I've been at Jones for over 10 years.  I've heard the conversations about using Hartford or Goldman or Federated when it mattered to our P&L statements and therefore our bonuses.  I know some people looked at it and some didn't.  I know of one large producer who is no longer with the firm who made a wholesale change to Hartford from American because of revenue sharing.  You are correct that it was a bad practice.  I'm not going to argue with you.  I prefer the setup we have now.

Are you telling me you REALLY cared that the GPs had a stake in Hartford?  Or was it just one more thing to put in your "I hate Jones" scrapbook?  I found it interesting, but I can't say I was shocked.  I don't use a lot of Hartford funds anyway, so I guess it didn't really matter to me.  I don't think it made my blood pressure go up like it evidently did yours. 

I have yet to find a major player in our industry that doesn't do revenue sharing.  We do have a smaller list than everyone else, however.  Maybe that's the difference.  So maybe technically I can't use the word "all", but I'm awfully darn close. 

As far as I can tell there are only three groups of people who really care about revenue sharing.  First, GPs because that's where a lot of their income comes from.  Second, our compliance officers because they have to ask about it everytime they visit our offices.  And third, ex-Jones brokers who always bring it up as one of the major reasons they left and why Jones is evil. 

My clients care about three things:  Their goals, their returns, and contact from me like I promised.  They have a difficult enough time trying to figure out how to save money, much less trying to figure out how Jones makes money. 

[quote=advisor28]

Spiff,

I was on the leadership team in my region and past advisor of Jones, one thing I didn't enjoy was having to prospect new people every month because of no reaccuring revenue (I had 12 gross monthly in A share trails).  This ultimatley took time away from my best clients so insurance planning and estate issues were out the window due to the required hunting each month.  I just cant believe EDJ is using the term financial advisor, I think asset gatherer is more appropriate.  Just a thought...if you and your clients are happy then all is well.

[/quote]

Really?  You ran a $50 million office (based on your $9200/month trails) and you couldn't do insurance or estate planning?  Not even on your best clients?  Now, I know those issues can be time consuming, but it's not like you have to do it more than once for your best clients.  And you really don't have to do much work.  C'mon.  You've got to find a better excuse than prospecting for not doing the timeblocking to get everything done.  At $50 million I would expect that referrals were a large part of your business.  I don't buy it. 

I don't know why you don't believe we're FAs.  Is there something that we should be doing that we're not doing now?  Retirement planning, estate planning, college planning, LTC planning, cash flow analysis, asset allocation models, investment planning, income planning.  I know I've missed some.  What part of that doesn't make us financial advisors? 

UH…how about 65 year bonds paying 4.77%…net 3

What’s wrong with bonds? If they’re viewed as a vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see the

problem.

Space-

I can hear a conversation of yours to an attorney.

" I know we are part of a dirty industry that does unethical things, but I can't control what my management does, and the seven preferred families are relatively good fund families, so I don't have a conflict because I don't receive any of the money directly just indirectly. All my clients care about is performance and that I call them regularly.

Spiff....Jones is perfect for you.  Please don't leave. They need happy ostriches.

Spiff,

Take a look at your current households and accounts, do you really see every client quarterly or semi-annually? What are the size of your avg households?  You will end up as many vets that were in my region if your as successful as you should be at 10-15 years in the biz, 3,000 accounts and 1,200 households (This is what the Jones Model is built to do).  You will have pages of bond calls which as a new IR you dream of however becomes a nightmare for a vet down the road. Can you honestly tell me your clients are benefiting from your advisory services?  Jones has those capabilities you listed above, my point is the way the model is devised you can't sustain seg 5 numbers and sit with all of your clients, and by the way your adding 10 more next month...so then you goodknight, which I did and it becomes an endless cycle of revolving door clients.  If you honestly read through your household list of clients your memory would start to fade on page 10.

[QUOTE]Are you telling me you REALLY cared that the GPs had a stake in Hartford?  Or was it just one more thing to put in your "I hate Jones" scrapbook?  I found it interesting, but I can't say I was shocked.  I don't use a lot of Hartford funds anyway, so I guess it didn't really matter to me.  I don't think it made my blood pressure go up like it evidently did yours.  [/quote]

Did the clients fully understand that both EDJ and you had a personal stake in hartford funds above and beyond the standard A-share comission.

Did they understand how that relationship could influence your recomendations in going with a Hartford fund vs funds from another family?

[quote]I have yet to find a major player in our industry that doesn't do revenue sharing.  We do have a smaller list than everyone else, however.  Maybe that's the difference.  So maybe technically I can't
use the word "all", but I'm awfully darn close. [/quote]

I don't think anyone else in the industry gets as large a %age of income from revenue sharing.

When AF funds perform poorly, a la Magellan etc, EDJ is going to be in a world of hurt as clients pull out of AF and EDJ as well.
[quote]As far as I can tell there are only three groups of people who really care about revenue sharing.  First, GPs because that's where a lot of their income comes from.  Second, our compliance officers because they have to ask about it everytime they visit our offices.  And third, ex-Jones brokers who always bring it up as one of the major reasons they left and why Jones is evil. [/quote]

Clients have a latent interest in it. Because it could color your suggestions away from their best interests.

[quote]My clients care about three things:  Their goals, their returns, and contact from me like I promised.  They have a difficult enough time trying to figure out how to save money, much less trying to figure out how Jones makes money. 

[quote=Philo Kvetch]What’s wrong with bonds? If they’re viewed as a vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see the

problem. [/quote]



Cause EDJ tends to only sell long bonds which are not terribly appropriate for many clients.



Yet another latent risk for EDJ,. b/c if interest rates should rise,
clients will not be please to see thier 30 year debentures trading at
83.

AllREIT,

There is a lot of truth to your bond statement which is undeniable among past and current EDJ reps.

[quote=AllREIT]

[quote=Philo Kvetch]What’s wrong with bonds? If they’re viewed as a

vehicle for long term capital

gain coupled with safety of principal and a regular dividend, I fail to see

the

problem. [/quote]



Cause EDJ tends to only sell long bonds which are not terribly appropriate

for many clients.



Yet another latent risk for EDJ,. b/c if interest rates should rise,

clients will not be please to see thier 30 year debentures trading at

83.

[/quote]



And if interest rates fall?

Philo,

Now that we all have been enlightened by the opposite effects of Rates and Price... I think the point lies in the motivation of which long term bonds are sold not in whether they have a place in portfolios if the client is educated ahead of time.  If you like I can put this into deep south terms: You buy your milk cow for the milk, if the price of beef goes up you don't kill your milk cow.

Enjoy.............

[quote=advisor28]

Philo,

Now that we all have been enlightened by the opposite effects of Rates

and Price… I think the point lies in the motivation of which long term bonds

are sold not in whether they have a place in portfolios if the client is

educated ahead of time. If you like I can put this into deep south terms: You

buy your milk cow for the milk, if the price of beef goes up you don’t kill

your milk cow.

Enjoy…

If you catch yourself using it don’t feel ashamed…no need for name calling but I’m always happy to educate the rookie’s.

[quote=advisor28] If you catch yourself using it don’t feel ashamed…no

need for name calling but I’m always happy to educate the rookie’s.[/quote]



Thanks again, pinhead.



A word of advice, if I may: given your, shall we say less than average

capabilities, don’t try to educate anyone.

Less then average capabilities? If I may: given your less than average response no offense taken.

[quote=advisor28] Less then average capabilities? If I may: given your less

than average response no offense taken.[/quote]



That’s good, pinhead. You should know, however, that I don’t care whether

you’re offended or not.

Best of luck to you, I see your a senior member of the forums since 2005…your probably mid 40’s and drive a red sports car too. That is if the misses keeps her job, I can imagine it would be tough on one income.

[quote=advisor28] Best of luck to you, I see your a senior member of the

forums since 2005…your probably mid 40’s and drive a red sports car too.

That is if the misses keeps her job, I can imagine it would be tough on one

income.[/quote]



Wrong again, pinhead. But you should be used to that.

[quote=Philo Kvetch]


And if interest rates fall? [/quote]



Clients don’t mind their bonds trading at 112, but they hate it alot worse to see them underwater at 83.



Anyways the main reason an EDJ’er sells a bond vs BFA/CIB is to avoid running up the break points in the AF bucket.



http://www.americanfunds.com/funds/classes/details.htm#break points



------



Owning long bonds, when you can own long TIPS is very dangerious and IMHO underpriced bet on lower than expected inflation.

I think the same could be said regarding stocks, reits, etfs, mfds, etc.

Clients like it when the price is up, and don’t like it when they’re down.

What’s your point?



As to the breakpoints, are you saying that they’d rather take 3 points on a

bond trade, so they don’t have to give the client some Washington Mutual

Investors at 4 1/2%?



No Allreit, your arguments don’t make any sense.