[quote=B24]

Navet,

I'm not sure of your background with Jones, but I can give you some perspective:

1. Jones is LIGHTYEARS from where it was just a few years ago.  Weddle has been making rapid-fire changes for the better, and part of that involves new blood.  However, you can't just fire Regional Leaders and veterans, so a lot of that old-school culture is going to persist for some time.

2. Yes, Jones' culture is hard to shift.  The high-cost business model is what makes it very expensive to work in another country.  I don't think you can build it from scratch.  But I wouldn't sue UK and Canada as benchmarks for anything.

3. The number of positive changes they have made over the past 5 years is remarkable.  And they continue to roll out new initiatives all the time. 

4. Advisory Solutions is just the first iteration of their fee-based platform.  There is MUCH more to come, including a UMA account (unified account that includes multiple asset types - stocks, bonds, funds, etc.), added models, and additional flexibility.  But as is the case with Jones, they tend to lag the market in terms of new services and features.  They need to take it one step at a time.

Honestly, I think their two biggest stumbling blocks are their recruiting/development/training/new FA process, and the one-man office structure.  Both of these are huge drains on resources (financial and manpower), and impediments to financial growth for the firm.  If they could lick these two, that would help them immensely.  The other stuff (products, advisory programs, technology, etc.) are all simple fixes.  The solutions are out there for them to implement.  But those first two require a complete change of mindset.

I also found it interesting how much they addressed the issue of veteran FA income being too reliant on the results of the firm and the market.  IMHO, they need to reward their bigger producers better, to the detriment of the lower producers.  If you produce $1mm, your net margin could go from 55-60% in good years to 38-40% in bad years (like 2008/2009), even if your production and branch profit stayed the same.  Not much incentive there to keep working for the "man". 

[/quote]

Exactly!  Can you imagine the savings and the lower cost of recruiting if they put 3 FA's per office to share one assistant? 

Legend ,

We believe the domestic client base, and the "profitable investment opportunity base" are also shrinking dramatically.  In our opinion this will dramatically reduce incomes of so called traditional brokers.  Personally I entered the business in 1973 and witnessed a flat equity market until August of 1982.  At that time a big day was thirty million shares ( like Bunker Hunt day ).  In those days few domestic households had a large Wall Street intrest, since then CNBC and the like have made a daily football game of the equity market.  Those days are gone, consider the global indebtness and take a look at recent bond market activity. 

Please call me if you wish to discuss this.

doesn't a location with 3 or more brokers have to be registered as a "branch" with one isn't it a "sub-branch"?

[quote=B24]

Squash,

I literally just fell out my chair, and as my head hit the frozen icicles of hell, I swear I saw pigs fly by. 

Next thing you know, you'll be telling me we have socialized medicine.

[/quote]

Is this because i am defending jones? or you disagree with what I am saying...

[quote=icebear48]

Legend ,

We believe the domestic client base, and the "profitable investment opportunity base" are also shrinking dramatically.  In our opinion this will dramatically reduce incomes of so called traditional brokers.  Personally I entered the business in 1973 and witnessed a flat equity market until August of 1982.  At that time a big day was thirty million shares ( like Bunker Hunt day ).  In those days few domestic households had a large Wall Street intrest, since then CNBC and the like have made a daily football game of the equity market.  Those days are gone, consider the global indebtness and take a look at recent bond market activity. 

Please call me if you wish to discuss this.

[/quote]

The number of investors are increasing due specifically to 401ks... Back in your "hey day" it was all pensions and untouchable money, 40 yrs with same company... Now everything is portable, 5-8yrs til a job change... The amount of people needing advice and having a $250K portfolio is increasing...

Welcome to 2010......it is nice to see you are still with us..

Time will tell (of course), but we bvelieve that the number of 401K participants (and sponsors) will continue to shrink dramatically.  After all, when you feel you may not have a job?  When you are struggleing to hang onto your life style and mortguage, do you contribute to your 401K?  Do employers who are going to pay billions in additional health care costs, and looking at declining sales and rising borrowing costs continue 401K matches.  We can easily make a case for the theory that much economic growth in say the first six yeas of the new century were fuled by home mortguage loans and leverage!   And, that's just the begenning, you need to learn to think outside the box. 

You are right, times have changed.  What is going on right now is historically unprecidented, those who do not adapt will propably not survive in this industry (certainly not with the lifestyles they have enjoed in the past few years)

[quote=squash2]

[quote=B24]

Squash,

I literally just fell out my chair, and as my head hit the frozen icicles of hell, I swear I saw pigs fly by. 

Next thing you know, you'll be telling me we have socialized medicine.

[/quote]

Is this because i am defending jones? or you disagree with what I am saying...

[/quote]

There's an open office in the next town over from me.  I think you have the "Jones stuff". 

[quote=icebear48]

Time will tell (of course), but we bvelieve that the number of 401K participants (and sponsors) will continue to shrink dramatically.  After all, when you feel you may not have a job?  When you are struggleing to hang onto your life style and mortguage, do you contribute to your 401K?  Do employers who are going to pay billions in additional health care costs, and looking at declining sales and rising borrowing costs continue 401K matches.  We can easily make a case for the theory that much economic growth in say the first six yeas of the new century were fuled by home mortguage loans and leverage!   And, that's just the begenning, you need to learn to think outside the box. 

You are right, times have changed.  What is going on right now is historically unprecidented, those who do not adapt will propably not survive in this industry (certainly not with the lifestyles they have enjoed in the past few years)

[/quote]

Even with all the bad news... 401ks are still portable...so it creates a market place for people who never would have invested otherwise...

I agree that the industry is changing....I think there is an over abundance of advisors 60+ that are going to be retiring in the next few years and create a giant gap(since firms can't figure out how to get new FA's to last)... I also think when compensation gets cut down, people in the industry are going to decide that this job isn't worth it..

[quote=B24]

[quote=squash2]

[quote=B24]

Squash,

I literally just fell out my chair, and as my head hit the frozen icicles of hell, I swear I saw pigs fly by. 

Next thing you know, you'll be telling me we have socialized medicine.

[/quote]

Is this because i am defending jones? or you disagree with what I am saying...

[/quote]

There's an open office in the next town over from me.  I think you have the "Jones stuff". 

[/quote]

I just don't like when they get picked on for no reason... when other firms don't even exist anymore...just a different model that is hard to understand...

[quote=navet]

Great comments Squash. I understand what you are saying, particularly with regards to McDonalds and Walmart. But I have seen both McD's and Wallyworld change significantly over the years. McD adding latte, breakfast, kids play areas, walmart adding grocery and putting in med clinics. I don't see much in the way of inovation with Jones. It added Adv Sol, but years after other wirehouses had the product. It's still a 70's based rural door to door stock and bond and mf house. I think it will continue to survive, making partners a nice income, yet stay under the radar of the big buyout firms. I don't see any chance of market domination. Now, survival is fine, but it's not something to be very proud of. And if growing the number of FA's to 12000 is required to meet it's long term GP + LP commitments, I see big trouble ahead. Jones doesn't have the management expertise to handle a large number of FA's. It doesn't have the capability to train them(and please don't try to say that the current training department full of non-licensed inexperienced wannabe's can do the job). I believe that someone is going to come up with a better mousetrap for new FA success, but I don't see any way for that to happen at Jones. And my question to newer FA's is, "is it in your best interest to stick around for an LP that may be unsustainable"?

[/quote]

You don't really know much about EDJ do you?  If you did, you'd know that those trainers probably have more licenses than you do.  ALL of them are licensed.  Many of them have some state specific licenses that you may or may not have to have.  They spend countless hours in training themselves to get you prepared to run your EDJ office.  No, most of them don't have experience in a Jones office.  Some of them do have experience in the trenches.  Just off the top of my head I know of 5 of them that were EDJ FAs at one time or who worked for other brokerage firms before they decided they wanted to go into training.  Just because you've never run an office, doesn't mean you don't have the ability to teach someone else how to do it. 

Just out of curiosity, what makes you think that Jones doesn't have the management experience to handle a large number of FAs?  Spend a little time looking at the partner's bios on Joneslink and you'll find that many of the people in key areas in the firm have MBAs or other management degrees.  I'm not sure they're any less qualified to run big firms than the folks who attempt it as places like Morgan or BAC/MER. 

Well thought out Spiff.  However, who said that management at BAC, WFC etc. was qualified.  Most all large frim management is, in our view, incompetent (and/or greedy) in one respect or another.  This incompetence is, we believe, a hugh factor in our present delema.  As to MBA's, well, in my personal experience this more often than not creates an ego problem, which is not necessarily a good management tool.

If I were a manager of training, an absolute must would be I would want winners , reps who succeeded at the most basic level, the FA, to train all newbies. I recognized when I went through the training that I was more educated about the biz than the trainers.

Jones did have 1 or 2 vets  per training class and that was where I spent my time. The trainers were a complete waste of manpower and money. Given it was a sales position and that the firm hired people from a variety of backgrounds, they probably had no choice but to dumb it down. Before Spiff takes this personal, it isn't intended to incite a diatribe....just my 2 cents.

If you run a business like its your own, you look at every aspect and training costs are significant. So much so, that  they sometimes go after reps if they leave within a few years. Intersting it seems they are more interested in getting you through and out rather than really train about the biz, until you leave. Then they want reimbusement...

I'm not sure that you can EVER have the perfect training/management setup at a large firm.  In fact, I think probably the most qualified people in all respects are at very small firms, where you would get hands-on training from the principles.

At large firms, you are likely either a career "management guy" (i.e. no experience in the trenches), or you are an advisor.  It is very difficult to have large numbers of experienced, talented, well-rounded individuals, that are happy to take a huge paycut to be a trainer.  It doesn't exist in almost any organization.

However, I would venture to say that there are more former high-producing FA's at Jones now in top management positions than at almost any other large firm.  And the ONLY way this has worked is because of the partnership structure, where much of their compensation comes in the form of GP/LP returns.  Otherwise, there would have been no way to pay these guys enough to walk away from $500K+ FA jobs in the field.

In addition to that, Jones has a mandatory management rotation program, so most top managers have worked (or will eventually work) in numerous different roles/departments throughout the firm.  I know most love to bash Jones, but they really are trying to do it right.  I just believe that their culture/philosophy has been both a benefit and a hindrence to the firm in many respects (one-man office, A-share fund focus, kool-aide culture, etc.).

Aside from the GP in charge of training, the classroom level trainers are not licensed and never sat accross from a client. They spout out new FA kool-ade, and can't anwer a good question. The best statement I ever heard one make is "what's the difference between a new E/J FA and a pizza?...A pizza can feed a family of four". Of course, the problem is that as FA numbers grow, there is probably no other way to train large numbers of FA's. The people best capable of training them are more experienced FA's, and they are too busy. So the new FA is taught a little about products(very little) and how to knock on doors. Unfortunately, that is probably better than what other companies do. So when you come down to it, it's simply survival of the fittest. And if the fittest survive, I would think it is in there best interest to move to the highest payout. So, if Jones is going to grow market share, it will have to find a way to keep more FA's.

I agree with that.  If you only had to train 1000 new FA's per year (and maybe 250 of those are transfer brokers) versus 3000, only to see 2000 leave, you could employee a fraction of the training staff, use less home-office space, maintain higher-quality trainers, spend less on travel/hotel/meals, etc.

On top of that, with less turnover, you get more tenure, which means more production, which means higher net income to the firm, etc.  However, I know one of the firm's concerns is the number of FA's that have "peaked" and are either in decline or are approaching retirement.  We have a lot of long-term FA's with the firm 15-30 years that may produce a lot, but are not growing.  So the firm needs to continue hiring new FA's to eventually absorb those practices and build growing offices.  This is one of the reasons (as some often complain) that they do not give $100mm offices to one person.  You do that, and you can be fairly certain there won't be much growth.  But you give $25mm to 4 guys, and they are now set, but have lots of incentive to grow.

[quote=icebear48]

Time will tell (of course), but we bvelieve that the number of 401K participants (and sponsors) will continue to shrink dramatically.  After all, when you feel you may not have a job?  When you are struggleing to hang onto your life style and mortguage, do you contribute to your 401K?  Do employers who are going to pay billions in additional health care costs, and looking at declining sales and rising borrowing costs continue 401K matches.  We can easily make a case for the theory that much economic growth in say the first six yeas of the new century were fuled by home mortguage loans and leverage!   And, that's just the begenning, you need to learn to think outside the box. 

You are right, times have changed.  What is going on right now is historically unprecidented, those who do not adapt will propably not survive in this industry (certainly not with the lifestyles they have enjoed in the past few years)

[/quote]

I find a couple of things about you interesting.  First, there are no less than 9 spelling errors in your previous post (not to mention the punctuation/grammar issues).  Not to be the spell check nazi, but when one has that many errors, it becomes difficult to believe there is an intelligent person behind the screen name.   Second, you keep saying "we" rather than "I".  Are you not capable of original thought?  Are you afraid to take a stand on your own?  Why is it "we"?

You may be the brightest mind this site has ever known (I'm pretty dumb, so you are probably smarter than I) but it certainly doesn't come across that way.

[quote=navet]

Aside from the GP in charge of training, the classroom level trainers are not licensed and never sat accross from a client. They spout out new FA kool-ade, and can't anwer a good question. The best statement I ever heard one make is "what's the difference between a new E/J FA and a pizza?...A pizza can feed a family of four". Of course, the problem is that as FA numbers grow, there is probably no other way to train large numbers of FA's. The people best capable of training them are more experienced FA's, and they are too busy. So the new FA is taught a little about products(very little) and how to knock on doors. Unfortunately, that is probably better than what other companies do. So when you come down to it, it's simply survival of the fittest. And if the fittest survive, I would think it is in there best interest to move to the highest payout. So, if Jones is going to grow market share, it will have to find a way to keep more FA's.

[/quote]

I usually reserve this comment for folks like foot (BigCheese to the noobs around here), but I'll use it for you in this instance.  You're an idiot.  In order to get up in front of the trainees and deliver that training, poor as you might think it is, those folks have to be licensed.  Period.  You want to know how I know?  I was one.  Series 7, 63, 24, and Insurance Licensed.  I was going to take the 9 and 10 (at least I think that's what they were, I could be wrong) but I decided I'd like being an FA more than a HQ Team Leader or Department Leader.  All before I left the safety and security of the corporate offices.  While I was there we had at least three people who had been in the field with Jones and come into the home office.  Two who had been with firms like Merrill and left there.  One guy had about $20 million that he managed while he was an ATL.  Like I said before, not all of them have experience as an FA, but some of them do. 

While I agree with you that Jones needs to find a way to keep more of it's new FAs, I don't believe the answer lies within the training department.  I believe it has more to do with what happens in the field.  The interaction with local FAs, mentors, field trainers, etc.  A person in the home office who is trying to track dozens of new FAs can't keep up with everyone at the same time. 

This business will always be about the survival of the fittest.  The only way for Jones to up the ante on retaining more new FAs is to either A)give them a helping hand ( which they are doing right now) or B) only hire transfer brokers (which they are focusing on).  There's too much emotion, attitude, motivation, and other non-teachable skills required for this position that even if you had the most well thought out training program in the industry, you'd still have high attrition.  Most people can only hear NO so many times before they give up.  It's always going to be that way. 

Foot - you're correct on the dumbing it down.  Just like public education, you have to teach to the lowest common denominator.  You can't effectively teach long division to third graders who don't have their basic math facts down pat. 

[quote=Incredible Hulk]

[quote=icebear48]

Time will tell (of course), but we bvelieve that the number of 401K participants (and sponsors) will continue to shrink dramatically.  After all, when you feel you may not have a job?  When you are struggleing to hang onto your life style and mortguage, do you contribute to your 401K?  Do employers who are going to pay billions in additional health care costs, and looking at declining sales and rising borrowing costs continue 401K matches.  We can easily make a case for the theory that much economic growth in say the first six yeas of the new century were fuled by home mortguage loans and leverage!   And, that's just the begenning, you need to learn to think outside the box. 

You are right, times have changed.  What is going on right now is historically unprecidented, those who do not adapt will propably not survive in this industry (certainly not with the lifestyles they have enjoed in the past few years)

[/quote]

I find a couple of things about you interesting.  First, there are no less than 9 spelling errors in your previous post (not to mention the punctuation/grammar issues).  Not to be the spell check nazi, but when one has that many errors, it becomes difficult to believe there is an intelligent person behind the screen name.   Second, you keep saying "we" rather than "I".  Are you not capable of original thought?  Are you afraid to take a stand on your own?  Why is it "we"?

You may be the brightest mind this site has ever known (I'm pretty dumb, so you are probably smarter than I) but it certainly doesn't come across that way.

[/quote]

...you are probably smarter than me.   

Sorry, couldn't stop myself. 

[quote=Spaceman Spiff]

[quote=navet]

Aside from the GP in charge of training, the classroom level trainers are not licensed and never sat accross from a client. They spout out new FA kool-ade, and can't anwer a good question. The best statement I ever heard one make is "what's the difference between a new E/J FA and a pizza?...A pizza can feed a family of four". Of course, the problem is that as FA numbers grow, there is probably no other way to train large numbers of FA's. The people best capable of training them are more experienced FA's, and they are too busy. So the new FA is taught a little about products(very little) and how to knock on doors. Unfortunately, that is probably better than what other companies do. So when you come down to it, it's simply survival of the fittest. And if the fittest survive, I would think it is in there best interest to move to the highest payout. So, if Jones is going to grow market share, it will have to find a way to keep more FA's.

[/quote]

I usually reserve this comment for folks like foot (BigCheese to the noobs around here), but I'll use it for you in this instance.  You're an idiot.  In order to get up in front of the trainees and deliver that training, poor as you might think it is, those folks have to be licensed.  Period.  You want to know how I know?  I was one.  Series 7, 63, 24, and Insurance Licensed.  I was going to take the 9 and 10 (at least I think that's what they were, I could be wrong) but I decided I'd like being an FA more than a HQ Team Leader or Department Leader.  All before I left the safety and security of the corporate offices.  While I was there we had at least three people who had been in the field with Jones and come into the home office.  Two who had been with firms like Merrill and left there.  One guy had about $20 million that he managed while he was an ATL.  Like I said before, not all of them have experience as an FA, but some of them do. 

While I agree with you that Jones needs to find a way to keep more of it's new FAs, I don't believe the answer lies within the training department.  I believe it has more to do with what happens in the field.  The interaction with local FAs, mentors, field trainers, etc.  A person in the home office who is trying to track dozens of new FAs can't keep up with everyone at the same time. 

This business will always be about the survival of the fittest.  The only way for Jones to up the ante on retaining more new FAs is to either A)give them a helping hand ( which they are doing right now) or B) only hire transfer brokers (which they are focusing on).  There's too much emotion, attitude, motivation, and other non-teachable skills required for this position that even if you had the most well thought out training program in the industry, you'd still have high attrition.  Most people can only hear NO so many times before they give up.  It's always going to be that way. 

Foot - you're correct on the dumbing it down.  Just like public education, you have to teach to the lowest common denominator.  You can't effectively teach long division to third graders who don't have their basic math facts down pat. 

[/quote]

Spiff, good points.  Your first point is dead-on.  You cannot possibly adequately prepare someone for this field of work (if they are starting new).  I can't think of one firm that can hire new trainees froms cratch and send them out to build a book.  I am talking about rookie, newbie, no-network type of guys.  The only thing I will disagree with is that I think the folks in the field (at least in my area) are way too thin right now to offer much in the way of training.  We have like 20 newbies in various stages of the pipeline, and not enough vets to go around.  And beyond that, not all fo those vets are people you really want training newbies. JMHO.

Your second point (emotion, attitude, etc.) hits the nail on the head.  Some stuff just can't be taught.  I have know guys here that gave up after just a few months because it was "sooooo hard".  In reality, for many, the business is not what they thought it would be (prospects walking in off the street to sign up for financial plans and some great investments).  I have then met other guys that have been pounded into the sand, put on goals, barely getting by, and they just keep on pushing.  They won't give up.   Many eventually leave (not on their own), but many eventually make it, and end up thriving, due to their tenacity.  It really takes a certain mindset, and something in your background that makes you "do it".  Usually, it's either someone where there simply is no thought of failure, where the only way they leave is kicking and screaming.  Or they are the guy that is simply too young and inexperienced to realize how hard this is.  They have not been spoiled yet by big salaries in the corporate world, and see that they have the opportunity to make more than they imagined (they are also not stressed over the mortgage, wife, and kids they need to support yet).  So they just put their nose to the grindstone and bang it out.

[quote=Incredible Hulk]

[quote=icebear48]

Time will tell (of course), but we bvelieve that the number of 401K participants (and sponsors) will continue to shrink dramatically.  After all, when you feel you may not have a job?  When you are struggleing to hang onto your life style and mortguage, do you contribute to your 401K?  Do employers who are going to pay billions in additional health care costs, and looking at declining sales and rising borrowing costs continue 401K matches.  We can easily make a case for the theory that much economic growth in say the first six yeas of the new century were fuled by home mortguage loans and leverage!   And, that's just the begenning, you need to learn to think outside the box. 

You are right, times have changed.  What is going on right now is historically unprecidented, those who do not adapt will propably not survive in this industry (certainly not with the lifestyles they have enjoed in the past few years)

[/quote]

I find a couple of things about you interesting.  First, there are no less than 9 spelling errors in your previous post (not to mention the punctuation/grammar issues).  Not to be the spell check nazi, but when one has that many errors, it becomes difficult to believe there is an intelligent person behind the screen name.   Second, you keep saying "we" rather than "I".  Are you not capable of original thought?  Are you afraid to take a stand on your own?  Why is it "we"?

You may be the brightest mind this site has ever known (I'm pretty dumb, so you are probably smarter than I) but it certainly doesn't come across that way.

Follow the links in my profile to my websites, Professional Bio, and newsletters.  Perhaps I am not more intelligent than you, but I almost certainly have a greater diversity of experinece than most here.

[/quote]