Edward Jones - how much does a Goodknight supplement?

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Jhud423's picture
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Joined: 2013-10-18

Trying to figure out exactly how much a Goodknight does for you at Edward Jones. If you are starting out at the typical $35,000 base in your first year with Jones, how much on average could you expect to make in year 1 if you are at the $5 mil Goodknight level? I know you obviously can't make a living off that, but how much income would that alone supplement your salary with?
 
Trust me, I know it's all about maxing out your contacts and opening tons of new accounts, etc., so no need to explain that. Thanks for any help provided.

Paranoid Android's picture
Joined: 2013-09-26

Keep in mind, usually the goodknight are clients the advisor doesn't want, unless they're a very large producer...these clients won't be bringing much to the table, will be hard to get in touch with, etc.

Also, anything you generate off that goodknight is split with your housing advisor....so, you're already giving 80% of your gross to Jones, then your piece is split in half between yourself and the advisor.

Basically the picture I'm painting for you is that a 5 million dollar goodknight, while a decent foundation to get you hitting the ground semi running, isn't going to help much as far as your first year pay...where it should help is having someone to actually talk to so you don't lose momentum, bringing in outside assets, and generating referrals if you can get in front of these people.

They'll give you the average numbers, if you're making 35k base(I thought the typical was 30k?), I believe the average first year is somewhere around 50k.

Jhud423's picture
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Joined: 2013-10-18

Paranoid Android wrote:
Keep in mind, usually the goodknight are clients the advisor doesn't want, unless they're a very large producer...these clients won't be bringing much to the table, will be hard to get in touch with, etc.

Also, anything you generate off that goodknight is split with your housing advisor....so, you're already giving 80% of your gross to Jones, then your piece is split in half between yourself and the advisor.

Basically the picture I'm painting for you is that a 5 million dollar goodknight, while a decent foundation to get you hitting the ground semi running, isn't going to help much as far as your first year pay...where it should help is having someone to actually talk to so you don't lose momentum, bringing in outside assets, and generating referrals if you can get in front of these people.

They'll give you the average numbers, if you're making 35k base(I thought the typical was 30k?), I believe the average first year is somewhere around 50k.


I have heard the 50-60k figure for the first year. I guess what I'm confused on, is where does that extra 20-25k or so come from?

If part of 1st year compensation would likely come from goodknight (even 5-10k), I was wanting to know. And speaking of EDJ keeping 80% of everything you sell, do you mean 80% of the commission? I'm assuming so? For example, something as simple as an IRA rollover. If I opened an account for someone who set up say...a $15k IRA, what would I personally make off that?

Thanks, and sorry I'm a total newbie to all this.

Paranoid Android's picture
Joined: 2013-09-26

Oh no no, don't apologize my friend, it's certainly very important to understand how you are paid.

15k IRA, assuming you put them in A share mutual funds at lets say 5.25%.

That'll gross 787.50. Jones keeps 80% of your gross commission the first year, so you'll take home $157.50 before taxes.

That extra 20-25k comes from commission, trimester bonus's, new asset bonus's(when you bring in over 100k in a single selling month), things along that nature.

The 2nd year is usually around the same, 50-60k due to your salary dropping off but your commission's rising/payout rising.

The 80% isn't for life, just starting out. It gradually decreases to 60% with you taking home 40%.

Jhud423's picture
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Joined: 2013-10-18

Paranoid Android wrote:
Oh no no, don't apologize my friend, it's certainly very important to understand how you are paid.

15k IRA, assuming you put them in A share mutual funds at lets say 5.25%.

That'll gross 787.50. Jones keeps 80% of your gross commission the first year, so you'll take home $157.50 before taxes.

That extra 20-25k comes from commission, trimester bonus's, new asset bonus's(when you bring in over 100k in a single selling month), things along that nature.

The 2nd year is usually around the same, 50-60k due to your salary dropping off but your commission's rising/payout rising.

The 80% isn't for life, just starting out. It gradually decreases to 60% with you taking home 40%.


Great to know - thanks for the help!

One more question, then I'll shutup lol. At some point, I believe I saw the different bonuses you could get in the first couple years. Where can I access this info?

Paranoid Android's picture
Joined: 2013-09-26

Are you working with the firm? If you are, it's on joneslink. If not, have the advisor giving you the 5m get it for you.

Jhud423's picture
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Joined: 2013-10-18

Paranoid Android wrote:
Are you working with the firm? If you are, it's on joneslink. If not, have the advisor giving you the 5m get it for you.

Yeah, I just started with the firm. Will look on Joneslink - thanks

Glass Half Full's picture
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Joined: 2014-01-01

Congrats on getting on with jones. Our firm is not for everyone but for the right candidate, it is an exceptional opportunity. I can speak to your question about the GK - I have been the recipient of 2 GK plans, and the veteran advisor on one. Please understand the quality of a GK can vary significantly - sometimes it means the difference between establishing a solid foundation or washing out of jones, and sometimes the GK is more work and trouble than it benefits you. I have been given one of each. Generally speaking, they are the worst clients in the veterans branch - small accounts, people that need their hand held, are hard to get along with, people that don't return calls or listen to advice. However, with every GK plan, there are hidden gems - those clients who with a new face and little TLC can become your best relationships. The largest and most profitable client in my branch - a multi million dollar account - was a GK client that started out with a single muni bond.. If you do receive a GK, my advice is to give those clients world class service and see what rises to the top. But $5 million does not a successful office make - spend 20 percent of your time on the GK, and 80 percent building your own business. A $5 million plan might be expected to generate $15k gross ($3,000 net) in year one. ($30,000) comissionable gross split with the veteran FA), and $50,000 gross in year two, if you're doing your job.

Paranoid Android's picture
Joined: 2013-09-26

How about those new commercials talking about how big Edward Jones is? Certainly goes to show the change of pace Jones is trying to become. Putting offices in Boston, Chicago, LA, etc., commercials about how big they are.

The times are changing over there

Glass Half Full's picture
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Joined: 2014-01-01

I've been with jones for 5 years. My observation is that our model is better suited for rural markets. I am just a lowly FA, and not privy to the hard data, but it seems our attempts to enter urban markets (LRM - location rich markets) has been disappointing so far. But our firm is continuing to grow, and our profitability increases every year, so I have to assume our general partners know what they're doing. My one dissatisfaction is that I do think it makes sense sometimes to have 2-3 advisors in one branch to share expenses. My city of 60,000 people has 8 jones FAs - all with different offices, some just 3-4 blocks from each other. It looks silly and Sharing rent and utilities with another adviser would increase our profitability. Since part of my compensation is tied to profitability, that would seem to make sense for jones and the FAs.

Inwuwetrust's picture
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Joined: 2013-02-03

i was with jones for nine years and participated on the giving side of three gk plans.. all were garbage. my recommendation is to build your own practice. ill detail my edj practice below. to be fair, i left last year and transitioned to an ria and only took the accounts that i wanted. now only taking clients i want with $1mil in assets or $15,000 per annum in revenue.. with a 93% payout.

2004. 31 households. 49,300
2005. 93 households. 52,300
2006. 181 households. 72,000
2007. 248 households. 91,200
2008. 302 households. 102,000
2009. 345 households. 107,000
2010. 268 households. 121,000
2011. 189 households. 131,500
2012. 128 households. 150,000
2013. 58 households. 217,000

Paranoid Android's picture
Joined: 2013-09-26

Glass Half Full wrote:
I've been with jones for 5 years. My observation is that our model is better suited for rural markets. I am just a lowly FA, and not privy to the hard data, but it seems our attempts to enter urban markets (LRM - location rich markets) has been disappointing so far. But our firm is continuing to grow, and our profitability increases every year, so I have to assume our general partners know what they're doing. My one dissatisfaction is that I do think it makes sense sometimes to have 2-3 advisors in one branch to share expenses. My city of 60,000 people has 8 jones FAs - all with different offices, some just 3-4 blocks from each other. It looks silly and Sharing rent and utilities with another adviser would increase our profitability. Since part of my compensation is tied to profitability, that would seem to make sense for jones and the FAs.

Sounds like they are lost on what to do in the urban project. Not surprised when you have layers of people in STL that have A. Never been an advisor or B. Built their business knocking in farm towns.

Just weird to me that the would try and leave the Niche they've worked so hard at establishing. The benefit of a jones is they're in your town. You don't have to commute into a city or work over the phone because you've got an advisor in your town. That benefit is lost when Morgan Stanley, Merrill Lynch, Fidelity, UBS, etc. etc. are also in the clients backyard.

FOJFerrari's picture
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Joined: 2012-12-11

Jhud, avoid the Goodknight plan if you can.

Paranoid Android's picture
Joined: 2013-09-26

Depending on where he lives, I might avoid more than just the goodknight plan haha

Jhud423's picture
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Joined: 2013-10-18

Paranoid Android wrote:
Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Paranoid Android's picture
Joined: 2013-09-26

Jhud423 wrote:
Paranoid Android wrote:
Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Huh? I'm here to help as much as possible, but also be realistic...not trying to be negative or discouraging to anyone. Just there are areas of the country where Jones isn't the best option to start a career, and certain where they are a fantastic place to start. They apply a one size fits all model regardless if you are in Kansas or California, Montana or Massachusetts. If you live in a rural area, they're great...there's probably no better company to get your career going with, you'll be on a salary that fits your area and receive training that is completely relevant to you. If you're in an urban area, it's much much tougher, and with no cost of living adjustment, it can be tough for people to get off the ground. I saw a ton of people come and go because they were trying to give financial advice, while figuring out which payment to make rent or car to make that month in months 2 and 3 of being out there, while also trying to figure out how to build the business because the "knock knock, how did I happen to catch you at home today?" that gets you invited in for Sweet Tea in Georgia, gets the cops called on you in New Jersey.

That's what I meant by that....it's all about location. That's why I probably don't see this putting Jones in Chicago, Boston, LA, San Fran thing working out well for them. I wish them nothing but the very best, and while I moved on from them, I still have plenty of friends there and enjoyed my time being there...

Jhud423's picture
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Joined: 2013-10-18

Paranoid Android wrote:
Jhud423 wrote:
Paranoid Android wrote:
Depending on where he lives, I might avoid more than just the goodknight plan haha

Wait...first you're all gung-ho mr helpful, and now everything you say is negative or discouraging. Not sure I get you.

Huh? I'm here to help as much as possible, but also be realistic...not trying to be negative or discouraging to anyone. Just there are areas of the country where Jones isn't the best option to start a career, and certain where they are a fantastic place to start. They apply a one size fits all model regardless if you are in Kansas or California, Montana or Massachusetts. If you live in a rural area, they're great...there's probably no better company to get your career going with, you'll be on a salary that fits your area and receive training that is completely relevant to you. If you're in an urban area, it's much much tougher, and with no cost of living adjustment, it can be tough for people to get off the ground. I saw a ton of people come and go because they were trying to give financial advice, while figuring out which payment to make rent or car to make that month in months 2 and 3 of being out there, while also trying to figure out how to build the business because the "knock knock, how did I happen to catch you at home today?" that gets you invited in for Sweet Tea in Georgia, gets the cops called on you in New Jersey.

That's what I meant by that....it's all about location. That's why I probably don't see this putting Jones in Chicago, Boston, LA, San Fran thing working out well for them. I wish them nothing but the very best, and while I moved on from them, I still have plenty of friends there and enjoyed my time being there...


Ok then. Understood - sorry, I guess I read that wrong.

sweetalysse's picture
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Joined: 2014-07-14

I have been contacted about taking over a goodnight book, this is what I have been told:
the advisor is retiring and the book is being split into 2 parts, each just under 30mm
I am currently with WFA and have just finished my first full year with the firm. I did just over 80k in production and have gathered 9mm in AUM. Before joining WFA I was in the ML PMD program for 5 moths before moving to an area that ML did not cover. My current office has 7 advisors that range in age from 62-74, so the future for gathering assets from retiring FA's is good. Not sure which way to go, any advice? Before I entered this side of the business, I owned a commodity brokerage for just over 15 years.

Glass Half Full's picture
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Joined: 2014-01-01

I'm a jones FA - and very happy with the firm. It is absolutely a great place to work. I have friends at WFA, and they seem to be a good place to work as well. $30 million is a good start but it's not a life changer. I've got $50 million AUC and I wouldn't even consider switching firms unless it was at least a $100 million opportunity. If you've got a shot at some assets from retiring advisors at WFA, it probably makes sense to stay put, but I don't know how they transition their books. At jones you don't pay for a GK, you split commissions for 18 months, unless it's a succession plan, then it is over 3 years. If quality of life and work/life balance are important to you, though, there is no better place to work than jones. I enjoy a ridiculous amount of freedom with my time and business, and it only gets better.

Paranoid Android's picture
Joined: 2013-09-26

Any FA at any firm enjoys a ridiculous amount of freedom with their time and business. It's not any different at MSSB, ML, JPM, UBS, etc. That's how life is as an FA. You own your own business, you can do whatever you want as long as you're posting the numbers.

I have no ill will for Jones at all, have many great friends there still to this day and wish them nothing but the best, but switching away from Jones made me realize how much bullshit they feed you about how much better it is there than anywhere else. Switching to a wire, I was actually a little nervous just due to how much Jones had told me about the evil wires, but come to find out...it's the exact same gig no matter where you go, the only difference is the resources and location.

I fear for new trainees now that American Funds is doing ETF's. With no incentive to go fee based(in fact, if you're not getting that 5.75% up front and decide you want to do fee based, you'll be put on PIP for not meeting your numbers).

GHF, I'm not trying to put you down or anything like that, but can I get an explanation of why your work/life balance is better than mine? Genuinely curious. I work at a "wirehouse" and have had no work/life balance issues...in fact, it improved significantly.

Glass Half Full's picture
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Joined: 2014-01-01

Paranoid,
I hear you on the disincentive for new advisors to sell fee-based accounts. My first four years in the business, I sold no Advisory because: A.) I needed a paycheck, and B.) I had to hit production "expectations" - the EJ euphemism for quota, which I still find humorous. Jones has since recognized this and we are implementing new standards in October. Instead of just being T-4 production, now there are three additional components: new households, new assets and net new assets. The weighting a for each category is based on your production level and tenure with the firm. New advisors have greater emphasis on households, while level 8,9, and 10 FAs have greater emphasis on production. This makes sense as most level 8s are not looking to add new households, and are often trying to downsize. Production will only comprise 50 percent of my total standards. The idea is that a new FA opening a ton of accounts and putting a lot of money in AS will still be light on revenue, but the weightings in the other areas will allow him to be meeting or exceeding expectations.

Glass Half Full's picture
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Joined: 2014-01-01

In answer to your question about quality of life - I have only worked at Jones so I have no first hand basis for comparison. A good friend of mine (big producer) left EJ when he had a falling out with home office. Went to WFA. He has told me he has less freedom and flexibility when it comes to his schedule. Recently I had a conversation with a recruiter from a wirehouse. (I'm not looking to leave jones but will still listen to offers.) Of course he opened with the usual dangling carrot of big upfront money to jump ship. I told him quality of life is equally important to me as money. He then launched into a description of how awesome his firm is and how much people enjoy working there. I asked about flexibility with my schedule and he said "Oh, we are very flexible, we just ask you to submit a schedule a week in advance." That was the end of our conversation. Jones hired me the end of 2008 when virtually every other firm had a hiring freeze or was laying people off. I was 25 years old with no industry experience. Jones told me if I ran a legal, ethical, and profitable business, my job would never be in jeopardy. This has proven to be true. I stay within the jones framework, and get no pushback from compliance or FSD. I never get calls from my regional leader or development leader in HO, but they will pick up the phone if I call them. I am free to do what I want. If I want to work out in the morning and come in at 10, I do it. If I want to leave at 1 and go play golf, I do it. If I want to take a 4-day weekend and go somewhere with my wife, I do it. I don't have to ask anyone for permission, I just tell my BOA and leave. Today, I'm 31. I work 25 hours a week. I will net $130k-$150k this year in a part of the country where the median household income is $43k. I take two international vacations a year. I drive to a branch location I selected, walk into an office layout I helped design, say hello to the assistant I interviewed and hired, call the people I want to talk to, and recommend investments I want to sell. You can say I drank the koolaide, followed the recipe, am incapable of independent thought (insert mindless drone joke here), but Jones has kept every promise it made when I started. Everyone's experience is different, but mine has been overwhelmingly positive.

Paranoid Android's picture
Joined: 2013-09-26

I don't know which wirehouse that is obviously, or even if that's on a branch level...but I can tell you it's not at ours. I know many many guys who's days sound just like yours...minus the office they laid out(although I'm not going to lie...as nice as that was, I will take a skyscraper view any day). There's a guy on my floor who hasn't worked past 1PM in years. Ski's every day during the winter. Built that by doing good by his clients. Know another guy that spends a week in Florida just about every month. Plenty stroll in at 10am, or take the day to golf, whether with a client or not. Myself included.

I'm not saying you're incapable of independent thought or anything along those lines...not by any means. Jones is a great company and has some great people working there. I will say though...not everything they tell you about the evil wirehouses is true at all. Maybe it is over at Wells, where most of it all comes from a bank background, they don't have a very large presence up here...but I've never heard of anyone having to report a schedule. That's crazy.

I promise you though, EDJ isn't the only place that provides work life balance like that and freedom to shape your day, mold your business, etc. I believed they were when I signed on, found out that it's not all that bad out there. In the end, Edward Jones, ML, MS, UBS, RBS, RJ, etc....they care about 3 things. Assets, Households, Revenue. As long as you've got all three, you can basically do whatever you please.

Sounds like you've built a very respectable business though, I absolutely commend you for that. Like I said, I'm not trying to put you down in any way shape or form...it doesn't matter which logo ends up on the business card, we're all doing the exact same thing....so absolute nothing but respect your way.

Just wanted to kind of weigh in for someone is stuck choosing between the two paths. Went through training programs with both EDJ and a wire. I honestly felt the wire did much better, but I think that's because of my location...EDJ was trying to bring the good ol' south to the urban Northeast.

Oh and I don't have to buy my own pens, trashcan, etc. anymore which is nice. That wasn't easy when you're living on that starting salary that isn't adjusted for the cost of living for your area haha.

Glass Half Full's picture
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Joined: 2014-01-01

I am in complete agreement about the Jones business model not being the best fit for urban markets. I absolutely would not want to door knock in urban Newark, Hartford, Boston, etc. The entire single-FA branch model, and face-to-face value proposition really is better suited to small-town Kansas in my opinion. I live in a city (I say that tongue in cheek) of 60k. Most of my clients live in the tiny ag communities within a 50-mile radius. Many of my clients have this inherent distrust of large financial institutions "from back east", and a personal relationship with a local broker is their preference for money management. I do occasionally run across a ML, or UBS statement, but their closest offices are a 6 hour drive from me. DA Davidson, Waddell and Reed, and the local banks are our biggest competition. But as our business model and geography give us an advantage in our region, they become detriments in urban markets. We simply don't possess the name recognition or have the processes in place to enter an urban area and grab market share from the wirehouses. I have no doubt the wirehouse provided much more useful training for building a business in the urban northeast than Jones provided. We are trying the whole location rich market experiment in a couple select urban markets, and there is a huge firm wide push to leverage technology to better compete with wirehouses in urban areas, but I'm not entirely convinced it will work. Our previous attempts to expand -UK, Canada - have largely been failures. We sold the UK operation, and Canada is marginally profitable. But despite that, the firm is growing in FAs, households, assets, revenues and profits. I haven't seem the numbers but I would venture a guess the majority of this growth has come from our rural branches. Regardless, it's always nice to get a perspective from the other side of the fence. This is a great industry and a great profession. Best of luck to you and good luck on the course. "Work like few people are willing to the first few years, so you can live like few people can, the rest of your career."

ZwingDing's picture
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Joined: 2010-09-15

I've experienced the wire and EdJ model. IMO the wire did a better job of training on investments. EdJ's investment training is more simplistic. The wire had more investment options available and did more advanced training.

IMO EdJ has far superior training on building a practice. I've also found that EdJ is far more collegial. I can pick up the phone any time and speak with any producer of any level in our region and get to ask them questions. At the wire the big producers kept to themselves and the lower and mid-level producers were waiting for noobs to fail so they could get some of the assets. Needless to say they weren't focused on helping you make it.

As to EdJ in large metro areas, the door knocking thing has had some success but it is spotty. I know of people in large areas who are building the book with cold calling.

As to freedom: EdJ had way more freedom from the get go than the wire. At the wire you had to ask for permission to take time off and were generally given a hard time. At EdJ literally no one knew where you were during the day and you could take time off whenever. At the wire even good sized producers had to let the branch manager know their vacation schedule. I have an office now with EdJ and all I do is tell my BOA when I'm going to be gone and that's it.

Paranoid Android's picture
Joined: 2013-09-26

Maybe my firm or even branch is a complete outlier in the wire world? I've seen no one ever have to ask permission to leave the office, whether it be for an afternoon or a week. Trainee or top producer.

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