Questions for EJ guys
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foot - I still don’t know what Conestoga does. They don’t fine anything with Edgar. Nothing on Google, MSN, or Yahoo about them. Other than our conversations here. They’ve been a part of the 10-k since at least 1994. But, I’ve never heard any conversations about them. It’s still a mystery.
Connestoga – Company that makes covered wagons. Jones has a Hold on it. Growth and Income stock. Business was hurt by the introduction of the combustion engine, but we see the growing emphasis on alternative energy as being a positive. What could be more green than pure horse power.
As for the original question, I assumed that the GPs would be under pressure in this environment and might do something drastic. I had even read that Weddle was only getting salary this year. But if they can squeeze double digit returns out of the GP this year, then they are financial geniuses and have no worries.
[quote=Spaceman Spiff]
Sooth - marvelously intelligent evil genius? Have you seen the old clips of Ted Jones? Brilliant saleman - absolutely. Evil genious - not hardly. I always loved how they would invoke Ted Jones as if to say that he (Ted) would approve on all levels, morally and otherwise, about how the company was being run in the present. If you know much about Ted, I think the poor bastard is rolling over in his grave about how. He'd kick Jim Weasle right in the nuts--my opinion. It's not phony mumbo-jumbo like Novik just picks a number out of his rear end and says, hey, the LP did 16% this year. And, yes, that is what I am suggesting. Novik pulls numbers out of his ass. EDJ manages to a number. If you're so naive to not see, believe, and understand that, then you're not half as smart as I was giving you credit for being 5 minutes ago. [/quote]Exactly.I love how visible LP return % is and how invisible GP return % is.
B-
Your comment about the insurance agencies once again shows how naive one can be. Jones agencies takes a cut before they split your commission. In the case of annuities (even A share) the payout is 6%. Which means on every annuity ticket before the split they take 1.25%. Typically on life insurance the general agent takes at least 10% before the money falls to gross commission. From the recent 10K Jones said the following about its insurance business; Insurance. The Partnership has executed agency agreements with various national insurance companies. Edward Jones is able to offer life insurance, long-term care insurance, fixed and variable annuities and other types of insurance to its customers through its financial advisors who hold insurance sales licenses. As an agent for the insurance company, the Partnership receives commission on the purchase price of the policy.After looking further at the risks to the firm portion I thought this was interesting to post.
International Expansion — The Partnership's foreign operations are not yet profitable; they will require significant infusions of capital and may never become profitable.The Partnership's branch system has expanded into Canada and the United Kingdom. Operations are at substantial deficits in these two countries, and it is anticipated that it will be a substantial number of years before the Partnership's expansion in these countries will reach a sufficient scale of operations to achieve profitability. Additional investments will be incurred in the interim, which will be substantial. Despite the substantial past and prospective investment in the foreign branch system, the Partnership's Canadian and U.K. operations are not yet profitable, nor is there any assurance at this time that either operation will ultimately attain profitability. _________________ After all these years, one would think Canada operations would be in the black. According to the 10K, they may never be...Why would they continue to throw money down the drain (what impact do you think international expansion has had on your bonus bracket?)
Foot - first of all, I have neither the time nor inclination to rip apart the 10K. Frankly, I don’t care what they are doing in Canada or the UK. It’s really not my problem right now. What I care about is what I can do to improve my production. Maybe THAT is naive, but I can only focus on so many things at one time.
Now, WHY someone that doesn't even WORK for Jones cares so much about it that THEY have the time and desire to rip through a private partnership's annual filing is beyond me. And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.Isn't this the kind of business relationship one would normally be asked to disclose on a RFP?I still don’t know what Conestoga does.
foot has always been on the conspiracy theorist side of things when it comes to EDJ. He, and others like him, have this sick, twisted desire to see the company they used to work for diminished in some way. I think it burns them to no end that Jones keeps coming up as the best this or that, growing in the face of adversity, and getting stronger all the while. Should we tell him that Jones has been in the black every month this year? Should we tell him that we are bringing in scores of transfer brokers? Should we tell him that NY and NJ just named Jones as one of the top 5 places to work in the state? Nah, it'd just piss him off.
What no comments about litigation, competititon, or the uniform net capital rule? Those three factors could have a whole lot more negative impact on Jones and the 10-k than international expansion does. My guess with Canada and the UK is that while both of those operations have been in existence for a long time, neither of them have attained critical mass. They're both growing, but still relatively young. We have some big producers in those countries, but we have a lot more smaller ones. It takes a long time for those smaller ones to reach a point where their profitability outpaces the cash outlay for the new advisors. We don't see that at this point in the US because we've got thousands of offices that are profitable and we can withstand the onslaught of new advisors. I would venture to guess that it's going to take a long time to get Canada and the UK profitable like the US is. I hope to reap those rewards before I retire. I would be really concerned if Jones decided to scrap the whole international idea and just keep the US branches.
Isn't this the kind of business relationship one would normally be asked to disclose on a RFP?[/quote] You're going to have to help me out on RFP. That's a new acronym for me.[quote=Spaceman Spiff]I still don’t know what Conestoga does.
Sorry, I thought that was an industry wide thing.
Request for Proposal - typically non-profits have FA's fill them out when they are trying to get their business (fee-based/fee-only).Damn computer…
Anyway I agree with you fellas it doesn't make alot of sense to continue down this path. Suffice to say there are some who feel that all we do is spend our day coniving how we can screw with the FA's minds. For some unexplainable reason everytime I mention how much I appreciate EDJ and what I learned over 9 years, I get labled as twisted and wanting to have Jones diminished, because I report the truth...and sometimes that hurts. Jones Financial Companies has every right to make as much money from as many sources as it wants. They can tell you anything you want to believe. Nothing twisted. Just reporting as you requested Sir Spiffy...[quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[quote=now_indy][quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[/quote] - ExactlyFoot, I guess my only point is that many of the things you comment on are rather inconsequential in the grand scheme of things. And the fact is, many of the things you comment on are known, communicated, and not “hidden” from the FA’s. Just because Jim Weddle isn’t hanging from the rafters telling us about Conestoga whatever, LLC, it is somehow a conspiracy, or in some way less than legitimate. Even worse, the firm is trying to grow it’s presence overseas, albeit slowly, and somehow that makes them bad? It’s a long-term investment that will one day pay off. They are required, since they don’t yet see the light at the end of the tunnel, to disclose that they may NEVER be profitable. My guess is that they are trying to grow it organically without too much capital infusion, thus the slow growth. Alternatively, they could send up legions of recruiters, trainers, etc. and grow overnight at a cost. Or better yet, they could start buying firms (which we know won’t happen).
Bottom line, it seems like some people on this board are really grasping at straws sometimes to find criticism of the firm. Now, I have my own criticisms of the firm, which generally have nothing to do with most of the comical stuff I read on here. Most of what I read on here are the exact same issues you would encounter (to some degree) at a wirehouse.[quote=now_indy][quote=B24]
... And yes, I am fully aware that we take a haircut on insurance. That was never really a secret. And as a sidenote, we aer not the onyl broker/dealer that haircuts their insurance.[/quote] Actually, that pretty much is a secret. I didn't realize until I left Jones to come to LPL that Jones wasn't really splitting commissions 60/40 with me. I couldn't figure out how the EXACT same Hartford 20-yr term product generated more gross commission at LPL than at Jones. It's because LPL allows me to use two or three general agencies who actually COMPETE for my business (shocker). That was one of my biggest complaints with Jones. I signed up for a 60/40 split, and they were taking 15 to 20% off the top, and THEN splitting with me 60/40. Not cool.[/quote] - Exactly Also the Edward Jones door sign isn't worth paying them 60% or more[quote=footsoldier]Damn computer…
Anyway I agree with you fellas it doesn't make alot of sense to continue down this path. Suffice to say there are some who feel that all we do is spend our day coniving how we can screw with the FA's minds. For some unexplainable reason everytime I mention how much I appreciate EDJ and what I learned over 9 years, I get labled as twisted and wanting to have Jones diminished, because I report the truth...and sometimes that hurts. Jones Financial Companies has every right to make as much money from as many sources as it wants. They can tell you anything you want to believe. Nothing twisted. Just reporting as you requested Sir Spiffy... [/quote] Yeeeeaaaaaaaah...... sure, they have the right, in America. Question is, if you were just starting now, and you really understood everything (12b1s, selling agreements, the importance of being fee based and cutting out the middle men, the natural burnout curve of chasing people, the inherent design to aggregate the labor of many for the few...) - would you see the opportunity cost and take a different path. (Like, cold calling established RIAs and small b/d shops, and trying to uncover an employee situation where you could really learn the business, by servicing small accounts, and doing SOME cold marketing, and not having "ownership" of you own business, at a time in your life when you didn't even understand how you get paid.) Just asking.