Edward Jones' 4 month rolling average

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RealWorld's picture
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Joined: 2009-07-13

At EJ you have a four month rolling production average. I really don't like this system because some months are longer than others and we all know some months are better than others. I think it is obvious that using a 12 month rolling average for production would be a more suitable number to judge your production since it is production that we all are judged on anywhere in this business.I was wondering what other firms used. Is this standard in the industry?

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

Why does it matter if you're always above standard?  You can make a pretty decent argument either way, but I like the Jones 4 month rolling average.  I think it forces you to keep your nose to the grindstone.  Last year I put a $9100 gross number on the board.  I hadn't seen anything like that in years.  It really hurt my average for 4 months, but it gave me a little kick in the pants to get some things I'd been procrastinating on moving forward.  When it rolled off 5 months later, I was over it.  If we had a 12 month rolling average, I'd still be looking at it and it would still be affecting my average.  Our 4 month rolling charts are an excellent indicator of our activity level.  I can look back at last year and pinpoint exactly when I was working the way I know I'm supposed to and when I wasn't.  I'm afraid with a 12 month rolling number the chart wouldn't be able to really be a good indicator of what an FA's current mindset is.   

RealWorld's picture
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Joined: 2009-07-13

I disagree Spiff. But really I just want to know what other firms use.

RealWorld's picture
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Joined: 2009-07-13

I disagree Spiff. But really I just want to know what other firms use.

I am legend's picture
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Joined: 2010-03-04

Wells basically uses TTM

Lew Ashby's picture
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Joined: 2009-01-13

Most firms use T12, and they base their payout on it. Using T12 helps prevent that 9K gross month from ruining your budget for a few months. There's nothing wrong with T4, though, when your payout is held constant, like at Jones. And I would actually prefer it, if I were still at Jones.

Advisor238's picture
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Joined: 2009-02-25

I think the 4 month trailing production is a good measurement of what is going on in an FA's business at that time. I think 12mth is too long.

N.D.'s picture
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Joined: 2009-07-13

You can think about it this way, 4 month is for W2s and 12 month is for 1099s

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

Lew Ashby wrote:Most firms use T12, and they base their payout on it. Using T12 helps prevent that 9K gross month from ruining your budget for a few months. There's nothing wrong with T4, though, when your payout is held constant, like at Jones. And I would actually prefer it, if I were still at Jones.A $9K gross month will still ruin your budget for a few months even with a constant payout like we have at Jones.  Trust me on this one. 

Lew Ashby's picture
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Joined: 2009-01-13

Spaceman Spiff wrote:Lew Ashby wrote:Most firms use T12, and they base their payout on it. Using T12 helps prevent that 9K gross month from ruining your budget for a few months. There's nothing wrong with T4, though, when your payout is held constant, like at Jones. And I would actually prefer it, if I were still at Jones.A $9K gross month will still ruin your budget for a few months even with a constant payout like we have at Jones.  Trust me on this one. 

You are so right. I don't even wanna think about a 9k gross month! Lol

RealWorld's picture
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Joined: 2009-07-13

Just to clarify .... As far as advisor payout, we are paid on a one month production. As far as if Mr. Jones loves us or hates us we are judged on a T4, as far as what other employers are interested in it is of course a T12. I just think the short term viewpoint is bogus, both ways if you have one big month or one small one. Advisor A has a huge jan at jones and you will see their face on a panel at a meeting, then they basically do not much for another 6 weeks and 5 months later you see their name on the "bad list" in the region. I just think it is a poor judge of production.

RealWorld's picture
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Joined: 2009-07-13

Just to clarify .... As far as advisor payout, we are paid on a one month production. As far as if Mr. Jones loves us or hates us we are judged on a T4, as far as what other employers are interested in it is of course a T12. I just think the short term viewpoint is bogus, both ways if you have one big month or one small one. Advisor A has a huge jan at jones and you will see their face on a panel at a meeting, then they basically do not much for another 6 weeks and 5 months later you see their name on the "bad list" in the region. I just think it is a poor judge of production.

RealWorld's picture
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Joined: 2009-07-13

damn sorry about the double posts here...

BigCheese's picture
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Joined: 2009-07-13

It has been quite a long time since I have been on these forums. Nothing has changed...Spiff is still trying to reconcile having good months because his average spikes. Here is the latest in my biz...Have had 2 out of the last four months BME. Total gross will exceed 150K over that period. No one I mean no one other than my wife tells me how I am doiing. Rolling averages don't matter, nor does one good month, one good quarter, etc.This is what matters in my humble opinion.Get your marketing engine rolling and never stop until you can't take any more new clients (I project I can handle another 50M) before I either need more staff or additonal junior reps to manage (I am not looking forward to babysitting). As for marketing...I am a firm believer that you must be consistent and patient. Find some common ground with prospects and be the person that is there with the same message and after a period of time they will come. I have brought in nearly 10M from this group (and that only represents about 5% of the group) in less than 3 years. Most of that has come in the last year.Fogetabout company guidelines. Do the right thing and if you have a good month, move on. What I have seen is brokers stop what's working. Never quit and if its a group you like or you have interests in common you are less likely to look for the next great marketing idea. Silly rolling averages sustain some GP or managers existence, and cause you to change (Oh no not a 9K spike in average revenue). When you have choices by all means look for an alternative to the captive relationship. Some of my clients have been with me more than 10 years (when I was with Jones) and just a handful stayed. There have been two guys in my old office since I left in Sept 2006 and they are proof that it isn't EDJ or any other firm that clients really buy into...it's me and you. Don't ever forget that.Hope you are well Spiff.

Advisor238's picture
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Joined: 2009-02-25

I would hate a 9k gross month to. Thankfully, trails and fee revenue is quite a bit higher than that now. That sure makes things a lot easier.  

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

Cheese - Welcome back.  $150K in the last few months is a great stretch.  Congrats.  And I'm doing great, thanks for asking.  I'm still trying to figure out where I was trying to reconcile having a good month and having my average spike.  I think the example I gave was a really bad month.  But your reading comprehension hasn't ever been really good when it comes to my posts.  I do agree with you that if you just keep your marketing engine rolling and everything should work itself out just fine.  Having new business in your pipeline all the time is the key to never having to worry about what your firm thinks about your production.  That concept works whether you are indy or part of a firm like EDJ.   

Advisor238's picture
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Joined: 2009-02-25

Keeping the pipeline loaded is an essential in this business, but at what point do you begin to say I've got more households than I can properly serve? What do you guys consider the ideal number of households for a mature business? I like the idea of doing more with less. Digging deeper with existing clients and moving to more of a fee based business, this reduces the need to keep the pipeline filled up with new propsects all the time. Your thoughts?

breaking news's picture
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Joined: 2008-09-29

I think 300 households is a good number.  With that you can keep in contact with them monthly.  I want all my households to be over 100k and 50% of that fee based.  I would love 100% but I don't think that is possible at this time.  I'm not trying to get rich here.  Just earn a good living and be able to give part of it away.

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