EJ MONEY LOSING INTERNATIONAL OPERATIONS

133 replies [Last post]
Spaceman Spiff's picture
Offline
Joined: 2006-08-08

OK, thanks. How about the YTM and YTB?

BigCheese's picture
Offline
Joined: 2009-07-13

Spiff-
 
Your so called bond department feels non-rated bonds aren't appropriate...but it does recommend that AMBAC, MBIA, or XCEL are appropriate?
 
You have to be f____ing kidding...aren't you? I wouldn't pay for that piece of sh_t insurance if I could avoid it. Because you guys rarely offered non-rated you feel your department is helping you help your clients. BS!!!!!!!!!
 
Just another example of the crap/propoganda you guys believe. Someone earlier referred to Jones reps as lemmings. I am begining to think that was a fair characterization.

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

Once again, your facts are so old it's not even funny.  And people like you tell us that we don't know what we don't know.  You do know that the ratings on our bonds don't have ANYTHING, let me say that more slowly, A N Y T H I N G to do with AMBAC or MBIA or XCEL or FGIC or any of the other insurance agencies.  See, there are these OTHER rating agencies called Standard and Poors and Moody's that rate bonds for the entire industry.  The very same agencies that I'm going to guess you see rating from when you pull up your bond inventory.  Let me explain how this works.  Those companies look at all of the financial records of the bonds, of course at the request of the issuer, and they get a rating from that issuer.  Sometimes it's AAA (that's S&P) or Aaa (this one is Moody's) and sometimes it's some other variation.  There will be other letters involved too, but the basic concept is the farther along in the alphabet, the more shaky the municipality will be. 
The way the industry used to work is if one of those issues also went out and purchased bond insurance, their rating would go up to AAA or Aaa because there was supposedly a guarantee that those insurance companies would pay off the bonds if the municipality were to go bankrupt (that means they ran out of money) or if they defaulted (that means they stopped paying their principle and interest back) on those loans.  But now, we find out that the insurance companies that were supposed to be protecting the investor need protecting themselves.  Seems they got in a little over their heads and did some stuff that wasn't very smart. 
 
So, now a company like EDJ can either keep doing things like they used to, or they could tell their advisors to stop looking at the insurance on the bonds because it's not really as safe as they once thought.  Instead their advisors should fall back on the underlying rating from Moody's or S&P to talk about the safety of the bonds with clients.  Guess which one EDJ picked? 
 
Someone once referred to you as a moron (by the way, that wasn't me).  I'm starting to think that was a fair characterization.

BigCheese's picture
Offline
Joined: 2009-07-13

I still have countrywide cmo's with ambac insurance. We were told to sell them as AAA and insured...so I did. What a moron I was for listening to them.
And in my humble opinion, Spiff...you are the most moronic of all of them, becuase you aren't remotely balanced in your consistent Jones is the greatest attitude.
You wouldn't have a clue what the industry used to do because you were teaching all the Jones new reps to sell the hamburger (maybe you could describe for those that don't know what that is). EDJ is the greatest company for reps who can't or won't think for themselves. Sometimes I think you have a chance of actually breaking out of that conundrum. Days like today and all of your company responses tells me, again, I am wasting my typing skills. I hope there are a few out there who can see through the 2072 corporate responses.
Most of us consider a good day 2-3K gross or in my case I have a goal of identifying 1M of new money a day that I didn't know existed. For you, I get the impression that if you respond 1.5 times per day (which I believe is your average for 3 years) you can go home to Mama and tell her about the moron on the forums.

Windy3584's picture
Offline
Joined: 2009-08-31

Did anyone have Spiff as a teacher? Maybe we can start a thread on our Jones KYC, Eval-Grad, PDP teachers?

Juck Phones's picture
Offline
Joined: 2009-01-25

fa09 wrote:
 
I'm pretty sure the biggest hurt to your clients is your attitude. If you can't be productive to your clients within the Jones model either you suck or... if you think LPL is so much better then pick up the phone and go! Griping about Jones will get you nothing.
 

Hey fa, you're not even thinking with common sense.  My clients have no clue that I have any attitude against Big Greenie.  I love my clients and literally love what I do.  I am so fortunate. I will be educating my clients however, respectfully and professionally, "when the time is right".  I understand full well that there comes a time to move ones self forward or STFU. 
 

Let me balance things out perhaps with some sage wisdom of what I'll just say is "well over a decade".  You're new to EJ(?)  You may be new to the industry. 
A) With EJ you are with the absolute best firm, bar none, to LEARN this industry.  Years from now there may (or even may not) come a time that EJ is no longer best for you.  You'll know it then like I know it now.
B) You are starting out in this industry at the BEST time, bar none, that anyone living will EVER EVER EVER see for starting out.  What a great time for a new FA to build a career!  What a great time for a veteran FA to REbuild and reenergize a career.
 
I've lurked these boards for years and have certainly read the incessant bashing of the Big Greenie especially by ex-Jonsers.  Many of them remind me of ex spouses that just can't move themselves forward now that they're liberated from a bad situation.  When I get EJ in the rear view mirror I will t.r.y. to retain a balanced prespective of the Big Greenie though I am in no way mistaken- it is fact- when you leave a firm, it is not civil divorce it is WARFARE.
 
Speaking of which, I really need to lay low from this site now as paranoia may get the better of me in the near future.  Careful -get too c***y and you could get your clock cleaned.  Besides, I've just reached a personal goal that I had not wanted to exceed- my number of posts has reached 1% of Spiffs total posts.
soooo
Juck Phones

fa09's picture
Offline
Joined: 2009-06-03

JP seeing as to how you are a Seg 5 I would think you are the latter of my 2 insinuations/suggestions in that you should never stay in a place that makes your truly unhappy, despite all the obvious success you've attained in your last 10 years at the firm. That being said, you have been lurking for years and for at least 8 months you've harbored enough resentment to come up with your username. All I was saying was that you weren't helping by your bashing, and to exit and be happy. Thank you for your updated post, much more balanced and I wish you all the best in your attempt to free yourself from big green brother.

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

BigCheese wrote:
I still have countrywide cmo's with ambac insurance. We were told to sell them as AAA and insured...so I did. What a moron I was for listening to them.
And in my humble opinion, Spiff...you are the most moronic of all of them, becuase you aren't remotely balanced in your consistent Jones is the greatest attitude.
You wouldn't have a clue what the industry used to do because you were teaching all the Jones new reps to sell the hamburger (maybe you could describe for those that don't know what that is). EDJ is the greatest company for reps who can't or won't think for themselves. Sometimes I think you have a chance of actually breaking out of that conundrum. Days like today and all of your company responses tells me, again, I am wasting my typing skills. I hope there are a few out there who can see through the 2072 corporate responses.
Most of us consider a good day 2-3K gross or in my case I have a goal of identifying 1M of new money a day that I didn't know existed. For you, I get the impression that if you respond 1.5 times per day (which I believe is your average for 3 years) you can go home to Mama and tell her about the moron on the forums.
 
The only time I get so unbalanced in my posts is with you.  And with spears, but as he doesn't post much any longer, that's not as big an issue.  Everything that you say I am PRO EDJ, you are ANTI EDJ.  And you have the gall to tell me I'm unbalanced?  There are plenty of issues with EDJ.  I mentioned some of them in a post a few back.  There are plenty more things I'd love to see changed.  But you, along with some others, come on here LOOKING to talk bad about Jones.  That's when the kool aid starts flowing a little faster in my veins. 
 
What did anything that I was talking about in my post about our inventory have to do with bond insurance?  I understand COMPLETELY that Jones told you, me, and lots of others on this forum to tell our clients that the bonds were insured.  It wasn't until LAST YEAR that anyone knew there was a problem with the insurers.  So unless you suddenly became an accountant or an actuary and started delving into the books of AMBAC and MBIA, you weren't any more aware of what was going on in their balance sheet than any of the rest of us.  You may perceive that as Jones doing something insidious and evil to cause you to look foolish, but it simply wasn't.  When they found out there was an issue, they told us to stop telling people the bonds were insured and to rely solely on the underlying rating.  So now our inventory screens don't even show whether a bond has insurance or not.  So, does that make you a moron for selling those Countrywide bonds as insured?  No.  You were dealing with the best info you had at the time, which is the best any of us in this business can do.  
 
What do you expect to people to see if they were to look through the 2072 "corporate responses"? 
 
You continue to bash my career path with EDJ.  Why is that?  Do you think that while I was teaching people about the hamburger that I was oblivious to what was going on in the industry?  If so, you are mistaken.   
 
So, you think it takes me all day long to post 1.5 times?  I might spend a total of half an hour on here throughout the day.  Fortunately for me I have pretty good typing skills and can formulate a thought on the fly, so I can put a big post like this together pretty quickly.  Thanks for the concern though.  I too have my business goals and most days I hit them.   
 
 

BigCheese's picture
Offline
Joined: 2009-07-13

Spiff-
 
I have always maintained that Jones is a great place to start (how is that negative) and your responses to many are sarcastic and unbalanced...not just me. It's anyone who points out the flaws at Jones.
 
What you can't understand for some unexplainable reason is that there is a much better life outside of your firm. It might be at a wirehouse. It might be independent. Anywhere is probably better than Jones because of their limitations, once you understand the biz. Look at Juck Phones...a seg 5 producer who is seeing the light because of lack of inventory or watching his bonus go to buffoons who should never have been hired. Or myself I left because I wanted my kids to join my practice at some point. I wanted a higher payout for myself and found that I was paying way too much for what I was getting in return. And I couldn't work for a firm that I did not trust. Yes Jones management lied and I left.
And when they lie to you, if you have the balls (which I seriously doubt) and the revenue to back it up...you should consider leaving also.
 
Please stop patronizing us, we know what you don't. Jones is a fine company for people like you.

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

You have this habit of skillfully avoiding the questions that I ask that you don't want to answer.  
 
I have NEVER said anything negative about anyone who wants to leave Jones for anywhere else.  I know that some people will stay at Jones for the rest of their careers and some won't.  I know that the only place I'd ever consider going would be indy.  I've actually had some conversations with some friends that are indy right now.  All of them would welcome me with open arms into their practice. 
 
I patronize you because of your attitude.  I do tend to get sarcastic.  That last post I made to you about the insurance should have been read as dripping in sarcasm.  I don't really care what you think of Jones or of me for that matter.  I don't actually understand why you care so much.  You hold a grudge longer than anyone I've ever met, which just confuses the heck out of me.  But, as long as you continue to put up the posts that are so anti Jones with what you view as the truth, I'll continue to put up my pro Jones posts with what I perceive as the truth.  You can't throw stones at me telling me that I'm unbiased and expect me to just let you mouth off and not expect a response to balance out your rhetoric. 
 
BTW, your starting to sound like a politician.  Your talking in catch phrases - "Jones is a great place to start"  "Jones management lied" "You don't know what you don't know".  You're wearing a "Yes We Can" button right now aren't you?  

canucklehead's picture
Offline
Joined: 2005-04-18

Spaceman Spiff wrote:
 

BTW, your starting to sound like a politician.  Your talking in catch phrases - "Jones is a great place to start"  "Jones management lied" "You don't know what you don't know".  You're wearing a "Yes We Can" button right now aren't you?  
 
++++++++++++++++
 
All right, boys, break it up. It was fun for a while, but now somebody's gonna get hurt. You both make good points, but Spiffy, you've gone too far. Calling a guy a politician? And a "Yes We Can" man at that? YOU HAVE CROSSED A LINE, SIR.

noggin's picture
Offline
Joined: 2004-11-30

Spaceman- I think it takes a good period of time after leaving Jones where one can speak without a lot of venom flowing out. I was certainly a case in point. For me given what had transpired in my region, I felt that the best decision was to leave the firm. I am certain that they were ill equiped to deal with the situation in my region and in my mind handled it so poorly that I did not trust management any longer. As a matter of fact, about 3 months prior to leaving I had lunch with a GP who asked me when I would consider leaving. I told him " when I can longer trust management to make ethical and principled decisions". He looked at me oddly and then we talked about something else. That was my experience and everyone has a different one. I left and did not contact anyone until 1 year was up...there was no need to send me a threatening letter from the home office counsel reminding me what I had signed, I was already aware of it. Integrity is not something that you can remind one of in a letter.
 
All that being said, the more layers that were stripped from the organization as I was on the leadership team, the more I realized that the firm I joined was not the one that I was employed by. I met with a wholesaler from a fund company this week, he too had left EJ and I felt a strange kinship. The fact that he had worked there and of his own free will had made a decision to leave caused him to have more credibility in my eyes.
 
I enjoy the dialogue back and forth with you over time and I understand that you truly believe what you write. There is nothing worse than to stay employed with a company that you have no faith in ( i.e. Borker Boy). I wish you much success and look on my time at EJ with much fondness for the friendships fostered as well as the reward trips.

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

canucklehead wrote:Spaceman Spiff wrote:
 

BTW, your starting to sound like a politician.  Your talking in catch phrases - "Jones is a great place to start"  "Jones management lied" "You don't know what you don't know".  You're wearing a "Yes We Can" button right now aren't you?  
 
++++++++++++++++
 
All right, boys, break it up. It was fun for a while, but now somebody's gonna get hurt. You both make good points, but Spiffy, you've gone too far. Calling a guy a politician? And a "Yes We Can" man at that? YOU HAVE CROSSED A LINE, SIR.

 
Had I been drinking milk, it would have come out of my nose. 

canucklehead's picture
Offline
Joined: 2005-04-18

I'm glad we're all friends again!
 
Spiff, any guy who can laugh at himself is OK with me. Lord knows I'm forced to do that myself all too frequently. I actually have respect for both you and BC: I think that you both express your positions with passion, commitment, gentlemanliness and eloquence - characteristics that I haven't seen everywhere in this business.
 
FWIW, I think you're BOTH right, for your own reasons.

BigCheese's picture
Offline
Joined: 2009-07-13

"Jones management lied"
For me it was the revelation that Jones management had a huge conflict of interest with Hartford and had a duty to disclose to us that relationship.
 
They chose not to, and it wasn't until the disclosure was required by the SEC that we found out. Old news yes, but it was the signal that I needed to leave because as a representative of the firm, an employee, I couldn't trust them to hold to their word.
 
"The clients interests always come first."
 
 Clearly in this situation that wasn't the case. Hartford was new to the fund world and supposedly went through rigorous filters to be accepted by Jones. What it was is they paid the GP's the most and Jones owned an income interest from the very beginning. Slimy to its core.

noggin's picture
Offline
Joined: 2004-11-30

Big Cheese- I hear you. In a way, you don't really understand the company until you are so deep in the company that it is painful to leave.

canucklehead's picture
Offline
Joined: 2005-04-18

Cheese,
 
I left Jones for some of the same reasons you did. Others may have viewed it differently, but when Jones announced that they had settled with the SEC (and paid a massive fine) in Dec. 04, I was humiliated. I tried to be cavalier with clients who raised the subject, and it was quickly forgotten. But privately, I was mortified to be associated with a company that would do such things - and though I lost no clients, a couple of prospects told me that they would not deal with such a company.
 
I got over it, of course, but I was angry at Jones. I was even angrier with myself for having been surprised by their behavior. After all, I've been around a bit...am I surprised when a politician lies? NO. Do I believe everything (or anything) a car salesman tells me? NO. When I looked at the GP page on JonesNet, what did I see? With a few exceptions, a company owned and operated by SALESMEN. So why was I surprised when I found out they'd been fined for lack of disclosure? Naivete and foolishness on my part - and I'll try to make sure it doesn't happen again. Shame on me!
 
This is not an indictment of salespeople in general - the world is full of salespeople who have integrity, and treat others with dignity and respect - it's an indictment of ME, for having been foolish enough to think Jones was as different as they said they were. And please don't flame me with the "it goes on everywhere" line - it doesn't go on everywhere, and even if it did, that wouldn't make it right. I'm not being preachy, but I'm sick of corporate malfeasance, political lies, toxic loans - it all has dishonesty at its root, and I'm sick of it. UGHH!

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

I love this whole EDJ lied to us discussion in regards to revenue sharing and Hartford.
First, let me say that I respect both of your decisions to leave a company who you feel did something inappropriate.  
 
That doesn't mean I have to agree with you.  I just took a quick look at the 10-K filing for the Jones Financial companies all the way back to 1997.  Now, you're assertation is that EDJ lied to you.  Well, if that were to be true there wouldn't be any discussion at all about revenue sharing at all in those documents.  That is certainly not the case.  It's in there had you cared to look.  Truth was that back then virtually none of us knew what revenue sharing was, much less that it was such a large part of the EDJ bottom line.  If you looked at it in the 10-k you'd find it under fee revenue sources along with interest income, IRA fees, etc.  If you were really all that concerned about it after reading the 10-k you would have called Tom Miltenberger and asked what revenue sharing was.  Or you'd have called your RL and asked him.  The fact that you didn't doesn't mean that EDJ lied to you, it means that you weren't aware of it or didn't care about it.  There's a difference.  
 
Now, you could make a valid argument that they should have told us why we had the preferred fund families.  But then most of didn't really care why, we were just happy that someone besides us was doing the due diligence on them.  I know, I know, part of the due diligence was will you pay us revenue sharing or not.  Those that passed both the performance/management hurdle and revenue sharing hurdle got to be on the list.  Now, that didn't mean that those were the only companies you could have done business with.  B24 (sorry to drag your name into this) has been very clear that he has done his own research and doesn't use all preferred funds.  You could have done that exact same thing.  That would have been good for clients, don't you think? 
 
But now, you no longer have to worry about that because the companies you've associated with don't do ANYTHING shady like that.  They don't do revenue sharing.  They ALWAYS tell you how they're spending the firms resources in complete detail. 
 
You might want to check this link out: http://lplfinancial.lpl.com/Disclosure/Conflicts_of_Interest.htm
 
or this one:
http://www.raymondjames.com/disclosure_mutual_funds_co.htm
 
or this one:
http://www.commonwealth.com/Investors/revenue_sharing.asp
 
I could go on with the cut and paste, but you get the point.  Participating in a common industry practice doesn't constitue lying to you, IMHO. 
 
Now the Hartford thing...I really wish they would have just told all of us that they made an investment in Hartford's mutual fund business from the get go. 
 
 

canucklehead's picture
Offline
Joined: 2005-04-18

Like I said in the previous post, Spiff, I was much angrier at myself than I was at EJ. OF COURSE they had preferred funds, and OF COURSE the GPs were getting a little sumpin-sumpin through the backdoor. What kind of rose-colored glasses was I wearing not to know that? Jeez, I piss myself off sometimes. I know that when I go to the tire dealer and open the catalogue, well, whaddayaknow, Michelin tires are the first ones I see - and did Michelin pay more for that product positioning? OF COURSE. If I want a brand that might be more economical, it's up to me to keep turning the pages. And if I go to the grocery store, OF COURSE the $7 Kellogg product is at eye level. Nice and easy, no bending over. And if I want the generic corn flakes, they're on the bottom row. Did Kellogg pay for that positioning? OF COURSE.
 
It's up to me as a hopefully non brain-dead consumer to understand that product manufacturers have an intimate understanding of human nature, brand loyalty, and so on. And it is equally up to me to understand that I PAY for convenience, and that retailers will seek payment from manufacturers to "help" consumers make a decision. Caveat emptor, right?
 
But the rev share situation was different. There was a middleman - ME - and I was encouraged to hold myself out as unbiased. If a fund family appeared on the preferred list for any reason other than EJ TRULY AND OBJECTIVELY BELIEVED IT TO BE BEST OF CLASS, then, IMHO, that's dishonest.
 
I know this is an OLD subject, and hopefully EJ is now the firm you want to be. But sad to say, there's never just one c***roach...
 
Spiff, I hope I'm a mature enough individual to respect other people even when their opinions conflict with mine. And as I posted before, I think you're a bright individual who posts intelligent and thoughtful opinions. But good God, man, you can't possibly believe that what EJ did was ethical...can you?

canucklehead's picture
Offline
Joined: 2005-04-18

Wow, the software bleeped out c***roach? I wonder if d***roach would have worked...

Moraen's picture
Offline
Joined: 2009-01-22

It was unethical. It's a bit like cheating on your wife. You may have the roses and hotel rooms all over your joint credit card statement, but if she (your wife) doesn't check it, you still cheated. If somehow when you are running for office eight years later and it comes out, does that mean you didn't cheat?

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

Yeah, you can't even put John Hanc*** without the software bleeping you. 
 
Was it unethical?  I guess it depends on which company you're talking about.  Jones FAs had been using some of those fund families for years before revenue sharing agreements became the thing to do.  American, Lord Abbett, Putnam, Van Kampen, Federated - all of those were funds that Jones FAs had been using for a long time.  Heck, Ted Jones himself had the meeting with the American Funds folks.  And Jack Phelan started selling things like Affiliated and ICA back in the 50's.  Federated ran our MMKT.  Voyager was a firm favorite for decades.  Can you argue that we wouldn't be selling Hartford or Goldman if there wasn't a revenue sharing deal?  Maybe.  Nobody was selling Goldman anyway, but that's another topic.  Oppenheimer and Franklin, I believe, became preferred funds after the revenue sharing disclosures became more obvious. 
 
I don't really know how revenue sharing got started at EDJ.  I've heard the theories about Doug Hill being the driving force, but I've not ever heard anyone confirm it in any sort of official manner.  I know the phrase revenue sharing doesn't show up in the 10-k before 1997, but I don't know if it was happening before that. 
 
Could you perceive it as unethical?  Yep.  Do I?  Nope.  It didn't hurt my client.  Had I used Amercian Funds or Putnam or Lord Abbett funds with or without revenue sharing, my client's performance would not have been affected either way.  The only arguement you could make is that I might have used a completely different fund family.  I don't know if I would or wouldn't have. 
 
I have yet to have anyone tell me how my client was negatively affected by revenue sharing. 

voltmoie's picture
Offline
Joined: 2008-11-05

Spaceman Spiff wrote:Yeah, you can't even put John Hanc*** without the software bleeping you. 
 
Was it unethical?  I guess it depends on which company you're talking about.  Jones FAs had been using some of those fund families for years before revenue sharing agreements became the thing to do.  American, Lord Abbett, Putnam, Van Kampen, Federated - all of those were funds that Jones FAs had been using for a long time.  Heck, Ted Jones himself had the meeting with the American Funds folks.  And Jack Phelan started selling things like Affiliated and ICA back in the 50's.  Federated ran our MMKT.  Voyager was a firm favorite for decades.  Can you argue that we wouldn't be selling Hartford or Goldman if there wasn't a revenue sharing deal?  Maybe.  Nobody was selling Goldman anyway, but that's another topic.  Oppenheimer and Franklin, I believe, became preferred funds after the revenue sharing disclosures became more obvious. 
 
I don't really know how revenue sharing got started at EDJ.  I've heard the theories about Doug Hill being the driving force, but I've not ever heard anyone confirm it in any sort of official manner.  I know the phrase revenue sharing doesn't show up in the 10-k before 1997, but I don't know if it was happening before that. 
 
Could you perceive it as unethical?  Yep.  Do I?  Nope.  It didn't hurt my client.  Had I used Amercian Funds or Putnam or Lord Abbett funds with or without revenue sharing, my client's performance would not have been affected either way.  The only arguement you could make is that I might have used a completely different fund family.  I don't know if I would or wouldn't have. 
 
I have yet to have anyone tell me how my client was negatively affected by revenue sharing. 
 
Didn't hurt your clients?  Spiff ... you are classic buddy.  Can't see the forest through the trees.
 
Where did that money come from to pay the rev. sharing? Um, I'm gonna guess FEES!  Your clients paid them.  Just drink water this weekend - no kool-aid!

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

How did my clients pay them? Revenue sharing isn't a Jones specific revenue generator.  So, if the argument is that without the revenue sharing agreements at EDJ my clients 12-b1, shareholder accounting, and other internal expenses would be lower, then I think that's a really weak argument. 
 

bspears's picture
Offline
Joined: 2006-11-08

Spiff is like a battered wife, "Billy Bob is a good man", every time he gives her a black eye. 

B24's picture
B24
Offline
Joined: 2008-07-08

Spaceman Spiff wrote:
I love this whole EDJ lied to us discussion in regards to revenue sharing and Hartford.
First, let me say that I respect both of your decisions to leave a company who you feel did something inappropriate.  
 
That doesn't mean I have to agree with you.  I just took a quick look at the 10-K filing for the Jones Financial companies all the way back to 1997.  Now, you're assertation is that EDJ lied to you.  Well, if that were to be true there wouldn't be any discussion at all about revenue sharing at all in those documents.  That is certainly not the case.  It's in there had you cared to look.  Truth was that back then virtually none of us knew what revenue sharing was, much less that it was such a large part of the EDJ bottom line.  If you looked at it in the 10-k you'd find it under fee revenue sources along with interest income, IRA fees, etc.  If you were really all that concerned about it after reading the 10-k you would have called Tom Miltenberger and asked what revenue sharing was.  Or you'd have called your RL and asked him.  The fact that you didn't doesn't mean that EDJ lied to you, it means that you weren't aware of it or didn't care about it.  There's a difference.  
 
Now, you could make a valid argument that they should have told us why we had the preferred fund families.  But then most of didn't really care why, we were just happy that someone besides us was doing the due diligence on them.  I know, I know, part of the due diligence was will you pay us revenue sharing or not.  Those that passed both the performance/management hurdle and revenue sharing hurdle got to be on the list.  Now, that didn't mean that those were the only companies you could have done business with.  B24 (sorry to drag your name into this) has been very clear that he has done his own research and doesn't use all preferred funds.  You could have done that exact same thing.  That would have been good for clients, don't you think? 
 
But now, you no longer have to worry about that because the companies you've associated with don't do ANYTHING shady like that.  They don't do revenue sharing.  They ALWAYS tell you how they're spending the firms resources in complete detail. 
 
You might want to check this link out: http://lplfinancial.lpl.com/Disclosure/Conflicts_of_Interest.htm
 
or this one:
http://www.raymondjames.com/disclosure_mutual_funds_co.htm
 
or this one:
http://www.commonwealth.com/Investors/revenue_sharing.asp
 
I could go on with the cut and paste, but you get the point.  Participating in a common industry practice doesn't constitue lying to you, IMHO. 
 
Now the Hartford thing...I really wish they would have just told all of us that they made an investment in Hartford's mutual fund business from the get go. 
  
 
Not that I think it's right, but why is nobody concerned with the fact that ALL broker/dealers have revenue sharing agreement, as outlined above?  And some (I only looked at the first one, LPL) have FAR MORE revenue sharing agreements than Jones.  So again, I don't like revenue sharing in general, I am just curious why Edward Jones' revenue sharing agreements are somehow worse than all the rest?  How many clients knew that Smith Barney owned Legg Mason?  Almost every SB statement I see has some good old LM dogs in it.  How about Blackrock and Merrill Lynch?  Fortunately Blackrock is a decent fund company, but isn't it a conflict?  What about Van Kampen?  Owned by Morgan Stanley.  They're ALL conflicts of interest.  This industry is RIFE with conflicts of interest.  But that doesn't mean those conflicts are acted upon.  For example, I doubt that any LPL reps push their Preferred Funds because of the kickbacks.  But the potential is there. 
 

Moraen's picture
Offline
Joined: 2009-01-22

This is why it is good to be set up as an RIA.

bspears's picture
Offline
Joined: 2006-11-08

LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 

Hey Kool-Aid's picture
Offline
Joined: 2008-03-30

bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 

voltmoie's picture
Offline
Joined: 2008-11-05

Hey Kool-Aid wrote: 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family.  Agree 100%Off Topic: Would enjoy seeing a model portfolio of the best performing funds from each of the preferred companies for C share portfolio construction.

BigCheese's picture
Offline
Joined: 2009-07-13

Spiff-
 
The Hartford non disclosure was the final straw for me. And then when I saw the ways that Jones made money, and they continued the propaganda train...that we were the only profit center...I realized I had to go, and I did. This week marks three years since I left, and for those that want to really be an entrpeneur or truly work for themselves, its the best fit.
 
 
I didn't care for the revenue sharing agreements, and as you have stated ad nauseum, everyone is doing it. LPL does it and it pisses me off, hell they would sell my name to anyone if they could make a buck off it.

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

bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
I bought some John Hanc*** funds for a client a while back and got a call from their sales desk.  They said they'd love to send us some info and get their local rep into my office.  I didn't need it at the time, but I'm considering using their Lifestyle funds for some of my client and would love to have lunch with their rep to tell me more about them.  As far as I know, that's not illegal at EDJ. 
 
I can't imagine the number of phone calls that I'd get if Jones just opened the doors up wide and didn't put any limits on who can and can't call unsolicited on us.  As it is I've got about 25 vendors who want a piece of my time.  I don't see them all, but they still call and tie up my BOA for a while.  So, what you see as a limitation, I see as a benefit. 
 
I've never had one fund family shoved down my throat.  Sure, we hear from the preferred funds at regional meetings, but nobody from Jones tells me that I have to use them or questions me when I don't.
 
foot - I agree that the Hartford thing should have been handled differently.  I have a problem, like B24 outlined, with proprietary funds, like Riversource, and that came too close for comfort.  Even Jones said they liquidated their interest there because of the conflict of interest.

noggin's picture
Offline
Joined: 2004-11-30

Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 

noggin's picture
Offline
Joined: 2004-11-30

Spaceman Spiff wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
I bought some John Hanc*** funds for a client a while back and got a call from their sales desk.  They said they'd love to send us some info and get their local rep into my office.  I didn't need it at the time, but I'm considering using their Lifestyle funds for some of my client and would love to have lunch with their rep to tell me more about them.  As far as I know, that's not illegal at EDJ. 
 
I can't imagine the number of phone calls that I'd get if Jones just opened the doors up wide and didn't put any limits on who can and can't call unsolicited on us.  As it is I've got about 25 vendors who want a piece of my time.  I don't see them all, but they still call and tie up my BOA for a while.  So, what you see as a limitation, I see as a benefit. 
 
I've never had one fund family shoved down my throat.  Sure, we hear from the preferred funds at regional meetings, but nobody from Jones tells me that I have to use them or questions me when I don't.
 
foot - I agree that the Hartford thing should have been handled differently.  I have a problem, like B24 outlined, with proprietary funds, like Riversource, and that came too close for comfort.  Even Jones said they liquidated their interest there because of the conflict of interest.
 
The issue is access...always will be.
I handle the mutual fund relationships for our team. There is very little benefit in my mind to having less choice as you do. If we are not convinced to do business with a mutual fund company we politely tell them , don't call us we will call you. I never have a problem with one that I have told that to, repeatedly calling afterwards, it just doesn't happen. When you have to initiate the research yourself on which mutual funds to use outside the preferred group you are being limited whether you admit it or not. How do you find out about XYZ? How much time do you have ? I used Franklin Templeton for a couple of years when I was at Jones before they were preferred. How did I come up with the idea, you may ask.
 
I looked at the revenue sharing agreements on Mutual Funds with LPL, there were over 65 companies listed, Jones has 7 in their preferred. All of the ones that are preferred with Jones are on LPL's list with the addition of 58 more......
Which will give you more choice and possibly better results for your clients? Is 10 times more choice better? It certainly can't hurt.......

Hey Kool-Aid's picture
Offline
Joined: 2008-03-30

noggin wrote:Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 
 
Yes Noggin, I can...all three are available within Advisory Solutions and I can create a custom portfolio and use all of them.  Now, before you jump down my throat...I understand I don't have every fund in their families available to me, but I do have quite a few.  There is no argument that Indy Reps have a larger pool of funds/etfs to choose from, but that doesn't mean that a perfectly appropriate, quality portfolio can't be constructed with the myriad (sp) of investments that we have available at EDJ.
 
 

Moraen's picture
Offline
Joined: 2009-01-22

Hey Kool-Aid wrote: perfectly appropriate, ]

Not to nitpick, but appropriate does not achieve the fiduciary standard, correct? I also think that if you are using AS, you are acting as an IAR, which means you are held to the fiduciary standard.

In all seriousness, I may be wrong and talking out of my ass. But I think that's right.

And you spelled "myriad" correctly.

noggin's picture
Offline
Joined: 2004-11-30

Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 
 
Yes Noggin, I can...all three are available within Advisory Solutions and I can create a custom portfolio and use all of them.  Now, before you jump down my throat...I understand I don't have every fund in their families available to me, but I do have quite a few.  There is no argument that Indy Reps have a larger pool of funds/etfs to choose from, but that doesn't mean that a perfectly appropriate, quality portfolio can't be constructed with the myriad (sp) of investments that we have available at EDJ.
 
 
Can you pick which funds?

Hey Kool-Aid's picture
Offline
Joined: 2008-03-30

Moraen wrote: Hey Kool-Aid wrote: perfectly appropriate, ] Not to nitpick, but appropriate does not achieve the fiduciary standard, correct? I also think that if you are using AS, you are acting as an IAR, which means you are held to the fiduciary standard. In all seriousness, I may be wrong and talking out of my ass. But I think that's right. And you spelled "myriad" correctly.
 
Thank you ...I wasn't sure and didn't take the time to look it up...so (sp) just gives me belt & suspenders ....particularly with the spelling police on this site!
 
BTW...you are nitpicking but that's cool.  I am didn't mean to use "appropriate" as a technical term, I always strive to do what's best for the client, even when not in a fiduciary capacity.

Hey Kool-Aid's picture
Offline
Joined: 2008-03-30

noggin wrote:Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 
 
Yes Noggin, I can...all three are available within Advisory Solutions and I can create a custom portfolio and use all of them.  Now, before you jump down my throat...I understand I don't have every fund in their families available to me, but I do have quite a few.  There is no argument that Indy Reps have a larger pool of funds/etfs to choose from, but that doesn't mean that a perfectly appropriate, quality portfolio can't be constructed with the myriad (sp) of investments that we have available at EDJ.
 
 
Can you pick which funds?
 
Yes...but as I said, while we have lots of them available, we do not have all of the Vanguard, Dodge & Cox and TRoweprice to choose from.
 
 

noggin's picture
Offline
Joined: 2004-11-30

Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 
 
Yes Noggin, I can...all three are available within Advisory Solutions and I can create a custom portfolio and use all of them.  Now, before you jump down my throat...I understand I don't have every fund in their families available to me, but I do have quite a few.  There is no argument that Indy Reps have a larger pool of funds/etfs to choose from, but that doesn't mean that a perfectly appropriate, quality portfolio can't be constructed with the myriad (sp) of investments that we have available at EDJ.
 
 
Can you pick which funds?
 
Yes...but as I said, while we have lots of them available, we do not have all of the Vanguard, Dodge & Cox and TRoweprice to choose from.
 
 
Thanks for the information, my intent is not to bust your chops.

Hey Kool-Aid's picture
Offline
Joined: 2008-03-30

noggin wrote:Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:noggin wrote:Hey Kool-Aid wrote:bspears wrote:LPL can have as many Revenue sharing agreements they want.  I could care less.  They don't shove them down my throat.  I can have any rep in my office...which I believe you can't.  The relationship I have with LPL is TOTALLY different than being a captive employee.  I don't go to regional meetings where the speaker is from the preferred list and only frm that list.  I believe the conflict of interest is really over the top with Jones. 
 
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie!  I am permitted to use most any family I see fit for my clients.  I have never felt "pressured" to use a preferred family. 
 
Case in point... Let's say you have a client and they want to invest in Vanguard, Dodge and Cox and T Rowe Price. Can you do that? They are 3 of the largest and most widely regarded mutual fund families out there.....
 
 
 
Yes Noggin, I can...all three are available within Advisory Solutions and I can create a custom portfolio and use all of them.  Now, before you jump down my throat...I understand I don't have every fund in their families available to me, but I do have quite a few.  There is no argument that Indy Reps have a larger pool of funds/etfs to choose from, but that doesn't mean that a perfectly appropriate, quality portfolio can't be constructed with the myriad (sp) of investments that we have available at EDJ.
 
 
Can you pick which funds?
 
Yes...but as I said, while we have lots of them available, we do not have all of the Vanguard, Dodge & Cox and TRoweprice to choose from.
 
 
Thanks for the information, my intent is not to bust your chops.
 
I understand...it was a fair question, you left before Advisory Solutions rolled out if i'm not mistaken.  It's a pretty cool product, although, someday when and if they add equities, it will be much better!

Effay's picture
Offline
Joined: 2008-04-11

It's GAC time, Jonesers!
 
Jones has an agenda.
Ultimately, why does EJ Really need to get so Huge?
To Sell, Go Public or Merge! There is some plan down the road to benefit the general partnership. To say the firm could not compete as a smaller company is poppyc***.
As my kids would say: "DUH!"
 
Oh, and GAC stands for Get A Clue.

B24's picture
B24
Offline
Joined: 2008-07-08

Effay wrote:It's GAC time, Jonesers!
 
Jones has an agenda.
Ultimately, why does EJ Really need to get so Huge?
To Sell, Go Public or Merge! There is some plan down the road to benefit the general partnership. To say the firm could not compete as a smaller company is poppyc***.
As my kids would say: "DUH!"
 
Oh, and GAC stands for Get A Clue.
 
To make more money.  Duh.
 
There are so many benefits to being larger as a brokerage firm.  Larger capital base, larger inventory, better access to products/vendors, the ability to be more selective with recruiting in the future, to be able to focus more on per-FA production versus recruiting newbies, fixed-expense coverage, the list goes on.....
 
I don't think the partners have any interest in going public or being bought.  Most of them are making money hand over fist, and are already super-wealthy, and they also realize that trying to sell the company would be an almost impossible task (you would likely lose 1/2 the advisors in the company).  The very structure of our company and the offices prepares FA's to go independant very easily, and most that I talk to agree that if Jones were to sell out, their first call would be to the LPL recruiter (or whoever).
 
Our entire foundation is built on our capital structure, so I very highly doubt that a sale is even remotely possible in the next 10 years. 
 
 

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

If Jones went public I would take a very serious look at going indy. 

Effay - that conversation is not a new one.  Nobody needs to get a clue, except for you.   I have this cool plaque on my wall with a pic of Ted Jones and a horse.  Can't really tell them apart.  Maybe I need glasses.  The quote on it is Ted telling someone why he won't take the firm public.  Basically he says it's not about the money.  B24 is right.  If I'm a GP, why would I want to risk the money I've put up, my very good income stream, and my position to make money?  For the zero's?  Did you see what happened to the AGE guys?  Didn't Ben Edwards lose a bunch of money when AG got bought out? 
 
Being a Jones GP, and an LP on a different scale, is like owning a money printing press.  Unless the company folds you sit back, collect the monthly checks, and wait for the bigger ones a few times a year. 
 
I'm not going to say Jones will never go public, but I think I'd be safe in saying that Jones won't ever be bought out.  I can't see us going public in the near future either.  But never is a long time. 

B24's picture
B24
Offline
Joined: 2008-07-08

IMHO, it will either take a fundamental change in attitude among the upper-GP's (which is doubtful during the current regime), or a fundamental change in the industry that makes either our model or our target marketfinancially unappealing for us to remain independant.  But that would necessitate a situation where it would be appealing for another firm to acquire us. 
 
On a separate note, my belief is that there is some sort of "pact" among GP's not to take the company public (or sell out).  Yes, that screams of "cult", but I think there is a sense of stewardship at the firm, and I believe the existing GP's that worked under Ted Jones will not have any part of changing the culture of the firm - they owe that to him for basically "giving" the company away to the employees.  HOWEVER, there is nothing saying that over time, as the GP's move further and further from the Ted Jones legacy, that beliefs don't change.

BigCheese's picture
Offline
Joined: 2009-07-13

All of the pictures that I either received or paid for were re-used (the mats and frames) when I left Jones. Might have been the best investment they ever made in me....
Spiff-
Please try and separate your feelings from reality. Every person, every company has a price. Jone's GP's love the gravy train...but if they can make the same or more and give up the BS why wouldn't they sell out.
At least at LPL we KNOW they intend to sell. You just have to sit back and send forum messages because that decision is WAY ABOVE YOUR PAY GRID. Welcome to no mans land...isn't great not to be in control of your own destiny??

Moraen's picture
Offline
Joined: 2009-01-22

Jones has no reason to go public. Everybody has their price, but more than likely the price is so high no one will be willing to pay.

Personally, I don't think anybody really give two sh!ts about Ted Jones anymore in GP land. Great man, with a good heart. It's not the same firm though.

BigCheese's picture
Offline
Joined: 2009-07-13

Ted who?
 
Sooner or later if the GP's continue to only make their salaries, they will start to think about their exit strategy.
 
And then Spiff will be looking at his options.

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

Bachmann said years ago that Jones would sell to the right bidder with the right amount of money.  He said that he didn't believe there would be anyone with A) enough money or B) a good enough plan to retain the existing salesforce to make a deal work.  But, everything can be bought. 
 
foot - you don't really believe that EDJ's are that short sighted do you?  They recognize, just like most FAs who aren't getting a bonus right now, that times like these are temporary and relatively short in comparison to the good times.  You are correct that if all they were making was their $125K-$150K salary for a long enough period of time, they'd be looking for other opportunities.  However, they're not.  And they're not. 
 
You should also try to separate your opinons/feelings from reality.  Seems to me that you and I are just sitting on different sides of the same see saw. 

skillopie's picture
Offline
Joined: 2008-11-19

Moraen wrote:Jones has no reason to go public. Everybody has their price, but more than likely the price is so high no one will be willing to pay.

Personally, I don't think anybody really give two sh!ts about Ted Jones anymore in GP land. Great man, with a good heart. It's not the same firm though.I didn't know you could take a ponzi scheme public.Oh wait, Enron was public. looking forward to EDJ on the NYSE!

Please or Register to post comments.

Industry Newsletters
Investment Category Sponsor Links

 

Sponsored Introduction Continue on to (or wait seconds) ×