Jones Advisory Service

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Broker24's picture
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Joined: 2006-10-12

Just saw the platform.  Starts at 135 bips, breakpoints and discounts available.  100K minimum.  160 funds/etf's.  26 pre-selected models.  Can build custom models.  Performance reporting and monitoring, auto-rebalancing, required annual review f-t-f, quarterly phone review (or f-t-f).
 
It looks very good.  I was surprised at the funds out included.  Very, very few Preferred funds.  Only 4 American Funds.  I also saw that the account will receive a credit for any Revenue Sharing income received by the Preferred Fund Families (if you choose funds that offer Revenue Sharing to Jones).  Can move previously sold A-shares, but client will receive fee credits if held less than 2 years.  All regions will be rolled out by August.

jwcopper's picture
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Joined: 2008-05-14

What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?

Broker24's picture
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Joined: 2006-10-12

The market is demanding it, we are shifting our focus more towards "solutions" rather than "product", and it has been structured in an economical way (compared to market). Oh yeah, most of the "old school" team is out in STL. The new team "gets it".

freeman12's picture
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Joined: 2008-04-23

The GPs wont care if the old timers get upset because they wont be going anywhere. Anyone upset about fee based isnt going to switch and the GP's need to put new bodies in desks. B24 - I just posted to another forum. Get ahold of Morts office at MAP with the SMA product. I left Jones and built $40mil in managed by bringing $15 over and adding $25 in 18 months with SMA and fee mfunds etc. Alliance Bernstein has a hell of a good wholesale team that can teach this stuff.
Amazing, Jones with fee based. I know the weather has been weird but I didnt know hell froze over.
Congrats on the new product.

SupermanFan's picture
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Joined: 2006-03-22

Who thinks starting at 135bps is "structured in an economical way? 
 
The sliding price breaks are not particularly progressive...
135bps on first $500k
125bps on the next $500k between $500k & $1mm
100bps on (only) those dollars over $1mm
There's really not much break between, say, a $350k account and a $1.35mm account.
 
Of course this can be discounted but the FA's % payout gets discounted as well as the aggregate amount being lower, like EJ's policy on discounting equities. The more you cut your own throat, the more you bleed. 
 
Curious, how competitive is 135bps?

now_indy's picture
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Joined: 2006-07-28

SupermanFan wrote:
...
Curious, how competitive is 135bps?
...

That depends, are the funds institutional share classes? Or, are they just load waived A shares?  I assume the 4 American Funds are load waived A shares.  I would say that 1.35% is a good rate.  It's fairly low, but it's sure not the lowest price out there.

jwcopper's picture
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Joined: 2008-05-14

That is pretty standard in the market for wrap types of accounts using institutional share classes.  The fee is not as important as the advice that goes along with it.  I liked the previous comment about hell freezing over, that is very much what I thought would have to happen if they ever went fee based.  It certainly will be interesting to see how they integrate ETF's into the mix with those programs.  I guess us indy's will have to come up wiht something new to show how we are different.  Maybe I should have stayed at Jones? 

COBrien's picture
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Joined: 2007-03-02

I think the 1.35 is very competitive, especially since this is before the 12b-1's are credited/rebated back to the account---which amounts to 0.10-0.25, reducing the overall cost to the client...and from what I saw, I believe they're F shares.

troll's picture
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Joined: 2004-11-29

COBrien wrote:I think the 1.35 is very competitive, especially since this is before the 12b-1's are credited/rebated back to the account---which amounts to 0.10-0.25, reducing the overall cost to the client...and from what I saw, I believe they're F shares.
 
F shares are only from American Funds and they eliminate the 12-b-1 fee but the expense ratio does not drop by 25bps.  Slick way around rebating the 12-b-1 fee.  On its face 1.35% is competitive until your competition shows the difference in institutional shares vs. load waived A shares, then you are not so competitive.

troll's picture
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Joined: 2004-11-29

BTW, before you get too excited about the 12-b-1 rebates, I would be willing to bet they are for qualified money only as it is an ERISA rule.

spikedkoolaid's picture
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Joined: 2006-04-20

I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 

WestH's picture
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Joined: 2008-03-29

jwcopper wrote:What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?
 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...

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

WestH wrote:jwcopper wrote:What has been the philosophy message for rolling out this platform?  I would suspect a lot of old timer Jones folks will have a hard time making this change?  Since EDJ has basically bashed this type of investing for so long I am shocked to see them making a change to fee based platforms.  The MAP doesn't really count so as far as I see it, this is a 180 degree shift for them.  Can anyone summarize the strategic, marketing message from EDJ corp?
 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...
 
Jeez....here we go...dis dis dis...hate hate hate...Jones has no fee based program they suck blah blah blah....all the sudden...as Jones usually does, recognizes our shortcomings and does what's necessary to fix it...and all of the haters/donkeys start chirping about how bad it is and how big bad evil Jones is "playing catchup"...not hey, a great firm researches and finds out what they can do to improve then makes it happen...wow...no wonder we rank  highest in investor satisfation as well as one of the best places to work for in the country, hmmmmm, but to think that some people on this thread would realize it....nah...this is more fun!!!

Cowboy93's picture
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Joined: 2005-05-10

..and all of the haters/donkeys start chirping about how bad it is and how big bad evil Jones is "playing catchup"...

Gosh, there is no need to be so ugly and claim that Jones haters are all Democrats...that is a low blow.

Magician's picture
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Joined: 2008-05-19

Ok. Let's call this what it is. It's Jones attempting to make itself more retirement friendly. And finally "making sense of retirement".

I also think it's a way to stem the blood flow from reps leaving. But let's be honest, is this really going to help? What about stock accounts? People who just take dividends from stocks they inherited from the 20's?

My guess is the answer will be "we can't be all things to all people". Which is why we never had fee-based to begin with.

Kool-aid - I'm glad you like Jones - it's a great firm, but this is just another method of control, and some of us don't like being controlled. That's why we joined Jones in the first place, because we were told, "you get to do it your way". Not you get to do it your way "within these parameters".

Kudos for you to being loyal. Jones rewards loyalty quite well from what I've seen.

And by the way, of course it's more fun to bash Jones. Jones people get upset by it (sometimes even me). There's nothing more fun than getting a rise out of people. And if Merrill were ranked number 1 by RegRep; Fortune; and the other numerous periodicals Jones asks me to vote for my company for, then I'm sure people would be bashing Merrill.

Broker24's picture
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Joined: 2006-10-12

Man, I started a twister. 
 
So on the fee%, in addition to breakpoints, you can discount up to 15% WITHOUT affecting your payout.  For accounts over $1mm, you can discount up to 30% WITHOUT affecting your payout.  So, on $1mm, the fee could be about 85 bips (with the breakpoints and discounts), and still get your 40% payout.
 
90+% of the funds are ETF's, no load, or load waived.  SO the average exp ratio (blended portfolio will be around 30-45bips (of course the higher are for small cap, int'l, etc.). 
 
It's not perfect, but it's certainly a very positive step.  Word is, they will eventually allow stocks and bonds in as well.  I think they are taking one step at a time.
 
Like we have seen the past year or tow, it's no surprise that that this morning, the infamous Fes Shuaghnessy announced his "retirement".  Out with the old, in with the new.

Broker24's picture
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Joined: 2006-10-12

WestH wrote:
 
Easy answer:   Playing catch-up to stem the massive losses of thousands of Jones reps to the Independent firms over the years. 
Now if they can raise the payout to 90%...
 
 
Why would they do that?  In order to do that, they would have to stop paying for everything they pay for, start charging us for tickets, and turn into an indie firm.  Our payout structure is virtually identical to most other wirehouses/regionals.  That's just a comment that has absolutely no basis in reality.

Broker24's picture
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Joined: 2006-10-12

spikedkoolaid wrote:I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
Spiked, Buddy.  C'mon.  That is a perfectly diversified portfolio .

jwcopper's picture
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Joined: 2008-05-14

KoolAid you quoted my comment as bashing?  Wow, asking the Jones folks to explain the philosophical message equates to bashing?  Thankfully a rationale jones person answered my question earlier and thank you for doing so.  Now I saw the post saying 90%+ of the funds are ETF's?  Talk about a shift in philosophy, is this true?  What kind of ETF's are they using, are they sticking to cap weighted or are they using the 'intelligent' indexes?  And, KoolOff, I double checked and as far as I can tell this is not bashing.  And saying they are fixing things as always to make things better, that sure is nice but fee based accounts, the desire by clients to have them has been around for a very, very long time, almost as far back as when EDJ bought that tiny bond trading house so they could claim 'founded in 1871' yes that is a stab.  So, if you are really new and you are getting this, you are probably pretty excited.  But waiting till your firm is strong armed and beaten down to the point of being run out of the business before adapting and changing...?  I hope nothing new comes along for the next 30 years for your sake.  My genuine inquiry above stands, sorry the reply bled into my response to being called a basher.  Now where did I leave that mallet?

Magician's picture
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Joined: 2008-05-19

jw- I think the answer to your question somebody already took a swipe at.

From what I understand, EJ is marketing this as part of their "solutions based" approach. As for strategy, Weddle admitted in the five-year plan that this is to retain and gather assets Jones would not normally have kept or gotten. And as I stated earlier, I think it's an additional method of control and a way of keeping people from jumping ship.

I'm breaking my own rule here. I better get on the road and get to work.

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

jw - at what point was Jones beaten down to the point of being run out of business?  We had the Revenue Sharing issue a few years ago, but I wouldn't call that beaten down or even close to being run out of business. 
 
B24 didn't say the platform was 90% ETF.  He said it was 90% ETFs, no loads, and A share LW.
 
I'll bet this program has a lot of old time GPs scratching their heads (or retiring).  It is a switch in philosophy for Jones.  In my opinion a good one that is a bit overdue.  Bachman would never have considered it.  Doug just pretty much followed Bachman's lead.  Weddle has the ability to look outside the traditional Jones arena and do something that will be good for the firm long term.  The FAs will embrace it for the most part.  Those that don't want to can continue to build their businesses using A shares.  Nobody's going to complain. 
 
The message isn't that we don't believe in A shares any longer.  This is just one more solution to a clients financial situation or problem.  Just like the MAP program that launched several years ago is.  It gives clients more choices on how to work with us. 

doneWjones's picture
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Joined: 2006-12-17

spikedkoolaid wrote:I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
.... Of course they do spike,.... just ask them and they will tell you!!!  ; )

Broker24's picture
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Joined: 2006-10-12

jwcopper wrote:Now I saw the post saying 90%+ of the funds are ETF's? 
 
You 'mis-remember' my quote.  I said 90%+ are ETF's, no-load, or load-waived (combined).  I was trying to address the expense ratio/12b-1 question.  I would say, maybe 20% of the options are ETF's.  The reason it's not 100% is because some of the investment firms probably don't have advisor share class funds (I honestly don't know which ones - I haven't looked that closely yet).

Broker24's picture
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doneWjones wrote:spikedkoolaid wrote:I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
.... Of course they do spike,.... just ask them and they will tell you!!!  ; )
 
You guys are finally seeing the light!  
 
We'll take you back - you just have to ask! 

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

jwcopper wrote:KoolAid you quoted my comment as bashing?  Wow, asking the Jones folks to explain the philosophical message equates to bashing?  Thankfully a rationale jones person answered my question earlier and thank you for doing so.  Now I saw the post saying 90%+ of the funds are ETF's?  Talk about a shift in philosophy, is this true?  What kind of ETF's are they using, are they sticking to cap weighted or are they using the 'intelligent' indexes?  And, KoolOff, I double checked and as far as I can tell this is not bashing.  And saying they are fixing things as always to make things better, that sure is nice but fee based accounts, the desire by clients to have them has been around for a very, very long time, almost as far back as when EDJ bought that tiny bond trading house so they could claim 'founded in 1871' yes that is a stab.  So, if you are really new and you are getting this, you are probably pretty excited.  But waiting till your firm is strong armed and beaten down to the point of being run out of the business before adapting and changing...?  I hope nothing new comes along for the next 30 years for your sake.  My genuine inquiry above stands, sorry the reply bled into my response to being called a basher.  Now where did I leave that mallet?
 
My rant wasn't toward you ...fwiw....

jwcopper's picture
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Joined: 2008-05-14

Yes, I see, misread the line.  So, what ETF's are they using?  As time goes on there will probably be as many or more ETF's than mutual funds, so I am curious which companies and design styles they are using.

doneWjones's picture
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Joined: 2006-12-17

Broker24 wrote:doneWjones wrote:spikedkoolaid wrote:I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
.... Of course they do spike,.... just ask them and they will tell you!!!  ; )
 
You guys are finally seeing the light!  
 
We'll take you back - you just have to ask! 
AAAA.....yaahhhhhh....... I think I just puked in my mouth at the thought of that B24..........
 

Broker24's picture
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doneWjones wrote:Broker24 wrote:doneWjones wrote:spikedkoolaid wrote:I can see it now::::
$600,000.
 
$350,000 into the new Fee BAsed Program at 1.35
$150,000 into A-Shares at American--The Triad
$100,000 in 3 pt Tax Free 30 year bonds
 
That way the FA can still live and get paid, all in the NAME of diversification!!!!!!
Oh and by the way, Edward Jones has the most ethical fee based program on the street. (tongue in cheek)
 
 
.... Of course they do spike,.... just ask them and they will tell you!!!  ; )
 
You guys are finally seeing the light!  
 
We'll take you back - you just have to ask! 
AAAA.....yaahhhhhh....... I think I just puked in my mouth at the thought of that B24..........
 
 

 
DWJ - if you are embarassed to admit it on this forum, you can just PM me with your real intentions to come back.  I won't tell anyone. 

fisher23's picture
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Joined: 2008-03-03

How do you personally plan on using this new fee based setup?  Existing relationships or only new ones?

jamesbond's picture
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Joined: 2005-03-21

i am glad jones is finally coming into the 1980's. Now to play devils advocate to the jones reps, why use this program as opposed to just using c shares?? I know it goes against everything stl use to preach, so are they burning all the old sales training materials?

anonymous's picture
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Joined: 2005-09-29

I'm not a Jones rep, but a "C" share can only be used if it is going to be cheaper than an "A" share.   An advisory account doesn't have to be the cheapest.   One is for a sales charge.  The other is a fee for advice.

Redsox08's picture
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Joined: 2008-04-29

How does this change your thinking as a newbie in planning your business?
I assume we now make less up front but potentially more long term if we keep the client for years and years.
Any thoughts?

jamesbond's picture
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Joined: 2005-03-21

so what is the difference then  between a c share account and an advisory account if you are only using mfs?  In reality nothing except higher charges for the client. Advice is still given to clients in both platforms. As for the A share argument, it is an old and tired jones argument that A shares are always better. 

troll's picture
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jamesbond wrote:so what is the difference then  between a c share account and an advisory account if you are only using mfs?   In reality nothing except higher charges for the client. Advice is still given to clients in both platforms. 
 
Assuming a long term strategy,  a C share account only requires "know your customer" suitibility and charges a higher price for NO additional legal responsibility.  I am not saying the client does not receive additional or ongoing service, simply it is not required and C shares will be more expensive long term.  Fee based requires ongong service  to both the client and the portfolio on a much higher level.  Assume you get sued.  On the C share account you only have to show that the account was suitable on the day it was purchased.  If using an A share would have been cheaper, you would pay the difference back in fees and be done assuming the investment was suitable.  On a fee based account you have to prove that you monitored the client situation on an ongoing basis and monitored the investment on an ongoing basis.  Even if the investment was suitable on day one, even if the investment is suitable today, if you cannot prove ongoing monitoring of both the client and the investment, you are paying back the fees and any losses or lack of gains incurred by the client.

jamesbond's picture
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Joined: 2005-03-21

I understand the "fiduciary responsibilty" that being called an "advisor" entails. Most investment strategies are considered "long term". you miss my point. when limiting your  fee based account to mf, you are essentially running a c share business. There is no way to prove that you actively monitored a fee based account no more than you did a c share account. One assumption you are making in the c share structure is that changes are never made. 

troll's picture
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There is no way to prove that you actively monitored a fee based account no more than you did a c share account

 
You mean besides the endless paperwork documenting contact that are required and the quarterly manager reports?

Broker24's picture
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jamesbond wrote: I understand the "fiduciary responsibilty" that being called an "advisor" entails. Most investment strategies are considered "long term". you miss my point. when limiting your  fee based account to mf, you are essentially running a c share business. There is no way to prove that you actively monitored a fee based account no more than you did a c share account. One assumption you are making in the c share structure is that changes are never made. 

007, I think you missed the whole point of the "advisory" service. It's not just about a few mutual funds and a wrap fee.

jamesbond's picture
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Joined: 2005-03-21

this is ground control to major tom. 

Morphius's picture
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jamesbond wrote:so what is the difference then  between a c share account and an advisory account if you are only using mfs?  In reality nothing except higher charges for the client. Advice is still given to clients in both platforms. As for the A share argument, it is an old and tired jones argument that A shares are always better. 
You are blending two distinct aspects of this question, which may be adding to your confusion. This sounds like splitting hairs, but those hairs CAN become very significant in highly regulated industries such as ours.  I know this is going to sound like a bunch of legal mumbo-jumbo, but if you want to get at the gist of this confusing distinction, a little history is necessary.  If you don't care about this topic, stop now before you waste your time ... otherwise read on!There is the legal aspect, and the practical aspect from the viewpoint of the "typical" client.  You are really focusing on the practical aspect only when you say that there seems to be little difference between fee based or C share MF portfolios.  If you assume identical costs to the client in both cases, for example, and identical funds used (albeit with different share classes), what's the difference?The main difference is a legal one, and is the one that anonymous mentioned earlier.  In the eyes of the regulators and the law, the client in those two examples are NOT receiving the same service and are NOT paying for the same thing, despite what it might seem.In a C share portfolio, the client pays a sales charge commission for the transaction.  The broker is paid for brokering the transaction in which the client buys (say) MFs that may well have been recommended by the broker.  But despite what many think - and this is key - the broker is not and CAN NOT be paid for rendering "advice" that led to this brokerage transaction.  In an advisory account, the client is technically paying a fee (never a commission) for and receiving ongoing ADVICE, which may lead to the identical initial recommendations.  Even if the brokerage charges are "wrapped" into the fees, the client is explicitly paying for advice.  So why all the bother and nuance if from the client's standpoint the SEEMS to be little difference.  After all, when all is said and done, aren't the client's really paying us for our advice?  I mean really?!Maybe in practice, but not legally.  Critical to this understanding is this different standards between the two of suitablility vs. fiduciary, but more fundamentally it is because the approaches fall under two completely different laws and regulatory bodies.  That's why the brokerage world deals with FINRA (previously NASD) while the advisory world deals with the SEC (or the state in the case of smaller advisory firms). While a half century ago this worked fine, when brokerage firms only charged commissions and didn't talk about plans or advice, but with the demise of the Glass Segal Act (which legally separated investment brokerage firms from banks and insurance companies) and the rise of "financial planning" and RIAs, gradually these distinct lines blurred, as firms tried to offer everything to clients - investments, banking, insurance, advice.But the regulation and the regulatory bodies charged with enforcing them haven't really changed in any meaningful way, while the world changed around them.  Which is why today we have such confusion over this advisory question.The SEC tried to deal with this in 1999 with the so-called broker-dealer exemption rule (or the Merrill Rule as some refer to it) which stated (in an oversimplified way) that brokers could be paid fees instead of (or in lieu of) commissions without being subject to the more onerous legal standards of and direct regulation by the SEC, so long as any advice offered was "purely incidental" to the true service being provided, and paid for - the brokerage transaction.  This attempt was sort of the SEC's version of the US Military's "don't ask, don't tell" policy, because in reality - and this is where we get back to the practical aspect - most brokers agree, as do their clients, that it is their expertise and advice that clients pay them for.  Many are surprised to learn that it is NOT their advice they are receiving payment for, and in fact that would be strictly prohibited by law unless they put clients into explicit "advisory accounts," which almost uniformly mean delegating all advice and investment decisions to some in house (or third party) model run by ... wait for it ... an SEC regulated investment advisory firm (often simply a wholly owned subsidiary of the broker-dealer).Even that attempt by the SEC didn't pan out, as that exemption rule was vacated last year, which pretty much threw things back into the regulatory confusion we see today.  What the end game will be is anybody's guess.Way too much information for most, I know, but I've found that unless you at least open this Pandora's Box and peek in, you will never really understand why a C share portfolio is NOT the same as a fee based advisory portfolio.  I'll close with this: happy Memorial Day everyone, and please remember to observe a moment of silence this afternoon at 3 pm in honor our our fallen heroes who gave their lives in the service of their country.  Regardless of whether you support this war or not, support those who sacrificed so that you had the freedom to do as you wish today.Freedom isn't free.

chaz's picture
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Joined: 2007-08-18

Any ideas on why the 100k minimum?  Too high of fixed cost to justify below that?
 
 

Broker24's picture
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iceco1d wrote:Just a guess, but at 1% (or whatever they are going to charge), 100K is probably the minimum they see as worthwhile of resources in the short & mid term. 
 
They probably don't want reps wrapping $50/mo DCAers, and then having to waste more time with annual contact, documentation, etc.  Nor do they want fiduciary liability for a $10K account.
 
Again, not at Jones, just a guess. 
 
Sounds reasonable.  And chances are, someone with less than 100K doesn't need "advisory" services.  They are either too young, and still just accumulating, or are retired and don't have any money.  Either way, it's not much to "advise" on.

chaz's picture
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Broker24 wrote:iceco1d wrote:Just a guess, but at 1% (or whatever they are going to charge), 100K is probably the minimum they see as worthwhile of resources in the short & mid term. 
 
They probably don't want reps wrapping $50/mo DCAers, and then having to waste more time with annual contact, documentation, etc.  Nor do they want fiduciary liability for a $10K account.
 
Again, not at Jones, just a guess. 
 
Sounds reasonable.  And chances are, someone with less than 100K doesn't need "advisory" services.  They are either too young, and still just accumulating, or are retired and don't have any money.  Either way, it's not much to "advise" on.
 
Makes sense except for the clients who will be over 100k within a reasonable period of time but their first investment is below that level.  What course of action would you suggest if they like the fee based model?
 
2 Examples:
Client has old 401k you roll over that's <100k. 401k balance at current job >100k.
 
Client has 25k Cd you invest.  Has >100k worth of Cd's coming due in near future. 
 

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

I would first make a call to find out if either one would be let in on an exception to the rule status.  If yes, then I would tell them about it and let them decide.  If no, they don't need to know we have the program available since they don't qualify for it.  If they do at some point in the future we can talk about how to go about getting money into it. 
 
I don't think there is going to be an ad in the newspaper about it, so most clients won't know about it until we tell them.  So, you as the FA have to know which clients to discuss it with and which ones don't need to hear about it.   

Broker24's picture
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Joined: 2006-10-12

You could use C shares for the near term, then move them into the advisory service when the time is right.  You just have to be aware of the CDSC.

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