares are the most cost effective way to go for the average buy and hold client.  However, I believe people should have some choices as to how they pay me.  I will welcome and utilize the fee based platform when it comes out (unless it sucks).  But I will also show people A shares and give them the freedom to choose.  Just one more way Jones will prove they are better than everyone else.  

 

blogme's picture
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Joined: 2007-07-31

Spaceman not to burst your bubble but I think you know as well as I do that people can add or remove investments (A shares or Fee Based) to make the hypos look better or worse.  Plus it is not matter what the return on the hypo is but our job is about the actual return (what the client gets to keep in his/her pocket) after ALL expenses are paid including TAXES.  In many cases fee based accounts have huge advantages over A share mutual fund portfolios in taxable accounts, but like every investment out there neither is for everyone. 

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

You are correct.  I can manipulate hypos to show whatever I want.  I don't, because it doesn't benefit me in the long run. 
Fee based accounts don't have any tax leverage over a mutual fund portfolio.  Now, before you get your panties in a wad, let me clarify.  The payment to the broker is immaterial as far as the IRS is concerned.  Although some will say the fee is a writeoff and a commission isn't.  It's what you put inside the account that matters.  Actually a well designed commission based ETF portfolio without a lot of moving parts would be very efficient for clients on both a cost and tax front.   

blogme's picture
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Joined: 2007-07-31

Just so you know spaceman, whether the fee is eligible or not to be considered an investment expense to the IRS that is not even material when considered to being able to control your investments and control your tax situation.  Mutual funds do not allow you to do this and I know the turnover rate on American Funds is lower than  other firms but the fact is you have no control.  On the ETF side if you are talking about an actively traded ETF portfolio at Jones and that being better for the client or even cheaper for the client, you must not have seen what we charge to trade those (hint: it is just like a stock).  With the amount of research we have available to us that is no different than what an ordinary person could not figure out on their own (hint: very little to none), you can not possibly justify the cost of even one ETF trade at Jones so an actively traded portfolio has no revelavance.  I work for Jones and this is what I don't like about it.  I feel like I work with a bunch of uneducated individuals who lack the ability to reason.  And then you wonder why we have to train someone for a year on the ICA guide.  Spaceman do yourself a favor and continue to focus on just what Jones does, because if you open up to the rest of the world your narrow mind might blow up. 

Aromatherap's picture
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Joined: 2007-08-24

Blogme, if you don't like working with idiots, why did you join Jones?  Most of your peers are former used car salesmen, waiters, and bus drivers.  As far as your clients, who else would give money to a faggot door to door salesman, other than an idiot?  You're in the wrong spot if you don't like idiots.

advisor28's picture
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Joined: 2007-06-04

Spiff,
You never told me if you were a top account opener for the month?? An NAV advisory fund account can and does outperform your buy and forget A share portfolio with less risk in many instances net of fees.  You have no idea what is available and your R share mutual fund program underway will be fair at best. Whether you stay or go doesn't matter, however I would be prepared to have a better answer then we have the lowest ongoing expenses of any proposal you'll see Mr. Client. In a competitive situation against Jones I can tell the client what was proposed before they tell me. That is not going to get it done, buy and forget is no longer an option in todays market place.     

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

blogme - you have difficulty with reading comprehension don't you?  I clearly said that a portfolio with few moving parts, therefore not actively traded, will be cheaper for the client.  I'm talking about setting up an ETF portfolio once with a broad diversification mix and letting it do it's thing.  Since that theory of portfolio construction would mean you believe in an efficient market hypothesis, you shouldn't be actively trading it.  If you were it would make me question just how good the original portfolio was to begin with.  How many trades are you going to make in a year.  12?  15?  I don't know about your office, but I just don't work with a ton of non-qualified money that's not in annuities.   
News flash for you.  There's this thing called the internet that allows everyone who has the desire to find out everything that we know about anything.  You think those fact sheets you print out on your mutual funds are available only to licensed individuals.  Ever heard of Yahoo or Google?  There's enough info out there to choke a horse.
I usually don't argue with Jones people about the way Jones runs things.  Neither do I tell them what I think they should do with their career.  In this case you evidently have a fundamental difference of opinion with Jones on portfolio management.  I've always felt if I got to that point it would be time to part company.  Sounds like you'd probably be much happier somewhere else.
advisor28 - no, I'm not a top account opener.  Never have been.   Does it matter?
Jones has never been a buy and forget company.  Buy and hold is different.  I believe that a lot of the "active management" in the portfolios I see is more a function of the advisor trying to make it look like they are doing something for their clients by moving from fund A to fund B rather than tactical or strategic moves. 
I've also never told a client they would have the cheapest ongoing expenses out there.  If they want that they can go to Vanguard.  I also don't promise them they'll have the best return on the street.  I tell them they are going to make the returns they need to reach their goals.  If I start playing the my returns are better than yours game, I'm going to get beat.  And you are too. 
I'm willing to lose a client or not get a prospect if they are looking for something that I don't offer.  I tell them what I have to offer, the cost, and the services they can expect.  If it matches, great.  If not, I'm disappointed, but moving on. 

advisor28's picture
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Joined: 2007-06-04

Spiff,
You make valid points however my focus was on the fact that not all mutual fund families do everything well and having the ability to use funds from different families to fill in the gaps gives the client an advantage from a risk/reward standpoint.  At Jones this is not possible due to aggregation rules, when even in C shares there is a compelling argument to the multi manager approach vs. single family A shares.  As for your comment about does it matter to be a top account opener, at Jones it does matter..I'm glad to hear you realize that it can be a hinderence in a mature business. Just healthy banter, best to you in the future... 

Broker24's picture
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Joined: 2006-10-12

28,
I have to agreee with you here. I do use a lot of the standard Jones stuff
(i.e. American Funds). But more and more I am using AMF for my core
(Capital Income Builder, Income Fund, etc.) and global allocations, but
have to go other places for growth, small/mid cap, alternatives (real
estate, gold/commodities, total return bond, etc.).
I find it sort of difficult in our a-share world, but I make do for the most
part. I will use multiple a-shares when I have the funds to do it (i.e. two
100K breaks), or use c-shares paired with a-shares (i.e. a-shares to hit
the 100K break, plus c-shares for the next 50-75K).
The problem I have is that while American Funds is one of the best in the
growth & income space and global investing, they are not very good
beyond that. They are adequate with bond picking. They are not great
with growth, terrible with small/mid cap, and really can't offer anything
else compelling.

As far as the top account opener comment, after your first few years, I
don't really see where that matters at Jones. Most veterans will tell you
they are trying NOT to open more accounts.

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

I think the key to surviving and making clients happy in the A share world is to compromise.  I for the first few years of my biz I used nothing but American Funds.  Now I use a lot of Goldman and Franklin Templeton.  Hartford has some nice offerings too.  I've used some Columbia funds for that small/mid space.  I also believe it goes back to the basic conversation of meeting people's goals.  I don't care if you use A shares, C shares, ETFs, or individual holdings, you have to be able to make people the return they need to meet their goals.  Do that for them and they'll be happy. 
I don't really get concerned about the number of accounts I open.  I focus more on the AUM I bring in.  I take 1 $1 million account vs 10 $4000 IRAs. 

blogme's picture
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Joined: 2007-07-31

blogme - you have difficulty with reading comprehension don't you?  I clearly said that a portfolio with few moving parts, therefore not actively traded, will be cheaper for the client.  I'm talking about setting up an ETF portfolio once with a broad diversification mix and letting it do it's thing.  Since that theory of portfolio construction would mean you believe in an efficient market hypothesis, you shouldn't be actively trading it.  If you were it would make me question just how good the original portfolio was to begin with.  How many trades are you going to make in a year.  12?  15?  I don't know about your office, but I just don't work with a ton of non-qualified money that's not in annuities.   
News flash for you.  There's this thing called the internet that allows everyone who has the desire to find out everything that we know about anything.  You think those fact sheets you print out on your mutual funds are available only to licensed individuals.  Ever heard of Yahoo or Google?  There's enough info out there to choke a horse.
I usually don't argue with Jones people about the way Jones runs things.  Neither do I tell them what I think they should do with their career.  In this case you evidently have a fundamental difference of opinion with Jones on portfolio management.  I've always felt if I got to that point it would be time to part company.  Sounds like you'd probably be much happier somewhere else.
 
Spaceman, I guess I will have to agree with some of the other guys I have seen respond to some of your post in the past and say "You might want to go back and read the previous post before posting and making yourself look like an idiot."  First of all in case you forgot Edward Jones has NO actual theory on portfolio construction.  It has a philosphy called buy and hold.  Let's buy what our research department believes to be high quality investments and hold them for as long as we can keep the clients in them.  There are some good things here, but it is no where close to modern portfolio theory.  If you don't think so, try your little yahoo or google trick you where trying to tell me about and see what you find out.  Which brings me to my next point and I am glad you agreed with me.  There is so much information on the internet on yahoo, msn money, etc.  that is FREE!!!!  More than just free it is user friendly and an easy read for anyone, so let me state my point again about your little ETF portfolio.  With all of this information out there, which you agreed with me, is no different than what our research department is putting together how can you possibly to yourself justify one ETF trade.  The bare minimum the client would pay is $50 and they can do it on the internet with the same info for $7.  If there is value being added then I believe there is reason for a higher cost, NO value is added here.  Your not "Doing what is Right for the customer" only what drives up your gross and ulitmately puts more money in your pocket.  I am sorry if it is just me but my morals and beliefs, don't believe taking advantage of people is in their best interest!

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

What is it exactly that you do for a living?  I'm getting confused because you are arguing with me about clients paying for our advice.  I'll disagree with you that the info on the internet is "an easy read for anyone".  We think it's an easy read because we read it all day long.  Talk to your average client and see if they even know that Yahoo has a finance page.  Ask them if they understand what standard deviation is.  Or the difference between their CD and a bond.  The ETF sites will tell them what makes up the ETF, what index it tracks, and some other info, but it absolutely doesn't tell them how much to buy, when to buy/sell, or how it fits into their portfolio. 
Sorry, I can't help going back to the what is it that you do for a living question.  You get paid to tell people what to buy, how to buy it, and when to let it go.  You get paid to take information that they can get anywhere and help them make sense of it.  Under your current logic system, anything that can be found on the internet should be free to buy or at least really inexpensive.  I disagree. 
You are mostly correct that Jones doesn't have a theory on portfolio construction.  They do, it's just really basic.  You may have seen it.  We call it the diversification bar chart.  In case you hadn't noticed there is some theory on portfolio construction there.  You are correct that they don't say you should own 2.5% of 5 different satellite investments in addition to your core.  That's for you to decide.  One of the beauties of Jones I guess.  Nobody is going to shove their version of portfolio management down your throat. 
I don't know where you get off telling me that I'm not doing what is right for my clients because I may choose to suggest they buy an ETF that they can buy at Scottrade for $7.  If it's MY idea going into the portfolio that I built for them based on the goals they told me they wanted to reach, I don't have any moral debates about charging them the commission.  That's what they pay me for.  
You seem to be having some internal moral/ethics battle that is beyond me.  Honestly, I don't get it.  And, unless you are a buddy of mine and I just don't know it, I don't care.  But, I do believe that if you were my buddy having those thoughts it might be time to leave Jones.  I know of a job coming up on a team at Morgan Stanley if you're interested.  I'll give your name to them.

EDJ4now's picture
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Joined: 2006-02-08

I don't want to get in the middle of this, and I don't necessary agree with Spiff on everything, or probably even a majority of things.  However, he hit the nail on the head here.
Spaceman Spiff wrote:
You get paid to tell people what to buy, how to buy it, and when to let it go.  You get paid to take information that they can get anywhere and help them make sense of it.  Under your current logic system, anything that can be found on the internet should be free to buy or at least really inexpensive.  I disagree. 
I don't know where you get off telling me that I'm not doing what is right for my clients because I may choose to suggest they buy an ETF that they can buy at Scottrade for $7.  If it's MY idea going into the portfolio that I built for them based on the goals they told me they wanted to reach, I don't have any moral debates about charging them the commission.  That's what they pay me for.  

This was actually one of my reasons for leaving EDJ.  I think my advice is worth 1% a year.  If you don't, that's fine, but that doesn't mean I'm going to give it to you for 1.75% upfront and a .25% trail for the next 20 years.  The guy down the street will have to help you.
We get paid for our advice, and while we are well compensated, look at what frequently happens when we are not involved.  If someone is not willing to pay me 1% to help them not make bad choices that will detrimentally affect their ability to retire in the style they desire, then they can find someone else to help. 
When I am seeking advice on something very important, like my health, or other things that will have a negative effect on my standard of living if a bad choice is made, I am not price shopping for advice, I pay what I need to so I can get the best advice possible. 
If that's not what you want, then I will politely ask you to leave my office and go google modern portfolio theory.  My advice is valuable, and it is not free. 

jackbauer's picture
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Joined: 2007-08-17

JONES for 4 yrs, indy now for 3. 1. Jim Wettle himself guaranteed me that jones would never have anything that even resembled a fee based platform because such platforms were not good for investors; they are now developing such a platform.2. Jim also swore they would never have any time of buy-out program to IR's because the partners already paid the IR's every penny they could; now they do offer buyout plans and the sale of an IR's book.3. Jones pushed Federated and Putnam funds down our throat and would not pay full commissions to IR's selling Franklin temp or Rydex etc. .. they did not report to us IR's that the Putnam/Hartford/VK/American funds paid kickbacks to us.  UNTIL AFTER WE SETTLED OUT OF COURT that we took kickbacks.Jones is a swell place to learn how to prospect, teaches nothing about actually managing assets.  They are a sales company not a money management firm.  I now manage money, I am no longer a salesman.  Their are a lot of good people at Jones too scared to go it alone. 

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