Any truth to recent comments regarding EJ "Advisory Solutions" sales practices?

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pohsuwed's picture
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Joined: 2005-07-22

My office (independent) has had some interesting conversations with current and former Edward Jones advisors this last week regarding practices pertaining to their "Advisory Solutions" platform.  One advisor cited this as one reason why he left Jones (California), another cited this as one reason he is about to leave Jones (Washington), another confirmed that he has heard this discussed at the "water cooler" (Utah), and an advisor local to us was only willing to say that it wouldn't surprise him if this was the case.(sales practice concern removed by pohsuwed)Not being on the inside I can't confirm that this is true.  Likewise, I can't confirm whether it is an advisor-directed scheme or if it comes from the partnership.  However, it really wouldn't surprise me if it came from the partnership considering the geographic reach of these conversations.  Back in my Jones days the firm would preach how bad wrap arrangements were.  Eventually they added one of their own to increase their income on their latent 0.25bp trail assets.  With this new revelation they are showing that they are realizing that they still rely on up-front commissions to survive or just that they are greedy and willing to skirt the rules.  I just feel bad for the Edward Jones late adopters to "Advisory Solutions" who will be left out in the cold when Jones feels they have enough wrap business and in turn decentivize advisors who still rely on A-share business.I left Jones because I was tired of preaching the company line diligently only to be upended at the next meeting.  Yes, everyone needs to expect progress, but when you preach something as adamantly as they do only to change with the next change in the breeze they show their rainbow kool-aid colors.  On the independent side, I preach my own beliefs that I'm willing to support, defend, and if necessary, admit that I have changed.  It is much more pleasant to function this way than being a minion to the machine.

ytrewq's picture
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Joined: 2008-08-02

In the Stupid Olympics you get a gold metal.

pohsuwed's picture
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Unfortunately I felt the need based on the previous "stupid olympics" comment to remove the meat of my question which was a sales practice that has been described to my office by several advisors.  While my motive for removing the content was out of concern that I may have posted inappropriate comments on the message board, it really is unclear just why "ytrewq" felt my comments were "stupid".  I'm guessing that his reasoning for his comment is to suggest that I've made an inappropriate comment.Interestingly, though, I have considered that it might just be that he is a simple schoolyard bully who, when he can't think of anything fitting to the argument just calls people "stupid" or "ugly".  At least I can spell "medal".

Mr.Blonde's picture
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Joined: 2009-10-06

I would love to hear more about this practice. I've come a long way since 10 contacts for an iPOD or turkey but this is interesting. Does anyone wonder why the public compares us to used car salesmen?

noggin's picture
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Joined: 2004-11-30

Laugh if you want to but the Burgers Smokehouse Turkey would get you to make some calls.....

N.D.'s picture
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pohsuwed wrote:Interestingly, though, I have considered that it might just be that he is a simple schoolyard bully who, when he can't think of anything fitting to the argument just calls people "stupid" or "ugly".  Post whatever you choose and don't let a stranger intimidate you. Your choice to remove part of the post will cause you to loose creditability in anything else you comment on...As for ytrewq, he is not the school yard bully... just someone drowning on kool-aid.

B24's picture
B24
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Sicne you deleted the comment, I have no idea what you are talking about.  It's a MFD wrap program.  We can choose to use it or not use it.  Obviously they are giving it a lot of press internally to encourage its use.  But other than that (and since that's not a crime or even deceitful...) I'm not sure what makes this program different than any other wirehouse or other B/D wrap program.

Spaceman Spiff's picture
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poh - how about you man up and repost your original comments.  ytrewq can be a little abrasive, but his heart is in the right place.  And if you want to have a conversation about Advisory Solutions, he'd be the one guy to do it with.  I'm guessing he's got more in it than anyone else here.  So, thicken up that skin and repost your concerns.  Let the rest of us figure out if you should win the stupid Olympics Gold Medal or not. 

Mr.Blonde's picture
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I read his comment . Basically said that Jones guys were being told to sell A shares to a client and put in a to-do 2 years later to phone and sell him a stock. Once you have that conversation, position AS or something like that. i though AS was a mutual fund wrap with some etf's in it only, can't even hold stocks?

B24's picture
B24
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MB,Yes, it's jsut a wrap with funds/ETF's.  They are rolling out a UMA late this year.I assumed that's what he meant about the "sales issue".  To address it, you will always have those "professional salesmen" that will advocate stupid stuff.  No firm has the corner on that market.  But there is NOTHING coming out from Jones even SUGGESTING to commission them and then switch to Advisory in 2 years.  Obviously that is what some people are DOING, but it does not mean that it's what Jones is ADVOCATING.I'm not sure what he means about stocks though.  I've never heard that "strategy".

pohsuwed's picture
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Okay, Spaceboy.  Here it is:The concept that has been explained to me is that advisors are instructed initially to sell A-shares to their clients.  At that same time they set a "trigger" in the contact management system to "sell stock 'XYZ'" two years into the future.  "Stock XYZ" would be a stock that the advisor wouldn't otherwise attempt to sell to a client--this way, when the advisor sees this note in the system two years from that point in time they realize that the note really wasn't about selling the stock, but moving the clients from the A-share funds into Advisory Solutions.  Using this method the advisor earns maximum on the A-share sale, and then in the minimum appointed time to pass the two-year rule transitions the client into Advisory Solutions.  If this is true even to a small degree, this type of pre-meditated manipulation of the rules for the benefit of the firm and advisor clearly isn't acceptable.In our time at Jones we recall top advisors getting up in meetings discussing how certain fund families paid better revenue sharing than others, therefore we needed to sell those fund families.  Therefore, this Advisory Solutions game is absolutely no surprise to me.  My only question is whether this is just an issue of renegade advisors or whether this is a broader issue at Jones.  As I said, we had this same discussion with advisors across a broad area so we think it is not just a one-off occurance.  But then again, this whole issue is third-person to us.In a private conversation with ytrewq I understand that sometimes being a Jones advisor on the forum can be difficult being a continual target of bashing.  In a way I might suggest that Jones asks for it.  When the firm continually pumps into advisors that they are the best using manipulative information, it can sometimes be hard for them to understand other viewpoints.  For example, Jones like to suggest how smart their advisors are for joining such a great firm.  This is just like the one-sided and manipulative "missed good days" analysis.  If Jones thinks their advisors are so smart, why tell the advisors that in going independent they are responsible for their own overhead and that it's just not worth the risk?  After all, Jones advisors are still held accountable for their overhead and branch profitability on their P&L (along with the firm overhead).  Obviously, the most appropriate statement is that depending on how efficient an advisor is in managing their practice and their overhead expenses they may do better, or may do worse as an independent.  Furthermore, the higher the revenue the better the ratio of revenue to overhead expenses (which are largely fixed expenses).  Therefore, the more senior advisors would have potentially even better opportunities as independent advisors.  This is a rational and open viewpoint to have.  Unfortunately, the closed viewpoint of the firm in this area suggests to me that they are generally closed-minded in other areas as well.I'm not saying everyone should be independent.  Frankly, I know plenty of Jones advisors that really should stay there because the clout of the firm helps them overcome their own idiocrity.  Likewise, I know plenty of independents that just don't have the skills or the business mind to operate on their own.  The best thing that happened in my career is that I doorknocked into one of the "devil children" advisors who left Jones years before I joined.  We immediately struck up a great relationship, even though he giggled at my question as to why he would ever leave such a great firm.  From this relationship I realized that everything the Jones advisors said about this guy were false and exaggerative.  It really is a great example of groupthink.

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B24
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Hey Boyscout,Couple things: I think that whole "make a note to sell a stock in 2 years and it really means to switch to AS" is probably isolated.  Now, it may be isolated to your entire region, but I have honestly NEVER heard something so absurd.  I won't say it doesn't happen, since I am sure you're not just making it up.  But for the vast majority of FA's (at least all the one's I know, which is most in my region), there has been NO discussion of anything like that.  Yes, some people talk about existing clients that might be appropriate candidates to move into Advisory Solution today.  But let's not forget, when the wirehouse world switched to fees en masse maybe 10-15 years ago, some firms (FA's) switched entire BOOKS into fee-based programs.  As far as indy life being better, there will always be circumstances where going independant will be better and more profitable for a Jones FA.  That has been debated ad nauseum and agreed to on this forum.  And yes, some guys (Jones, wirehouse, wherever) that could NEVER go indy.  They don't WANT to, they don't want to run a business, they don't know HOW to run a business, and they are perfectly content working 6 hours a day making a few hundred large and not having to worry about anything else.Now get back to your strings... 

noggin's picture
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Joined: 2004-11-30

Really the Burgers Smokehouse turkeys are the best!!!

ytrewq's picture
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I am going to do a better job of trying to be tolerant of other peoples opinions.I am going to do a better job of not making smart comments when I disagree with someone.I am going to assume all questions asked are legitmate and not framed to lead an answer.I am going to believe people are sincere when they comment.  No matter how ridiculous the comment.I apologize to all I have offended.  If I can't say something nice I will say nothing.That was really hard to type but I am going to try to stick to it.  Be patient with me.PS:  I am going to learn how to spell "Medal" not "Metal".  Guess I am the one winning the gold now. 

Advisor238's picture
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Joined: 2009-02-25

In my region I have heard one of two advisors suggest that they were going to continue to sell A shares, and then later move their clients over to the Advisory program. As for this being something that the firm is promoting, absolutely not. In fact, it would generate a reprimand from the home office if it was ever discovered that an FA in the field was promoting or doing this.

navet's picture
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Joined: 2010-02-25

Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect.

Incredible Hulk's picture
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navet wrote:Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect. In coming up with the name "navet" were you really trying to spell "naive"?    I am just a lowly seg 4, but I have not put an order in mfds over $50k in nearly a year.  I am still "pulling those big numbers."   It must be tough to be a failure, but at least you have the internet to take unfounded jabs at Jones....

Incredible Hulk's picture
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noggin wrote:Really the Burgers Smokehouse turkeys are the best!!! You left too soon.  They expanded the choices to include a ham or a cheescake (my personal favorite). 

gethardgetraw's picture
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Joined: 2009-10-22

You can sell whatever you want and you can say whatever you want (so long as it's legal) to your clients. OP is retarded - you don't have to regurgitate the EDJ philospohy if you don't want to.

navet's picture
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Incredible Hulk wrote:navet wrote:Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect. Learn to read jackass, or is that not required at Jones? That's right, a lot of you don't have degrees. I don't care how much you put into mf's. In order to survive, you either have to churn or consistently bring in lots of new cash. Mf trails are tiny, and I talk to enough friendly wholesalers who see what you guys are doing.In coming up with the name "navet" were you really trying to spell "naive"?    I am just a lowly seg 4, but I have not put an order in mfds over $50k in nearly a year.  I am still "pulling those big numbers."   It must be tough to be a failure, but at least you have the internet to take unfounded jabs at Jones....

Advisor238's picture
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navet wrote:Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect.I don't think the way we are compensated is much different from the wirehouses. It's always going to be tough living off of a fee based business until you get a lot of assets in the fee based program. That's true at any firm. You basically have to do a mixture of commission based products with your fee based to be able to survive, at least early in the game. I don't think this is a problem that is specific to EDJ. It's an industry problem.

Incredible Hulk's picture
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navet wrote:Incredible Hulk wrote:navet wrote:Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect. Learn to read jackass, or is that not required at Jones? That's right, a lot of you don't have degrees. I don't care how much you put into mf's. In order to survive, you either have to churn or consistently bring in lots of new cash. Mf trails are tiny, and I talk to enough friendly wholesalers who see what you guys are doing.In coming up with the name "navet" were you really trying to spell "naive"?    I am just a lowly seg 4, but I have not put an order in mfds over $50k in nearly a year.  I am still "pulling those big numbers."   It must be tough to be a failure, but at least you have the internet to take unfounded jabs at Jones....A couple of points.  One, what you meant to say is that I have poor reading comprehension, not that I can't read.  I think it's pretty obvious that at a minimum I can at least read.  But, I digress.  After I read your post again I stand by my original comment.  You are incredibly naive & ignorant.  I won't bore you with how an established broker runs his book to generate monthly revenue.As far as the switching to advisory solutions after two years is concerned any one suggesting it is rampant at Jones is (ahem) naive & ignorant as it hasn't even been available to the masses at Jones for two full years yet.  Thus, the first $ that could be rolled from A shares (that the broker intentionally chose A shares over Advisory) to AS penalty free can't be done until after July 1st.   Also, I wonder how many on this board laughed at your description of "big numbers" in our business as a Seg 4 EDJ broker.Navet, I based my opinion of you on your specific comments.  You base your opinion on conjecture from "wholesalers" and personal frustration with your apparent lack of production.  I guess that does make me the jackass, not you. 

squash2's picture
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He isn't far off base.. I know of a group of advisors in one region that are doing this...with help from their RL.. This isn't a Jones thing, It's a greed thing.. All firms have loopholes in compensation somehow. People have found it and are not exploiting it. This is no different then breaking up a rollover to avoid breakpoints and claiming diversification.One of two things will happen.. Jones will enact some retro rebate at the advisors expense or they won't do anything.Either way it is Greed and Not Jones...I know of brokers who have sold Non-traded REITs, then move firms and put the assets in a fee program(took the commish up front, then wrapped it, eventhough their is special pricing discounts for fee accounts.

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I think one of the points that gets lost on people....when the rest of the industry made wholesale changes to fees back in the 90's and last decade, they took all (or many) of their clients and switched them too fees.  Nobody seemed up in arms about that.

Incredible Hulk's picture
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squash2 wrote:He isn't far off base.. I know of a group of advisors in one region that are doing this...with help from their RL.. This isn't a Jones thing, It's a greed thing.. All firms have loopholes in compensation somehow. People have found it and are not exploiting it. This is no different then breaking up a rollover to avoid breakpoints and claiming diversification.One of two things will happen.. Jones will enact some retro rebate at the advisors expense or they won't do anything.Either way it is Greed and Not Jones...I know of brokers who have sold Non-traded REITs, then move firms and put the assets in a fee program(took the commish up front, then wrapped it, eventhough their is special pricing discounts for fee accounts. You are missing the point.  It is not possible as only a few advisors had access to advisory prior to July 2008.  Two years from that date is still 2 months away.  To say that you know advisors who are inentionally selling A shares and then rolling them to advisory two years later en masse is BS.  It took a year for "most" (subjective on my part) to even warm up to the idea of advisory.  We sold against it for a decade.  I can say without a shadow of doubt that no brokers (en masse) have DONE this.  They may intend to do it, but it has not happened yet.  So feel free to speculate about what may happen, but that is all that it is, speculation.

pohsuwed's picture
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Incredible Hulk - It's a good thing you are not an attorney as that's not much of a defense.  The timing of AS starting less than two years ago is completely irrelevant as advisors are currently establishing this practice with intent to manipulate in the future.  And frankly, if they think AS is the better platform they have already gone against their responsibility to the client by selling them the inferior A-share.  Then the fact that they are placing tick marks in their system into the future only is confirming that they did what is in their own best interest first and then they will do what they feel is in the interest of the client later.Advisors who feel comfortable living the letter of the law have another thing coming as the fiduciary standard works its way further into our practices.  And if Jones or any firm/advisor is moving to fee-based (it is quite interesting that Jones so adamantly sold against fee-based platforms only to come out with their own) as a pre-emptive measure to prepare for the fiduciary standard or a variation thereof, this type of sales practice only shows how much they just don't get it.Unfortunately, at Jones they are quite protective of their senior advisors and generally will stand behind them versus reprimand them for actions like this.  In one of the cases the story goes that an advisor who was told to participate in this sales practice during an extraordinarily long break at regional meeting (the RL and others on the management team took this time to walk through the advisor tables to discuss it with them versus making it the topic of a meeting segment) brought this to the attention of the regional auditor who took it upon himself to dig a little deeper focusing on the regional leader and another member of the regional management team.  Interestly, shortly thereafter the auditor was moved to another area out of schedule.  I would think it would be better to issue reprimands especially if the "act" that Incredible Hulk focuses on hasn't already been committed.  Instead, most senior advisors at Jones just get their way.

LockEDJ's picture
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While I was with Jones, this situation actually occurred:One the FO people came out to do a seminar on AdvSol. When the presentation neared the end, he talked about the 18 month waiting period. A five year veteran, Seg4 type person actually stood up and said they would basically put people into A shares and call them in a year and half and start talking about this wonderful new program she had. I couldn't believe it and talked about it to several of my erstwhile "mentors" as we left. Worthwhile to note, noone in the room - most especially the StL representative suggested anything like the word "churning". I might say that I did comment on it in the "review" given out after the presentation.Later, I sent an email to the "productivity leader" on this and made sure the RL was CCd. I even sent an email to Jim Weddle regarding this, for that fireside chat thing he does. Needless to say, no response.Do I know if the person was upbraided internally? No, I don't. But I think it's safe to say that despite their holier-than-thou prostestations, the company harbors and - through AdvSol - encourages predators. If they didn't want predators, it would have been easy enough to stop it. The company has long preached that A shares paid for themselves over a long term time period, and that period was at least defined as 5 years. They could have simply prevented all this by using that as the standard, it's the standard they've stood behind for decades. Instead they let greed and desire for success (adoption rate) preceed the client's best interests. So be it, you reap as you sow.

navet's picture
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The point is, how do you make a living on  a 10bp trail? Either bring in a ton of new money every month, or churn. Jones is a transactional business trying to change to a fee based. Fee based is great for an experienced rep, but you can't get to the next segment with it. I know from personal contact with other FA's that they start with A-shares, with the intention of switching them to AS as soon as they can without getting FSPENDed. All while chanting the mantra of doing what's best for the client. And I don't see much of an alternative.

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B24 wrote:I think one of the points that gets lost on people....when the rest of the industry made wholesale changes to fees back in the 90's and last decade, they took all (or many) of their clients and switched them too fees.  Nobody seemed up in arms about that.There is a difference in...FIRM A - "We are changing our platform structure to a model we believe best fits the firm and our clients. Starting Jan 1st all accounts will be fee based"andFIRM B - "We are adding a fee based platform for advisors to use when they feel it is in the client's best interest"

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navet wrote:The point is, how do you make a living on  a 10bp trail? Either bring in a ton of new money every month, or churn. Jones is a transactional business trying to change to a fee based. Fee based is great for an experienced rep, but you can't get to the next segment with it. I know from personal contact with other FA's that they start with A-shares, with the intention of switching them to AS as soon as they can without getting FSPENDed. All while chanting the mantra of doing what's best for the client. And I don't see much of an alternative.I was making my way with this in my third year, with less assets than most in my area. Don't tell me about the birthing pain, just show me the baby. And if you are going to do wrong, you deserve to get drummed out of this business. If you know "other FAs that they start with A shares with the intention of switching them" then you know thieves. That's simply bullshit.

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ND - Your description of Firm A sounds like it came right from and old Jones regional.  They just love blanket statements that really ignore the details.  They use statements like this to sooth their advisors into a sense of power and elevation from the riff-raff.  Unfortunately, they simply become ignorant more than anything.  Remember that these firms were already selective on account sizes in the first place and that they planned on attrition either client-induced or advisor-induced due to lack of "fit".  Personally, I have a mixed brokerage/advisory shop.The problem with both Firms A and B is that I have seen very few situations where advisors actually know how to run a good advisory program, regardless of the firm they are with.  If we think most advisors' brokerage business is hodge-podge, their advisory practices are just the same--especially when they mix and match brokerage and advisory.

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Joined: 2010-02-05

I spent the better part of decade with Jones...I went through all of the training the ups and downs etc... I still have respect for what they do thier marketing both for advisors and clients. The backbone of the firm is thier strict and relentless preservation of the culture. Without it and the social / family aspects that are interwoven throughout Jones they would not be the firm that they are today. I didn't realize how much of a hold it had on me until after I left and went indy. I was physically sick for a couple of days because of the fear that was trumped up about being indy. I am not an expert about Jones. I don't know what "management" talks about. I just see the results. Being in a commission based compensation model (In my opinion) is bad for advice. Adv Sol is what it is a way to deliver a consistent revenue stream that is easy to sell and doesn't slow the broker down. They don't want to complicate matters or give more latitude because it slows the sales process. There are a lot of brokers at jones who want to be "advisors" but because of the compensation model they can't do it financially. It is a waste of time and money for them. I have heard and witnessed it. Seems like I have heard every line in the book to generate commissions from "your mutual funds have matured" to "We need to diversify into..(fill in the blank)". These were not the people that I hung around these are things I heard at sales meetings. I did it the hard way..Even though there were times when I could have easily churned accounts and gotten away with it..I didn't. The times when switches were ligitimate and there was a short hold I was taken through the wringer. There were brokers(big producers) who got away with MURDER!!!! So here are the facts the way that I see them about Jones and the whole churning thing in general. It is very possible to succeed at the Jones model it takes a very dedicated person who actively decides to embrace the system as run with it and not ask questions and to (and I hate saying this...) blindly trust your leadership. You will make a good living and get plenty of recognition and socially your family will have plenty of family and friends. It is imperative that you be the worker bee though because coming up with 40k gross every month is no easy task!!! This is probably about 3 out of 10 jones brokers 4 max. This is the "perfect jones broker" The other Jones brokers to me fall into two other categories. The first being the one who needs to know stuff and how it works and why...(this was me)..You are willing to work hard and put in the effort but you want to know the truth behind it all and if you are missing something...you are a student of the business...At Jones we don't last long unless there is some sort of emotional obligation..i.e. given an office, close relative works there etc... We figure out that we won't be satisfied unless were are in complete control of our destiny..which is what Jones sells us on in the beginning. (This is possible but there are footnotes.) The second type of person that I ran into is the type that will never be a good producer because there is no motivation to do so. They are comfortable and go on vacation every six months and make a buck fifty or so..now weddle and the others seemingly have gotten tired of these people and are trying to weed them out buy moving up production standards...I had always wondered when the axe was going to fall... To be frank I am aware of the social engineering that goes into making Jones what it is... unfortunately some people don't understand it, some know about it but don't care and don't subscribe to it, and then there are those that gobble it up. They are a very well run company and they protect the "culture" and do everything they can to control the environment. Very smart business but it destoys the entrenuerial spirit because it lacks creativity. Thus the reason for the opinion that most Jones brokers are under educated etc...this is not the advisors idea...it came from jones. Whenever I asked about additional education I was always told to I had to be in the next segment... To get CFP went from being above standard and profitable..to seg 3, then seg 4, I still get baffled by those that have a CFP or CFA and stay at Jones...just from the education that you get in those programs I would think there would be tire marks in parking lot. Jones spends a tremendous amount of effort and money on psychology and it works like a charm...They know who they are hiring and why..I'm not mad at them because I can't say I would be upset to make GP cash...or a heated garage floor with a ferrari modena..I'd be grinning ear to ear too..Just like smiling Bob on the Enzyte commercial..whoops that was on American Greed wasn't it....Glad to be indy...much happier...much more purpose

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B24
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Joined: 2008-07-08

When did you leave, and what is your situation now?  Indy B/D?  RIA?

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Joined: 2006-08-08

OK, first thing...paragraphs.  I have a headache now from trying to read through your huge paragraph.  Second, that was a nice little diatribe.  Some of it I would agree with you.  Some of it is your opinion, which you are entitled to.  Some of it is factually inaccurate.  I'll admit that I'm a little fuzzy on this advice business that you mention.  Seems you might be confusing advice - yes Mr. Prospect, you should fund your Roth IRA this year - with portfolio management - yes Mr. Prospect, my fee is 1% a year and here are the investments we're going to use.  The difficulty about this business is that we have to be both.  You're constantly blurring the line between FA and IR.  Some clients don't want you to dig into their personal life and tell them how to manage it.  They just simply want you to tell them what they should be investing in right now.  It is difficult in the commission based model to focus on utilizing FAST, thereby giving what I believe you would call advice.  I think that AS gives the average high Seg 3, Seg 4, or Seg 5 FA the ability to bridge that gap more effectively.  Because he can utilize AS and not have to worry about bringing in $1 mil in new $ this month to hit $30K in transaction biz, he can spend a little more time running some of those modules for his clients.  True, right now he can only use funds and ETFs to get him there, but give in another 6-12 months and he'll more than likely be able to do more than that.  The point is, if he wants to transition to an advice business, he can do that.   BTW, you, as an indy, have to make that same choice.  Just because you changed the color of your jersey doesn't mean the game has changed.  Anyone who make $150K with Jones, doesn't get phone calls from HQ telling them to produce more.  They get bonus checks.  Which means that they don't have to worry about those pesky production standards.  Because they're above the minimum line and profitable.  The latter being the most important. Weddle, et al aren't worried about those folks.  They're worried about the 10 year Seg 3 guy who makes $100K.  Those folks aren't extremely profitable if they are at all, don't get bonus checks, but still get to go on trips, and all of the other things the firms spends its resources on.  They want those folks to pick it up a little bit.  After all, if you're netting $100K, then you're probably only taking home abotu $60K a year.  This job is way to difficult and stressful to be satisfied with $60K a year.   I've got a buddy who drives for UPS who makes more than that.  I don't believe that Jones can stop you if you want to get the CFP or CFA.  I'm not sure why you'd want to get a CFA and stay in production.  They might not reimburse you for the classes, but as long as you meet the criteria to sit for the exam, I'm not sure Jones can tell you that you can't take it.  We have a guy in our region who is low Seg 3, in and out of meeting expectations, but just recently passed the CFP.  I couldn't tell you if Jones reimbursed him for the training or not, but they obviously didn't stop him.  Congrats on your move to indy world.  I hope you have a long and successful career.  Not everyone is cut out to make it at Jones.  And that's OK.  Not everyone is cut out to be independant either.   

jlc_hunter's picture
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Joined: 2010-02-05

I left last year... I am indy b/d considering an RIA just for the advice part and not managing assets under it.  I am not confusing advice attached to a product sale and general financial advice rendered for a fee paid for assets under mgmt and planning or being paid by the hour(consulting). Those are two separate items with regards to finra...trust me I just went through whole thing deciding about the RIA thing. Jones didn't stop me from education at all and if that was the impression that I left that is not what I intended at all. The bottom line their interest is their interest most of the revenue comes from sales of product. This is a HUGE problem as the industry is headed in the other direction and clients are getting wise to it as well. Advisory solutions to me is a band aid. FAST is not really financial planning software at all. I am sure that it can evolve into a more useful tool. Actually being indy at the right firm can basically give you the choice (with some constraints) to basically operate as an RIA (by only using fee based accounts) and still have access to brokerage it you need it.  You don't have to go out and form your own RIA if you are confortable with the firms account platform. That is one of the reasons why I left.  At least at LPL thier SAM platforms allow you quite a bit of flexibility and they are priced reasonably. When I was doing the RIA search and looked at TD Ameritrade thier platform was great and system was very user friendly but the drawback is that you are starting from scratch forming your own RIA...yes there is help out there but it is by no stretch a cake walk... You also can expect to drop about 10k in legal and consulting fees etc.. to get it off the ground. The positive part is you are now an RIA with that comes 100% payout and custom shop. You also answer directly to the SEC or your state based on your AUM...screw up there and it's not pretty!!! Especially after the Madoff self-custody issue.Back to the Jones thing... It takes about a year to get settled I made my share of mistakes none of them huge but big enough to make you mad. One thing that was strange is how quickly you find out about your relationships with people. Had some huge dissappointments also some surprises.

nicholas2835's picture
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Joined: 2012-08-29

I'm a little late to this party but I wanted to post to it for future readers, such as myself. I actually worked in the EDJ home office specifically supporting Advisory Solutions (answering questions advisors had on it) so I was somewhat of an expert on the subject.

Advisory Solutions is a mutual fund and/or ETF auto-managed account where a client gives EDJ their money, it's invested in ADVSOL, and it's automatically invested in premade portfolios. The investments, allocations, and percentages are all fixed in these premade portfolios based on risk tolerance (i.e. aggressive growth vs. income focus vs. moderate allocation). They are chosen by a committee in St. Louis and the advisor has no say what they are - other than they select the premade portfolio for their client. They are automatically rebalanced via computer software, and the committee updates the fund picks as needed.

Your comment on putting clients into A shares and calling them 2 years later to put them into stock was nothing that I ever heard of. However, I did quite often hear many people (home office reps, regional leaders, trainers) recommend putting clients into A shares to get the upfront 5.75% load, and two-ish years later calling to put them into ADVSOL. The reason was the A shares generated that upfront 5-6% commission advisors need to A) keep EDJ from firing them and B) to put food on their tables in their early years, which for most advisors are "ramen soup and potato" years. If these new advisors used ADVSOL first off and not the A shares, most of them would be fired and their clients taken for not meeting their early commission goals. I routinely fielded the question "when can I ethically move a client to ADVSOL after selling them A shares?"

I left shortly after and haven't looked back. The reason is, for those of you reading with a little less financial service experience, these advisors were asking how long it would take for unethical to become ethical. My answer to you is that it doesn't, in this case, and you should be careful about the people and organizations you deal with when it comes to investing.

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